Third quarter 2021: Strong increase in demand and order book

Group

Developments in Bucher Industries’ markets were extremely positive in the first nine months of 2021. Order intake rose markedly in all five divisions, largely as a result of the continuing economic recovery but also due to catch-up effects and precautionary orders. The strong momentum gave rise to bottlenecks and delays in the supply chain and logistics as well as corresponding increases in material and transport costs. The divisions were accordingly faced with challenges in production that intensified over the course of the reporting period. Recruiting qualified employees also became increasingly difficult. The divisions enlarged their workforce primarily by means of temporary workers yet were unable to increase capacities to the desired extent, particularly in the USA. Nevertheless, group sales were up significantly compared to the prior-year period.
 

Kuhn Group

Significant sales growth

The positive trend of recent months continued in the agricultural machinery markets. Demand for Kuhn Group products was exceptionally strong due to various government support programmes, good prices for agricultural products and a high demand for them especially from China and overall favourable weather conditions. In addition, dealers’ low inventory levels prompted larger orders and early order placement. Following several difficult years, North America experienced a substantial upturn. In Europe, market conditions were at a good level in both the arable sector and in the dairy and livestock industry. And in Brazil, good harvests and high crop prices helped agricultural producers achieve record margins, which kept them extremely eager to invest. In this very dynamic environment, Kuhn Group saw order intake rise by nearly half. However, the challenges in procurement and logistics as well as the shortage of workers, particularly in North America, became more acute and had consequences for production. Sales nevertheless grew markedly year on year and even exceeded the 2019 level.
 

Bucher Municipal

Record order intake

Demand for Bucher Municipal products was very high. Order intake rose markedly, with all product groups except refuse collection vehicles contributing. Demand was particularly strong for truck-mounted sweepers, winter maintenance equipment, and the new series of “CityCat V20” compact sweepers. The order book grew to a record level. The division’s production was increasingly hampered by problems in the supply chain. Procuring chassis, hydraulic components and batteries was very difficult. The COVID-19 measures also continued to pose a challenge, particularly in Australia. Nevertheless, sales were up substantially over the hard-hit prior-year period and ended just slightly below the 2019 level.
 

Bucher Hydraulics

Order intake and order book at record levels

The extraordinary momentum in the hydraulics markets continued in the third quarter. Demand for Bucher Hydraulics components and solutions was extremely high in all key regions and segments. This trend was reinforced by the fact that customers were placing precautionary orders due to the general increase in delivery times. The division’s order intake in the first nine months of 2021 increased by more than half year on year and is at a record level. The order book almost tripled. Adjusting production capacities to the required level was very difficult. Nevertheless, sales rose markedly over the prior-year period and were on a par with the record level of 2019. The integration of the mobile electric drive technology business, which Bucher Hydraulics acquired from Lenze Schmidhauser in Romanshorn, Switzerland, in early July, is proceeding according to plan.
 

Bucher Emhart Glass

Very high demand

Demand for glass containers rose strongly again thanks to the easing of restrictions in the gastronomic sector and at major events. Customers of Bucher Emhart Glass approved projects and invested in modernising and expanding their machinery as well as in completely new plant. The division’s order intake rose by well over half compared to the very low level of the previous year and almost reached the high level of 2019. There was a significant increase in orders for glass-forming machinery in particular. Sales recovered with a delay but reached the level of the prior-year period again by the end of the first nine months of the year. The division achieved this despite persistent challenges in the supply chain and logistics as well as government-imposed COVID-19 restrictions in Malaysia.
 

Bucher Specials

Demand continues to recover

Overall, the business units of Bucher Specials developed positively during the first nine months of the year, thanks in part to the easing of pandemic-related restrictions in the gastronomic sector and at major events in many regions of the world. Bucher Vaslin reported pleasing demand, partially due to catch-up effects. At Bucher Unipektin, order intake rose significantly from a very low level. The performance of the two acquisitions made in the past two years in the areas of processing equipment for citrus fruits and vacuum belt drying technology was positive. Bucher Landtechnik surpassed the good business performance seen in the same period of the previous year, despite manufacturers’ delivery problems. At Jetter, the recovery in the glass industry was reflected in a significant increase in orders for industrial automation. Overall, order intake at Bucher Specials rose markedly. All four business units faced challenges in the supply chain. Consequently, sales growth was not as strong, but sales are back at the 2019 level.
 

Outlook for 2021

The Group expects the economic momentum to continue throughout the rest of the year. However, the difficulties in procurement and logistics are likely to intensify. Correspondingly, material and transport costs will continue to rise, which can be compensated to a large extent with price increases. The growing shortage of skilled labour will also make it more difficult to boost capacities. The restrictions caused by the pandemic are likely to remain in place on the whole. Kuhn Group anticipates a positive development in its most important markets. The challenges in production and the supply chain are expected to increase and lead to higher costs throughout the rest of the year. The division expects a marked rise in sales for 2021. The operating profit margin is also likely to be considerably higher and reach the double-digit level thanks to good capacity utilisation and price increases. Bucher Municipal anticipates good demand and expects sales to increase. The full-year consolidation of Spoutvac, the Australian manufacturer of sewer cleaning vehicles, as well as the newly launched electrified products, particularly in the sweeper and winter maintenance equipment businesses, will also make a contribution. The operating profit margin will be impacted by supply chain challenges but should still increase due to the better utilisation of production capacities and efficiency gains. Bucher Hydraulics expects the dynamic momentum in the hydraulics markets to continue. Capacity utilisation will remain at a high level. For 2021, the division anticipates marked growth in sales and the operating profit margin, despite the challenges it faces in production. Bucher Emhart Glass expects demand to continue to rise and production capacity utilisation to be good, as was already the case in the fourth quarter of the previous year. Accordingly, the division expects full-year sales to be in line with 2020 overall. The operating profit margin is likely to be significantly higher thanks to a persistently low cost base and the product mix. At Bucher Specials, ongoing restrictions will probably continue to cause a certain measure of restraint in the project business; however, uncertainties should diminish. The division expects significantly higher sales and an operating profit margin in the mid-to-high single-digit range thanks to the cost-savings measures put in place. Overall, the Group expects a substantial increase in sales, operating profit margin and profit for the year. The operating profit margin is likely to reach the target of 10%.