The Group started 2019 with a similar machine backlog to the year before. 2019 order entries were 8% lower as in the year before, with sheetfed at -7%, web-fed at -22% and services at the same level as the year before. Order entries improved to a good level in the last three months of the year. Compared to the previous year, order entries decreased, mainly in Europe and the Americas, and slightly increased in Asia and Africa. The Group finished the reporting year with a significantly lower machine backlog than in 2018 and a stable service backlog.
For the full year 2019, consolidated sales increased by CHF 2-million, or 0.1%, to CHF 1,636-million. Adjusted for currency effects, organic sales were up CHF 33-million, or 2.0%, in 2019. Exchange rate variances decreased sales by CHF 31-million, or 1.9%.
Sales reached CHF 899-million in the second half of 2019 compared to CHF 737-million in the first six months of the year, and to CHF 872-million in the second semester of 2018. Sales recognised in the second half of 2019 are at the highest level achieved in a semester since the all-time high recorded in the second half of 2007.
Sales of sheetfed products increased by 0.7% to CHF 810 million. The demand for products for the corrugated industry was slightly stronger than for products for the folding carton industry. Sales of web-fed products decreased by 1.6% reaching CHF 338-million for the year 2019. The reduction is mainly due to lower sales of coating equipment which could not be fully compensated by higher sales of flexo printing equipment. Sales of services and spare parts increased by 0.4% to CHF 488-million.
The operating result (EBIT) was CHF 81-million, or 5.0%, of sales compared to CHF 87-million, or 5.3%, of sales in 2018. The operating result (EBIT) achieved in the second half of the year was on a good level but could not compensate for the negative impact of the unfavourable product mix, lower production workload and increased pressure on margins of the first half of 2019. All three Business Units are also impacted by the increased costs associated with the ramp-up of the Group’s digital activities (Mouvent, BBS, IoT).
The net result increased to CHF 53-million compared to CHF 50-million in 2018. The lower operating result (EBIT) was more than compensated for by lower financial costs and lower income taxes. Lower income taxes are mainly due to a reduction of losses in entities, where no deferred tax assets are recognised in 2019.
A significant reduction of inventories contributed to a cash inflow from operating activities of CHF 55-million compared to the negative cash flow from operating activities of CHF 46-million in 2018. The net debt position increased to CHF 59-million compared to CHF 21-million in 2018. The increase was mainly due to capital expenditures of CHF 56-million and the purchase of non-controlling interests in Bobst Firenze and Bobst Istanbul. The return on capital employed (ROCE) decreased to 12.9% in the reporting year compared to 14.2% in 2018. The equity ratio increased to 36.7% from 32.2% in the previous year, mainly due to the reimbursement of the CHF 110-million bond maturing in February of the reporting year.
Bobst follows a long-term strategy focusing on four strategic objectives — innovation, operational excellence, people development and growth. Delivering these objectives involves a range of initiatives which cover, among others, the quality of our products and services, optimising the organisation, focusing on customers, developing new products and digitalisation.
Sustainability continues to grow in importance and is now fully integrated, from machine design to substrate processing. Leading the way with industrial solutions, key industry leaders have been jointly developing new recyclable plastic materials and pouches, with respect for the global environment. Bobst is investing heavily with brand owners in the search for environmentally friendly packaging and label solutions.
Digitalisation supports and spurs Group transformation through various initiatives, including a common Group processes platform, IoT and Mouvent. Digital printing will continue to ramp up equipment for labels, film and folding carton applications, ensuring complete solutions and eco-friendly water-based ink (made by Mouvent). Furthermore, the unmet needs around workflow and connectivity are on the table, and solutions — largely linked to the digitalisation of the process — will form a major element of discussions at Drupa 2020.