Bobst warns of slowdown in H1 results
Thursday, July 25, 2019
Bobst has reported a slowdown in sales for the first half of 2019 and subsequently issued a warning on growth for the remainder of the year.
Total turnover in Swiss Francs (CHF) to 30 June came in at 736.8m (£598.3m), down 3.4% from CHF 762.5m in the same period of 2018.
The growth warning was attributed to a 15% decrease in order entries and an order backlog 9% slower than the previous year. Reporting a net profit for H1 2019 of CHF 7.4m, down significantly from CHF 24.9m last year, the Swiss equipment manufacturer adjusted its EBIT expectations for the full year to a 5% margin compared to the 6-7% announced in March.
Turnover across the majority of Bobst’s business units reported a fall, with sheetfed declining by 3.5% and web-fed by 13.8%, though the services wing of the company reported a 2.7% upturn from CHF 237.1m to 243.6m year-on-year.
Bobst’s own report described outlook for the full year as “positive” with “some signs of slowdown”, with improvements across all business units expected in the second half of the year.
Its report said: “Uncertainty has increased in our relevant markets due to the geopolitical instabilities and the trade war between the US and China.
“In addition to these negative factors, our industry is also impacted by the increased awareness of consumers and brand owners, that more sustainable packaging solutions must be found. This will bring new opportunities for Bobst Group in the mid- to long-term, but it slows down the current investments of our customers.”
The report pointed to Labelexpo 2019, set to take place on 24-27 September, as a key boon for the brand in the second half of the year with the world premiere of an as-yet-unveiled UV/flexo hybrid press earmarked for the Brussels show.
Having adjusted its expectations, and at current exchange rates, Bobst expects its 2019 full-year sales to reach a similar level as in 2018 when it reported CHF 1.63bn.
The manufacturer restated its continued intent to invest in improving its capabilities with a focus on digital printing products, its internal business system and the Internet of Things
It is also exploring the expansion of its Bron site in Lyon, France, which would subsequently lead to the sale of its corresponding Villeurbanne plant, as well as the sale of excess land it owns in North America.
If successful, combined proceeds from these two divestments are expected have a positive impact of around CHF 30-35m on EBIT and of around CHF 20-25m on net profits.