Adjustment of Expectations for Full Year 2019
Bobst Group SA expects to achieve sales of CHF 737 million in the first half-year of 2019 compared to CHF 763 million in the same period in 2018. The Group expects to reach an operating result (EBIT) of around CHF 15 million (CHF 35 million in 2018) and a net result of around CHF 7 million (CHF 25 million in 2018) for the first six months of the year 2019.
The main reasons for the reduction in operating result (EBIT) are slightly lower sales, a quite unfavourable product mix, the increased pressure on prices in order to defend market share, lower utilisation of the industrial capacities due to lower order intake, as well as foreseen increased costs associated with the digital initiatives launched by the Group. The decrease in net result comes from a lower operating result (EBIT) and from losses, on which no deferred tax assets are recognised since year end 2018.
Uncertainty has increased in relevant markets due to the geopolitical instabilities and the trade war between the US and China. In addition to these negative factors, our industry is also impacted by the increased awareness of consumers and brand owners that more sustainable packaging solutions must be found. This will bring new opportunities for Bobst Group in the mid to long term, but it slows down the current investment by customers. Accelerated consolidation in our industry and new entrants are leading to more competition and price pressure that affects both machine Business Units.
At current exchange rates, the Group expects 2019 full year sales on a similar level as in the previous year (2018 CHF 1 635 million). The guidance for the 2019 full year operating result (EBIT) margin, which was in the range of 6% to 7%, is less than 5%. The reduction in operating result (EBIT) margin is mainly due to increased price pressure in order to defend market share, a lower utilisation of the industrial capacities due to lower orders and the planned reduction of inventories.