Consistent implementation of the strategy
With the strategic realignment approved at the end of 2019 and the global coronavirus pandemic and its multi-layered impacts, we faced unprecedented challenges in 2020. We have endeavored to deal with the situation responsibly at all times, first to protect our employees, but also to protect our long-term business relationships. Also thanks to our solid capital position, we were able to respond quickly while continuing to make consistent progress with important projects as well as to develop digital solutions for internal cooperation and interaction with our customers. It is our goal to complete the Group’s transformation with the focus on Bystronic in 2021.
The coronavirus pandemic and its impacts were the dominant themes for long periods, particularly in the first half of the year. Our businesses picked up as expected in the second half of the year compared with the mid-year low. In the fourth quarter, order intake at Bystronic and net revenue at FoamPartner exceeded the figures for the same period in 2019, before the outbreak of the pandemic. The Mammut business unit’s physical store sales were particularly affected by the repeated lockdowns of retail stores. In this environment, however, the expansion of digital sales channels, a strategy initiated some years before, proved successful, with revenue from those channels up 72.7%. On a comparable basis, the Group’s net revenue in 2020 was 10.4% below the previous year. Not least thanks to the measures introduced in March under the heading “Cash, Cost, Complexity” to partially compensate for the economic impacts of the pandemic, the operating result reached CHF 79.7 million, including the divestment gain of CHF 47.4 million from the sales of the Schmid Rhyner business unit at the end of February 2020.
Resignation of the Executive Committee
On November 10, 2020, we were also able to announce that an agreement to sell the FoamPartner business unit had been signed, and we expect the divestment of the Mammut business unit towards the middle of 2021, subject to market conditions. We are therefore on the finishing stretch with the focusing of the business portfolio announced on December 9, 2019, with buyers that will further develop the businesses and lead them into the future. The current structure for managing a Group with very different business activities is no longer required, which is why the Executive Committee will step down at the Annual General Meeting on April 21, 2021. In addition to the undersigned Group CEO Michael Willome, Group CFO Kaspar W. Kelterborn, General Counsel Barbara Senn as well as FoamPartner CEO Dr. Michael Riedel and Mammut CEO Dr. Oliver Pabst will leave the Group during the transformation, the latter two in the context of the planned sale of their business units they manage.
Conzzeta to become Bystronic
Conzzeta will consist of the Bystronic business unit in future. This company has a strong market position globally and thus a promising starting position. Trends in the sheet metal processing market will allow it to establish even greater customer proximity with new technical solutions and services. In this context, Bystronic is pursuing an accelerated growth strategy, which was presented at the virtual Capital Markets Day on November 10, 2020 (see the Strategy section) and which will structurally improve Conzzeta’s growth and margin potential to a significant extent. With the new focus, a change of name also seems appropriate, which is why the agenda for the upcoming Annual General Meeting will include a motion to change the name from Conzzeta AG to Bystronic AG. The aim of this is to position Bystronic as a modern, sustainably managed and future-oriented company.
New management team
During the 2020 transition year, Bystronic has systematically prepared to implement its “Strategy 2025”. This includes the development of a new management structure with a regional focus. Preparations were also made to strengthen certain management processes, taking into account the experience available at Conzzeta. Given the rapid progress of the Group’s multi-layered transformation, the Board of Directors has appointed Bystronic’s Executive Committee. In addition to Alex Waser as CEO, it comprises Beat Neukom, CFO (as of May 2021), Johan Elster, President Region EMEA, Robert St. Aubin, President Region Americas, Norbert Seo, President Region APAC, Dr. Song You, President Region China, and Eamon Doherty, Chief Service Officer, and will bear operational responsibility for the Group from April 22, 2021.
The Board of Directors would like to thank the departing members of the Executive Committee for their influential work, especially also during the challenging Group transformation with the successful divestment of several business units. It is mainly to their credit that, over the last few years, measures were developed and consistently implemented to strengthen the earnings potential and operational performance in all businesses while delivering above-average growth. The Board of Directors and Executive Committee would also like to thank all employees for their efforts in the last financial year. The successful implementation of the transformation was an additional strain for employees in an already challenging environment, and despite the associated uncertainties about their professional future, they handled it with a professional attitude. We wish all those involved every success for the future, particularly, of course, the new Bystronic, its management team and its over 3,000 employees.
Conzzeta is within reach of completing its strategic transformation. In addition to the change of name, the Board of Directors also proposes to the Annual General Meeting of April 21, 2021, the distribution of a dividend of CHF 124.2 million. The proposal allows shareholders to participate in the excess liquidity of the company, as announced in December 2019 in context of the strategic transformation. Bystronic, however, shall remain well capitalized for the implementation of its “Strategy 2025” in order to be able to act flexibly as a growth-oriented company in a market of the future.
All of Conzzeta’s business units have started 2021 with positive momentum, while the business environment remains challenging due to the tense pandemic situation and ongoing macroeconomic uncertainties. For the continued business of Bystronic, a return to growth is expected in 2021 in line with the targets communicated at the Capital Markets Day on November 10, 2020, with revenue growth of 5% to 8% as well an EBIT margin of around 8%, which is still at the lower end of the target range.
Zurich, March 16, 2021
Chairman of the Board