Group Business Review

Ongoing difficult market environment leads to lower order intake and half-year loss

The market situation in the first half of 2024 continued to be very challenging. Customers behaved cautiously so order intake fell 27.6% to CHF 304.7 million. Accordingly, sales fell 29.3% to CHF 330.9 million. The steep decrease in sales volume led to an EBIT of CHF –23.0 million.

Order intake, sales, order backlog

Due to general economic uncertainty, demand in all regions fell and customers were cautious with investments in the first six months of 2024. Processes related to project decisions and contract conclusions took significantly longer than normal, and customers delayed investment decisions. Many companies in the sheet metal industry serving various sectors were not operating at full production capacity. Customers were also generally reluctant to invest as they anticipated lower interest rates.

And finally, even sectors like agriculture, in which many of our customers operate, experienced decline. Many customers manufacture parts for agricultural machinery, and the agricultural sector suffered in the first half of the year due to low grain prices. Bystronic also felt the effects of this.

Order intake fell 27.6% to CHF 304.7 million (–24.5% at constant exchange rates) and sales decreased accordingly by 29.3% to CHF 330.9 million. As of June 30, 2024, the order backlog was CHF 238.5 million, compared to CHF 252.9 million at year end 2023.

Profitability

The low level of sales and consequently the inability to cover related fixed costs resulted in an EBIT of CHF –23.0 million (H1ʼ2023: CHF 25.3 million). To ensure profitability even with lower sales, Bystronic launched a comprehensive cost optimization program at the beginning of the year to achieve structural as well as volume-related cost savings.

Implementation of the program is progressing, and important measures were already taken in the first half of the year. Production capacity was reduced temporarily in response to volume changes, and employees who work in production-related jobs at our Niederönz facility have been put on short-time work. In addition, Bystronic has made several structural adjustments. It reorganized the EMEA region into clusters, eliminating one level of management. In the APAC region, the regional office in Singapore was closed, and the reporting lines to company leadership simplified. This places Bystronic closer to its customers and streamlines the organization. With these and other measures, the Group will save fixed costs over the next years and will position itself for the next economic upswing.

Bystronicʼs net result was CHF –20.8 million (H1ʼ2023: CHF 19.8 million). This corresponds to a loss of CHF 10.08 per Class A registered share. The return on net operating assets (RONOA) was –15.2% (H1ʼ2023: 12.5%).

Operating free cash flow was CHF –26.9 million, compared to CHF –34.4 million in the previous year. This is primarily due to the loss.

Outlook

Market conditions remain challenging, and Bystronic does not expect recovery in the second half of 2024. As a result, the Group expects order intake and sales below previous year levels and accordingly, a significant loss for 2024.