High demand, very full order books, delayed sales recognition in the first half of 2022

Ad hoc announcement pursuant to Art. 53 LR

High demand, very full order books, delayed sales recognition in the first half of 2022

• Strong demand matching prior-year level – growth in all regions except China
• Procurement and shipping frictions
• EBIT below expectations due to delayed sales recognition and higher costs
• Better second half-year with higher sales expected

_{¹ at constant exchange rates
² Return on net operating assets}

Zurich, July 21, 2022 – Challenges such as supply chain bottlenecks, limited transport capacities, and the lockdowns in China impacted the first half of 2022. Nevertheless, thanks to its innovative product and service portfolio, Bystronic achieved a stable order intake matching the previous year’s strong level. In the Americas and Asia Pacific regions, Bystronic posted a double-digit order intake growth, while demand in EMEA remained at the prior-year level. In China, by contrast, regional lockdowns and a cooling economy led to a noticeable decline. On balance, demand developed favorably – in particular in the gold segment. At constant exchange rates, order intake increased by 0.5% and totaled CHF 536.1 million.

Bystronic increased sales by 2.8% (6.2% at constant exchange rates) to CHF 453.2 million. The EMEA, Americas, and Asia Pacific regions increased sales, while business in China and consequently the entry-level segment saw a decline. Sales recognition represented a major challenge. Due to the unavailability of certain components for shipped systems, these were not yet operational and Bystronic will only recognize the sales with a delay. As a result, inventories of finished products increased by CHF 49 million in the first half-year. This effect applies to approximately CHF 100 million in sales with a corresponding profit contribution.

In line with its strategy, Bystronic continued to expand its service business and increased sales by 10.8% to CHF 110.1 million (24.3% of total sales). In the first half of 2022, thanks to its new, modular service portfolio, Bystronic continued to sell more than 95% of its new machines in the gold and silver segments in conjunction with a service contract. In the field of software and smart factory, Bystronic conducted further tests with selected customers and is preparing to launch the BySoft Bystronic Software Suite at the main industry trade show “EuroBLECH” in October.

The operating result (EBIT) decreased to CHF 10.5 million. The EBIT margin stood at 2.3% compared to 6.9% in the previous year. This is mainly attributable to the delayed sales recognition and higher procurement and transport costs. In 2021 and the first half of 2022, Bystronic repeatedly implemented price increases in order to absorb the rising input costs. Due to the substantial order backlog, these positive effects will largely start to develop an impact from 2023 onwards. Furthermore, Bystronic recruited additional personnel for its service business and production capacities and intensified its sales and marketing activities. The resulting higher costs impacted the result. Therefore, Bystronic has initiated cost savings measures, which will materialize as of the second half of 2022.

Alex Waser, CEO of Bystronic, says: “The first half of 2022 proved to be very challenging. With our more than 3,600 employees, we are doing all we can to optimally satisfy our customers’ requirements in all areas and to supply our systems as quickly as possible despite procurement frictions – even though this demands a high level of personal commitment from our employees. Thanks to their strong dedication and the stable market dynamics to date, we look to the second half of the year with confidence.”

Outlook
The conditions on the procurement markets and with regard to shipping capacities continue to be very tense. For Bystronic, this primarily entails challenges in purchasing, longer shipping and installation lead times, and correspondingly higher costs in production, which can only be passed on to customers with a time delay – in particular in consideration of the high order backlog. Despite the limited visibility, Bystronic expects a better second half of 2022.

Thanks to the innovative portfolio, the stronger demand trends towards automation solutions, the expansion of the service business, and the strong balance sheet with a net liquidity in excess of CHF 330 million, Bystronic is in a good position to generate further growth. Until 2025, Bystronic continues to aim for annual organic sales growth in excess of 5%, an EBIT margin of over 12%, and a RONOA of over 25%. 


Conference
CEO Alex Waser and CFO Beat Neukom will present the results today, July 21, 2022 at 10:30 a.m. CET during a conference call and an audio webcast in English. The webcast is available here or under the “Presentations” section of our website: https://ir.bystronic.com/en/reports.php

Numbers to dial in to the conference call:
Switzerland / Europe: +41 (0) 58 310 50 00
United Kingdom: +44 (0) 207 107 06 13
United States: +1 (1) 631 570 56 13


Appendix
The complete Half-Year Report 2022 can be downloaded from our website: https://ir.bystronic.com/en/reports.php
 

 
For queries:
Investor Relations
Patrizia Meier    
Mobile +41 79 637 46 33  
patrizia.meier@bystronic.com 

Media Relations
Michael Präger    
Mobile +41 79 870 01 43
michael.praeger@bystronic.com


About Bystronic
Bystronic (SIX: BYS) is a leading global technology company in the field of sheet metal processing. The focus is on the automation of the complete material and data flow of the cutting and bending process chain. The intelligent networking of laser cutting systems and press brakes based on innovative automation, software, and service solutions is key to achieving the comprehensive digitalization of the sheet metal processing industry.

Bystronic’s operational headquarters are located in Niederönz, Switzerland. Additional development and production sites are located in Sulgen (Switzerland), Gotha (Germany), Cazzago San Martino and San Giuliano Milanese (Italy), Tianjin and Shenzhen (China), and Hoffman Estates (USA). We are active with our own sales and service companies in more than 30 countries and are represented by agents in numerous other countries.

Disclaimer
This media release has been published in English and German. Should the English translation differ from the German original, the wording of the German version shall prevail.

This media release contains forward-looking statements, which are subject to uncertainty and risks. Actual future results may differ materially from those expressed in or implied by these statements. Some of these uncertainties and risks relate to factors that are beyond Bystronic’s ability to control or predict precisely, such as, in particular, future market conditions, currency fluctuations, or the behavior of other market participants, suppliers, and transport companies, as well as possible effects of the war in Ukraine and the associated sanctions as well as any countermeasures. Readers are cautioned not to put undue reliance on forward-looking statements, since these relate only to the date of this communication. Bystronic disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or any other factors.