Order entries in the first six months of 2024 were as expected 15% below the level reached in 2023. Sales increased slightly and were at CHF 828 million, compared to CHF 815 million in the first half of 2023. The operating result (EBIT) was CHF 35 million, compared to CHF 47 million in 2023. The net result reached CHF 8 million, down from CHF 41 million in the previous year. Sales and results for the first half-year were according to expectations. Net debt was CHF 228 million compared to CHF 218 million at the beginning of the year. Order backlog at the end of June was 35% lower than in previous year and 3% lower than at the end of 2023.

After a successful drupa exhibition last June, the Group expects a good second half of the year but there are also risks which can negatively impact the full year results. In particular the uncertain geopolitical situation and further slowdown of the industry in some regions.

During the first half of 2024, consolidated sales amounted to CHF 828.2 million, representing an increase of CHF 13.6 million, or 1.7%, compared with the same period in 2023. Volume and price variances had a positive impact of CHF 25.2 million, or 3.1%. The exchange rates had an overall negative impact on sales of CHF 15.2 million, or -1.9%. An improvement of CHF 3.5 million, or +0.4%, came from the acquisition of Dücker Robotics srl, Momo, Italy, completed on 28 April 2023.

The increase of consolidated sales was due to higher services sales, while sale of equipment and spare parts was at the same level as in the first half of 2023. The distribution of sales by geographical zones showed an increase in Asia & Oceania and the Americas, while sales in Europe and Africa were below the levels reached in the first half year 2023.

The operating result (EBIT) reached CHF 34.7 million compared with CHF 46.8 million for the same period in 2023. The lower operating result (EBIT) is mainly due to higher cost of personnel and to marketing costs linked to the drupa exhibition, which takes place only every 4 years.

The operating result (EBIT) for Business Unit Printing & Converting decreased slightly from CHF -3.8 million in the first half of 2023 to CHF -5.8 million in the reporting year. The better absorption of costs due to a good load of the factories could not fully compensate higher personnel costs and the cost of drupa.

Operating result (EBIT) for Business Unit Services & Performance decreased by CHF 10.6 million compared with the same period in 2023, to reach CHF 41.3 million in the first half of 2024. The decrease in profitability comes mainly from a less favorable product mix in the first six months of the year, the cost of drupa and higher IT-costs, linked to the preparation of the SAP Hana implementation.

Net result reached CHF 7.7 million, compared to CHF 41.3 million in 2023. The decrease in net result is due to lower operating result (EBIT) and the impact of the sale of the participations in BHS Corrugated Maschinen- und Anlagen GmbH and IVG Weiherhammer GmbH. In 2023 there was also a significant positive impact in the financial result, due to gains on foreign exchange hedges which have the opposite effect in 2024.

The net debt position was CHF 227.5 million at the end of June 2024 compared to a net debt position of CHF 218.2 million at the end of 2023. The increase of net working capital had a negative effect on the Group’s liquidity but this was partly compensated by the sale of the participations in BHS and IVG. The consolidated equity reached 21.6% of the total balance sheet, compared to 25.7% at the end of 2023. The reduction of the ratio is due to the issuance of the CHF 200 million bond beginning of the year which increased temporarily the balance sheet total. The sale of the participations in BHS and IVG had a positive impact on the Group’s equity.

BUSINESS ACTIVITY AND OUTLOOK BY BUSINESS UNIT

Business Unit Printing & Converting (BUPC)
In term of order entries, the Business Unit Printing and Converting experienced a slow first half year in 2024, as projected 24% lower than in June 2023. This was mainly driven by large Key Accounts postponing their capital investments, after recent strong years. Also global market consolidation through mergers of larger groups has a delaying effect. The Americas region remains stable over all industries, whilst Asia, the Middle East and Africa regions are continuing as a strong growth engine. Central Europe however, is not yet in recovery status.

For all industries we serve, our newest printing and converting technology novelty launches, including BOBST CONNECT, as well as advanced automation solutions, are well perceived by the market. This was also underlined by the great success of this year drupa exhibition, which has proven that the BOBST Industry Vision, built on the 4 pillars (Connectivity, Digitalization, Automation and Sustainability) is answering the needs and pain points of our customers with tangible solutions, over the entire printing and converting workflow.

The heavy impact of geopolitical uncertainties and instability represent our greatest challenges. A dedicated cross-functional task force is mitigating this risk, by leveraging our global scale and operational capabilities, as a part of the BUPC transformation program.

We expect a general market recovery trend in the second half of the year, which is also underlined by the high number of project awards during drupa 2024, as well as other successful customer events in the Americas and Asia.

Business Unit Services & Performance (BUSP)
First half-year sales for the Business Unit Services & Performance were 4.8% above the same period in 2023 at CHF 331.0 million and most regions contributed. The growth was done mainly with services, while parts were stable. Remanufacturing, Digital Services and our service contract “Maintenance Plus” are the growth drivers and this even though it was difficult to execute some of the above due to the high number of new machine installations worldwide.

Our new parts distribution Hub in Genk (Belgium) is ramping up nicely as we have finalized the integration of most of the product lines. An “InNight” service, guarantying delivery before 9 am if ordered till 6 pm the night before, will be soon proposed to customers in a radius of 800 kilometers from Genk.

The new BOBST Customer Relationship Management and Technical Support (CRM phase 1) is now deployed globally and allows a better execution and follow-up of our Customer Care Centers. A second phase, called CRM2 for Field Service, will be deployed in the third quarter of this year allowing our 950 Field Service Technicians to use mobile devices to access documents online and do the planning of interventions, as they operate at customers or remotely. This CRM digitalization transformation is supported with a cloud-based SAP Hana system, launched in North America early 2025. BUSP takes the opportunity to create a benchmarked customer service in this region before deploying it worldwide by 2026.

Drupa was also a clear confirmation that we are shaping the future of the packaging world with our digital vision, and that the service solutions provided to our customers are beneficial to their business growth and performance. The focus we have is to find solutions to improve the productivity of the installed base by analyzing data from machines under BOBST Connect. We are confident to be able to offer consulting, upgrades, retrofits and to train operators thanks to our findings.
The sustainability program also pushes us to develop solutions to reduce energy consumption and what was presented to our customers during drupa perfectly match their expectations.

The Business Unit Services & Performance should continue to perform as well as in the first semester of 2024, if no major crisis arise and if the exchange rates stabilize around the levels we had in the first semester.

OUTLOOK FOR THE SECOND HALF OF 2024
Machine orders for the full year will improve compared to the first six months of 2024, but might remain below previous year level, while Business Unit Services & Performance should continue at the same level. The uncertainties caused by the geopolitical situation and fluctuating foreign currencies might slow-down the recovery, while interest created with the new solutions presented at drupa will for sure support the recovery.
As announced on 27 February, the Group expects 2024 full year sales and operating result (EBIT) to be lower than the levels reached in 2022, which was CHF 1.84 billion sales and CHF 141.3 million operating result (EBIT).

The long-term financial targets of at least 8% operating result (EBIT) and a minimum 20% return on capital employed (ROCE) are confirmed.