Healthy business development
The 2011 business year was characterised by very brisk demand for specialised agricultural machinery and equipment for the glass container industry. The upward trend in the hydraulic systems market continued, though it flattened out towards the end of the reporting year. The development of demand for municipal vehicles was surprisingly stable. Winemaking equipment alone experienced partly significant decreases in its main European markets. In this largely favourable market environment, Bucher Industries achieved a marked increase in sales and order intake. The strong Swiss franc resulted in substantial negative currency effects, in excess of 12%. The Group's workforce increased by 28.3% to10 136 full-time employees at the end of the year. Of these, 290 were accounted for by the acquisition of Krause Corporation and 1 180 by the 63% holding acquired in Shandong Sanjin Glass Machinery Co. Ltd. at the end of June 2011.
The share buy-back programme introduced during the reporting year resulted in the repurchase of 293 170 shares, or 2.8% of the share capital of Bucher Industries AG, by the end of 2011. This corresponds to a total value of CHF 46.2 million and an average price per share of CHF 157.70. The Group expects to conclude the share buy-back programme in February 2012.
Favourable conditions in agricultural machinery
In the reporting year, Kuhn Group was able to take advantage of the favourable conditions in the principal markets of Western, Central and Eastern Europe, as well as the USA and Brazil, thanks to its strong market positions and broad range of products. Sales and order intake were significantly higher than the previous year, increasing by as much as a third in local currencies. The acquisition of the Krause Corporation in Kansas, also contributed to the increase. The division was able to cope with the strong rise in volumes thanks to the great flexibility of its plants. These operated at high levels of capacity utilisation in Western Europe and beyond their limits in North America.
In the reporting year, the market for municipal vehicles in Western Europe was surprisingly stable, though business was running at a low level. Despite the burden of public indebtedness, municipalities and private operators of sweeper fleets barely changed their investment policy. Competition for some tenders was fierce; the squeeze on prices and competitive pressure remained high. Demand for winter maintenance equipment was slightly up on the previous year. The demand for municipal vehicles in Australia and specialist sweepers were buoyant. The award of a major order worth CHF 62 million from the city of Moscow was another success story. Around 20% of the revenue from this order had an impact on sales in the reporting year. In this market environment, the division, which operates one of its main plants in Switzerland, was especially hard hit by the strength of the Swiss franc. Nevertheless, it held its ground well and significantly increased sales in local currencies compared with 2010.
Upturn in the main markets
In Bucher Hydraulics' principal markets, the strong upswing seen in 2010 continued in the first half of the year, particularly in the construction equipment and agricultural machinery segments. This dynamic development lost some of its momentum towards the end of the year. Nevertheless, the division continued to grow in the second half. Bucher Hydraulics further increased sales and order intake in the reporting year, actually growing quite strongly in terms of local currencies. The start-up of serial production of components for some major customers made a significant contribution to this pleasing progress in the fourth quarter. The two main plants in Switzerland, with a very high export ratio of around 90%, were particularly hard hit by the strength of the Swiss franc.
Highly dynamic market
After overcoming a ten-year low at the end of 2010, the glass container industry experienced a real boom in demand for machinery and spare parts for the manufacture of glass containers in 2011. It was not until the end of the year that the first signs of a normalisation were seen, above all in Western Europe. As the market leader, Emhart Glass benefitted from the upturn and was able to increase order intake as well as sales over the previous year. In addition to the general rise in demand, these pleasing sales figures were further boosted by a major order worth CHF 40 million from Hindustan National Glass & Industries in India, almost half of which was delivered in the reporting year, as well as sales of CHF 27 million from the Sanjin joint venture in China.
Varied market development
The independent businesses consolidated under Bucher Specials are active in diverse markets and their performance in the reporting year presented a varied picture. Demand for winemaking equipment declined because of a suspension of subsidies lasting several months in France, the main market. Moreover, unusually mild climatic conditions in Western Europe led to an earlier grape harvest, narrowing the investment window. By contrast, the business with fruit juice processing equipment benefitted from higher prices for fruit juice concentrate and some backlog in demand from previous years. The Swiss distributorship for tractors and agricultural machinery was stable. Despite the decline in winemaking equipment, Bucher Specials was able to increase sales, order intake and the order book year on year.
Group result for 2011 and outlook for 2012
For the 2011 business year, the Group expects a percentage increase in both operating profit and profit for the year on a par with the first half of the year. The outlook for the current year is surrounded by uncertainties owing to the massive indebtedness of the European and US economies and the instability of the euro zone. On the other hand, some positive tendencies are discernible in our markets. The Group is therefore cautiously optimistic about the prospects for the current year and expects improved sales, operating profit and profit for the year.
Simply great machines
Bucher Industries is a global technology group with leading market positions in speciality areas of mechanical and vehicle engineering. The company's operations include specialised agricultural machinery, municipal vehicles, hydraulic components, manufacturing equipment for the glass container industry and for wine and fruit juice production. The group's shares are traded on the SIX Swiss Exchange (SIX: BUCN).