Editorial

Ongoing difficult market environment impacts order intake

The first half of 2024 was disappointing for us. The market situation remained strained, and many of our customers were unable to utilize their full production capacity. As a result, they were cautious with their investment decisions. A wide variety of industries were impacted. Even sectors like agriculture, in which many of our customers operate, experienced decline. In addition, customers hesitated to invest in anticipation of lower interest rates.

This investment behavior was visible around the world. Order intake and sales declined in all markets, and production capacity at our locations was not fully utilized. Despite cost reduction measures, low sales volumes could not cover the reduced fixed cost base, and this resulted in a loss for the first half of the year.

Further development of our organization into an end-to-end solutions provider

Our strategy aims to position ourselves as an end-to-end solutions provider in the sheet metal processing industry. In addition to innovative systems for cutting and bending, our portfolio includes a broad range of automation and software solutions, as well as a wide pallet of services.

The demand for complex system solutions with automation and software components has increased significantly in recent years, as efficiency gains resulting from process optimization are crucial for our customers. In addition, our automation and software offerings have provided access to new customer segments and markets, especially in the US and Australia. That is why we continue to advance the networking of processes in our industry.

In the first half of the year, we implemented further important automation and digitalization projects. However, high start-up costs and unplanned additional expenses during implementation have led to insufficient profitability with the completed projects. Each of these projects placed increased demands on our processes and offered us development opportunities as an organization. They offer us the chance to improve our project processes and to further expand the know-how of our teams. We plan to optimize these operational processes in the future.

Implementation of the cost optimization program

We launched our cost optimization program at the beginning of the year. It is enabling us to reduce both volume-related and structural costs. We have already implemented the first important measures to streamline processes and focus even more on our customers. We reduced levels of management and simplified reporting lines. Due to the slow development of the market since the beginning of the year, we will be considering further measures to improve efficiency and reduce our cost base.

Transfer of responsibilities in senior leadership

Our long-time CEO Alex Waser elected to retire from his role as CEO at the end of June 2024, and his successor, Domenico Iacovelli, assumed leadership of the Group. Domenicoʼs deep understanding of the industry is enabling him to rapidly familiarize himself with the company. He has already visited all our production locations and met with customers to discuss collaboration – all of which will ensure continuity and a seamless transition.

Confidence thanks to our employeesʼ commitment

Difficult market conditions, the cost optimization measures implemented and our positioning as an end-to-end solutions provider have been a challenge for our employees. We would like to especially thank them for their flexibility and tireless commitment to our customers.

Thanks to the engagement of our employees, our broad portfolio and new guidance from senior leadership, we are confident that we can guide Bystronic into calmer waters, especially when markets regain their strength. We are motivated for the second half of the year, and we thank all our business partners, colleagues and stakeholders for the support they will provide with the work that lays ahead.

Zurich, July 19, 2024

Dr. Heinz O. Baumgartner

Chairman of the Board of Directors

Domenico Iacovelli

CEO Bystronic Group