| >> |
Letter from the Chairman
|
| |
 The year 2002 was characterized by a very difficult economic
environment, having an especially harsh impact on suppliers of
investment goods. Certainly, the overall mood in the world economy
was strongly influenced by both economic and geopolitical
uncertainties. Due to these uncertainties, it was very difficult
for our customers to make investment decisions having medium and
long-term effects.
Despite both the unfavorable environment and the very negative
exchange rate fluctuations, Bobst Group was able to increase its
turnover volume. In addition, we have clearly increased our market
share in this, in 2002, declining market.
The strategy decided by the Board of Directors a few years ago has
proven to be successful. We continue to put into practice our «
three by three» vision which is to become the leading supplier of
equipment and services in the three packaging areas: folding
carton, corrugated board and flexible materials, in the three large
world regions which are Europe, the Americas and Asia. In support
of this vision, we are currently actively involved in negotiations
concerning the Metso Converting acquisition, which will
significantly increase our flexible materials packaging activity.
In the course of the past year, the Board of Directors reviewed the
new directives issued by the Swiss Stock
Exchange concerning Corporate Governance. For many years already,
Bobst Group has operated under these rules. The Board of Directors
has decided to itself assume the function and responsibility of an
Audit Committee. The Compensation Committee will continue to
function as it has in previous years.
The current appointment term of Messrs. Reto Domeniconi, Jean-Luc
Laloë and Hervé Ruttimann ends at this year Shareholders’ Meeting.
However, we are pleased that all three have made themselves
available for a new term. Mr. Pierre Jolliet has decided to resign
at the Shareholders’ Meeting 2003. We thank him for his valuable
contribution during his 10 years of service as a member of the
Board.
A review of potential candidates proposed by JBF Finance SA, our
largest shareholder, has resulted in the Board’s recommendation for
the election of Messrs. Charles Gebhard and Thibault de
Kalbermatten. We will present the credentials of these two
gentlemen more extensively in our upcoming Shareholders’ Meeting.
As of January 1, 2002, the Group Executive Committee is operating
under its new organizational struc-ture. Since that time we have
already seen positive signs through even further improved customer
orientation. The Management and the employees of the Group have
adapted very quickly to this organization. We are convinced that
this new structure will help us achieve our goals and facilitate
the successful future of the Group.
In the year 2002, our share price outperformed both the Swiss
Market Index (SMI) and the Swiss Performance Index (SPI) for
machinery. This very positive evolution is certainly due to the
unique market position Bobst Group has built up over many years. In
addition, its role as a supplier of equipment and services to the
packaging industry, which in turn is directly linked to the
evolution of volumes of consumer goods (many of them in defensive
sectors), allows our Group to be less cyclical than typical
equipment suppliers, such as the machine tool industry.
Still, the total market capitalization is below the Group’s equity
and does not reflect its real value. We believe the overall stock
market situation is a major reason for this. This is also why our
share price came under pressure at the beginning of 2003. It is
well known that many insurance companies and pension funds sold
large portions of their share holdings, including, of course, some
of our shares.
The dividend we propose at the Shareholders’ meeting is in line
with our policy of payout ratio between 40 and 50% of net profit.
This payout therefore brings again a very interesting yield to our
shareholders.
Finally, I would like to thank the Management as well as each
employee of the Group for their dedication and hard work which are
necessary, especially in these difficult times.
Marc C. Cappis
Chairman of the board
|
| >> |
Letter from the CEO
|
| |
 The slight decrease (2.22%) in turnover for
2002, compared to the previous year, is essentially due to the US
Dollar evolution compared to the Euro and the Swiss Franc. Without
this, the Real volume has increased by 1.65%. We were thus able to
surpass our management objective of turnover stability. This was
achieved despite the fact that in 2002, for the first time in many
years, our markets experienced low
economic cycles simultaneously in our three major market zones i.e.
Europe, the Americas and Asia. Typically, in earlier years, if we
experienced low activity in one zone, it was partially compensated
by healthier conditions in the other zones.
In most product lines of our Group, market shares increased. This
is the result of a very active market organization worldwide and,
of course, a certain price aggressiveness in very specific
projects. Based on our information, we know that our competition
has suffered more than we have.
The EBITDA (Earnings before Interests, Taxes, Depreciation and
Amortization) reached a new all time record level, despite
significant market pressures in this unfavorable economic
environment. In April 2002, we forecasted a decline in net profit
due to higher amortizations and interest costs. In addition, the
exchange rate situation has accentuated the trend further and has
pushed the net profit for 2002 below our management target. This,
despite the important efforts made by our employees at all levels
in the Group. We thank them here sincerely for their commitment to
our success.
The implementation of the new organizational structure by business
areas, market organization, supply, production and logistics, and
support functions was a major objective set for us during 2002. The
concept of this organization confirms to be what our Group will
need in the future years. Dedicated customers focus and strong
delegation of responsibilities have already brought clear signs of
success. 2003 will see
the completion of this important change.
2002 has seen the end of several larger investment projects.
Shanghai in China, Itatiba in Brazil, Pune in India, Mex near
Lausanne in Switzerland and Bron near Lyon in France have completed
their expansion projects. The Group is now entering a period of
normal levels of capital expenditures which we project to be in the
approximate range of 45 to 55 million Swiss Francs per year. This
will include major IT projects
due to obsolescence.
We will however intensively pursue investments in the new product
and service development. This dynamic innovation policy has clearly
proven to be necessary to prepare the Group for the future and to
differentiate us from our competition.
As we write these lines, we are pursuing the process for the
potential acquisition of the Metso Converting activities. This is
one of our alternatives to significantly increase our presence in
the fast growing flexible materials market. Due Diligence is under
way and negotiations have started. The Metso Converting 2002
results, clearly below expectations, will have to be taken into
account. The strategic fit with Metso Converting, however, is and
remains very interesting.
The consolidation is continuing in the equipment suppliers
industry. Bobst Group, through its company Martin in Lyon, France,
has acquired Rapidex SA in Angers, France. This small acquisition
rounds off very nicely the gamut of products we are offering to the
Corrugated Board industry. Other acquisitions took place in our
industries. For instance, a large German Offset printing press
manufacturer finally purchased two product lines competing with us.
As these were for sale for many years, it did not come to a
surprise to us. We expect that the coming years will witness
further changes in the landscape of suppliers to the industries we
serve.
Forecasting an evolution of our activities for 2003 is very
difficult if not impossible. Too many outside factors could
drastically influence our development during this year. Despite
this, the management has again set itself the ambitious goal to
reach similar turnover as in 2002 as well as improving
profitability at the same time.
Andreas Koopmann
Chief Executive Officer
|
| |
Click
here to download Reports
Relations
with medias: +41 (21) 621 2622
Relations with analysts and investors: +41 (21) 621 2560
or mail to Joseph
Santoro
|
|
|
