Bucher Industries sustains high level of order intake

Group

Varying economic dynamics
The Group was able to maintain the gratifying order situation. Demand for specialised agricultural machinery was particularly lively. By contrast, the sharp upturn in the market for hydraulic systems and glass forming machinery flattened out as expected in the third quarter. Demand was subdued in the difficult public sector, which is beset by a high level of indebtedness. The failure to resolve the debt crisis affecting the Western industrial nations continued to unsettle the financial markets, fuelling doubts about the sustainability of the recovery. The strength of the Swiss franc and Swedish crown resulted in substantial negative currency effects in the double-digit percentage range.

Sustained high level of order intake
All divisions of Bucher Industries played a part in the positive business performance in the first nine months of 2011, although the contribution made by agricultural machinery and glass forming machinery was disproportionately high. The Group was able to more than offset the negative impact of the currency fluctuations and increase sales and order intake by 12% and 17% respectively. Overall, capacity utilization at the Group's production sites was at a high level and in some cases reached the limits of capacity. On 26 October 2011, the repurchase volume for the share buy-back programme on the second trading line at the SIX Swiss Exchange amounted to 207 700 shares, or 2% of the share capital.

Kuhn Group

Favourable conditions in the agricultural sector
In the principal markets of Western Europe and North America, prices for agricultural products remained at a high level, encouraging farmers to invest in machinery. The high level of demand in Eastern Europe was sustained. Rainfall in July and August mitigated the effects of the springtime drought in Western Europe. In the USA, market development showed regional variations. The southern states suffered from an extreme drought, while the north continued to enjoy excellent climatic conditions. Kuhn Krause, Inc., acquired in May 2011, faced a particular challenge as a result of the high level of demand, which stretched plant capacity to the limit. In this favourable environment, Kuhn Group achieved a substantial increase in sales and order intake.

Bucher Municipal


Stable demand
The European market for municipal vehicles remained surprisingly stable in the reporting period, despite the high level of public-sector indebtedness. In local currencies, the division was able to increase sales and order intake and gain in market share. The result was positively influenced above all by the buoyant market for spreaders and snowploughs for winter maintenance and the high level of demand for municipal refuse collection vehicles in Australia. The Swiss plant for municipal vehicles was hard hit by the strength of the Swiss franc, increasing the working week from 40 to 42.5 hours in response.

Bucher Hydraulics

Momentum sustained
The positive run of business continued, though as expected at a lower level, which produced high rates of growth in local markets. In Western Europe and the USA, the order intake, sales and order book were well above the same period a year ago, particularly in construction and agricultural machinery. The focus on customer-specific applications, coupled with great reliability and innovation secured further new projects from major customers. The two production plants in Switzerland were heavily affected by the strength of the Swiss franc, which prompted an increase in the working week from 40 to 42.5 hours.

Emhart Glass

Stabilisation at a high level
Following the ten-year low at the end of 2010, Emhart Glass took full advantage of the sharp upturn in demand. In the third quarter, the demand for machinery for the glass container industry stabilized at a high level. New business with glass forming and inspection machinery, as well as the spare parts and service business, contributed to the positive order situation in the reporting period. Capacity was fully utilized. Following the acquisition of a 63% holding in Chinese market leader Sanjin in June 2011, collaboration between the two companies is progressing well and joint project teams have started work. Demand in China is still high, enabling Sanjin to return double-digit growth figures. The expansion of the plant in Malaysia is progressing according to plan and will reduce the division's dependence on the strong Swedish crown.

Bucher Specials

Differing market trends
The individual businesses consolidated under Bucher Specials presented a varied pattern of development. The winemaking machinery and equipment business was held back by the temporary halt to investment subsidies in France, the early grape harvest and fierce competition for project orders. Fruit juice processing, by contrast, recovered quickly from the cyclical low of the previous year and more than compensated for the decline in winemaking systems. Demand at the Swiss distributorship for tractors and agricultural machinery remained stable. Overall, Bucher Specials generated an increase in sales and order intake.

Outlook 2011
In view of the prevailing uncertainties in the financial markets arising from the unresolved debt crisis, any forecasts about worldwide economic developments must be tempered with caution. Thanks to its strong market positions and high level of competitive-ness, Bucher Industries nevertheless remains cautiously confident. We expect the business environment in most of our markets to remain favourable until the end of the year. For the 2011 business year as a whole, we anticipate sales growth on a level similar to the first nine months and growth in operating profit and profit for the year in line with the first half of 2011.



Contact
Bucher Management AG Flughafenstrasse 90 8058 Zurich Tel. 043 815 80 80 Fax 043 815 80 81 info@bucherind.com

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