Bobst sales up while earnings slip

Bobst Group is claiming strong results for the first half of the year, generating CHF 762.5m ($1bn) for the first six months of 2018, up 19 per cent compared to CHF 643.2m ($891m) the prior corresponding period (pcp), although its earnings have dropped.

The company’s earnings before interest and tax (EBIT) decreased by around 12 per cent to CHF 35.2m from CHF 39.8m in the pcp.

The group has lowered its 2018 full year profit guidance, expecting to achieve an operating result (EBIT) higher than CHF 90m for the full year 2018, a drop from its EBIT of CHF 119m last year. The company says the drop in earnings is due to an unfavorable product mix, the ramp-up of the digital printing activities as well as further investments to strengthen the Group’s sales and service network, and capabilities in growing markets.

For the second half, the company is also planning to invest in upgrades to more recent products, as well as launch a new range of digital printing products.

Bobst is attributing its increased sales to high backlog at the beginning of the year, with higher activity in all three of its business units. Volume and price variances had a positive impact of CHF 93.2m, or 14.5 per cent. The company also created two new entities in Vietnam and the Netherlands, which it says granted it an improvement of CHF 0.2m.

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In the Asia and Oceania region, Bobst generated sales of CHF 150.7m, making up 19.8 per cent of its total revenue, dropping from CHF 170.7 in the first half of 2017, which took up 26.5 per cent of its revenue. Europe remained its strongest region for sales, with Bobst making CHF 369.4 for the last half year, dominating 48.4 per cent of its total revenue. The year before, the region produced sales of CHF 279.6m, which took up 43.5 per cent of the group’s sales.

In the different sectors, sales for Sheet-fed totalled in at CHF 391m, up 29.3 per cent from CHF 302.3m in the pcp, while its EBIT were CHF 29.7m, increasing by 17.1 per cent from CHF 12.6m.

Web-fed produced sales of CHF 134.1m for the half, up 12.3 per cent from CHF 119.5m from the year before. Web-fed’s EBIT saw a loss of CHF 20.2m, increasing from its prior loss of CHF 5.3m.

Bobst says its Web-fed saw dropped earnings due to an unfavorable product mix and high pressure on margins, along constructing a new site in China and ramping up the product lines structure as well as higher than expected restructuring efforts at one of its German entities.  

Bobst Services made sales of CHF 237.1m, rising 7.2 per cent from CHF 221.2m in H1 2017.  Its EBIT was CHF 27.4m, dropping 5.8 per cent from CHF 33.2m, Bobst says the slip aligned with it increasing the number of field service technicians and technical support people. Induction and training costs have also had a negative effect on the sales unit.

Bobst also says all three segments were affected by the Group building up its digital printing.

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