Bucher Industries : Group presentation update October 2020

Group presentation

October 2020

Bucher Industries

The five divisions of Bucher Industries

CHF 3.1 billion sales, 13'100 employees, 9.2% EBIT margin

Bucher Industries 2019

Bucher Emhart Glass

CHF 490 million sales 1'800 employees

Bucher Specials

Bucher Hydraulics

CHF 320 million sales 900 employees

CHF 650 million sales 2'800 employees

Kuhn Group

CHF 1'180 million sales 5'200 employees

Bucher Municipal

CHF 540 million sales 2'400 employees

Net sales by division

Bucher Industries 2019

CHFm

2015

Bucher Specials

Bucher Emhart Glass

Bucher Hydraulics

Bucher Municipal

Kuhn Group

2016

2017

2018

2019

Number 1 in selected markets

Kuhn Group

World market leader

in forage harvesting machinery

and feed mixers

Bucher Municipal

European market leader

in sweepers

Bucher Hydraulics

World leader

in hydraulic power packs

Bucher Emhart Glass

World market leader in glass container manufacturing equipment

Bucher Specials

World market leader in fruit juice and winemaking equipment

International Group

More than 40 manufacturing locations and development sites on five continents

International Group

Net sales by region

CHFm

2015

OtherAsiaAmericasEuropeof which SwitzerlandEBIT margin

2016

2017

2018

2019

Aspirations

Diversified group in mechanical and vehicle engineeringDecentralised responsibility for products, markets and results in the divisions; centrally co-ordinated

Technological leadership for a strong market position

Strengthening of divisions

Solid balance sheet for long-term, industrial independence

Increase in enterprise value

(RONOA > WACC)

Principles

High level of independence for divisions − No competition for resources and responsibilities − Exchange of experiences on specialist topics

Leadership by

• − Strategic planning

• − Key financial figures

• − Standardised values and prescribed governance requirements

• − Division management appointments

• − Selected, operational projects

Lean corporate centre structure − With approx. 30 employees

Good result despite lower demand

Group: 2019 at a glance

Slight 1% increase in sales over the excellent previous year, operating profit margin of 9.2% fell slightly short of the 2018 level

• ‒ Kuhn Group: Difficult situation in the North American market, sales and operating profit margin slightly lower than in the previous year

• ‒ Bucher Municipal: Sales at the same high level as previous year despite weaker demand

• ‒ Bucher Hydraulics: Sharp drop in demand after exceptionally dynamic previous year, slight increase in sales

• ‒ Bucher Emhart Glass: Trend toward increased use of glass containers, sales and operating profit reached record high

‒

Bucher Specials: Challenges for Bucher Unipektin, positive development in the other business units

3'206 3'065 1'137

Order intake

Net sales

Order book

Operating profit (EBITDA) as % of net sales

368 11.9%

-6.2

-3.6 -5.6

1.4

4.0 1.8

-10.4

-7.8 -7.9

374 12.2%

-1.6

Operating profit (EBIT) as % of net sales

285 9.2%

292 9.5%

-2.6

Employees at 31 December

Average employees

13'107 13'280

13'054 12'636

0.4 -0.6

5.1 2.6

• 1) Adjusted for currency effects

• 2) Adjusted for currency, acquisition and divestment effects

CHFm	Change in
2019	2018	%
Profit for the year	228	226	0.9
as % of net sales	7.3%	7.4%
Earnings per share in CHF	21.92	21.80	0.6
Capital expenditure	125	103	21.9
Operating free cash flow	163	101	61.6
Net cash/debt	215	159	34.7
Equity	1'393	1'296	7.5
as % of total assets (equity ratio)	54.7%	51.0%
Net operating assets (NOA) average	1'214	1'156	5.1
return (RONOA) after tax in %	19.0%	19.6%

2015

2016

2017

2018

2019

Capital expenditure (Capex)

Depreciation and amortisation ……… .....

Capex as % of net sales

15 Group presentation

Key investment projects

Fixed and intangible assets

Kuhn Group

"MGM Monswiller" extension near

Saverne, France

Bucher Municipal

Production extension in Ventspils, Latvia

Bucher Hydraulics

Expansion of production capacity in Gurgaon, India

Doubling of production halls in response to growing need for large agricultural machinery. Expected to be operational in early 2021.

Assembly line built specifically for the serial production of the new

"CityCat V20e" at the compact sweeper production site.

Further development of a new product line for less demanding applications in the lower price segment.

2015

2016

2017

2018

2019

Research and development costs

as % of net sales

17 Group presentation

Selected development projects

Bucher Municipal Electrification of all product groups

Bucher Hydraulics Innovative axial piston line AX pumps and AX motors

Bucher Vaslin

"Maestro": Add-on to the "Bucher XPert" grape press

"CityCat V20e": Battery is based on the latest technology and has been specially developed for use in this compact sweeper.

The AX series offers an exceptionally high efficiency rate in a wide range of rotational speeds as well as low-speed, smooth, accurate movements.

"Maestro" controls all four phases of a complete cycle, improves productivity and delivers extensive information about the pressing process.

M&A transactions 2018

Bucher Emhart GlassBucher HydraulicsKuhn GroupBucher Specials

Purchase of remaining shares (37%)

Joint Venture (70%)

Purchase of remaining shares (62%)

Asset Deal

Net sales1) CHF 55 millionNettoumsatz1) CHF 40 Mio.

Net sales1) CHF 20 millionNet sales1) CHF 20 million

Employees 800

1) before acquisition

Mitarbeitende 300

Employees 60

Employees 30

M&A transactions 2019 - 2020

2019

Bucher Municipal

Zynkon, China

Net sales1) CHF 14 million

Employees 110

Bucher Emhart GlassBucher SpecialsBucher Emhart Glass

Asset Deal, sold to Rath Group

Net sales1) CHF 9 million

Employees 50

Net sales1) CHF 3 million

Employees 20

Net sales1) CHF 8 million

Employees 35

2020

Bucher Municipal

Eurovoirie, France

Net sales1) CHF 34 million2)

Employees 75

Bucher Specials

Luzzysa, Spain

Net sales1) CHF 4 million

Employees 20

Bucher Municipal

Spoutvac, Australia

Net sales1) CHF 16 million

Employees 35

• 1) before acquisition/divestment

• 2) of which more than half with Bucher Municipal equipment

Colour coding:

Acquisition

Divestment

Record sales despite weaker demand

Performance: Net sales and EBIT margin

CHFm 3'500 3'000

2'500 2'000 1'500 1'000

500

0

2015

2016

2017

2018

2019

Net sales

EBIT margin

2015

2016

2017

2018

2019

Net operating assets (NOA 4q.-average)

as % of net sales

Return on NOA (RONOA) after tax

2015

2016

2017

2018

2019

Operating free cash flow

Investments (net)

Net cash flow from operating activities

23 Group presentation

Positive free cash flow with brisk investment activity

Financing and risk management

CHFm

300

250

200

150

100

50

0

285

Net cash flow from operating activities

-122

Capital expenditure

(net)Operating free cash flowNet investments in other financial assets

Acquisitions/ divestmentsDividend/ treasury sharesFree cash flow

24 Group presentation

Net cash/debt

Free cash flow

2015

2016

2017

2018

2019

Total assets

Equity

Equity ratio

Operating profit by division

CHFm	EBIT	EBIT margin	EBIT	EBIT margin
2019	2019	2018	2018
Kuhn Group	98	8.3%	104	8.7%
Bucher Municipal	46	8.4%	51	9.5%
Bucher Hydraulics	81	12.5%	84	13.4%
Bucher Emhart Glass	66	13.5%	47	10.4%
Bucher Specials	20	6.2%	26	8.3%
Other/consolidation	-20
Bucher Industries	292	9.5%

Divisions

Kuhn Group

Specialised agricultural machinery

Arable farming

Ploughing

Tillage

Seeding

Fertilisation

Spraying

Dairy and livestock farming

Hay and forage harvesting Feed storage

Bedding and feeding

Manure spreaders

Landscape maintenance

Hedge cutters

Difficult situation in the North American market

Kuhn Group: 2019 at a glance

Markets heterogeneous but increasingly challenging overall

• ‒ USA: Further deterioration in the situation for agricultural producers, farms undergoing consolidation at an increased pace

• ‒ Europe: Demand for machinery for the dairy and livestock sector satisfactory

• ‒ Brazil: Good performance

Order intake down by 6% and sales by 2%

Operating profit margin slightly below previous year at 8.3%

‒

Difficult situation in the North American market

‒ Efficiency gains in Europe and Brazil and higher prices in Europe

Net sales by region

Kuhn Group

CHFm

3%

3%

OtherAsiaAmericasEuropeof which SwitzerlandEBIT margin

1%

2015

2016

2017

2018

2019

Number of employees by region

Kuhn Group

Employees1)

6%

2015

2016

1) Expressed in full-time equivalents; average

Other

Netherlands

Brazil

North America

France

2017

2018

2019

World market for agricultural machinery

Kuhn Group

Market served by Kuhn Group

Farm tractors
Harvesting machinery
	Hay and silage making machinery
	Tillage
	Seeding, planting, fertilising and spraying machinery
	Other agricultural machinery and attachments and parts

Worldagriculturalmachinerymarketvolume: AroundEUR107billion(VDMAestimate)

%

Source: Freedonia - VDMA 2018/2019

28

44%

16

7

8

56%

11

30

Complete product range under the Kuhn brand

Kuhn Group

MowersHay and forage Tedders Rakes Balers	Hedge cutters	Feed mixers	Tillage equipment driven non-driven	Seeders drilling precision	Spreaders	Sprayers	Tractors	Harvesters self-propelled
Kuhn Group
John Deere
CNH
AGCO
Claas
Krone
Amazone
Pöttinger
Kubota/KVE/ Great Plains
Exel / Hardi
Lemken
Horsch
Väderstad
SDF
Maschio

Market position

Kuhn Group

World's leading manufacturer of specialised and tractor-related agricultural equipment

• − Comprehensive range of agricultural machinery

• − World market leader in hay and forage harvesting machinery and feed mixers

• − Leader in tillage, fertilisation and planting and seeding equipment

• − Strong market positions in Europe and in North and South America

• − Extensive network of independent dealers and distributors

• − Products and services marketed worldwide under the Kuhn brand

Bucher Municipal

Municipal vehicles and winter maintenance equipment

Compact sweepers

Truck mounted sweepersWinter equipment

Sewer cleaning

Refuse collection

Good capacity utilisation despite weaker demand

Bucher Municipal: 2019 at a glance

Order intake down by 6% compared to very strong previous year Decline in all product groups except winter maintenance equipment

Sales maintained exceptionally high level of previous year ‒ Strong order book at start of the reporting period

‒

Good capacity utilisation and ability to deliver

Operating profit margin fell short of previous year at 8.4%

• ‒ Consolidation of Zynkon

• ‒ Integration costs

• ‒ Higher expenditure for research and development

Net sales by region

Bucher Municipal

CHFm

OtherAsiaAmericasAustraliaEuropeof which SwitzerlandEBIT margin

2015

2016

2017

2018

2019

Number of employees by region

Bucher Municipal

Employees1)

2'340

2015

1) Expressed in full-time equivalents; average

Other

Germany

Italy

Switzerland

Australia

Latvia

Denmark

Great Britain

2016

2017

2018

2019

Complete product range under one brand

Bucher Municipal

Competitors

Bucher Municipal

Federal Signal

Alamo

Douglas Dynamics

Terberg-RosRoca

Aebi-Schmidt

Faun

Fayat

Hako

Boschung

Cappellotto

Kaiser

Zoomlion

Market position

Bucher Municipal

Leading supplier of municipal vehicles for use in cleaning and clearance work in public and private traffic areas

• − Comprehensive product range for the municipal vehicles market

• − European market leader in sweepers and winter maintenance

• − Market leader in sweepers in Great Britain

• − Market leader in refuse collection vehicles and sweepers in Australia

• − Market leader in sewer cleaning in Scandinavia and Great Britain

Bucher Hydraulics

Customised drive systems

Pumps

Valves

Subsystems

Tailor-made customer solutions

Motors

Cylinders

Power packs

Construction equipment

Materials handling

Industry

Other segments: Mining/tunnelling, energy technology, municipal vehicles, elevator technology, high-voltage switch gear

Slight increase in sales despite strongly declining demand

Bucher Hydraulics: 2019 at a glance

Order intake down by 20%

‒

Decline in most markets and segments

‒ Very dynamic previous year influenced by early orders placed to avoid bottlenecks

‒

Corresponds overall to the trend in the hydraulics market

Sales up by 4%

‒

Strong order book at start of the reporting period

‒ Full-year consolidation of Bucher Hydraulics Wuxi

Operating profit margin of 12.5% down from the previous year

• ‒ Expenditure related to product development and capacity expansion

• ‒ Integration of Bucher Hydraulics Wuxi

• ‒ Higher material prices

Net sales by region

Bucher Hydraulics

2015

1%

OtherAsiaAmericasEuropeof which SwitzerlandEBIT margin

2%

2016

2017

2018

2019

Number of employees by region

Bucher Hydraulics

Employees1)

2'844

2%

2015

2016

1) Expressed in full-time equivalents; average

Other

Italy

India

China

North America

Switzerland

Germany

2017

2018

2019

World hydraulics component market

Bucher Hydraulics

Market served by Bucher Hydraulics

Source: CETOP Statistics, 2016

Valves19%

(incl. power packs)

Other

11%

Leading manufacturer with wide range of products

Bucher Hydraulics

Competitors

Bucher Hydraulics

Parker (USA)

Eaton (USA)

Rexroth (DE)

Danfoss (DK)

Hydac (DE)

HAWE (DE)

Dana (IT)

Interpump (IT)

Argo-Hytos (DE)

Moog (USA)

Concentric (SE)

Husco (USA)

Sun Hydraulics (USA)

Hydraforce (USA)

Market position

Bucher Hydraulics

Leading international manufacturer of modern hydraulic systems

• − European market leader in mobile and elevator hydraulics

• − World leader in manufacturing hydraulic power packs

• − Strong presence in the USA

• − Expansion in India and China

• − Concentration on customer-specific drive solutions

Bucher Emhart Glass

Glass container manufacturing equipment

Hot End

Gob forming

Batch charger

Glass container manufacturing process

Glass-forming machine

Cold End

Inspection

Record business volumes and operating profit

Bucher Emhart Glass: 2019 at a glance

Continuing trend toward use of glass instead of plastic containers Momentum eased at a very high level towards the end of 2019

Order intake up by 5% and sales by 9%

Order book still well above the already high level of the previous year

Operating profit margin at record high of 13.5%

‒

Production capacity fully utilised

• ‒ Technologically sophisticated project business

• ‒ Efficiency gains in China

• ‒ Positive one-time effects

Net sales by region

Bucher Emhart Glass

CHFm

2015

Other

Asia

Europe

EBIT margin

2016

2017

2018

2019

Number of employees by region

Bucher Emhart Glass

Employees1)

Other

Malaysia

Sweden

China

2015

1)

1) IEnxVporellszseeitdstienllefunl;l-Dtimurechesqcuhivnaitltents; average

2016

2017

2018

2019

Capacity for production of glass containers

Bucher Emhart Glass

Global capacity 2019: 88 million tons

24

Europe

MEA

CIS

China

North AmericaLatin America

APAC

World's leading machinery manufacturer

Bucher Emhart Glass

Competitors	Hot end	Cold end
IS forming machine
Refractory	Forehearth	Feeder & shear	NIS	BIS	AIS	IS	Ware handling	Lehr	Inspection	Palletising	Wrapping
Bucher Emhart Glass
Bottero (IT)
Heye (DE)
Sklostroj (CZ)
BDF (IT)
Competitors (CN)
Tiama (FR)
PSR (UK)

Market position

Bucher Emhart Glass

World's leading supplier of machinery, equipment and services for glass container manufacturing

• − World market leader for glass-forming machinery and services

• − Solid market position in inspection machines

Bucher Specials

Individual businesses

Bucher Vaslin

Winemaking equipment

Bucher Unipektin

Equipment for fruit juice processing, beer filtration and drying

Bucher Landtechnik

Agricultural distributorship in Switzerland

Jetter

Automation solutions

Acquisition-driven sales growth

Bucher Specials: 2019 at a glance

Order intake up by 8% and sales by 2%

• ‒ Bucher Vaslin: Momentum slowed over the course of the year, good sales trend overall

• ‒ Bucher Unipektin: Challenging business environment, renewed rise in demand during second half-year

• ‒ Bucher Landtechnik: Growth in a stagnating market, supported by newly acquired products

‒

Jetter: Sales growth, high demand from glass container industry

Operating profit margin of 6.2% significantly below the previous year's level

• ‒ Challenging environment for Bucher Unipektin

• ‒ Acquisition-related integration costs

• ‒ Higher expenditure for development of new products and solutions

Net sales by region

Bucher Specials

2015

2016

2017

2018

2019

Number of employees by region

Bucher Specials

Employees1)

953

Other

Switzerland

Germany

France

2015

1) Expressed in full-time equivalents; average

2016

2017

2018

2019

Bucher Vaslin

World market leader in wine production

Competitors	Reception	Crushing	Pressing	Fermentation	Filtration	Filling
Bucher Vaslin
Diemme (IT)
Della/Toffola (IT)
Pellenc/Pera (FR)
Willmes (DE)
Gai (IT)

Bucher Unipektin

World market leader in fruit juice production

Competitors	Reception	Milling	Mash heating	Dejuicing	Pasteurisation	Filtration	Adsorption	Evaporation
Bucher Unipektin
Flottweg (DE)
Bauer & Partners (PL)
GEA Group (DE)
Alfa Laval (SE)
Schmidt-Bretten (DE)
Bellmer (DE)
Kaimi (CN)

Bucher Landtechnik

Market leader in Switzerland

Competitors

MowersHay and forage Tedders RakesBalers

Hedge cutters

Feed mixers

Tillage equipment driven non-driven

Seeders drilling precision

Spreaders

Sprayers

Tractors

Harvesters self-propelled

Wheel-loaders

Bucher Landtechnik

Kuhn

Kuhn

Kuhn

Kuhn

Kuhn

Kuhn

Kuhn

Kuhn

Kuhn

Kuhn

Kuhn

CNH

CNH

Weide-mann, Merlo

Matra (John Deere)

GVS (AGCO)

Krone

Krone

Krone

Krone

Rabe

Rabe

Rabe

Rabe

Fendt / MF/ Valtra

Fendt / MF / Krone

Bichon

Serco (Claas)

InTrac

Ott Landmaschinen

Kv

Kv

Kv

Kv

Kv

Amazone Kv

Amazone Kv

Amazone Kv

Amazone Kv

Amazone Rauch / Kv

Amazone Kv

Pöttinger CH

Kv: Kverneland

CNH: Case New Holland MF: Massey Ferguson

Jetter

Market position in Europe

Competitors	Field level	Control level	Diagnostic level	Enterprise level
Industrial automation	Sensors	Actuators (amplifiers, motors, field devices)	Control systems	HMI's and Visualisation	Enterprise and manu-facturing control (MES)
Jetter
Siemens (DE)
Schneider (FR)
Beckhoff (DE)
B&R (AT)
Mobile automation	Sensors	Actuators (amplifiers, motors, field devices)	Control systems	HMI's and Visualisation	Enterprise and manu-facturing control (MES)
Jetter	Cooperation with Bucher Hydraulics
ifm (DE)
Müller Elektronik (DE)
Moba (DE)

Market position

Bucher Specials

World market leader in fruit juice and wine production equipment

• − Bucher Vaslin: world market leader in wine production equipment

• − Bucher Unipektin: world market leader in fruit juice processing equipment

Outlook

Regionally divergent trends

require a geographically adapted strategy

TrendsTopicsSelected projects

Developed countries

Efficiency / sustainability

• ‒ Stricter environmental regulations

• ‒ Innovation

• ‒ Sensors, data, networking

• ‒ Electrification

Emerging markets

Mechanisation / urbanisation

• ‒ Market access

• ‒ Localisation

• ‒ Compliance

‒ Precision farming ‒ "CityCat V20e" ‒ AX hydraulic pumps and motors ‒ "End to End" glass forming	‒ Kuhn Group in the east ‒ Expansion of Bucher Municipal Asia ‒ Selected acquisitions

Resilient agricultural market

Kuhn Group: Outlook for 2020

Low dealer inventories and government support measures for farmers strengthen demand for agricultural machinery

‒

North America: Volatile market environment, agricultural producers temporarily supported by massively increased government payments

‒ Europe: Good demand in dairy and livestock sector, uncertainties in the arable sector due to persistent drought in certain regions and regarding future agricultural policies

‒

Brazil: Very good market situation thanks to the favourable conditions for agricultural producers

Strategic focus

‒

Large machines for large farms

‒ Digital solutions for precision farming and customer retention

‒

Close to customers: Distribution centres in Brazil and RussiaFor 2020: Decline in sales somewhat less than in the first nine months; operating profit margin lower than in the previous year

Further stabilisation in the remaining months

Bucher Municipal: Outlook for 2020

Slight recovery of business performance

‒

Demand overall satisfactory

‒ Further improvement in production conditions and supply chain

Strategic projects

• ‒ "One company - one brand"

• ‒ Launch of new electric compact sweeper "CityCat V20e"

• ‒ Integration of Eurovoirie and Spoutvac

• ‒ Greater efficiency due to modularisation

For 2020: Sales to recover in the remaining months; operating profit margin in the mid-single-digit range

Further stabilisation of hydraulics market

Bucher Hydraulics: Outlook for 2020

Signs of recovery in certain markets

• ‒ Upturn in key segments agricultural machinery and materials handling, construction equipment remains weak

• ‒ Regional differences in development

• ‒ Early measures and flexible cost structure help to adapt to lower capacity utilisation

Investments in the future

• ‒ Development of innovative AX axial piston line, particularly suitable for electrified machines

• ‒ Increasing focus on electrohydraulics

• ‒ Ongoing expansion of the product line in the lower price segment

For 2020: Decline in sales slightly less than in the first nine months; operating profit margin around the double-digit mark despite substantial decline in sales

Further improvement in demand

Bucher Emhart Glass: Outlook for 2020

Slow improvement in demand at a low level

‒

Slight upturn in project activities with some customers

‒ Negotiation of major projects and installation of equipment resumed

‒

China seems to have bottomed outFurther strengthening of market position ‒ Construction of first complete "End to End" production lines ‒ Expansion of services, e.g. "Training on glass"

For 2020: Further recovery of sales for the remainder of the year, but significantly lower year on year; operating profit margin around the double-digit mark

Ongoing challenges in beverage industry

Bucher Specials: Outlook for 2020

Fourth quarter dominated by project postponements and a low order book

• ‒ Bucher Vaslin: Stabilising demand on low level in main markets

• ‒ Bucher Unipektin: Project postponements by customers

• ‒ Bucher Landtechnik: Continuously solid development despite the uncertainties regarding agricultural policy

‒

Jetter: Demand on low level, impacted by the development at Bucher Emhart GlassFor 2020: Marked decline in sales compared to 2019; operating profit margin positive, thanks to various cost-savings initiatives

Slight recovery of business performance

Group: Outlook for 2020

Outlook based on the assumption that all production sites remain operational

‒

Kuhn Group: Decline in sales somewhat less than in the first nine months; operating profit margin lower than in the previous year

• ‒ Bucher Municipal: Sales to recover in the remaining months; operating profit margin in the mid-single-digit range

• ‒ Bucher Hydraulics: Decline in sales slightly less than in the first nine months; operating profit margin around the double-digit mark despite substantial decline in sales

• ‒ Bucher Emhart Glass: Further recovery of sales for the remainder of the year, but significantly lower year on year; operating profit margin around the double-digit mark

• ‒ Bucher Specials: Marked decline in sales compared to 2019; operating profit margin positive, thanks to various cost-savings initiatives

For 2020: Decline in sales slightly less than in first nine months; operating profit margin around that for first half-year

Contact for media T [phone] for investors and financial analysts T [phone]