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ANNUAL REPORT 2017

DRIVING
THE FUTURE

Innovations for a better world.


WE DRIVE BÜHLER IN AUTOMOTIVE
Most people are aware of Bühler’s position in the food

THE FUTURE and feed industry. But did you know that over the
years, our Advanced Materials (AM) segment has
become a relevant partner of the automotive industry?
Around 60% of the AM business is associated with
this industry. 2017 has been a very successful year
for AM – which is why we’ve made it the focus of this
Annual Report.

Rearview Lubricants Engine block Head-up Capacitor LED and laser


camera Trias Carat 350 Compact display Leybold Optics CAP light systems
SYRUSpro three-roll mill die-casting machine SYRUSpro 1500 vacuum coater SYRUSpro
vacuum coater vacuum coater vacuum coater

Taillight reflector Shock tower Steering column


AluMet Carat 280 Compact column
Ecoline 84
metallizer die-casting machine die-casting
Ecoline 84 machine

These are just a few examples of Bühler’s AM solutions for the automotive industry.
THE BÜHLER GROUP
Every day, billions of people come into contact with
Bühler process technologies to cover their basic needs
for food and mobility. We develop innovations for a bet-
ter world with a focus on sustainability, health, safety,
and energy efficiency.

GRAINS & FOOD


Bühler is an industrial process and technologies pro-
vider for the food and feed manufacturing industries.
We significantly contribute to safely feeding the world’s
population as a front-runner in the global production
and processing of wheat, maize, rice, pasta, cereals,
cocoa, and coffee. Our Grains & Food (GF) solutions
and technologies help manufacturers make safe and
healthy finished products for human and animal nutri-
tion. Learn more about where you will find our GF
technologies on pages 32−33.

ADVANCED MATERIALS
Bühler is a solution provider of die-casting, wet-
grinding, and thin-film technologies for high-volume
application areas, including the automotive industry,
precision optics, opthalmics, electronics, paints,
packaging, and inks. Our Advanced Materials (AM)
solutions and technologies help manufacturers pro-
duce higher-efficiency vehicles, keep foods safe,
give prescription-glasses wearers improved eyesight,
advance telecommunications, and make buildings
more economical. Learn more about where you will
find our AM technologies on pages 34−35.
2

Calvin Grieder, Chairman, and Stefan Scheiber, CEO.


STATEMENT
Bühler Annual Report 2017
3

GROWTH
THROUGH VALUES

Dear colleagues, customers, and business partners,

Bühler developed favorably in 2017 thanks to substantial organic growth. Order intake
increased by 10% to CHF 2.80 billion and turnover rose by 9% to CHF 2.67 billion.

For us, growth is not an end in itself. Instead, we view it as a genuine sign that our
customers and the markets have responded positively to our mission of creating sus-
tainable value. We have focused our efforts on achieving 30% less energy and waste
in our customers’ process solutions – this is the target we set ourselves for 2020.
We are fully aware that we have taken on a significant challenge.

With the introduction of numerous new technologies and solutions in 2017, we have
moved closer to achieving these ambitious objectives. We have brought more than
50 new products to market that use less energy, reduce waste, and bring about
greater yield and quality. The Bühler Networking Days held at Interpack in 2017 also
centered on our overarching drive for innovation and sustainability.

An important strategic step in 2017 was the announcement of the acquisition of the
Austrian Haas Group, the world market leader for biscuit, wafer, and waffle production
systems. The integration of Haas will enable us to offer customers new, comprehen-
sive solutions; and it will enable Bühler to secure a leading position in the attractive
consumer food business.

Serving our customers every day in a better way has also driven our efforts to expand
our service network and build our digital services platform. We have installed more
than 100 service stations around the world, and our digital myBühler portal is already
used by 20% of our customers − a significant step in real-time and proactive service.

Alongside other significant strategic developments – such as the start of construc-


tion of the CUBIC innovation campus at the Uzwil headquarters and the moderniza-
tion of our Swiss sites – keeping quality and the best delivery service in our hands
has driven us to invest and expand our global local manufacturing sites as well. We
built a new 200,000-square-meter site in China. In 2017, Bühler also took the plunge
into the capital market for the first time in its 150-year history. We raised new capital
with a corporate bond to increase our leeway to develop further projects. We are
moving into 2018 with optimism and the objective of continuing our sustainable and
profitable growth.

We would like to express our sincere gratitude to our customers, partners, employees
and their families, and our owners. Our success is based on their trust and commit-
ment. We look forward to continuing this close and fruitful cooperation in the future.

Sincerely,

Calvin Grieder Stefan Scheiber


Chairman of the Board Chief Executive Officer
4
CONTENTS
Bühler Annual Report 2017
5

CONTENTS

Statement of the Chairman and the CEO 2


Highlights 2017 6
Interview with CEO Stefan Scheiber 10

GROUP REPORT 17

OUR BUSINESS 31
Bühler in your life 36

THE FUTURE
OF MOBILITY 51

PARTNERSHIP
WITH CUSTOMERS 65
Lishen, China 66
City Group and Akij, Bangladesh 72
Africa Improved Foods, Rwanda 80
ZEISS Vision Care, Germany 88

SUSTAINABILITY 95

GOVERNANCE 107

FINANCIAL REPORT 129


6

HIGHLIGHTS
OF THE YEAR 2017
MODERNIZATION 2017 NETWORKING DAYS BEST SUPPLIER AWARD
OF SWISS SITES @ INTERPACK FOR SLURRY SOLUTION
At the Interpack trade show in Düsseldorf,
Germany, Bühler applies its Networking Days
concept to create an industry platform for the
development of sustainable solutions.

20 inno- 6 pro-
vations cesses
are unveiled are shown
at the event. at the event. With the Chinese battery
manufacturer Lishen, Bühler
developed a new process for
producing battery slurry – the
Bühler begins modernizing its core component of these
Swiss sites, with a focus on energy storage devices. With
manufacturing and logistics. the signing of the first large-
scale contracts in 2016, Bühler
250 guests 1.1 m reached achieved a market breakthrough. In July 2017,
attend the special Bühler’s social media Lishen presents Bühler with its award for Best
VIP event. activities are popular. Supplier for its performance.

January February March April May June

BÜHLER INSECT TECHNOLOGY SOLUTIONS ANNIVERSARY:


IS FOUNDED 70 YEARS OF SORTEX
Bühler establishes the joint venture, ing of insects. In mid-year, BITS was 70 years ago, Sortex invented the optical sorting
Bühler Insect Technology Solutions (BITS), awarded its first contract for building a process. Today it is one of the leading providers
together with the technology start-up factory. It is scheduled to go onstream in of such systems. Optical sorting is an important
Protix to drive the industrial process- the second half of 2018. process stage in ensuring food safety and in
recycling applications.
Eggs
Everything that can be sorted with
Sortex technologies:
Adult black
soldier fly
Food Rearing Larvae
losses Agricultural Coffee
Co
offee
fee Confe
Con
Confec-
fec- Dehydrated
up to 80% nutrient recovery
seeds tionery
ry foods
and waste
1.3 billion
t/year
300 million t/year of nutrients
could be recovered Fruits
Fruiits Grain Nuts Oil
Ol
seeds
see
eds
Rearing residue Larvae
processing processing

Fertilizer for Lipids and protein meal Pulses


s Plastics Rice Spices
S
plant nutrition for animal nutrition

Snacks Soup Tea Vegetables


pasta
HIGHLIGHTS
Bühler Annual Report 2017
7

BAKERY INNOVATION HAAS AND BÜHLER: TOGETHER THEY WILL


CENTER REOPENS BECOME NO. 1 IN CONSUMER FOODS
The new Bakery Inno-
vation Center in Uzwil
opens. Bühler customers
can now test product
formulas and processes,
and develop solutions
to consistently create Bühler announces that Haas, the Austrian 2018. By teaming up with Haas, Bühler is in
top-quality products market leader in the field of wafers, biscuits, a position to develop and market complete
in this 1,000-square- and confectionery production equipment, is solutions for making wafers, cakes, choco-
meter facility. joining the Bühler family effective January late confectionery, and bakery products.

10 YEARS OF APPREN- YOUNG DELEGATES FIRST CAPITAL


TICES ABROAD VISIT BOGOTÁ MARKET ENTRY
Bühler celebrates 10 years of Bühler sends seven delegates to For the first time in its corporate
sending its apprentices in Switzerland One Young World. This annual history, Bühler enters the capital
abroad for a portion of their training. conference brings together the market by launching a
world’s most talented young leaders, corporate bond.
Apprenticeship locations abroad encouraging them to bring about
Braunschweig positive change.
London
Changzhou
Minneapolis Wuxi CHF 420 m
Bangalore Through the issue of a dual-tranche
bond, Bühler will enhance its invest-
Johannes-
Joinville burg ment and acquisitions potential.

July August September October November December

CONSTRUCTING EMBRACING GROWTH BÜHLER BUILDS


THE CUBIC DIGITALIZATION IN ASIA HUGE BAKERY
Building work on Bühler founds a new business Bühler opens a new factory Bühler builds one of the
the new CUBIC area: Digital Technologies. in Changzhou, China. This world’s largest bakeries
innovation campus Its purpose is to develop production, research, and de- in Wittenberg, Germany.
begins. This project new digital services and velopment center specializes The Lieken bakery has now
is the expression of business models to keep our in processing equipment and started production.
Bühler’s commit- customers at the forefront of plants for animal and aquatic
ment to developing digitalization. One of the first feed and pet food. It will
innovations for a cloud services it launched is produce more than 10,000
better world. The TotalSense, which enables machines annually.
innovation center rice processors to check the
is connected to quality of their rice quickly, 200,100 m2 683,520 kg
an application easily, and cost-efficiently. is the total size of dough per day
center to bring of the is the maximum
the worlds of premises. total capacity of the bakery.
engineering
and business 9–10 km of piping
together.
are installed by Bühler
for liquids handling.

4.5 km of
pneumatic
conveying lines
are incorporated for
dry materials handling.

1.2 km of
aspiration lines
are installed.
8

HAAS ACQUISITION
One and one makes three
For Bühler, the strategic acquisition
of Haas (effective January 2018) is a
milestone in the development of its
consumer food operations. Bühler is
the market leader for manufacturing
chocolate mass and finished products
along the entire value chain. Haas is
the undisputed leader in the produc-
tion and manufacturing of equipment
for wafers, waffles, biscuits, and con-
fectionery – a very attractive market
that Bühler is now part of as a result
of this acquisition.

With this combination, Bühler can offer


customers in the consumer food in-
dustry new opportunities for innovation
and growth. We can now also provide
our milling customers with additional
opportunities for diversification. Both
family-owned companies have long
histories, a reputation for delivering
quality, and corporate cultures based
on trust and a commitment to sus-
tainability – an ideal starting point for
successful cooperation and integration.
HIGHLIGHTS
Bühler Annual Report 2017
9

Bühler will open up its global network of around 100 service


centers, application centers, and innovation partnerships for
Haas customers and develop and provide complete solu-
tions for the production of wafers, waffles, biscuits, and
confectionery with chocolate and baked goods. Thanks
to Bühler’s strong presence in Asia, new opportunities are
opening up for waffle and biscuit products in this important
growth market.

Like Bühler, Haas is a family-owned business with over


100 years of tradition. Founded in Vienna by a locksmith,
Haas began producing wafer machines in the middle of
the century. Over the decades, the company became a
world leader in production equipment for wafers, waffles,
hard and soft biscuits, ice-cream cones, cakes, and baked
goods. With around 1,750 employees worldwide, Haas
generates a turnover of EUR 300 million and is active in
six countries with its own production facilities.
10
INTERVIEW
Bühler Annual Report 2017
11

“WE’VE MADE AN
IMPRESSIVE LEAP”
CEO Stefan Scheiber, in an inter-
view with Head of Communications,
Burkhard Böndel, explains how
Bühler combines customer success
and sustainability, the role of digital-
ization – and why a strong corpo-
rate culture fuels growth.

Mr. Scheiber, a lot is happening at Bühler: You


acquired the Austrian wafer, waffle, and biscuit
specialist Haas, you are building an innovation
center in Uzwil, and you have successfully
entered the electric vehicle battery market.
That isn’t everything by a long shot. The list goes on. The first
orders for insect processing have come in; we’ve launched
the first digital service for the quality assessment of rice;
we’ve opened a new factory in Changzhou, China; we are
equipping our production with Industry 4.0 methods; and
we have aligned our Grains & Food operations more closely
with market needs.

Transformations like you’ve described don’t


happen overnight.
The foundations for it were laid years ago, and in many
cases we are now reaping the benefits. Take batteries, for
example. Five years ago, we began developing a completely
unique continuous mixing process to produce battery slurry
with our customers. The pilot line was launched in 2016, and
in 2017 Lishen opened its new gigafactory in Suzhou using
our new process.

How did you bring this change about?


It’s due to our innovation culture, which is bearing fruit.
Bühler reached a leading position in many areas over the
past few decades. But that can quickly lead to a situation
where people suppose that no further progress is possible.
People then automatically adopt a defensive attitude, and
they fight defensive battles. We’ve definitely broken through
12

Burkhard Böndel, Head of Corporate Communications. Stefan Scheiber, Chief Executive Officer.
INTERVIEW
Bühler Annual Report 2017
13

this way of thinking. Of course, you can’t just change your dardize individual elements strategically, with automation, for
market share as and when you like. But even where we’re example. Of course, it’s only possible to offer these kinds of
already number one, there is so much untapped potential integrated solutions with qualified employees. This is why we
in the markets. We’ve now so deeply ingrained a motto into run excellent training programs for our employees, and our
our consciousness that we’re making huge progress. We customers also benefit from our offering. After all, top-range
call that motto “play-to-win” – for our customers, the world, equipment needs to be operated properly to reap the most
and also for ourselves. benefits. This training takes place in our global application
centers, or the milling schools that we run on every continent.
In what direction is Bühler moving with this
impressive dynamism? Which new opportunities does digitalization
We have transformed ourselves into a solution provider open up for the industry?
for the sustainable production of food and feed as well as We urgently need new technologies and solutions to make
for applications for mobility and optics. We integrate value our world more sustainable. Approximately 30% of all food
chains and processes with one point of contact between still goes to waste, too many antibiotics are being used in
us and the customers. This way, we stand out from all the animal feed, and our transport systems are coming close to
other providers in the market. their limits. How can we better understand, manage, and
control such complex systems and value chains? This is
What are some examples of full solutions? where data-based applications will help us in the future.
Take the processing of grain, for example. We come in after
the combine harvester with silos, conveying systems, load- Can you give us an example?
ing and unloading systems. Then the raw materials go We have now launched a quality check for rice made up
through the cleaning process, optical sorting to ensure food of a light box, an app, and a cloud solution. The rice pro-
safety, processing with grinding and milling – through to cessor prepares a rice sample, slides it into the light box,
packaging. We can supply our milling customers with plants opens the app, and scans the grains with a mobile phone.
for producing dough or pasta, and also waffles and biscuits. The app sends the image to our cloud, where it is analyzed
In the Advanced Materials business, solutions consist of and a precise result is produced in minutes. The processor
highly integrated die-casting cells, including all the peripher- can then use this information to optimize their plant and
ies, such as robotics. On top of that are our services, train- negotiate prices with retailers with the documented quality
ing courses, and the opportunity to work together on solu- data. This is a significant leap relative to existing practice.
tions, such as new recipes, in our application centers. This Currently, rice producers manually take samples once a day
comprehensiveness is one of Bühler’s unique selling points.
We are extending it in a calculated way with new technolo-
gies, application centers, and the innovation campus – the
CUBIC – which is currently under construction. We no
longer think in terms of organizational business areas, but “In 2017, we also established
from the customer’s perspective. We think in terms of pro-
cess solutions, for example: from grains to pasta, or from our first team of data analytics
aluminum to the finished structural element. experts. Our goal is to help
What do customers gain from this advance digital transformation
comprehensive approach?
With our solutions, we can help our customers assure food in our industries.”
safety, increase the quality and nutritional value of their
products, reduce their energy consumption and waste, and STEFAN SCHEIBER
increase their efficiency. Our sustainability objective is to CEO
enable our customers to use 30% less energy and produce
30% less waste. Such value is not created purely at the
machine level, but rather by integrating value chains across
entire systems. This becomes visible with major projects, by placing them on a grooved board and sorting the grains
such as the ones we are completing in Bangladesh. Here of rice by hand according to their quality. This is not only
we are helping to fundamentally improve food supply inconvenient, time consuming, and inaccurate; it doesn’t
throughout the region. For us, sustainability isn’t just an produce structured, traceable data.
afterthought; it’s the starting point for our actions, espe-
cially when developing new technologies. How is Bühler adapting to these changes?
We are doing this by setting up our new Digital Technol-
What are other benefits of this setup? ogies business area, accelerating the development of such
They are very practical: our customers don’t have to deal services from our site in London, and investing extensively
with 20 different people, just with one contact. That makes in technical platforms and specialists. In 2017, we also es-
it easier to develop and implement complex projects. As tablished our first team of data analytics experts. Our goal
we develop products further, we can synchronize and stan- is to help advance digital transformation in our industries.
14

How is this changing the relationship with our


customers and other partners?
We are moving even closer together. The enormous poten-
tial of connectivity lies not only in technology, but also in
people with their specific knowledge, experience, and skills.
A few years ago, we completely opened up the innovation
process at Bühler. Meanwhile, collaborative innovation with
customers, our employees, scientific institutions, start-ups,
nongovernmental organizations, and technology partners
has become an established practice for us.
No individual can answer the question of how to sus-
tainably nourish 9 billion people in 2050. This requires net-
works where various experts come together to develop
and implement new solutions. The fact that we at Bühler
have contributed to establishing such networks, not least
through our Networking Days, makes us proud, and we
regard it as a duty.
As a relevant market player in the areas of nutrition and
mobility, we have a responsibility to our customers and soci-
ety. We strive to live up to that calling.

“As a relevant market player in


the areas of nutrition and mo-
bility, we have a responsibility to
our customers and society.”
STEFAN SCHEIBER
CEO
INTERVIEW
Bühler Annual Report 2017
15
16
GROUP REPORT
Bühler Annual Report 2017
17

GROUP
REPORT
We present ourselves in a sound operating
condition and strategic setup. In the year under
review, we made important decisions, from our
successful entry into new markets and the
continuing expansion of our production network
to a strategic acquisition.
18

VALUE THROUGH
PROFITABLE GROWTH
How sustainability contributes to our
corporate success.

2017 was a successful year for Bühler. We succeeded in includes remodeling our application centers. Digitaliza-
creating sustainable value for customers, employees, and tion is increasingly the focus of our innovations – not as
the environment, in growing organically in almost all regions an end in itself, but rather as a key technology to arrive
and business areas, and in making a strategically significant at new, sustainable solutions in food manufacturing and
acquisition. Commissioning our newest production plant in materials processing. We are looking into the future with
China has helped us further expand our global production optimism and are confident that we will be able to further
network. We also began modernizing our sites in Switzer- solidify our business development as we continue to work
land. Significant progress was made in the implementation on improving profitability.
of our sustainability goals through the market launch of new
technologies and process solutions, such as manufacturing Double-digit organic growth
battery slurry and the industrial processing of insects. The most important indicator of growth for Bühler is order in-
take. We were able to raise these by 10% to CHF 2.80 billion
Our collaboration with partners in industry, science, and compared to the previous year. Turnover increased by 9%
business start-ups has played a key role in developing such to CHF 2.67 billion, which resulted in an order backlog of
innovative solutions. We therefore plan to continue our Net- CHF 1.73 billion (+9%). All three figures are at record lev-
working Days and have started building the CUBIC inno- els. We have succeeded in setting a new, clear course of
vation campus in Uzwil − a networking venue. This effort growth – benefited by the overall positive world economy.

Order intake Turnover


(in CHF billion) + 10% (in CHF billion) + 9%
2.80 2.67
2.58 2.47 2.54 2.41 2.45
2.36 2.32 2.33

2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

Equity ratio Net liquidity


(in %) -2.2 pp (in million CHF) + 87%
863*

45.7 47.0
44.6 45.2 44.8

464 462
377 392

*Includes corporate
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 bond of CHF 420 m.
GROUP REPORT
Bühler Annual Report 2017
19

It is also gratifying to note that both businesses of Bühler year: 7.1%). Supported by a good financial result of CHF
have grown. Grains & Food (GF) increased its received order 13 million (previous year: CHF 6 million), net profit reached
intake by 7% to CHF 2.1 billion and Advanced Materials (AM) CHF 174 million (+22%).
by 21% to CHF 672 million.
Already at a solid level, Bühler’s financial situation continued
GF turnover grew by 7% to CHF 2 billion, and AM by 19% to to strengthen. We had a strong increase in investment into
CHF 640 million. In terms of regions, Asia (+20%) and the the asset base of CHF 100 million (+41%). The operating
Middle East & Africa (+12%) showed the strongest turn- cash flow dropped slightly to CHF 158 million. Net liquidity
over growth. Even Europe saw a reasonable increase of 4%. jumped to CHF 863 million (+87%) as a result of the cash
In terms of turnover, our geographic range is thus broad inflow from the corporate bond of CHF 420 million. Despite
and well-balanced: Europe 29%, Asia 28%, North America this gain from external financing, the equity ratio remained
16%, Middle East & Africa 15%, South Asia 6%, and South high at 44.8% (previous year: 47.0%). The capital perfor-
America 6%. mance indicator RONOA (return on net operating assets)
grew from 19.5% to 21.0%, indicating the efficient use of
Structurally, our portfolio mix showed progress as well. In given resources and an ongoing high financial flexibility.
2017 we decided to independently capture and strengthen
the single machines business sector in addition to projects Corporate bond successfully launched
and plants and services. Since then, we have shown strong In order to finance our many strategic initiatives long-
growth of 32% in this area. Our growth in turnover for proj- term, we decided to obtain capital from the financial mar-
ects and plants is 8%, and for services 4%. ket for the first time. The company bond of CHF 420 million
is divided into two tranches with terms of five and nine
Profitability years – CHF 180 million (Tranche A), and CHF 240 million
Our increase in profitability shows that we have established (Tranche B). The bond gives us the needed company flexi-
solid, profitable growth despite a challenging cost situa- bility at favorable conditions to invest in modernizing our
tion. EBIT increased in absolute terms by 18% to CHF 205 locations, our innovation centers, and the digital trans-
million, which represents an EBIT margin of 7.7% (previous formation of our company, in addition to acquisitions.

EBIT Net profit


(in CHF million) + 18% (in CHF million) + 22%
205 174
177 174 143 143
139 145 123 121

2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

Return on net operating Investments into


assets (RONOA) asset base
(in %) +1.5 pp (in CHF million) +41%
100
88
22.0 21.0
18.1 19.5 71
17.6
58
54
0

2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
20

STRONG OPERATING BUSINESS


Both Bühler businesses contributed to the positive result for the year, and
Advanced Materials once again stood out with strong growth rates and
record results. Both businesses were able to gain additional market share
despite somewhat saturated markets.

Turnover by business area


(in %)

4 27
Grinding & Dispersing Grain Milling

8
Leybold Optics
12
Die Casting

8
Grain Logistics 21
9 Value Nutrition
Sortex & Rice
10
Consumer Foods

GRAINS & FOOD

The food processing business increased order in- Grain Logistics (in 2018: Grain Quality & Supply)
take by 7% to CHF 2.1 billion and, with that, its Grain Logistics continued to expand its leading position in
turnover by 7% to CHF 2 billion. An important the beer market and was able to win globally significant malt-
factor in our success is the ability of Grains & Food ing projects. Five of the newest plants in Holland, the US,
to offer sustainable, integrated, complete solutions, Australia, China, and Vietnam were put into operation. The
which we demonstrated at our booth at Interpack, in rice business was equally successful. Bühler secured its
Düsseldorf, Germany where we held our Networking position as the global market leader with large orders, pri-
Days @ Interpack event. To continue promoting this marily from Nigeria and Angola. To achieve this, the close
approach of providing integrated solutions, we decid- collaboration with the individual business areas was crucial.
ed in 2017 to refocus Grains & Food. This involves The conveying system TUBO, launched in 2016, was very
the renaming and further development of the business well received on the market and was launched for other raw
areas. These changes took effect at the beginning of materials such as coffee and rice. In contrast, challenging
2018. The business areas and results shown in this conditions in the grain storage market led to postponement
report reflect the structures from 2017. of large investments in Asia.
GROUP REPORT
Bühler Annual Report 2017
21

Order intake
CHF 2.1 billion + 7%
Turnover
CHF 2.0 billion + 7%

Grain Milling (in 2018: Milling Solutions) proved that it is possible to scale protein production from
With multiple large projects, Grain Milling is again on a insects. The plant will serve as a blueprint.
course of growth and was able to further expand its lead-
ing position in saturated markets. In Switzerland, the highly Sortex & Rice (in 2018: Digital Technologies)
acclaimed Kornhaus in Zurich was completed through a Sortex & Rice recorded above-average growth in optical
close partnership between Swissmill and Bühler. In the US, sorters as well as in rice processing. The newly introduced
we successfully put a new process for manufacturing corn sorting technology for frozen vegetables and fruits grew
flour into operation for our customer Plant Good Harvest. faster than the market; at the same time, Bühler was able
The Prime Masa reduces wastewater by about 90% using to reinforce its position in the recycling market. Sorting PET
steam and increases yields at the same time. waste using the Bühler Sortex E PolyVision and Sortex A
ColorVision machines creates bottle-grade recycled PET
In Rwanda, a plant for manufacturing fortified foods for ex- flakes at the highest yield in the market. The business area
pectant mothers and babies started operation with the goal has now put the same technical capabilities to use for de-
of reducing malnutrition in the country. It was a community veloping the first completely digital quality service for rice:
project within Bühler Milling Solutions and Value Nutrition TotalSense. This app allows processors to subscribe to a
and partner DSM (see pages 80–87). Bühler also received cloud solution that can reliably collect and document the
a large order to supply over 1,000 microdosing units in Pa- quality of a rice sample in just a few seconds.
kistan. These have been placed with local milling operations
as part of the British Food Fortification Programme and will Consumer Foods
have a positive effect on millions of people in this region. Consumer Foods developed very well over 2017. Japanese
customer Meito decided to build a new plant in Seto, north
Value Nutrition of Nagoya, and chose Bühler as their preferred full-scope
Value Nutrition recorded an excellent business year. The stra- provider. The order consists of a complete cocoa processing
tegic focus on the feed business led to strong increases in line, from cocoa bean intake to cocoa liquor, and a choco-
market share in Europe, the Middle East & Africa, and Asia. late mass production line from ingredient handling to liquid
After the delivery of the first five plants for the Philippine chocolate mass storage.
food group San Miguel, Bühler and the company reached
an agreement on further expansions. The coffee business was also successful in the past year.
The new coffee roaster ordered by Chicco d’Oro in 2015 was
The close partnership with the pasta maker Barilla resulted successfully commissioned. Bühler also signed a contract
in a new project in Russia and an expansion of the Bühler with its Norwegian customer Joh. Johannson to build a
pasta business. Value Nutrition opened application centers carbon-neutral plant. We demonstrated our competence
in China to adapt end products even more to market de- in integrated and sustainable complete solutions with our
mands: in Wuxi, it opened Pasta & Noodles, and in Chang- Networking Days @ Interpack where we launched 20 pro-
zhou, a center for the production of machinery and plants duct innovations, including a robot-supported plant for
for animal feed, aquafeed, and pet food. With an order for lower volumes (ChocoBotic) and DoMiReCo, a digital, self-
the first industrial insect processing plant in Europe, Bühler controlled process.
22

ADVANCED
MATERIALS

The Advanced Materials business developed excep- Media and MicroMedia, along with integrated plant construc-
tionally and recorded a record year in 2017. Order tion competences for efficient solutions in wet grinding.
intake increased substantially by 21% to CHF 672 mil-
lion; and turnover rose strongly by 19% to CHF 640 Die Casting
million. This shows that Advanced Materials was the After several years of strong growth and moving up to be-
growth engine for the Bühler Group and, with the fo- come the global market leader, Die Casting increased its
cus on mobility over the past years, it has become the order intake to a high level and revenues rose considerably
second pillar together with the food processing area. again. The Ecoline machine series was a particular growth
About 60% of revenues for Advanced Materials stem driver, with more than 100 orders logged. Three factors are
from the automotive industry. decisive in addition to leading technical solutions. First, Die
Casting is the only supplier in all three relevant production
Grinding & Dispersing regions of the automotive industry – Europe, America, and
After multiple years of joint research and development with China – and has its own assembly plants, service and ap-
its Chinese customer Lishen, followed by a first pilot line in plication centers. It can thus support internationally active
2015, Grinding & Dispersing finally made a breakthrough in processors globally.
its new battery business in 2017 (see pages 66–71). The
business area successfully launched a new process for Second, the business area has extensive application knowl-
manufacturing electrode slurries. The process enables edge about structural aluminum components and can assist
maximization of the energy density of the batteries and its customers with this demanding application. Third, Die
is also more economical. Lishen successfully started up Casting is also benefiting from the rapid growth of e-mobility,
a total of 10 production lines and honored Bühler with its because more and more parts are being made of light alloys
Best Supplier Award. to cut down on weight for these vehicles.

In addition, the business area also won contracts from other With more than 400 Carat machines installed for large and
customers, which made the battery business into a robust complex components as well as over 400 installed Eco-
and quickly expanding market for Grinding & Dispersing. The line machines, Bühler has the strongest global presence.
business area also continued to grow in other application To continue this growth curve and increase service quality
fields, such as digital printing for personalized applications for customers, Die Casting opened a global parts center in
and, especially, color printing for the packaging industry – Alzenau, Germany. The business area also commissioned
also driven by innovative technologies such as Macro- an application and technology center in China in order to
GROUP REPORT
Bühler Annual Report 2017
23

Order intake
CHF 672 million + 21%
Turnover
CHF 640 million +19%

offer training as well as customer-specific application devel-


opment in the region. In the US, Die Casting installed the
largest-ever die-casting machine built by Bühler with a lock-
ing force of 4,500 tons for its customer Mercury Marine.

Leybold Optics
Leybold Optics was the most successful business area of
the Group in 2017 in terms of growth. After its big turnaround
and a very promising 2016, Leybold Optics was able to or-
ganically increase its incoming orders by more than 50%.
Plants for large-scale architectural glass coating, for which
Leybold Optics now has a global market share of about
60%, decisively contributed to this.

More intense market cultivation and extensive service offers


based on innovative technologies led to success. Solutions
for precision coating of sensors, camera lenses, and screens
for the automotive industry and entertainment electronics
were also significant. The increasing emergence of driver-
assisted systems, mobile devices, and devices equipped
with sensors and IoT solutions is generating a demand that
Bühler can exploit with its ultra precise and economical ma-
chines for coatings on the nanometer scale.

To further respond to current trends, Bühler opened an ap-


plication center at Leybold Optics in Alzenau, Germany. It
offers different vacuum-coating machines, ranging from
small to large rigid substrates; to plastic films; to deposition,
such as evaporation with various types of plasma assistance;
to sputtering, including ion-beam sputtering.
24

REGIONAL
PRESENCE
Bühler enjoyed growth in
all regions, with Europe 29% 28%
and Asia as front-runners.

Europe Asia
Following its strategy of “in the region, Turnover
for the region”, Bühler has become share by
region
a true global player with a balanced 5,205 (+3.1%)
presence of production sites, service
stations, research and development 3,535 (+3%)
facilities, and application and training
centers around the globe.
Employees
2017
(10,972
compared to
10,641 in 2016)

Sales offices 26 19

Service stations 26 22

Manufacturing sites 13 7

Application centers 6 6

Highlights Networking Days @ Inter- Record order intake


pack Düsseldorf boosts Rapid growth with aqua-
Consumer Foods Europe feed solutions
Well-performing markets Started first continuous
for Advanced Materials mixing process for electrode
Strong growth of opti- slurry with more orders from
cal sorting triggered by other customers coming in
innovations for fruits Established Bühler Insect
and vegetables Technology Solutions and
Important strategic signed first full-plant contract
projects won: GoodMills Strong growth of our
Germany, Coffee Norway, Customer Service business,
Malteries Soufflet Bulgaria, especially in China and
Barilla Russia Southeast Asia
GROUP REPORT
Bühler Annual Report 2017
25

15% 16%

6% South Middle East 6% South North


Asia & Africa America America

590 (+3.7%) 470 (+4.4%) 399 (+1%) 773 (+3.6%)

5 14 5 8

15 15 12 8

1 2 2 3

1 1 1 4

Successful market entry Strong order growth in Strong sales performance Introduction of a new
in aqua feed plants and projects, sin- of Colombia, Peru, Ecua- optical sorter for fruits,
Speciality Milling continues gle machines, and in Cus- dor, Chile, and Argentina vegetables, and tree nuts
to grow with new applica- tomer Service Good order intake in Cus- Successful commissioning
tions in maize Successful diversification tomer Service with growth of 120,000-tonne malting
Market leadership for from Grain Milling to other of nearly 20% facility commissioned for
optical sorting business areas Successful sale of more Great Western Malting
Growth in the Advanced Substantial growth in Rice than 50 oil-processing Banco de México places
Materials business, with and Grain Logistics machines for Renova, and largest order in the region
an exceptional year for New orders for glass ship loaders and conveyors for Grinding and Dispersing
Die Casting coaters from Turkey for port terminals AGD and Die Casting increased
Terminal 6 in Argentina market share to 50% for
Biggest single-machine
order to improve nutrition Sale of a 20 t/h rice mill to new structural castings
in Pakistan with over ORF in Colombia Regional apprenticeship
1,000 microdosing units ISO 9000 accreditation program enhanced
26

STRATEGIC INVESTMENTS
We made considerable investments for the future in 2017, including
the Haas acquisition, the development of new digital technologies
and process solutions, the modernization and expansion of our
production network, and breaking ground for our innovation campus.

Haas joins the Bühler Group time being, Haas will be managed as an independent unit.
A high point of 2017 was the announcement of the take- Because of similar corporate cultures as family companies,
over of the Austrian Haas Group. The transaction closed in and identical customer orientation and quality standards,
January 2018. The Haas family decided to put the company the conditions for successful integration are optimal.
under the Bühler Group umbrella after long-term strategic
considerations. Haas is a highly regarded manufacturer of Expansion of digital services
plants for wafers, biscuits, and confectionery and a clear Bühler achieved a milestone in its digital transformation
market leader. None of the machines or solutions of either and development of new, service-oriented business mod-
company overlap, and they complement each other superb- els. Digitalization creates new possibilities to control the
ly. It also became clear that many customers use products quality of processes, enhance transparency along the
from both Bühler and Haas at the same time. value chain, and improve efficiency of machines and sys-
tems worldwide, thereby achieving Bühler’s sustainability
This step has opened great perspectives for Bühler and goals. Bühler developed a new global platform for digital
Haas to jointly take a leading position in the consumer food services in collaboration with Microsoft, and also created
market and also to offer customers integrated solutions a new business area, Digital Technologies, as part of the
along the entire value chain from a single source. For the Grains & Food business refocus. The first digital services

The Bühler factory in Changzhou, China, specializes in processing equipment for animal and aqua feed and pet food.
GROUP REPORT
Bühler Annual Report 2017
27

Bühler’s secure, Internet of Things technology solutions enable customers to remotely access production data.

have already been launched, for example, TotalSense. For systems for the processing of feed for farm animals, fish,
the first time, Bühler sold not only hardware, but also an and pets. In terms of production capacity, Changzhou is
app that is installed on a smartphone. TotalSense enables one of Bühler’s three largest production sites. In terms of
rice producers to determine quality online. Until now, espe- production methods, manufacturing standards, and quality,
cially with smaller processors, the rice was controlled man- the plant sets a new standard within the Bühler Group.
ually. This approach is slow and prone to error.
Work on the modernization of the Swiss sites is on schedule.
The user takes a photo of the rice sample using an The goal of the five-year project in Uzwil is to develop it into
Android smartphone, uploads it to the Bühler cloud, and one of the world’s leading production sites using Industry
within a few minutes it has been analyzed according to the 4.0 technologies. In this way, the competitiveness of Swit-
parameters the user has set. This low-cost solution gives zerland as a location should remain strong. The first phase,
rice processors peace of mind with consistent, reliable feed- which is largely completed, was to refurbish production and
back on the quality of their rice. Currently, there are about logistics for mass-produced parts.
50 such new digital services under development, and about
10 of them will be put on the market in early 2018. Bühler Construction of innovation campus begins
is investigating how to further expand its growing portfolio Bühler broke ground for its new innovation campus in Uzwil
of digital services. (CUBIC) in 2017. The CUBIC comprises two elements: the
modernized application development lab and the new inno-
Modernization of the global production network vation building. The building is slated for completion in the
With regard to investments in Bühler’s global production net- first quarter of 2019. The considerable investment of about
work, two projects stand out: the opening of the new factory CHF 50 million over a period of three years is a symbol of
in Changzhou, China, and the modernization of the Swiss Bühler’s dedication to innovation, technology, and Switzer-
sites. The new plant in Changzhou was put into operation in land as its headquarters. This investment will strengthen the
September and now serves as a global center for the man- company’s market leadership, and it contributes to the goal
ufacturing, research, and development of feed machines of innovating to improve the world in collaboration with part-
and plants. The focus is on process solutions and complete ners from industry, science, NGOs, and start-ups.
28

FACING THE FUTURE WITH OPTIMISM


With our collaborative innovation model, we are developing
sustainable technologies and solutions – and are well posi-
tioned for the future.

Innovation with transparent labeling that features carbon footprint infor-


In 2017, Bühler already achieved its 2020 sustainability mation. They are now working in the Bühler-supported Mass-
target of running 50% of its research and development (R&D) Challenge accelerator.
projects in collaboration with our business partners. We in-
vested around 4.5% of turnover into R&D (CHF 119 million), Sustainability
and are expanding our collaboration network with custom- This has been a landmark year for Bühler as we continue
ers, suppliers, start-ups, and leading academic institutions to play our part in creating a safe, healthy planet for future
to drive innovation and help meet our sustainability goals. generations (see pages 96–97). In 2017, we already exceed-
ed our target to ensure 20% of our R&D projects focus on
Bühler partnered with UNITECH to invite young people to improved nutrition, and the number of R&D projects that
participate in the Carbon Footprint Challenge 2017. More increase yield and reduce waste have also risen to 39%,
than 100 proposals to reduce carbon footprint came in, and showing good progress toward our ultimate target of 50%.
the teams behind the five best ideas were invited to Uzwil
to develop them further and pitch them to attending com- The Bühler Supplier Code of Conduct, designed to help
panies. The winners, Counting Carbon, from Trinity College our suppliers as well as our manufacturing and logistics
Dublin, have a solid plan to change consumer behavior partners achieve greater sustainability, has been signed by

ChocoBotic reinvents the traditional moulding line with robotics.


GROUP REPORT
Bühler Annual Report 2017
29

Bühler’s process for manufacturing electrode slurries enables the maximization of the energy density of batteries.

30% of our primary suppliers from a standing start of zero in for a better world” and achieve our ambitious sustainability
2016, when it was rolled out. We are pleased with the prog- goals. Supported by new opportunities that have opened
ress being made toward the goal of 100% by 2020. up thanks to digitalization, unique integrated process solu-
tions, leading technologies, and its global presence, Bühler
Outlook is well-positioned for the future.
Bühler is looking to the future with optimism. We are aware of
the speed of change in the digital age and have kept the un- We will use this positioning in 2018 to present two more
certainties of current world events in view − such as geopolit- Networking Days: in China, on the topic of “the future of
ical, currency, and interest rate issues as well as trends con- mobility”, and in Milan as part of the Ipack-IMA trade fair
trary to free trade. However, in view of these factors, we are under the theme “feeling good about food”. The official
convinced that for Bühler the opportunities are significantly opening of the new factory in Changhzou, China, in the mid-
greater than the risks. 2017 was an important milestone for dle of this year will strengthen our position in Asia as well as
Bühler, including the acquisition of Haas, and securing the in the global feed segment.
financial means needed to expand the company’s investment
and acquisition potential. We will continue to focus more In fiscal 2018, Bühler is anticipating its growth course to
sharply on this as we work toward our vision of “innovations continue with further improved profitability.
30
OUR BUSINESS
Bühler Annual Report 2017
31

OUR
BUSINESS
As diverse as Bühler’s end markets may be –
from food and feed, to vehicles, printing units,
buildings, packaging, lenses, batteries, and much
more – two common factors hold its broad port-
folio together: process solutions and sustainability.
32

GRAINS & FOOD


At a glance
We want everyone to have access to
Bühler Grain Quality & Supply provides
healthy food. Although the technolo-
gies, process solutions, and applica-
Grain Quality high-quality and safe solutions for
grains, malting and brewery, and rice.
tions of Grains & Food may be diverse, & Supply Its aim is to increase efficiency, improve
traceability, and reduce food loss.
they share the same focus − quality
and safety. We provide solutions for
the processing of grains, pulses, rice, Bühler Milling Solutions delivers state-
corn, cocoa, nuts, and coffee beans, Milling of-the-art process technology for
transforming raw materials such as soft
to name but a few. Bühler’s custom-
ers supply foods to more than 2 billion Solutions wheat, durum, rye, and maize into high-
grade flour and semolina products.
people every day. We want there to
be enough food for everyone, and we Bühler Value Nutrition is the global
want to reduce food waste. We want
to conserve energy and water, and we
Value solution and technology partner for
producers of animal feed, pasta and
want to help reduce the need for sugar Nutrition noodles, vegetable oil, cereals and
snacks, and pet food.
and fat in food to address overnutrition
and obesity.
Bühler Digital Technologies offers sort-
Grain Quality & Supply offers safe Digital ing machines, industrial measuring ma-
chines, sensors, control systems, and
cleaning, storage, and transport solu-
tions for raw materials and solutions
Technologies service-driven products for the food
and non-food processing industries.
for the processing of grains into malt
for beer. Milling Solutions combines Bühler Consumer Foods provides
the optimum grinding and processing Consumer innovative solutions for the processing
of cocoa, nuts, and coffee as well as
of grains and pulses with the highest
hygienic standards. Consumer Foods Foods the manufacturing of chocolate, bakery
products, and various bars.
enables confectionery manufacturers
to efficiently produce high-quality end
products. Value Nutrition allows energy-
efficient and safe production of pasta,
breakfast cereals, and animal feed via
extrusion, drying, and feed mills. The
70%
of all chocolate is produced
About

30%
newly established Digital Technologies in Bühler plants. 4 million
of all breakfast
tons of cocoa beans are
business area uses optical sorting and cereals are
harvested every year.
processed
cloud-based monitoring solutions to
with Bühler
ensure that contaminants are removed technologies.
during processing and the safety of
food and feed is documented.

All business areas offer integrated pro-


30%
of global rice and pulse pro-
cess solutions for value-added chains duction is covered by Bühler
from a single source: from green solutions. Rice is a staple
food for 3 billion people.
coffee or cocoa beans and harvest-
ed grain to roast and ground coffee,
chocolate bars, pralines, flour, noodles,
dough, or animal feed. This portfolio
is complemented by a global network
65%
of the world’s grain is pro-
of service, training, and application cessed on Bühler machinery.
centers for our customers around the
world. Our training offering helps cus-
tomers to operate Bühler systems op-
timally to achieve maximum yield and
reduced downtime.
75%
of global malt
40%
of industrially-made
processing is covered pasta is produced using
by Bühler solutions. Bühler technology.
OUR BUSINESS
Bühler Annual Report 2017
33

How various raw materials become high-quality food products:


Seven examples of Bühler Grains & Food process technologies

= Where Bühler technologies are involved

Grain Paddy Coffee Cocoa


rice beans beans

Cleaning Intake, precleaning Cleaning, Cleaning, alkalization,


and storage sorting debacterizing, roasting

Grinding
Liquor grinding,
pressing
Rice
Dosing cleaning
Storage, handling,
conveying
Dosing, mixing

Weighing Dough Mixing


preparation
Drying
Refining,
Mixing Blending conching

Extrusion
Dough preparation Rice milling Forming Tempering
Hygienizing

Extrusion Roasting
Cutting Depositing
Drying
Grading
Baking

Tempering Cooling
Pelleting
Cooling Grinding
Cooling Bagging and
load out
Enrobing Demoulding
Enrobing

Decorating, Storing Cooling Supporting element Storage, Cooling Handling


sprinkling degassing

Biscuit Pasta Feed White Roast and Chocolate Chocolate


products rice ground coffee products products
34

ADVANCED MATERIALS
At a glance
We want to contribute to protecting
Bühler Die Casting is the global
the climate through the use of energy-
efficient vehicles, machines, and build-
Die technology partner for all die-casting
needs and supports its customers
ings – and this leitmotif plays an Casting through all phases of their investment.
important role in the technologies,
process solutions, and applications of
Advanced Materials. Lightweight alu- Bühler Leybold Optics is the special-
minum or magnesium parts – manufac- Leybold ist for state-of-the-art development
and manufacturing of vacuum deposi-
tured on die-casting cells – reduce fuel
consumption. Vacuum-coated archi-
Optics tion equipment.

tectural glass for facades – produced


on Leybold Optics equipment – makes Bühler Grinding & Dispersing offers
buildings more energy-efficient. Bat- Grinding & future-oriented technology and tailor-
tery slurry – manufactured on equip- made solutions for wet-grinding and
ment from Grinding & Dispersing – in- Dispersing dispersing processes.
creases the range of electric vehicles.

The range of applications the custom-


ers of the three business areas serve
is virtually endless: finely ground pig-
ments for paints, printing inks, cos-
metics, coatings for sensors, lenses,
camera lenses, smartphone screens,
precision optics, packaging, engine
blocks, oil pans, gear housings, struc-
tural parts, and more.
About 100%
of the top 10 packaging
Over

The markets are extremely diverse, but


60%
of all offset inks worldwide
ink producers use Bühler
solutions. 60%
of all banknote printing
Advanced Materials has one constant are manufactured with inks are made with
factor: mobility. The segment gener- Bühler technology. Bühler machines.
ates around 60% of its sales from the
automotive industry.

There are also similarities between the


business areas in terms of technology.
30
gigafactories will be running
worldwide by 2030. Bühler
It always comes down to the most pre-
technology
cise material processing with the high- has gained Some
est level of reliability and reproducibility
under industrial conditions.
market
share in the bat-
tery segment beyond
first-reference installations.
25%
components produced
of all
die-cast

Bühler manufactures high-precision globally are made on


die-casting cells. Its vacuum-coating Bühler systems.
systems deposit thin films on glass Nearly
and plastic on a scale measured in
nanometers. And wet milling produces
dispersions of pigments and particles
1,000
die-casting foundries
that are also on a nanometer scale. rely on Bühler
The business areas not only supply the day in, day out.
machines and systems to do this, but
also the process expertise – including
a worldwide network for training, con-
sulting, and services.
50%
of new cars worldwide
50%
of the world’s car
have die-cast compo- taillights and head-
nents produced with lamps are metallized
Bühler technology. on Bühler machines.
OUR BUSINESS
Bühler Annual Report 2017
35

Aluminum to die-cast parts, pigments to cosmetics:


Six examples of Bühler Advanced Materials process technologies

= Where Bühler technologies are involved

Aluminum, Pigments Active material, Acrylic Resin Film


magnesium and chemical conductive additives, acid
materials binder, and solvent

Dosing Storage and Material Purifying Lens design Film manufacturing


conveying handling and primary slitting

Surfacing

Dosing and Liquid and powder Polymerization Film metallizing


weighing dosing

Polishing

Casting

Mixing and Dissolving Drying Slitting


pre-grinding Cleaning

Hardcoating
Wet grinding Continuous mixing Grinding Top coating
and dispersing

Extracting

Anti-reflective
coating

Conditioning, let- Filtering Surface Printing


down, adjustments crosslinking
Edging

Marking Potting, Storage and Diaper Framing Laminating


packaging degassing making

Die-cast Paint and inks, Electrode slurries Diapers Eyeglasses Food


components coatings, cosmetics, for batteries packaging
agrochemicals material
YOU’LL BE SUPRISED
TO SEE ...
OUR BUSINESS
Bühler Annual Report 2017
... EVERYWHERE
OUR TECHNOLOGIES
TOUCH YOUR DAILY LIFE.
AM Coatings for
architectural glasses

AM Die-cast parts
for street lamps

GF Flour for
a variety of
bread and
baked goods

GF Chocolate
bars and
hollow figures
AM Filter
for sensors
in fitness
trackers

GF Beer

AM Coatings for
decorative metallizing

Every day, billions of people come into diapers, lipstick, banknotes, the foods Bühler’s businesses:
contact with Bühler technologies to you eat, and the vehicles you drive. We
cover their basic needs for food and strive to create innovations for a better Grains & Food GF
mobility, and more. Our technologies world, with a special focus on healthy,
Advanced Materials AM
are in your smartphone, solar panels, safe, and sustainable solutions.

This is just a small selection of products made with Bühler technologies.


AM Paints
for houses

GF Sinking and
floating aqua feed

AM Color filters
for LCD screens

AM AM Lacquers AM Household
Inks and for furniture ceramics
coatings for
food packaging

GF Solutions AM Ink for


for recycling AM Electronic components inkjet printers
PET bottles for smartphones

GF Wheat and GF Rice


gluten-free pasta AM Die-cast
GF Pasta pots and pans

AM Security printing AM Electrode slurries for


inks and holograms residential stationary batteries
for banknotes
AM Electrode slurries for
industrial stationary batteries

AM Film capacitors
for windmills
AM Metal slurry
for solar cells AM Coatings for
windmills

GF Coffee

GF Asian
noodles

INFOGRAPHIC
Inks for
AM
magazines

AM Agrochemicals

AM AM Inks and AM Automotive AM Superabsorbent


Lipsticks dyes for textiles coatings polymers for diapers
and nail-
polishes

AM Electrode slurries AM Protective coatings


for electric car batteries

AM Film capacitors for


electric and hybrid vehicles
OUR BUSINESS
Bühler Annual Report 2017

AM Batteries,
sensors, and cameras

GF Handling
and storage
for grain, rice,
cocoa, and coffee

GF
Pellets
to feed
cattle
GF Vegetable oil

AM Coatings for
camera lenses
AM Anti-fingerprint
coatings and
decorative coatings
for eyeglasses
and sunglasses

AM Die-cast parts
AM Coatings for cars and scooters
for automobile
bezels and AM Augmented reality,

GF Waffles reflectors e.g., head-up display


for ice-cream
cones

GF Pet food
38

OUR SUSTAINABLE
STRATEGIC FRAMEWORK
To safely feed the world, reduce emissions,
and promote customer success, Bühler is
driven by its core topics.

Our mission is to find ways to feed a growing world popula-


tion with healthy and safe food and to translate the sustain-
ability issues facing the global food, feed, and automotive
industries into opportunities for our customers. To do this,
we identified five core topics in 2016 that are decisive for
driving change: food and feed safety, nutrition, energy and
waste reduction, digitalization and mobility.

Food and feed safety


Each year, an astonishing 10% of the world’s population
becomes ill from eating contaminated food, with the
World Health Organization noting that children under
five are the most-at-risk group. With a quarter of glo-
bal grain crops contaminated with dangerous myco-
toxins, and overuse of antibiotics in farming leading
to critical levels of resistance, it’s plain to see why it’s
crucial to address food and feed safety issues.

We have already developed a broad range of tech-


nologies to meet this growing challenge, from high-
capacity drying after harvest, to cleaning and optical
sorting solutions that address contamination of the
grain crop, and from there to processing and pack-
aging. We continue to explore means to harness the
immense opportunities offered by digitalization and
cloud solutions to enable far greater traceability and
transparency throughout the production process.

Seamless traceability allows customers to track every pro-


cess step from field to fork and determine the exact time,
location, and ingredients affected in case of any contam-
ination. With heightened food and feed safety regulations
and the rise of the empowered consumer wanting full trans-
parency about what they buy, food and feed processors
must be enabled to collect this high-quality track-and-trace
data along the entire supply chain. Bühler’s digital and auto-
mation solutions make this possible.

In 2017, we launched a new food alert system, which takes


food safety information from across the globe and with data
analytics distills it into a seamless, easy-to-use tailored solu-
tion that gives customers instant, vital information to enable
them to make timely and effective responses to food safety
risks. Quick understanding of a potential risk could mean
the difference between commercial inconvenience and rep-
utational disaster. Our Leybold Optics PAK and PAK T series
have improved food safety in the packaging industry, with a
OUR BUSINESS
Bühler Annual Report 2017
39

Food and feed safety


We are continuously improving our solutions
for the production of safe foods. In 2017, 34%
of our R&D projects focused on the topic, and
we launched a digital food safety alert system.

thin coating film providing an effective barrier against gases,


moisture, odors, and microorganisms, while the Choco-
Botic solution has reinvented chocolate lines with fewer
stations and components, more hygienic design, and
far greater ease of cleaning. Other recent innovations
include the PolyFlake flaking mill, which offers signifi-
cantly higher standards of hygiene, and the Sortex E
BioVision for removing foreign objects from the pro-
cessing line.

We are also committed to raising awareness and de-


veloping skills through extensive training and educa-
tion with a variety of tailored food safety courses for
our customers. Bühler also applies these principles
in-house: nearly 1,900 employees have participated
in our training program to learn about food hazards
and hygienic product design, and get an entire over-
view of food safety from the point of harvest to the
end consumer.

Nutrition
With an estimated 840 million people suffering from
hunger and one-third of the developing world’s popula-
tion experiencing micronutrient deficiencies, it has never
been more obvious that our global nutrition system has
become unsustainable. At the same time, obesity is placing
a huge burden on the health systems of the industrialized
–  and, increasingly, the developing – world, while popula-
tion growth means that by 2050 we’ll need an additional
265 million tonnes of protein to feed more than 9 billion
people. No single company can fully address these issues;
however, we are in a unique position to make a real differ-
ence, because food produced using our technologies serves
more than 2 billion people every day.

Bühler takes a collaborative approach to developing innova-


tions, pushing research to new levels, and investigating new
methods and materials research further with our in-house
experts, customers, and partners. To address the need for
alternative, sustainable protein sources, solutions will need
to be found, and we are exploring alternatives to turn these
significant challenges into business opportunities.
40

Nutrition Energy and waste reduction


In 2017 we exceeded our 2020 target of Our goal is to reduce energy and water
ensuring that 20% of our food-relevant R&D consumption, carbon emissions, and waste by
projects would focus on improving nutrition 30% by 2020. In 2017, we introduced 50 new
by 3%. This is just the beginning. products and technologies that do just that.

Food fortification is a vital tool in the fight against malnutrition. Energy and waste reduction
In 2017 Bühler supplied more than 1,000 microfeeders to Improved energy efficiency isn’t just good for the environ-
local mills and food factories in Pakistan under the lead of ment – it’s good for business too. With energy use account-
the UK-based Food Fortification Programme. It is helping to ing for anywhere up to 10% of a company’s total costs, any
tackle the high levels of child stunting and malnutrition in the savings translate directly into better margins. Bühler wants
region by adding vitamins and minerals to foods. Around half to reduce energy consumption and waste at customer sites
of Pakistan’s mills will soon be equipped with these solutions. and its own by 30% over the next three years, and is con-
tinuing to develop machines and partnerships that make a
With its 2017 partnership with Protix, one of the world’s significant contribution to tackling some of the world’s most
leading insect production companies, Bühler will drive the pressing ecological issues.
industrial production of animal feed from insects. Insects
are reared on food waste, which they efficiently turn into Sortex A ColorVision and Sortex E PolyVision enable re-
protein. It’s a sustainable, virtuous cycle, as they are the pre- cyclers to sort out different types of plastics that arrive at
ferred food source for many animals and their by-products their sites and produce food-bottle-grade PET flakes at the
become plant fertilizer. The company has already achieved highest yield in the market. Our new Tubex hopper scale
a milestone with the first order for the largest industrial- is helping to cut energy costs by more than 95% with an
scale insect processing plant in Europe, which is expected innovative drive and control system that stores energy be-
to be fully operational and leading the way in this rapidly tween driving cycles. Alongside this dramatic saving, cus-
developing field by the second half of 2018. Longer-term, tomers also benefit from easy operation, accurate weigh-
Bühler is looking at algae as another potential protein solu- ing, and minimal maintenance. Among other innovations
tion. The company supports producers efforts to bring the that are slashing energy consumption are the JetMix flour
safest, most nutritious foods to the market. Bühler is also hydration method and Solano roasting machine, both of
collaborating with its partners and customers to help cut which reduce energy use by up to 30%. Bühler’s Prime
sugar and fat content. Masa process for manufacturing Nixtamal corn flour em-
ploys steam technology to use 90% less water, while offer-
The latter are one of the increasingly popular alternatives ing a higher yield and eliminating wastewater during the
used by our customers to provide high-protein, high-fiber production process without compromising flavor or texture.
meat substitutes, while texturized vegetable proteins are And the Ecothermatik, a solution for long-cut pasta drying,
becoming increasingly important alternatives for consumers optimizes thermal energy use to combine low energy con-
looking to reduce their meat intake. Known as textrudates, sumption with top product quality.
these are made from vegetable raw materials using a cook-
ing extrusion process. Bühler has long been at the forefront A key part of our drive to help create a more sustainable
of producing dry – and now wet – textrudates as meat alter- world is a constant commitment to exchanging knowledge
natives and is expanding its research. Through collaboration and ideas. Bühler is a Diamond Sponsor of MassChallenge,
with ETH Zurich (Swiss Federal Institute of Techology), a the world’s largest start-up accelerator, and we work closely
study has shown that bean isolate, wheat gluten, and sun- with Partners in Food Solutions to support food processing
flower seeds are also promising alternatives. entrepreneurs in Africa.
OUR BUSINESS
Bühler Annual Report 2017
41

Digitalization Mobility
Digital solutions will help us – and our cus- We contribute to making cars lighter with
tomers – improve quality, reduce waste, our die-casting systems, and electric vehicles
energy, and downtime. We currently have more energy efficient with our new electrode
over 50 digital services in development. slurry solution.

Digitalization IoT technology enables clients to remotely access critical


The opportunities offered by digitalization enable us to help production data practically in real time, and so make cru-
customers reach new levels of productivity. Digital solutions cial decisions about machine performance, tolerance levels,
can help customers cut their energy use and drive down and sorting criteria to ensure optimum production. This year
their carbon footprint while also achieving significant cost saw Bühler launch AnywarePro, which is designed to take
savings via improved quality, increased differentiation, and complex analysis data produced by an optical sorter and
reduced downtime, among others. Machines today no lon- transmit it to whoever needs it, anywhere in the world. That
ger “merely” produce goods, but also produce valuable data key data provides information to optimize production. It also
that can revolutionize business. We view digitalization as an allows engineers to diagnose and solve system malfunctions
enabler for positive progress. With our profound machine remotely, dramatically cutting wasteful downtime.
and process knowledge, we can offer digital solutions to our
customers that go beyond machinery. Mobility
Nowhere are the sustainability pressures facing the planet
Among the wide range of digital innovations we’ve launched more acutely visible than on our roads. As populations and
in 2017 is TotalSense, which uses digital technology to en- wealth grow in emerging economies, so does the demand
able rice producers to analyze their yield whenever they for cars. Transport now accounts for 13% of all greenhouse
need to and get a detailed report anywhere in just a few gas emissions, 75% of which comes from road traffic. As
minutes. The purely digital solution is portable, low-cost, and demand increases, so does the need for clean, efficient mo-
a perfect example of Bühler’s approach to digitalization. bility solutions, with China now the world’s fastest-growing
market for electric cars. In 2017 around 800,000 electric
At Networking Days @ Interpack 2017, Bühler launched sev- vehicles were sold there, a number that’s expected to reach
eral digital innovations, including ChocoGenius – an any- 5 million by 2020, with global sales predicted to reach the
time, anywhere web-based training service to train choco- 60 million mark a decade later.
late line operators. We also released the Smart Chocolate
Factory, a self-optimizing digital service for dosing, mixing, Bühler is playing a key role, having developed a unique
refining, and conching. It’s a digital factory that helps cus- continuous mixing process to produce a key component in
tomers achieve a 10% reduction in operating costs and a batteries: the electrode slurry for the positive and negative
10% increase in performance. Another example is AeroPro poles in the battery. With this, the industry is able to enhance
Moisture Control, which enables clients to closely moni- the production of batteries and their energy density. With the
tor moisture content in their production processes to ensure opening of the Lishen plant in Suzhou, Bühler was able to
optimum end results via sensor technology, the Internet of demonstrate the industrial scalability of this new technology.
Things (IoT), and cloud-based storage architecture. The in- Our traditional die-casting methods are also in high demand,
telligent drying solution with real-time, continuous moisture as they enable the production of lightweight engine blocks
management improves quality and cuts waste. Through this and structural components, which cut fuel consumption and
intelligent moisture control, every 1% of moisture gain in a carbon emissions. With a 10% reduction in weight delivering
typical feed dryer operation is equivalent to a annual saving as much as an 8% improvement in fuel efficiency, the bene-
of USD 300,000. fits for the planet and the bottom line are immense.
42

INNOVATIONS FOR
A BETTER WORLD
Bühler continues to lead the way in harnessing
the potential of new technologies.

Innovation has been at the very center of Bühler’s activities St. Gallen (HSG), Kansas State University, and the UNITECH
for more than 150 years, from the earliest days of mecha- university network. Its strategic partnerships include the
nized food production to today’s ever-evolving digital world. EIT Food Accelerator Network, Partners in Food Solutions,
The company invests as much as 5% of its turnover in re- Africa Improved Foods, and leading start-up accelerator
search and development each year, and works in close col- MassChallenge. Alumni of the latter alone have so far raised
laboration with customers, suppliers, start-ups, and leading more than USD 2 billion, generated over USD 900 million
academic institutions to continually drive innovation and in revenue, and created more than 65,000 jobs. In 2017,
help meet its ambitious sustainability goals. Bühler began working with the Swiss Data Science Center,
a joint venture between EPFL and ETH Zurich, which accel-
Key elements of this are the company’s Innovation Chal- erates the adoption of data science and machine-learning
lenges and Networking Days, which allow extensive collab- techniques in the industrial sector.
oration with scientists, staff, industry partners, students, and
start-ups, all of whom are able to bring fresh perspectives to Another successful collaboration was the founding of the
help turn today’s challenges into tomorrow’s opportunities. joint venture Bühler Insect Technology Solutions together
The 2017 Networking Days brought together 750 people to with Protix, a leading insect production company based
discuss sustainability and nutrition. This year, Bühler will hold in the Netherlands, to address the world’s growing protein
its first Networking Days event dedicated to Advanced Ma- gap with a sustainable protein source − insects. It’s an ideal
terials, with a focus on the lithium-ion battery business and partnership as Bühler provides its expertise in developing
how it can make mobility more sustainable. scalable, cost-effective industrial processing solutions for
food and feed, and Protix has 10 years of experience in the
Collaboration is key field of insect breeding, rearing, and processing.
One of the key drivers of Bühler’s ongoing innovation is its
close working relationship with a whole range of networks. The opening of a new production, research, and develop-
Among the major institutions Bühler collaborates with are ment center in Changzhou, China, was another highlight. It
ETH Zurich (Swiss Federal Institute of Technology), EPFL specializes in processing equipment and complete plants
(École Polytechnique Fédérale de Lausanne), University for animal and aqua feed and pet food. Its large application
College London, Imperial College London, the University of center is dedicated to animal nutrition.

Digital value chain


Digitalization drives transparency, efficiency, and performance
across the entire food value chain.

= Bühler IoT solutions

Agriculture Storage Transportation Primary processing Secondary processing Retailer Consumer


OUR BUSINESS
Bühler Annual Report 2017
43

The CUBIC innovation campus will be a space for people to meet and create solutions for a better world.

Working side by side camera links. Bühler’s African Milling School provides peer-
The company is investing CHF 50 million in the CUBIC less training for the continent’s next generation of millers,
innovation campus at its Uzwil headquarters, where the equipping them with the knowledge to process grain into
industry’s smartest minds will come together in an open high-value products.
atmosphere in state-of-the-art application labs to create
innovations for a better world. The expanded and modern- Challenging times
ized Bakery Innovation Center is where the Bühler knowl- The world is facing unprecedented challenges. Bühler part-
edge gained from decades in the industry is applied to a nered with UNITECH to invite young people to participate
whole range of creative, customized solutions. in the Carbon Footprint Challenge 2017, an ideas forum for
creating a more sustainable future. This generated more than
The best facilities need the best staff, and each year Bühler a hundred proposals, and the teams behind the best were
trains nearly 600 apprentices in Switzerland, Germany, invited to Uzwil to work on their ideas and pitch them to
China, India, and the US, while the ClassUnlimited teach- partner companies. The winners, Counting Carbon, from
ing concept allows apprentices to spend months gaining Trinity College Dublin, have their sights on changing con-
valuable experience abroad while still taking classes via live sumer behavior with transparent labeling that features
44

Innovation
In 2017, we achieved our 2020
sustainability target of running 50% of
R&D projects in collaboration with our
business partners.

carbon footprint information. They are now working in the a far more sustainable industry. Real-time monitoring and
MassChallenge accelerator and already have a number of control mean that even the most modest benefits can ac-
big-name companies behind them. cumulate into substantial gains over the course of a year.
In terms of reducing unplanned downtime, machine-learning
Bühler is center stage in the rapidly growing e-mobility algorithms can predict where and when failures will occur,
marketplace and its drive to cut emissions and improve air allowing customers to schedule maintenance activities to
quality. The sector is experiencing phenomenal growth, and avoid any interruption to production schedules.
Bühler’s unique mixing process for electrode slurries is dra-
matically boosting the quality of lithium-ion batteries and al- Bühler never loses sight of the fact that technology is an
lowing vehicles to travel up to a third farther than those with enabler rather than a solution in itself, and will always work
conventional batteries. In 2017 Bühler also commissioned closely with customers to develop exactly the right solution.
a new plant with four industrial-scale production lines for
battery slurry for Lishen, one of the largest battery manu- Complete commitment
facturers in China. Both Bühler’s management and board are fully committed
to driving a digitalization strategy that utilizes the immense
Digital futures business value potential of IoT technology. The technology
The key driver of innovation across all sectors, however, is is developing at an exponential rate.
digitalization. Bühler has been at the forefront, establishing
the Urs Bühler Innovation Fund three years ago to support One of Bühler’s recent groundbreaking digital solutions that
development in key areas such as the Internet of Things harnesses IoT technology to offer revolutionary user benefits
(IoT). The company sees digitalization as a key enabler is the TotalSense rice analyzer. This allows users to virtually
and genuine driver of value. When harnessed properly, the send grains to the cloud for a full quality analysis in under
potential of digital innovations is immense, not just in drama- two minutes, meaning producers can analyze their yield any-
tically cutting waste, downtime, operating costs, and energy where and at any time. All users need to do is place samples
use, but also improving quality, safety, and productivity, and in a special tool and upload a picture via smartphone to
boosting the bottom line. receive a detailed report. TotalSense came out of a Bühler
Challenge organized in partnership with UNITECH.
In just three years from now, it’s estimated that 28 billion
“things” will be connected to the Internet, with sensors mon- Then there’s AnywarePro, a diagnostic tool that sorts com-
itoring and tracking data sent to the cloud to be converted plex production analysis data and again transmits it to the
into “smart” information, then transferred back to become cloud for access by anyone with permission on their phone,
real-time action. It’s in this intelligent gathering and leverag- tablet, or computer. Initially introduced for rice mills, it is now
ing of data that the true value of IoT lies. being rolled out to any food or non-food production lines
using an optical sorter, taking all the complex analysis data
The easy availability of low-cost sensors, low-cost data and providing feedback to a customized dashboard.
transfer, and unlimited cloud storage are potential game
changers for food industry efficiency, for example, with Cloud-based data analytics solution, myAssist, helps to
the ability to revolutionize monitoring and optimization pro- streamline milling production processes and maximize pro-
cesses, improve productivity and transparency, and create ductivity, while integrated robotic technology plays a central
OUR BUSINESS
Bühler Annual Report 2017
45

Digital solutions, implemented correctly, can reduce waste, energy, and downtime; improve quality; and boost the bottom line.

role in ChocoBotic, which is reinventing traditional moulding The power of networks


methods with more hygienically designed lines that are free Digitalization technology is developing at an extraordinary
of chains and their lubricants, and have fewer stations and pace, and those organizations that fail to fully embrace the
components. The increased flexibility offers customers ad- potential will inevitably be left behind. Digitalization is an on-
justable process times, makes cleaning simpler, and allows going – and highly complex – journey, which is why a broad
for easily extended modules. network of strong partnerships with other industries, aca-
demia, and start-ups is vital to staying ahead of the game
There’s also Smart Chocolate Factory, a self-optimizing dig- and maximizing the opportunities. Bühler thinks far beyond
ital service for dosing, mixing, refining, and conching lines. the realm of simple machine solutions to create genuine val-
This “digital factory” is able to boost a line’s quality and ue for its customers.
performance, giving customers both a 10% reduction in
operating costs and a 10% increase in performance. The digitalized world is very much the “new normal”, and
Bühler has positioned itself centerstage. This, combined with
Bühler’s state-of-the art food safety alert system is able to its profound process expertise and knowledge gained from
apply data analytics to an immense amount of worldwide decades of experience, makes it uniquely placed to offer its
sources to provide the most accurate, up-to-date information customers a truly competitive advantage.
available. Data searches are made through an intuitive and
easily navigated dashboard, with analysis available by prod- With 150 years of process technology behind it, an expert
uct, country, time period, data source, or risk type, reducing team of in-house data analysis scientists, and a truly global
a complex process that may once have taken hours or even physical infrastructure, Bühler is able to offer unrivaled digi-
days to a matter of moments. talization possibilities. It’s time to explore the future together.
46

OUR EMPLOYEES
A key element of our sustainability
approach is the promotion and
training of our staff.

At Bühler, we recognize it is our employees that make us employees spread across different continents. It gives us
the success that we are. It is their innovation and creativity access to some of the best talents the world has to offer.
that give life to future products, and it is their entrepreneur- Through Excelerator, Bühler is preparing for future chal-
ship and corporate insight that bring those products to mar- lenges by nurturing these talents into our next generation
ket. But no company can just hope these skills will emerge. of leaders. Each year, employees are nominated for a two-
We all need support to become the best we can be, and day assessment program from which 20 candidates are
at Bühler, we believe it is our role to help our colleagues selected. Each successful candidate receives their own
achieve just that with training and development. unique development plan to build on strengths and galva-
nize leadership qualities.
The kind of training we provide depends on an indivi-
dual’s ambition and career stage. Which is why Bühler en- Developing leadership
sures it delivers tailored career development to the right Successful companies need strength. The Master of Bühler
people when they will benefit most. One such initiative, Management (MBM) program ensures that it is not just our
which we are proud to be running for the first time this leaders, but also our future senior managers who are well
year, is the Bühler Excelerator. One of Bühler’s great as- equipped with the entrepreneurial agility, corporate under-
sets is the breadth of its global reach, with thousands of standing, and creativity to ensure Bühler’s ongoing success.

The 2017 Bühler apprentices from Switzerland.


OUR BUSINESS
Bühler Annual Report 2017
47

Mike Muriithi, Service Automation Engineer. Bianca Sissing, Lead Project Engineer.

Helmut Heiken, Service Engineer. Alfred Zou, Team Leader Engineering.

First launched in 2012, the MBM involves the selection of Bühler has been a pioneer in vocational training for over
around 30 candidates from a pool of nominees around 100 years. In 1915 Albert Bürkler began his training in me-
the globe. Drawn from across Bühler’s regions and busi- chanics as the first apprentice. Since then, approximately
ness portfolios, they will have demonstrated the drive to 7,700 young men and women have completed an appren-
win and a curiosity to learn. The 12-month program in- ticeship at Bühler.
volves both virtual learning and active classroom partici-
pation. Candidates attend week-long themed training pro- Today, about 1,000 former apprentices are still working with
grams at different international locations, covering subjects the company. Bühler has managed to keep the retention rate
such as innovation, leadership, and entrepreneurship. The steady at around 73% over the years. For the past decade it
participants are required to identify and develop potential has been applying the highly successful Swiss apprentice-
business opportunities, with the course culminating in a proj- ship model across the globe. About 600 apprentices enroll
ect presentation to the Bühler Executive Board. The inter- in 12 different vocational courses at Bühler around the world
national program helps candidates develop cross-boundary each year, 292 of them in Switzerland. Our sites in Germany,
networks while appreciating the strength that comes with Austria, China, India, Brazil, the US, and South Africa like-
cultural diversity. wise provide vocational training.
48

Bühler training is based on the Swiss system of dual ed-


ucation, combining work in the classroom with hands-on
practical experience in a Bühler plant. Apprentices receive a
salary and social benefits, and their training needs covered.
It means that graduates start their careers prepared and
debt-free, while Bühler benefits from hiring an already highly
skilled workforce.

The next generation of managers


A fourth and equally important development pipeline is
aimed at the smartest and brightest leaving business
schools and universities. The Bühler Management Trainee
Program takes seven trainees a year and fast-tracks them
through the Bühler corporate experience on a path to senior
management and even leadership. They work in different
plants, are introduced to clients, and learn about all aspects
of entrepreneurship. Over the three-year program they are
provided with the broadest insight into the company from the
shop floor to the highest decision-making arenas. For a year
students will work as assistants to the Executive Board or
to a regional head, gaining a unique insight into the highest
level of corporate decision-making. This is no normal training
program. This is the best a company can offer.

Bühler was voted Switzerland’s Most Attractive Employer


2017 in the products and services category. Each year, the
international recruitment research company Universum
surveys engineering and business students to see which
companies are perceived as the most attractive potential
employers. Bühler topped the field when it comes to what to have. When staff were asked to rate Bühler’s qualities,
we produce. We also received Silver in a Best Machine Tool producing exciting products and services was rated our
Employer recruitment survey across Switzerland, Germany, greatest strength.
and Austria.
These accolades show us that our efforts to maintain the
Equally important is how our own employees judge our per- values we have acquired as a Swiss family-run business
formance, as it helps us attract and retain the best talent. are paying off. Once potential employees get to know about
When comparing what we do well to what our staff think us, they understand the very special culture we try to gen-
is important that we do well, there is a pleasing fit. When erate, where staff arrive for work each day enthused and
surveyed, 67% said having exciting products and services empowered by the opportunities we offer across the globe
was the most important corporate quality for a company to our more than 10,900 employees.
OUR BUSINESS
Bühler Annual Report 2017
49

Employees who supported the 2017 Networking Days @ Interpack in Düsseldorf.

An inclusive approach the company in all aspects of what we do. Therefore, we


It is because of that global reach that Bühler has made diver- brought together business groups in 2017 to create road
sity and inclusion ever-increasing objectives. As a company maps on how we can improve gender balance and inclusion
with 140 locations around the world, we understand the at all echelons of the company.
strength, creativity, and imagination that a culturally diverse
workforce brings to an international enterprise. All employees have equal rights, and regardless of gender,
origin, nationality, ethnicity, or age, we strive to collaborate
Our training and recruitment programs hire the best can- with respect and candor. We want physical disability to be
didates from around the world, and place importance on properly supported, with every new building being disability-
filling management positions with local candidates when- friendly. At Bühler we believe in creating an inclusive culture
ever possible. We want to further increase diversity across so that all talents are allowed to flourish.
50
THE FUTURE OF MOBILITY
Bühler Annual Report 2017
51

THE FUTURE
OF MOBILITY
The story of humanity is also the story of mobility.
Over the millennia, our species has spread across
the globe, subjecting its living environments to ever-
increasing traffic flows. This development is now
reaching its limits: traffic density, climate change, air
pollution, and accident victims call for safer and more
sustainable mobility solutions. Bühler contributes to
this with its Advanced Materials business.
52

UPWARDLY
mobile
Mobility is a basic
human instinct
“All human activity is prompted by desire,” said the
philosopher Bertrand Russell. He also said some of
these wishes “can never be fully gratified.” One of our
most relentless desires has always been to discover,
explore, and settle in new places, something that has
defined our species since its very beginnings.

What else could explain the Russian town of Oymy-


akon, whose 500 inhabitants live on permanently
frozen ground with 21 hours of darkness a day
during winter, and which once recorded a low of
minus 67°C? Or Dallol in Ethiopia, where settlers
endured annual average temperatures of 34.6°C, the
highest ever recorded for an inhabited location on
earth? Then there’s the Peruvian town of La Rinco-
nada, which sits at a vertigo-inducing 5,130 meters
above sea level, or the island of Tristan Da Cunha,
whose 2,400-kilometer distance from the nearest
inhabited land mass hasn’t stopped 300 people
from making it their home.

No other species has this same drive. And while


we’ve always needed to find natural resources, that
can only explain part of it. It must simply be some-
thing that’s in our genes.
THE FUTURE OF MOBILITY
Bühler Annual Report 2017
53
54

NEW CHALLENGES,
new horizons
The car has transformed
the way we live
The last century saw the car coming in to play a cen-
tral role in our lives and our imaginations, and we went
on to design our towns and cities around it. With its
total number now reaching an estimated 1.2 billion,
the car’s success has revolutionized our world – and
thereby sowed the seeds of the need for change.
So successful has been the car that it’s bringing
the world’s most populated cities to a standstill. The
average driving speed in ultra-congested Mumbai is
now around 8 mph – little more than twice our aver-
age walking speed.

More distressing is the rate of accidents. Global road


traffic deaths now stand at more than 1.25 million
per year, says the World Health Organization, with
almost 90% in low- and middle-income countries.
And the damage doesn’t stop there. Carbon monox-
ide, nitrogen oxides, and particulate matter are just
some of the harmful emissions from car exhausts,
and more than 90% of the world’s population now
lives in places where air quality exceeds safety limits.
With around 3 million deaths a year linked to exposure
to air pollution, clearly it’s time for transformation.

As the population grows, and with it our consump-


tion of precious resources, the race is on to create
sustainable solutions.
THE FUTURE OF MOBILITY
Bühler Annual Report 2017
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56
THE FUTURE OF MOBILITY
Bühler Annual Report 2017
57

THE LIGHT
touch
Aluminum die casting for
greener vehicles
By late 2016, car ownership in the world’s most pop-
ulous country had reached a staggering 190 million.
With the average car weighing in at something like
1,500 kg, that’s a total of 285 billion kg in China alone.
That’s a lot of car.

Clearly, the heavier a vehicle is, the more energy it


uses, with just a 10% reduction in weight estimated
to deliver as much as an 8% improvement in fuel
efficiency. Researchers have been exploring the pos-
sibility of replacing heavy steel car parts with plastic
or even wood pulp, but the heaviest part of a car
remains its engine.

Bühler – at the forefront of aluminum die-casting


machinery – is supporting the automotive industry’s
efforts to make cars as light as possible with alumi-
num structural components rather than steel. Today,
the average car contains around 180 kg of alumi-
num, and forecasts say that this will grow to 220 kg
by 2025.
58

FULLY
charged
The rise of the electric car
The world is increasingly looking toward e-mobility
to solve the urgent problem of emissions and danger-
ously poor air quality, and the development of elec-
tric cars is proceeding at a dizzying pace. Charging
points will soon be as familiar a sight on our roads as
gas stations are now.

Tesla aims to have not only ultra fast electric sports


cars but even articulated trucks for sale within a few
short years, and Norway has already set an ambitious
target that 100% of all new cars sold will be electric,
hydrogen, or “plug-in” hybrids by 2025. India, mean-
while, has committed to selling only electric cars to
its vast domestic market just five years after that, and
China wants to see 5 million electric cars on its roads
by 2020.

Electric cars may be low-maintenance, but they need


powerful, state-of-the-art batteries, and in order to
meet this rapidly growing demand, Bühler has devel-
oped a unique process to produce a key component
of batteries: the electrode slurry for the positive and
negative poles in the battery. With this, the industry is
able to enhance the production of batteries and their
energy density.
THE FUTURE OF MOBILITY
Bühler Annual Report 2017
59
60

SELF
determination
Self-driving cars are the future
With the appalling death toll on our roads, and
studies estimating human error to be the primary
cause of all traffic accidents, it seems a logical step
to remove humans from the driving equation.

With other potential benefits, including drastically


reduced emissions, minimized congestion, and the
freeing up of vast areas of land once used for park-
ing spaces, autonomous vehicles have the potential
to fundamentally change our mobility system. They
represent nothing less than a paradigm shift – a move
to a new, truly individualized level of public transport.

A large number of companies are actively devel-


oping self-driving technology, and the autonomous
taxis already tested in Singapore are just the start.
Pittsburgh’s streets have seen driverless Ubers, and
self-driving trucks have even been delivering refriger-
ators in California, albeit with a human observer on
board – for now. Dubai’s ambition to become the
world’s smartest city, meanwhile, includes a target
to have self-driving vehicles account for a quarter of
all its journeys by 2030.

These new vehicles demand sophisticated onboard


cameras, sensors, head-up displays, lightweight con-
struction, and long-life batteries – all of which are part
of Bühler’s solution portfolio.
THE FUTURE OF MOBILITY
Bühler Annual Report 2017
61

© Rinspeed AG
62
THE FUTURE OF MOBILITY
Bühler Annual Report 2017
63

IN FULL
flight
The move from the ground
to the sky
What was once the preserve of science fiction is fast
on its way to becoming a reality, with a number of
companies now working on developing vehicles that
can take to the air.

Dubai has already tested an automated flying taxi


service that it hopes to have operational in the next
five years, and Chinese multinational Geely – par-
ent company of Volvo – is also investing in flying car
technology. Flying taxis and drones benefit from
Bühler’s process technologies for the production of
high-end batteries, sensors, cameras, and more.

One of the main challenges for aspiring flying car-


makers is mastering vertical takeoff and landing
technology, which does away with the need for
a runway and could make traffic jams a thing of
the past – on the ground, at least. The fully electric,
autonomous Volocopter is designed to transform
urban mobility by relieving the strain of road traffic.

So whether it’s electric cars, self-driving cars, or fly-


ing cars, one thing is certain – we’re entering a new
dimension in the quest to make mobility more sustain-
able. The next few years are going to see a complete
and dramatic shift in our perceptions of transport
and travel. That basic human instinct to discover,
develop, and explore remains as powerful as ever.

It’s going to be quite a journey.


© Volocopter
64
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Bühler Annual Report 2017
65

PARTNERSHIP
WITH CUSTOMERS
“Engineering Customer Success” – this is the
level of performance that Bühler promises its
customers. In four examples, we show how
we honor this promise to help our customers
change the world for the better.
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67

BREAKTHROUGH
on the sixth attempt
LISHEN
Tianjin, China
It’s 2014: Jesse Wang wipes a bead of sweat
from his face and readjusts his breathing mask.
He knows that now is not the time to make
mistakes. He joined Bühler three years ago, in
July. He didn’t know much about batteries
when he started, and he never thought that he
would become an expert working tirelessly to
develop a new electrode slurry. A process that
would be so unique that his customer, Yi Liu,
would later say: “This solution from Bühler will
completely change the battery industry. It is a
historic moment, a revolution.”

YI LIU
Lishen Manager of the
Engineering Department
68

Just after starting in this position, Wang received the


order to expand the battery laboratory at the Bühler site in
Wuxi. The talks with the first customer were so promising that
Bühler quickly decided to make this preliminary investment.
Wang was responsible for the battery industry in China, sup-
ported by his colleagues at the Swiss headquarters who had
originally developed the idea for the new process.
But now he is alone in the battery lab, already working on
the sixth trial to make the electrode slurry. So far, the tests
have not produced the sought-after results. Would he meet
the high requirements his customer Lishen was looking for
this time?

Batteries are the guiding factor


Batteries keep our world turning. They are the small energy
stores that drive our lives and make them easier. More and
more cars are being entirely powered by batteries – partic-
ularly in China. In 2017, around 800,000 electric cars were
sold in the country; that’s nearly half the total global produc-
tion. E-mobility is heavily supported and subsidized by the
Chinese government. It is an effective measure against air
pollution and crucial to China’s strategy of becoming a high-
tech country. Financial support is expected to run out by the
end of 2020 though. By that point at the latest, car batteries
will have to be powerful enough to be able to survive in the
free market. Reason enough for battery manufacturers such
as Lishen to invest significantly in research and development
of new processes to produce batteries.
Founded in 1997, Lishen today employs over 9,000 peo-
ple. Its list of customers reads like a “who’s who” of the
electronics and entertainment industry: Apple, Samsung,
Dell, HP, Huawei, and Lenovo are just some of the illustrious
names. The Chinese battery manufacturer has production
plants in Beijing, Qingdao, Suzhou, Wuhan, Shenzhen, and
Mianyang and is one of the top-five battery producers in
China. Lishen is planning to increase yearly output from
around 10 GWh currently to 40 GWh by 2021 – which is
equivalent to an output of around 800,000 car batteries.

It’s all about the slurry “This order has allowed us to


Wang applies the electrode slurry carefully onto a carrier film.
It is black and slightly viscous in consistency. He is using send a clear signal to the industry:
a film applicator to apply the layer as thinly as possible on the new mixing process is ready
the film – this should be no thicker than 100 micrometers.
Afterward, the dried electrode goes to Lishen and to his for industrial use.”
main contact, Liu, the engineer who is responsible on the
customer side. JESSE WANG
The cooperation with Lishen is extremely close. The two Bühler Engineer
companies work well together: as the client, Lishen brings its
expertise and knowledge of batteries to the table. In return,
Bühler brings knowledge of processes and years of expe- of large batches takes several hours, the production in the
rience in continuous mixing: a unique mixing process never new process developed by Bühler takes only a few minutes.
used in the battery industry before until now. Using a rotating twin-shaft mixer, the necessary process
The electrode slurry is essential for the power density steps – such as mixing, homogenizing, dispersing, and de-
and energy density of a battery, that is to say, for the output gassing – are combined in a single, continuously running unit.
and energy per battery volume. Traditionally, slurries are pro- Thanks to this continuous mixing process, the manufac-
duced in batches in large vessels. These conventional plants turer is able to intervene at any given moment should the
are huge and expensive. The process is also very inflexible: results not meet the requirements. Ultimately, what counts
if a batch does not meet the requirements, it is either dis- is that the improved mixing process significantly increases
posed of or used for inferior products. While the production battery performance. It also reduces the investment costs,
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The viscosity of the electrode slurry took six years to perfect.

and the energy costs are much lower using this new process Will the sixth attempt pay off?
in comparison to using conventional production methods. Wang is in the analysis laboratory. In addition to the many
Lastly, the space requirements of the new process are con- other parameters, for this sixth test he has further adjusted
siderably lower, and fewer rejects are produced. Something the concentration of the bonding agent. The test results are
that has also impressed Lishen. Abandoning the classic in. He checks the viscosity and the distribution of particles
batch processing of electrode slurry in favor of a new con- in the electrode slurry as well as the electrical conductivity
tinuous process benefits the customer. But will Bühler be of the electrode; together these determine the power density
successful in developing the industrial-scale process soon and energy density of the battery. The viscosity of the slurry
enough for Lishen’s new plant? was particularly problematic in the last series of tests. New
Each trial takes several months. First, the Bühler engi- raw materials and new parameter settings led to the slurry
neers develop and validate the optimum slurry composition being too thick, so that it could not be optimally used. “Thick
based on Lishen specifications. Once the Bühler team is and viscous like toothpaste,” Wang recollects.
satisfied with the test results, they produce 50 liters using The latest values convince the engineer. The test results
the new formula, which is then sent to Lishen. Liu, currently meet Liu’s requirements. But it will be several months before
a leading engineer from the process department at Lishen, Lishen confirms the results. It’s a long wait before Wang
then takes over. The Lishen team uses the new electrode knows whether the client will want to perform more trials.
slurry to create battery prototypes and conducts extensive But time is of the essence, because Lishen’s competitors
tests. Because this is no ordinary electrode slurry. Bühler are also working on innovations, and the Bühler process is
has revolutionized the battery-making process. the first in a series of steps in the complicated process of
70

The rotating twin-shaft mixer is the heart of Bühler’s continuous process to produce electrode slurry.

developing batteries. Should the Bühler engineers miss their for Bühler. The successful trials that eventually led to ordering
goal, it endangers the whole manufacturing process and the the first pilot plant were the beginning of a mutual success
new plants Lishen is planning in Suzhou. story for Lishen and Bühler. Both partners agreed the deliv-
The production of batteries takes place in several phases. ery of 10 production lines on an industrial scale. Four will be
It begins with preparing the various raw materials that the opened in the new Suzhou factory, two in Tianjin, where the
battery manufacturers usually buy from chemical companies. pilot plant is located, and four more at the Qingdao location.
These are then processed into anode and cathode slurries
in a mixing process.
This is where Bühler’s innovative continuous mixing pro-
cess comes in; however, Bühler solutions are also used in
the upstream process to ensure correct dosing of raw materi- “This solution from Bühler will
als. After the mixing process, the slurries are applied to films.
These are then cut to size and rolled up into battery cells. In completely change the battery
the next step, the manufacturers charge and discharge the industry. It is a historic moment,
cells to ensure the best possible battery performance. Final-
ly, the cells are packaged in battery packs, which are then a revolution.”
used in cars. A single electric car battery consists of several
hundred to several thousand battery cells. YI LIU
Lishen Engineer
Everything hinges on this one call
Months later, Wang’s mobile phone rings. He takes the call.
Liu is on the other end of the line. The Lishen project manager,
who is usually rather restrained, is delighted: the results of
the sixth trial are impressive. The viscosity problem has been Altogether, the lines have a yearly output of up to
solved, and the power density and energy density of the 10 GW/h. Enough to produce more than 200,000 car bat-
batteries have significantly increased during the test series. teries per year.
Wang can hardly believe it. He only trusts the results after “This order allowed us to send a clear signal to the in-
conducting the tests again. But in fact, Wang and his team dustry: the new mixing process is ready for industrial use;
have done it. The electrode slurry was indeed of the required the benefits can be seen directly in an industrial context. So
quality. Things now start picking up pace, and Lishen signs a it did not take long for additional orders to roll in. Another
contract for the delivery of a pilot plant to their factory in Tian- customer has already ordered four production lines, and we
jin. It is August 2014, three years after Wang started working are in talks with further customers,” Wang explains.
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Bühler engineer Jesse Wang was instrumental in revolutionizing the battery-making process.

A milestone for the battery industry new factory of ours is producing a new generation of bat-
Wang ties his tie. It is July 20, 2017. Today is a historic teries. This 30% increase in energy density means we have
moment, the grand opening of the Lishen plant in Suzhou in achieved a quantum leap,” Liu and Wang nod to each other
front of hundreds of spectators. He has already visited the with appreciation. Lishen Suzhou honors Bühler with the
plant and knows just how impressive it is: stretching over Best Equipment Supplier award.
600 by 50 meters, the plant contains all the processing steps “Six years of joint research and development have paid
for car batteries, from the raw materials and the electrode off. Six years of strong cooperation between Lishen and
slurry right up to the finished electric car battery. Everyone Bühler colleagues in China and Switzerland. This award and
from the battery industry will get together tonight. Represen- 10 production lines at Lishen are visible proof of this,” Wang
tatives of the local and regional government will show up. A says with pride. And Liu adds: “Bühler kept the promise they
great success after six years of work in the lab. made. Bühler is our long-term partner; we tackle new pro-
It has grown dark in Suzhou. The audience listens with jects together.” Since then, Liu has been appointed Manager
bated breath to the statements made by Qin Xingcai, the of the Engineering Department at Lishen. Not least because
President of Lishen. The company plans to be at the fore- of the successful project with Bühler, and a milestone for the
front of the Chinese battery market with the new plant. “This battery industry.
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73

FOODS FOR
a brighter future
CITY GROUP AND AKIJ
Dhaka, Bangladesh
Poverty, malnutrition, infectious diseases. The
common perception so many people have of
Bangladesh has been out of date for some time.
The country has been experiencing an eco-
nomic upturn for well over two decades, which
is also evident in the indigenous food industry.
More food, better, safer, and at lower prices is
the motto. Together with the producers City
Group and Akij, Bühler is undoubtedly involved
in the positive development of food security for
the country.
74

AKIJ GROUP
Akij Group is a conglomerate that grew out of
“Our products are for human the jute trading business. Founded by Sheikh Akij
Uddin in the latter part of the 1940s, the com-
consumption, and food safety pany now operates in the textile, cement, ceram-
is indeed the most important ics, packaging, plastic, and steel industries, and
is the country’s largest tobacco producer. In the
thing to take into consideration food sector, Akij produces mineral water, milk, soft
drinks, snacks, wheat flour, and bakery products.
when designing a product.” With Bühler, Akij set up a flour mill close to Dha-
ka. The Akij Group includes 26 companies and has
SHEIKH BASHIR UDDIN more than 50,000 employees. The destiny of the
Owner and Managing Director of Akij Flour Mills Ltd. company is now in the hands of the founder’s son,
Sheikh Bashir Uddin.

Sheikh Bashir Uddin, owner of Akij Flour Mills Ltd., employs 50,000 people.
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Bühler Annual Report 2017
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Dry mops and dust cloths are in constant use. Bharati has grown from a small jute-trading operation to one of the
is one of dozens of cleaning women who ensure a pristine biggest corporate conglomerates in Bangladesh. Akij has
production environment in the Akij flour mill. She wears also engaged in food and drink production for more than
colorful attire, the salwar kameez, consisting of green trou- 10 years. Cooperation with Bühler began in 2014, when
sers, a matching long top, and a head scarf. The colors Bashir decided to build a mill. Since then, two production
glow in the glossy white, immaculate mill. No dust particles lines have been developed for traditional flour, with daily ca-
are found here. And this in Bangladesh, where, especially in pacities of 500 and 550 metric tons, respectively, as well as
the late monsoon season, the dust from the road sticks to an Atta mill with a capacity of 150 metric tons per day.
clothing moist from the heat. The project also includes a flour storage system with a
Cleanliness is the watchword in industrial food pro- capacity of 3,200 metric tons. “Akij has invested in our latest
duction, says Sheikh Bashir Uddin, owner and Managing equipment and technology, and therefore has the most
Director of Akij Flour Mills Ltd.: “I don’t even know who could state-of-the-art mill in the whole of South Asia,” says Marcel
say food safety is not important. Our products are for human Züst, Senior Advisor at Bühler for the region.
consumption, and food safety is indeed the most import- Industrial food production in Bangladesh has become
ant thing to take into consideration when designing a prod- more important in recent years. After all, production is
uct.” Akij’s business is booming. In 70 years, the company the country’s greatest hope. It is thanks to industry that

Zahid Abu, Senior Engineer Bühler Dhaka and Galibur Rahman, Head Miller Akij Flour Mills Ltd. inspect the newly-built production site.
76

CITY GROUP
The City Group conglomerate has been in food
production since the 1970s. Once Fazlur Rahman’s
first mustard mill project was successful, the founder
began to diversify. Other lines of business, such as
packaging, energy, and steel, were added. The co- “The government has set itself
operation with Bühler began in 1997, with the con-
struction of the first mill. Rahman soon expanded the goal of making Bangladesh
his business to include more mills, two pelleting a middle-income country by
plants for poultry feed, and a production plant for
fish feed. Bühler also supplied machines for crush- 2020. In order to achieve this,
ing soybeans, which are integrated into the pro-
cess of the soybean oil extraction plant supplied the private sector must invest in
by Andreotti. City Group now has 26 companies, production – we need more
which together employ over 10,000 people. Rahman
is still the head of the company as Chairman and rice, flour, and cooking oil.”
has named his daughter Shampa as his successor.
FAZLUR RAHMAN
Founder and Chairman of City Group

City Group’s Shampa Rahman and her father, Fazlur Rahman, have counted on the partnership with Bühler for over 20 years.
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Local markets offer a bigger variety of foodstuffs thanks to increased industrial production.

Bangladesh has been able to cross the poverty thresh- explains Sheikh Bashir Uddin. “From our side, we can drive
old as defined by the Human Development Index of the development of new, nutritional products; of course, we
the United Nations. This slow but steady economic growth also need people to buy them. Thanks to the size of our indus-
has meant the country is now classified as one with me- trial operations, our products are available for a reasonable
dium development. The average life expectancy is 72, and price, which enables more consumers to have access to
the average school education lasts 10.2 years. Average more foods.”
per capita annual income is USD 1,600. Also convinced of this is Fazlur Rahman, Chairman of
City Group, the biggest Bühler customer in the country.
The food sector is supporting the upturn “Bangladesh is growing,” says Rahman. “We want to help
Nevertheless, the way out of poverty is difficult. With approx- establish a sound basis for the country’s economy. The gov-
imately 165 million inhabitants, Bangladesh has one of the ernment has set the goal of making Bangladesh a middle-
highest population densities in the world. Streets and hous- income country by 2020. In order to achieve this, the
es are already overflowing in the capital city of Dhaka; the private sector must invest in production – we need more
settlement stretches across huge areas with slums and sub- rice, flour, and cooking oil.”
urbs. Mountains of garbage are piling up outside the city Rahman’s conglomerate is active in the domestic food
center. Flooding is a routine occurrence. industry. Having originally processed mustard seeds to
A silver lining can be seen, though. GDP has been growing make oil, Rahman developed the business over a period
steadily since 1995; in 2016, it grew by 7.1%, and in the three of 50 years to become a highly diversified company. In
years before that, the annual rate was approximately 6%. The the food and feed sector, City Group now not only pro-
textile and metal industries are the most notable drivers of duces mustard, sunflower, and soybean oil, but also flour,
this development, but the domestic food processing indus- lentils, and rice. Today, Fazlur’s daughter, Shampa Rahman,
tries are keeping pace. “The livelihood of the population will is No. 2 at City Group, and will take over the business in
increase first and foremost with the growth in the economy,” the future.
78

The company’s newly commissioned production plant


on the bank of the Shitalakshya River, 30 kilometers out-
side Dhaka, was brought about together with Bühler.

Industrial production means safe production


The new production plant’s capacities exceed the di-
mensions of those hitherto seen and are among the
biggest projects that Bühler has ever carried out: during
peak times, up to 50 metric tons of finished products leave
the new production lines every hour. The production location
includes a transshipment center for wheat with an intake
capacity of 600 metric tons per hour as well as a facility
for processing red lentils (600 metric tons per day), rice
(72 metric tons per hour), and Atta flour (4 x 150 metric tons
per day). In addition, a soybean warm dehulling plant with
a throughput rate of 5,000 metric tons per day is currently
under construction.
The food situation in the country is still not where it should
be. With an unbalanced rice diet, malnutrition is still an issue,
as are food-borne bacterial infections. And this is precisely
why City Group is going for diversification with protein-rich
lentils and vitamin-rich Atta flour. Safe food production is
also a priority. Cleanliness is the top priority at the City
Group production plant; gloves and caps are just as much
a part of cleaning staff attire as the salwar kameez.
With Bühler, the company has a partner that has been
employing the highest standards of hygiene for years.
Bühler has been working with City Group to raise domestic
food production to the highest level since 1997. The pro-
duction site recently established outside Dhaka proves that
this is possible.

Partnerships built on trust


City Group’s positive experience in previous projects with
Bühler is the reason their family again awarded the big
contract to Bühler, says Shampa Rahman: “I have known
the people at Bühler since my childhood – some of them are
just like family to me.”
She and her father value the quality of work at Bühler
above all else: “And when problems arise, we can ask the
people at Bühler to solve them – and they always do!”
Customer care is right at the top of the priority list for
Bühler in Bangladesh. In the past two years, Marcel Züst
made an average of one trip a month to Dhaka to monitor
the progress of both major projects. “Being able to inau-
gurate the new Bühler Dhaka Service Station in the early
summer of 2017 was helpful,” says Züst. “This means that
a highly competent team will be available on-site to help
with technical problems or inspections in the future.”
The fruits of the joint endeavors are offered on the local
market; alongside the traditional huge supply of rice from
jute sacks, there are more and more prepackaged foods,
lentils, flour, and cooking oil. City Group’s Teer brand is as
common at every stand as Akij’s Sunshine flour. Thanks to
the industrial processing by Bühler machines, these pro-
ducts comply with the highest standards in the sphere of
food safety, and are available at prices that many people
now can already afford.
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Bühler Annual Report 2017
79

A bird’s-eye view of City Group in Dhaka. Here, they produce rice, dal, and wheat flour, and trade raw materials.
80
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Bühler Annual Report 2017
81

PROJECT LIFE
Fighting malnutrition
AFRICA
IMPROVED FOODS
Kigali, Rwanda

A toddler dances. She wears one shoe, holding


the other as she happily sways to imaginary
music. Her mother glances at the 1.5-year-old
now and again, but her attention – along with
that of the other mothers gathered in a little
room at the Centre de Santé health facility in
the Rulindo district of Rwanda – is on the nurse
explaining the importance of proper nourish-
ment for their babies and themselves while
pregnant or nursing. The mothers and children
in this room are recipients of the fortified por-
ridge made by Africa Improved Foods (AIF) and
distributed by the Government of Rwanda to
scale up nutrition efforts and combat stunting in
the country.
82

Amar Ali, CEO of AIF, in the company warehouse. AIF produces 16 million metric tons of relief food for the World Food Programme each year.

The mothers have brought their babies to be weighed and “The world needs smallholder
measured to assess their development progress. When they
come for a check-up, they take part in a lesson and then get farmers. AIF can do its part
more of the fortified cereal, which they have also learned by making rural livelihoods
to prepare in similar classes. The mothers receive the AIF-
made fortified cereal for free as part of the Rwandan Ministry more sustainable.”
of Health’s Thousand Days program to address the effects
of malnutrition, particularly in the critical first 1,000 days of AMAR ALI
development from conception to age two. CEO of Africa Improved Foods

Finding lasting solutions


The young women keenly listen as a nurse describes how to
prevent malnutrition in their babies and themselves. Nourish security, a significant threat in Rwanda. The government has
your own body properly during pregnancy, breastfeed for at partnered with AIF to find a lasting solution to both issues.
least two years, and when your infant is six months old, be- Despite ongoing efforts, nearly 37% of children under
gin to supplement with the fortified porridge provided by the five in Rwanda are affected by stunting, according to the
government. The majority of the women here are among the government’s 2015 Comprehensive Food Security and Vul-
poorest 20% in the country and lack education, making them nerability Analysis report. Stunting is one consequence of
especially vulnerable to malnutrition. Added to that is food in- under nutrition, and simply put, it means a child’s height is
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Bühler Annual Report 2017
83

AIF produces its commercial Nootri range cereals for mothers and infants.

significantly less than the average for their age. However, the AIF’s mission is curbing malnutrition not only in Rwanda
complexities of stunting extend far beyond impaired growth but across sub-Saharan Africa, which has been heavily
to include poor cognitive and organ development, weakened impacted by famine in recent years. The famine is fueled
immune systems, and nutrition-related chronic diseases in by the worst El Niño event on record. While achieving its
adulthood. Though the numbers have improved from 43% mission, AIF is also working to develop a truly sustainable
in 2012 when the last study was made, there is still much to food value chain in Rwanda that it hopes to extend to other
be done, primarily in rural areas, such as Rulindo, where the countries, including Uganda, eastern Congo, Kenya, Tanza-
average is still 40% compared to 27% in urban areas. nia, and Ethiopia, in the next five years. “We are happy to be
providing relief foods and foods to address malnutrition, but
Taking action in the first 1,000 days more needs to be done. Our premise is to support African
While the statistics are daunting, stunting can be prevented countries so they reach a level where they no longer need
if the right steps are taken in those first 1,000 days. “We’ve international support and can be economically self-sustain-
placed 46 children in the government program at the Centre ing using local capacities,” explains AIF CEO, Amar Ali.
de Santé. All of them have stunting problems where their AIF directly employs 300 people – among them mill oper-
height did not match their age,” says Jacqueline Urures, ators, who required training to learn how to effectively and
head of the health center and a nurse for 15 years. “It will take safely operate the high-end Bühler-built factory, located in
some time to accurately evaluate, but we can already say the Kigali Special Economic Zone. The factory has a produc-
that three of them are now in the correct height-age range. tion capacity of 45,000 metric tons annually. “The need in
We also see that well-nourished children have more energy.” Africa for the products we produce is extremely high consider-
84

ENGINEERING ing the famine in East Africa,” Ali says. “We can’t afford down-
time. We chose Bühler because we wanted a reputable com-
CUSTOMER SUCCESS pany that knows how to build in Africa and in challenging
environments without compromising quality and that will be
Bühler’s involvement in what would become AIF be- with us through all the challenges. There have been many
gan in 2009, when Peter Boehni, Head of the Bühler challenges, and Bühler has been there as a partner through-
Innovation Satellite at the Swiss Federal Institute of out. One of the challenges was finding people to operate
Technology in Lausanne, heard about a DSM project the mill. Bühler did that as well, training our people on their
that would address malnutrition in Africa with a facto- equipment in Nairobi.”
ry in Africa. “I knew this was the perfect project for us AIF officially inaugurated its CHF 60 million plant in May
because we share DSM’s goals of wanting to create 2017, but already in late 2016 had begun manufacturing
a more sustainable food industry to feed the grow- fortified cereals for its biggest customers – the World Food
ing global population and address malnutrition,” says Programme (WFP) and the Government of Rwanda. From
Boehni. The project was aptly named “Life.” Though the start of production to the end of 2017, the company
technical discussions with the Bühler team, DSM, and had produced 4 million kilograms of fortified cereal for the
consortium initiator CHAI (Clinton Health Access Ini- Rwandan government, and 17 million bags – 26 million kilos
tiative) began in 2013, Project Life only really began – of relief foods for the WFP.
to take form in 2015 when the AIF consortium was The WFP and the Government of Rwanda are not only
established and the decision was made to build a customers. They are also members of the AIF public-private
plant in Kigali, Rwanda. “Things happened fast after joint venture, along with Royal DSM (the project initiator), the
we signed the contract in July 2015,” says Bühler’s International Finance Corporation, Dutch development bank
Theodor Sutter, Key Account Manager for the project. FMO, and the UK-based CDC Group. “We could not achieve
By December 2016, the plant was fully productive.” our mission without the support of the Rwandan govern-
ment, which is a shareholder, customer, and partner in all

Bühler Key Account Manager, Theodor Sutter, and AIF Chief Operating Officer, Jan Vriens, worked together to make the AIF factory a reality.
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85

Bühler Service Engineer Alex Ndachi is often on-site to train AIF technicians in the maintenance of machinery.

ways,” says Ali. “The WFP is our biggest customer. They Each family tends between 100 and 1,500 square meters
enable us to build scale and make our products more of land. The majority of them lack access to modern meth-
affordable, and their stringent quality standards give us ods of harvesting, processing, and storage. This is where
the opportunity to improve overall standards of production AIF comes in. The consortium collects the maize shortly
in the country. Together, we sustainably catalyze the eco- after harvest and transports it directly to its facilities, where
system around us with this economic development model.” the moisture content is maintained to acceptable levels.
“With AIF picking up maize harvests immediately, we have
In the region, for the region seen a significant reduction of post-harvest loss due to afla-
By sourcing the maize and soy for their porridges from nearly toxin,” says Yassin Iyamuremye, Director General of Corpo-
10,000 local smallholder farmers, cutting out the intermedi- rate Services for the country’s Ministry of Agriculture and
aries, and paying them at the point of pickup, the company is Animal Resources.
supporting the government’s plans to spur agricultural trans- The farmers in the AIF-supported cooperatives are paid
formation. Agriculture currently contributes to about 33% at the moment of pickup, an unusual but effective practice.
of Rwanda’s Gross Domestic Product (GDP), according to Raising the income of local farmers by sourcing crops from
its National Institute of Statistics. It plans to increase this. them, as AIF does, improves their livelihoods and creates
Today, about 70% of Rwandans make their living from financial inclusion. “I’m grateful to be in the cooperative and
agriculture. One of them is farmer Vestine Akmanizanye. On have access to good seeds and fertilizer. Without the mid-
her own, the widow cannot handle the planting and harvest- dlemen, I get a good price for my crop,” says Akmanizanye.
ing of her 250-square-meter field in the northern province.
Thankfully, she doesn’t have to. She’s a member of the AIF- Keeping up with growing demand
supported Rulindo district Farmer’s Cooperative, which over- Just three years ago the government was struggling to find
sees 160 hectares – 1.6 million square meters – of farmland a market for the maize and soy crops produced by small-
run by 3,300 families. On a hazy, warm morning in Septem- holder farmers, but it now faces a new issue, explains
ber 2017, almost 20 cooperative members have gathered to the Director General, as AIF is currently consuming about
help Akmanizanye sow maize. “I could not manage it on my 30,000 metric tons of maize a year. “Our next issue is devel-
own,” she explains in Kinyarwanda, the country’s national oping a strategy to ensure the raw materials continue to
language. Cooperative manager, Thacien Hakizimana, inter- remain available to them. We need to put a system in place
prets her words into English. “People in the cooperative work to mitigate drought impact and resilience against climate
together. We work in harmony to help one another,” she says. change, and irrigation systems are a big part of this.”
86

“AIF’s partnerships with


the cooperatives create
financial inclusion. This is a
big achievement.”
YASSIN IYAMUREMYE
Director General of Corporate Services
for the Rwandan Ministry of Agriculture
and Animal Resources

Rulindo Cooperative Manager, Thacien Hakizimana, and Cooperative Chairman, Elia Habimana, say AIF has changed the lives of farmers.
PARTNERSHIP WITH CUSTOMERS
Bühler Annual Report 2017
87

Cooperatives play a vital role in drought preparedness, Young people today don’t want to take over the smallholder
Iyamuremye says. “Well-managed cooperatives can make farms of their parents,” says Ali. “This has a lot to do with
a difference, not only in the lives of individual farmers. They the fact that these farms just haven’t paid off in the past.
also help the government obtain its goal of increasing agri- We are trying to solve this because it is part of a bigger pic-
cultural GDP. The cooperatives have a successful ‘teach my ture. The population of Africa is projected to grow at about
neighbor’ approach.” 100,000 people a day between now and 2050. They need
Elia Habimana, Cooperative Chairman of the Rulindo food and jobs, and the world needs smallholder farmers to
district, applied for this voluntary position to help fellow meet its nutrition needs. AIF can do its part by making rural
farmers actively exchange knowledge. He is respected and livelihoods more sustainable.”
viewed as a role model by his peers, explains Cooperative
Manager Hakizimana. “It is a lot of work to be the Chairman,
but I want to support my government with the sustainable “I am grateful to be in the
development of farming,” Habimana says. “We farmers have
learned from the challenge of drought, we are elevating the cooperative and have access
quality of our harvests, and we are improving our yields. We to good seeds and fertilizer.
have benefited 100% from our partnership with AIF.”
The investment into the cooperatives has a greater pur- Without the middlemen, I get
pose than meeting AIF’s production goals, the company’s
CEO explains. “Worldwide, 80% of farmers are smallholders, a good price for my crop.”
and they produce over 80% of the food consumed in the
developing world. They have an essential role to play in food VESTINE AKMANIZANYE
security, and with this in mind, we are facing a big problem. Smallholder farmer and cooperative member

Vestine Akmanizanye is a member of the Rulindo district cooperative.


88
PARTNERSHIP WITH CUSTOMERS
Bühler Annual Report 2017
89

A HINT OF
HIGH TECH
ZEISS VISION CARE
Aalen, Germany
The best perspective in every situation: ZEISS
is driving the functionality and quality of glasses
to new heights with its innovations. With its
coating unit, Bühler is part of this unique devel-
opment. How will the success story continue?
90

“The better we under- Victoria Beckham swears by them, and the Spanish ath-
lete Ruth Beitia wore them in Rio 2016 for her Olympic high
stand what’s going on in jump victory: glasses with lenses from ZEISS. If there is one
the brain, the better we global brand of optics that guarantees the best perspective,
it has to be the German manufacturer ZEISS. As Rolex is to
can construct glasses.” watches, Rolls Royce to cars, Apple to phones, and Chanel
to perfumes, ZEISS is to lenses.
MARKUS HAIDL And with good reason. The company’s history is filled
ZEISS Researcher with groundbreaking innovations to this day: as early as the
19th century, ZEISS developed the first physical models for
the optical calculation of microscopes. In 1912, the compa-
ny invented the Punktal spectacle lens, which was the first
modern precision spectacle lens ever. The anti-glare coating
followed in 1959. In 1986, ZEISS made progressive lenses

Bühler coating specialist Karl Matl and ZEISS researcher Markus Haidl work together to perfect the coating process.
PARTNERSHIP WITH CUSTOMERS
Bühler Annual Report 2017
91

with horizontal symmetry easy to wear for the first time. this as a basis together with your personal visual require-
ZEISS has been digitizing optics since 1992, starting with ments, it feeds the relevant production parameters for the
a video-based system for making individual measurements lens into the processing machine at one of the production
to ensure the lenses fit perfectly. In 2013, ZEISS launched sites in America, Europe, or Asia. The result is a truly tailor-
DuraVision Platinum, the most scratch-resistant glass on the made, personalized lens, as unique as a fingerprint. The
market so far. ZEISS also revolutionized customer-specific effect is impressive: “The vision performance in low light
lens production, so that lenses now need only be processed conditions and at night is significantly improved. As a result,
on the one side – many eyewear manufacturers through- motorists are safer on the road. Colors appear much more
out the world have acquired a license for this technology. intense – all visual impressions appear sharper and with
Every year, ZEISS invests 10% of its revenue in research more contrast,” explains ZEISS researcher Haidl.
and development – which is reflected in the pace of innova-
tion in lenses and optical instruments. Production and logistics: ZEISS manufactures up to
ZEISS plays a huge roll in the successful track record of 15,000 of this type of custom product every day alone in
glasses. Every year, it sells 100 million spectacle lenses in its prescription production facility in Aalen, Germany, and
more than 60 countries around the world. There are special the shaping process is carried out individually for each
designs and coatings for car drivers, people who work with lens, rather than in batches. Production and logistics run as
computers and athletes – custom-made lenses optimized smoothly as the internal workings of a Swiss watch. Starting
from a blank, the glass is shaped completely automatically in
around 90 seconds by a five-axis CNC (Computer Numer-
ical Control) processing machine and optically adjusted for
“We need to ensure that the its future wearer. The production process from calculating
the individual lens to shaping, polishing, tinting, and coating
results we achieve with proto- includes more than 30 individual stages in total.
types can be reliably repro-
Functionality: “This is where the magic happens, be-
duced in mass production.” cause this is where we differ so much from other manufac-
turers,” explains Haidl. Basic functions such as anti-glare
KARL MATL or scratch resistance have long been part of the standard
Bühler Coating Specialist repertoire of glass manufacturers; but now there is a trend
toward glasses that are developed for the highest level of
comfort and safety in every conceivable situation.
For motorists, for example: The ZEISS developers have
for the eyes, face, frame, and lifestyle all bear the ZEISS created special spectacle lenses that filter out part of the
hallmark. Glasses have since evolved from being a medically high-energy blue light of modern LED headlights. This part
prescribed visual aid to becoming an industrial mass-pro- of the light makes the modern lights very bright – good
duced fashion staple, an everyday object that sits on your for the driver – but it is irritating for others, for example, for
nose and does far more than simply correct vision. drivers in oncoming traffic. The reduction provided by the
Of course, this makes it easy to forget how important it ZEISS DriveSafe coating reduces the glare, making it more
is to have good vision. “Seeing is believing,” ZEISS research- pleasant to drive at night or in poor visibility conditions. For
er Markus Haidl puts it in a nutshell. Education, quality of screen use, for example: the high-resolution retina screens
life, and comfort are unthinkable without clear vision. See- on tablets and smartphones send light waves that signal to
ing is considered to be the most important sense humans our brains that it is day. This affects the distribution of the
have – we take in 80% of all information through our eyes. sleep hormone melatonin. ZEISS lenses can also mitigate
If your vision is impaired, it is difficult to learn, your working the effects of these particular wavelengths. Contact lenses,
life is drastically shorter, and your quality of life suffers. As for example: With EnergizeMe, ZEISS has developed lenses
in other areas of basic human needs, when it comes to vi- specifically for contact lens wearers. Contact lens wearers
sion, there are still many people who do not have access to also wear glasses for several hours a day to rest their eyes.
optical aids – an estimated 625 million people worldwide. Given the intensive use of digital devices – which emit a high
proportion of blue light – and the particular viewing habits
Customized mass production of contact lens wearers, ZEISS offers this target group a
The high-tech nature of glasses is often overlooked. At first product that is optimized for their special vision requirements
glance, a plastic lens just appears to be a transparent piece and digital lifestyle.
of plastic. But the ZEISS lenses pack a real punch, in three
different ways: Coatings are crucial
This brings us to the subject of coatings: “We use coatings to
Individual optics: With the ZEISS i.Profiler, the opti- give the lenses their special functions,” Haidl explains. This
cian can capture the eye’s defects with extreme precision at means that the coating is a crucial process stage in produc-
1,500 measuring points per eye. A special algorithm – known ing the lenses – and also one of Bühler’s areas of application.
as the Coca-Cola formula of spectacle lens manufacturers – After an immersion bath for a scratch-resistant coating,
calculates the best possible correction for your vision. Using the polished spectacle lenses are put in a vacuum chamber,
92

Markus Haidl is convinced: the glasses success story is not yet over.

where the layers for the other functions are vapor-deposited. “Together, we are working
Up to nine individual layers made from six different materials
are applied in individual steps. Metal oxides are evaporated towards being able to control
in a high vacuum and deposited on the surface of the lens, and adapt the coating process
which is ionized and therefore attracts the oxide molecules
with the opposite charge. To also achieve extremely hard more effectively.”
and resilient layers, the coating packages are then addition-
ally compressed using ionizing radiation. By the end of the MARKUS HAIDL
process, all the layers together are only 400 nanometers ZEISS Researcher
thick. This is a hint of hightech: this is the distance that grass
grows in 15 seconds.
“Compared to these dimensions, in which we have to With the SYRUS coating systems, Bühler Leybold Optics
produce things precisely and reliably, everything else is fairly has more or less mastered the art of coating to perfection.
trivial,” says Bühler coating specialist Karl Matl. In case of a It’s essential that the high-performance unit does not fail: it
potential error, the automated production means that the must reliably deliver the coating results 24 hours a day, and
production process for an individual lens must be started this is what makes the quality of the ZEISS lenses so unique.
again from scratch. The delivery of the affected customer The blue reflex color of the ZEISS glasses requires coating
orders would be delayed by having to produce the lens again, thickness accuracy down to the nanometer – these are just
especially if things did not quite go to plan in the coating a few atom layers on top of each other.
stage at the end of the process. With several thousand or- For over 10 years, ZEISS has been so satisfied that Bühler
ders a day in Aalen, error-free production is a real challenge. is one of their preferred suppliers and the SYRUS system is
PARTNERSHIP WITH CUSTOMERS
Bühler Annual Report 2017
93

used in all of the spectacle lens manufacturer’s production to gain deeper and deeper insights into how we humans form
sites. “For us, Bühler is not just a supplier, but really a part- a subjective and emotional picture based on a physically ob-
ner,” Haidl explains. After all, it is not just the technologies jective input of light waves. “The better we understand what’s
and machines, but ultimately the people who ensure that going on in the brain, the better we can construct glasses,”
the research and development work actually ends up on explains ZEISS researcher Haidl. At the ZEISS Vision Science
the lens in an efficient industrial process. “And for this, we Lab in Tübingen, researchers are working on these funda-
consider Bühler a reliable partner that shows a great deal of mental questions in close interdisciplinary cooperation with
initiative,” says Haidl. universities and nonuniversity research institutions.
Trust on both sides also plays a crucial role here. “We There is also still potential for further optimization in pro-
need to ensure that the results we achieve with prototypes duction. “Together, we are working toward being able to con-
can be reliably reproduced in mass production,” says Matl. trol and adapt the coating process more effectively,” says
This requires close coordination between ZEISS and Bühler, Haidl. If that works, it would be possible to work more pre-
especially in particular situations. For the transfer of a newly cisely and eliminate the source of errors more easily. Bühler
developed, functional coating such as ZEISS DriveSafe, it is currently developing an even more accurate measurement
is also necessary to develop new technologies and coating of the nanometer-thin layers in order to achieve greater ac-
standards – parts of the innovation process that must be curacy for the layer thickness cut-off.
mastered together. And also in terms of functionality, more riddles need to
After more than 170 years of ZEISS and over 100 years be deciphered; preventing lenses from fogging up is right at
of precision lenses, one might ask: Is the glasses success the very top of the list. If antifog glasses were to be launched
story slowly coming to an end? Have developments of the on the market, it would not just be appreciated by winter
transparent piece of plastic been exhausted? sports athletes and chefs. All the renowned eyewear manu-
This question makes ZEISS researcher Haidl and Bühler facturers are working on it – and it would not be a coincidence
expert Matl smile. It all comes down to the fact that vision if ZEISS, with the close cooperation of Bühler, were to solve
itself is not fully understood. Current brain research allows us the problem and impress eyeglass wearers once again.

The blue reflex color of the ZEISS lenses is a unique characteristic made with Bühler coating technology.
94
SUSTAINABILITY
Bühler Annual Report 2017
95

SUSTAINABILITY
We live a sustainable business policy. We strive
to improve our solutions and services to generate
long-term added value for our customers, feed
the world’s growing population, reduce energy
consumption, and leave a healthier planet to
future generations.
96

ALIGNING WITH THE UNITED NATIONS


SUSTAINABLE DEVELOPMENT GOALS
Bühler is committed to making a meaningful impact for its customers,
employees, partners, and the environment. To realize this on a global
scale, it has aligned its sustainability strategy with the United Nations
Sustainable Development Goals (SDGs).

The 17 SDGs are a universal call to action to end poverty, In these times of accelerated change, it is vital to understand
protect the planet, and ensure that all people enjoy peace how our industries will transform, identify where we are able
and prosperity in inclusive societies. They are a guide to to generate positive impact, and position ourselves to sup-
help governments achieve the ambitious and transforma- port this transformation. We believe that only through broad-
tional 2030 Agenda for Sustainable Development. Leaving scale collaboration will we continue to create a sustainable
a healthier planet for future generations is a global under- business that delivers a significant impact in line with the
taking. It requires the partnership of governments, the private SDGs. Equally, we are convinced that industry must step up
sector, civil society, and citizens alike. to the challenge of catalyzing sustainable change.

Working today for tomorrow During the last 10 years, we have opened up our innovation
Making the right choices now to improve life in a sustain- model, developing close partnerships with customers, sup-
able way for future generations is important to Bühler. As pliers, academic institutes, and start-ups to understand the
a leading international solutions provider for the industrial challenges of our times and anticipate future trends.
manufacturing of food and advanced materials we, like all
corporations, play a significant role in helping governments Gaining strength through alignment
worldwide achieve the 2030 Agenda. We’ve made it a pri- People are at the core of everything Bühler has achieved.
ority to engage and align with the SDGs because a sustain- We are strong thanks to our employees. A key element of
able business policy is at the core of our success. For over our sustainability approach is the promotion, training, and
150 years, we have striven to continuously improve our prod- further education of our staff and those in our ecosystem.
ucts and services to generate sustainable added value for We foster a culture where personal initiative and responsibil-
our customers. In this effort, we place great emphasis on ity are encouraged in a diverse and inclusive environment.
the ecological, economic, and social impact of all our activ- Aligning with the SDGs and incorporating them into our
ities, and the SDGs underline our vision of “innovations for activities and culture will further strengthen Bühler’s efforts
a better world.” to remain a global employer of choice.
SUSTAINABILITY
Bühler Annual Report 2017
97

BÜHLER IMPACTS
THESE 10 KEY SDGS
Developing solutions to sustainably feed Bühler has started construction of its
9 billion people by 2050 is our goal. We new innovation campus – the CUBIC
are creating industrial-scale solutions for – in Uzwil, Switzerland. It is designed
the processing of insects and pulses as to be a state-of-the-art workplace
alternative protein sources and improv- focused on collaborative innovation,
ing the efficiency of food production to where knowledge holders from across
reduce waste by 30%. Bühler Insect our industries and beyond can come
Technology Solutions, and partner, Protix, are building the together to address global challenges. The CUBIC will bring
world’s largest industrial insect-processing plant, scheduled together the worlds of engineering and business, as diverse
to be operational in the second half of 2018. approaches lead to success. It opens in 2019.

The health and well-being of our em- To reduce societal inequity through
ployees and the population at large is education, training, and collaboration,
important to Bühler. We work with food Bühler partners with various organiza-
manufacturers globally to help them tions. It established the African Milling
make foods safe and more nutritious, School in Kenya in 2015 to train mill-
for example, by reducing sugar and salt ers, and has joined Partners in Food
while still retaining taste. We offer our Solutions to create a more sustainable
employees a safe, healthy, and balanced work environment, food industry on the continent via volunteering. Bühler also
and a health-management program. Our mission is no acci- strives to create a positive workplace where all employees
dents at Bühler and no accidents at customer sites. have equal rights.

Bühler established its Learning Center Responsible production means align-


in 2012 to offer high-end training pro- ing our purchasing policies and pro-
grams to customers and employees duction processes in compliance with
in Europe, North and South America, international standards. To improve
Asia, Southeast Asia, Middle East and its environmental performance, Bühler
Africa. In its global application centers, also requires its suppliers to com-
experts run practical tests with custom- ply with our global quality, environ-
ers to help them develop and improve products. Bühler has mental, and safety standards. Its ISO 9001:2015 and ISO
been training apprentices for more than 100 years, and its 14001:2015 certificates were renewed and are valid through
model is a benchmark for many countries and companies. November 2020.

Diversity and inclusion are top priori- Bühler’s goal is to reduce its environ-
ties for Bühler, as innovation and lead- mental footprint, energy consumption
ership will be enhanced when the col- and waste at its customers’ sites, and
lective skills of employees of different in its own manufacturing and logistics
gender, origin, nationality, ethnicity, by 30% by 2020. Bühler has set a goal
age, knowledge, and skill levels are to lower its material consumption, pol-
brought to bear. The company Code lutants, and energy consumption per
of Conduct serves as a guide for employees to live the productive hour at 5% annually. By developing new digital
company principles of trust, respect, recognition, involve- solutions, the company will further help its customers im-
ment, and passion. prove quality and reduce waste.

Motivated employees and dedicated Broadscale collaboration supports the


management staff are key to Bühler’s creation of a sustainable business that
long-term growth and business per- delivers a significant impact on climate
formance. Adequate compensation; goals. Bühler has been expanding its
safe, rewarding work in an international collaborative innovation model, devel-
environment; and employee develop- oping close partnerships with custom-
ment programs enable Bühler to at- ers, suppliers, academic institutes, and
tract and retain talent. Over 73% of apprentices remain start-ups over the last decade. We are committed to driving
with the company after completing their training. Each year, collaboration further. In the digital world, collaboration is a
600 apprentices are enrolled worldwide. key basis for success.

These are just a few examples of Bühler’s sustainability efforts.


98

OUR KEY PERFORMANCE


INDICATORS FOR SUSTAINABILITY
Our guidelines are aligned with
the Global Reporting Initiative (G4)

To report accurately on sustainability, it is necessary to set mon global measures put in place to tackle the world’s most
measurable performance indicators and define a transpar- pressing issues. Bühler began exploring how to incorporate
ent evaluation method to measure and compare yearly pro- the SDGs into its KPIs and materiality aspects in 2017. Our
gress. Bühler has aligned the sustainability report with the approach to sustainability is always evolving, and we will
requirements of the Global Reporting Initiative (G4), which is further review how best to align our KPIs with the SDGs in
the leading international standard. In particular, Bühler’s re- the coming years.
porting is adapted from the core option of the GRI guidelines.
Materiality analysis
Our sustainability reporting has been expanded continually Bühler’s stakeholders are its customers, employees, sup-
since 2013. At present, the 17 major Bühler sites out of a pliers, and other business partners, academia, the commu-
total of 25 sites are reporting on 39 key performance in- nities in which Bühler operates, the regulatory authorities,
dicators (KPIs). The reporting sites account for 92 % of all governments, nongovernmental organizations, as well as
productive hours. the environment.

In 2016, Bühler reviewed all sustainability KPIs and Bühler fosters a continuing exchange with its stakeholders
aligned them with the Bühler2020 strategy. The year 2015 regarding all aspects of sustainability. These stakeholders
forms the baseline for the performance evaluation by were included when the most important materiality aspects
2020. In 2017, Bühler aligned its sustainability strategy with were identified (see page 99). The materiality aspects are
the United Nations Sustainable Development Goals (SDGs), constantly being revised and upgraded to reflect the market
which came into effect in January 2016. The SDGs are com- conditions and the changing priorities of the stakeholders.
SUSTAINABILITY
Bühler Annual Report 2017
99

BÜHLER MATERIALITY ASPECTS

ENVIRONMENTAL
Energy consumption at our locations and the plants and
equipment in operation at our customers’ sites account for a
Food security, safety, share of the total burden on the environment. We have there-
and nutrition fore set ourselves the goal of reducing both the ecological
footprint of our own sites and that of our customers along
Resource efficiency their value chains. Our process technologies in die casting,
dispersion, and surface coating help improve sustainable
Environmental footprint mobility and the energy efficiency of buildings.
of our sites

SOCIAL
Motivated, carefully trained employees and dedicated man-
agement staff are key to our success. Bühler is commit-
Health and safety ted at all levels to the training and continued education of
its employees. As a global organization, Bühler considers
Culture of continuous the cultural diversity of its employees to be one of its major
learning strengths. This is reflected in its efforts to fill management-
level positions with local candidates whenever possible.
Fair and equal treatment All employees have equal rights, regardless of their origin,
nationality, religion, or gender.

ECONOMIC
Sustainable business success is a precondition for Bühler to
meet the ecological and social expectations that are placed
Long-term profitability on our organization. We deliberately define long-term profit-
ability targets, so as to secure our independence and free-
Corporate governance dom. It is important to us to ensure that all our market regions
benefit from our value generation.
Contribution to local
economies
100

INSECT PROTEIN A LANDMARK SHIFT


AN INDUSTRY IS BORN CARBON-NEUTRAL COFFEE
In 2017, Bühler made great advances toward its goal of utili- With Oslo’s ambition to become carbon-neutral by 2030 and
zing protein from insects for animal feed, realizing that as Norwegians being among the world’s biggest per capita
the global population grows and environmental stresses in- drinkers of coffee, it seems natural that Bühler should team
crease, we will need alternative and more sustainable pro- up with the country’s largest coffee manufacturer to build
tein sources. Insects are rich in protein, and they feed on the world’s first carbon-neutral coffee plant. Joh. Johannson
food waste, leaving a minimal environmental footprint. produces high-quality roasted beans and ground coffee.
The challenge has been how to produce carbon-neutral
In early 2017 Bühler teamed up with Protix, one of the coffee without compromising on flavor or quality. Extensive
world’s leading insect-rearing and processing companies, flavor-matching trials took place at our Application Center
to form Bühler Insect Technology Solutions. The joint ven- in Uzwil until cupping experts gave their seal of approval.
ture was set up to develop industrial-scale production pro-
cesses to manufacture protein-rich feedstock using insects The new greenfield plant in Vestby will be using two Bühler
and larvae. As part of the project, Bühler is currently building InfinityRoast 2000 roasters with green bean preheating units
the world’s largest industrial insect processing plant in Chi- along with sophisticated energy recovery systems and emis-
na, with an opening date in the second half of 2018. sion control technologies to cut energy consumption and
greenhouse gases. Bühler is providing all the processing
By 2050 it is estimated that insects could be the source of equipment apart from packaging. Hundreds of photovoltaic
15% of the world’s protein. We are witnessing the birth of a panels will be used to mitigate energy consumption to en-
new industry, with Bühler spearheading change through its sure the whole plant is carbon-neutral. The future plant is a
unrivaled experience in developing scalable, hygienic, and landmark change that will allow Joh. Johannson’s customers
cost-effective processing plants. to enjoy carbon-neutral coffee.

ENVIRONMENTAL SUSTAINABILITY
SDG Materiality aspect Our commitment Sustainability goals

Food security, safety, We set the standards for the We continuously improve our solutions for safe
and nutrition reduction of food losses and and healthy foods.
for safe and healthy foods.

Resource efficiency We set the standards for We continuously improve our solutions for
resource-efficient solutions. resource efficiency.

Environmental footprint We reduce the environ- We reduce energy and water consumption as well
of our sites mental footprint of our sites as carbon emissions and waste by 30% by 2020.
worldwide.

We ensure environmental compliance in our


supply chain.
SUSTAINABILITY
Bühler Annual Report 2017
101

OPTIMAL MOISTURE CONTENT


FOR PERFECT PET FOOD
The efficiency of the machinery and production processes
that Bühler manufactures is at the forefront of the challenge
to cut waste and energy usage by 30% for our customers
by 2020. The beauty of the challenge is that an efficiently
run business means saving costs while reducing carbon
footprint. An example is the new AeroPro Moisture Control –
a complete moisture control system that, in realtime, aug-
ments the dryer temperature profile to minimize overdrying.
Using microwave sensor technology and the Internet of
Things, Bühler has devised a continuous moisture manage-
ment process that improves dryer yield and cuts energy use
for drying.

Through continuous analysis, the time gaps associated


with traditional manual sampling techniques are eliminated,
allowing algorithms to immediately adjust production para-
meters so the optimum moisture content is achieved. Speci-
fically, 1% moisture gain in final product water content is
equivalent to USD 300,000 a year for the average pet food
line. It’s a win-win-win for the customer, for Bühler, and for
carbon emissions.

GRI G4- Target Baseline


Key performance indicator (KPI) related KPI 2020 2015 2016 2017

Percentage of food-relevant R & D projects with focus to improve G4-PR1 50 % 28 % 29 % 34 %


food safety.
Number of employees in key positions to receive training in food safety. Additional 3,000 498 1,572 1,884
(related to G4-PR1)

Percentage of food-relevant R & D projects with focus to improve nutrition. Additional 20 % 8% 10 % 23 %


(related to G4-PR1)

Percentage of R & D projects with focus to improve energy efficiency per Additional 70 % 24 % 29 % 37 %
tonne of end product or finished piece. (related to G4-EN6,
G4-EN7, G4-EN27)

Percentage of R & D projects with focus to improve product yield. G4-EN27 50 % 22 % 29 % 40 %

Energy consumption relative to 1,000 productive hours, GJ/1,000 h. G4-EN3/EN6 30 % 91.5 77.1 79.9
reduction
to baseline

Carbon equivalents relative to 1,000 productive hours, t/1,000 h. G4-EN15 30 % 12.8 10.8 10.1
reduction
to baseline

Water consumption relative to 1,000 productive hours, l/1,000 h. G4-EN8/EN10 30 % 84.1 89.5 55.5
reduction
to baseline

Amount of waste (including recycled material) relative to 1,000 G4-EN23 30 % 3,715 3,178 2,266
productive hours, kg/1,000 h. reduction
to baseline

Amount of hazardous waste relative to 1,000 productive hours, G4-EN23 30 % 246 151 153
kg/1,000 h. reduction
to baseline

Number of significant fines for noncompliance with environmental laws. G4-EN29 0 0 0 0

Percentage of top suppliers that have signed the Bühler Supplier G4-EN32 100 % 0 Rollout 30 %
Code of Conduct or have an own equivalent code of conduct. ongoing
102

TRAINING DRIVES FARM-TO-FORK PROTECTION


FUTURE SUCCESS FOOD SAFETY TRAINING
At Bühler we pride ourselves on the breadth and depth of It is only if every link in the food chain is secure against
the lifelong learning and education we provide, both inter- potential pathogen risk that we can be sure our food is
nally and externally. With Bühler support, 600 apprentices properly protected. Five years ago Bühler launched a major
enrolled in courses across the globe this year, ranging from food-training program with the goal of ensuring every em-
boilermaking to plant design. Each apprentice benefits from ployee knows about food hazards and hygienic product
the unique Swiss dual vocational system, which combines design, while understanding that food safety is paramount in
practical experience with classroom exposure while earning all we do.
as they learn.
Our food-training courses have evolved since the launch.
Bühler also applies this principle of balancing the practical Bühler invites its clients to training courses to explain the
with the theoretical to the African Milling School it set up in food and feed safety challenges each industry or processor
Kenya’s capital, Nairobi. Each year two-dozen students faces. It’s through this interchange of knowledge that Bühler
from across Africa begin a two-year course where they learn is able to adapt food safety solutions to its many different
to become the next generation of millers and head millers. markets, and so help achieve farm-to-fork protection. Bühler
Within Bühler we run the Master of Bühler Management does not just want to understand the food safety concerns
(MBM), where 30 of our best employees are selected from of its customers, but also their customers in turn. This year
across Bühler’s regions and businesses for themed training the reach of the program extended beyond on-site training,
programs held at different international locations. The MBM with the launch of an e-learning module and off-site training
aims to ensure our future managers are equipped with the at customer sites. To date nearly 1,900 employees in key
right leadership and entrepreneurial skills to drive Bühler’s positions have completed the food safety training online or
future success. in courses.

SOCIAL SUSTAINABILITY
SDG Materiality aspect Our commitment Sustainability goals

Health and safety We strengthen our corporate We want to increase the safety of our products
culture of health and safety. and our manufacturing locations.

We enhance the health and well-being of our


employees worldwide.

Culture of continuous We pursue our corporate We enable our employees worldwide to increase
learning culture of continuous learning. their level of relevant competencies.

We ensure the sustained availability of core


competencies in a dynamic context.

We offer attractive job opportunities and develop-


ment for young employees.
We want to promote our culture of innovation and
entrepreneurship across all organizational levels.

We want to enhance the integration of our


partners into our innovation process.

Fair and equal treatment We strengthen our We foster a workplace free from any
corporate culture of fair and discrimination.
equal treatment.
SUSTAINABILITY
Bühler Annual Report 2017
103

EMPOWERING YOUNG
LEADERS TO DRIVE CHANGE
A sustainable future requires informed, empowered, and
connected leaders. The One Young World initiative brings
together young future leaders from across the globe with a
call to action to bring about positive change. This is the
second year that Bühler has sent a delegation to the annual
summit, where they were inspired and encouraged by world
leaders in politics, NGOs, the arts, and corporations to de-
bate and formulate solutions that address some of the most
pressing issues of our time.

Bühler celebrates the opportunity One Young World pro-


vides to inspire the future generation to drive change for a
more sustainable future from within companies and across
industries. It is also a chance for Bühler’s young leaders to
meet, discuss, and form networks with colleagues and
clients that will help to improve and strengthen Bühler and
its aims from within. At this year’s October summit in
Bogotá, Colombia, delegates addressed diversity and inclu-
sion, peace and reconciliation, powering sustainable de-
velopment through technology, business ethics, and doing
well by doing good.

GRI G4- Target Baseline


Key performance indicator (KPI) related KPI 2020 2015 2016 2017

Percentage of R & D projects with focus to improve operator safety. G4-PR1 50 % 48 % 43 % 22 %


Number of recordable work-related injuries per 100 full-time employees. G4-LA6 0 2.9 2.9 2.3

Sickness-related absenteeism (days per employee and year). G4-LA6


0 2 3.8 2.4

80 % 80 % 86% 89 %
Percentage of all employees undergo the Employee Performance G4-LA10 and
Management process every year. G4-LA11
The number of training days per full-time employee per year. G4-LA9 2 2 2.3 1.85
Percentage of training costs over total personnel costs per local Additional 1% 1.2 % 1.9 % 0.9 %
Learning Center. (related to G4-LA9)

Percentage of High Potentials among all employees. Additional 5% 2.8 % 3.1% 3.2 %
The key positions for the senior functions at management level 1, 2, and 3 Additional 100 % 100 % 80 % 88 %
have been defined, and potential successors have been determined. (related to G4-LA12)

Percentage of all apprentices who are hired subsequently to Additional 80 % 77 % 71% 73 %


their apprenticeship. (related to G4-LA12)

Percentage of employees participating in the Bühler Innovation Challenge Additional 60 % 34 % 32 % NA


(every two years).
Percentage of implemented business ideas from the Additional 5% NA 2% NA
Bühler Innovation Challenge (every two years).
Percentage of projects run in collaboration with partners Additional 50 % 44 % 47 % 53 %
(suppliers, customers, universities).

Percentage of female employees. G4-LA12 20 % 15 % 16 % 15 %


104

COLLABORATION DRIVES A BREAKTHROUGH


ECONOMIC SUSTAINABILITY FOR THE BATTERY INDUSTRY
Bühler believes that to help achieve a sustainable future, it 2017 has been a milestone year for electric vehicles as
needs to support new, cutting-edge businesses to ensure China considers following France and Britain in setting a
it can carry innovation forward for the benefit of future gen- deadline for a ban on the sale of new gas-fueled and diesel
erations. In 2014, Bühler partnered with MassChallenge in cars. Public health concerns about air quality is driving
Boston, a nonprofit organization that helps support start- change, and Bühler is part of the revolution to support the
ups by providing them with mentors from across the busi- development of e-mobility through its partnership with
ness community. A year later Bühler, along with other part- Lishen, one of China’s largest battery manufacturers.
ner companies, founded the MassChallenge accelerator
program in Switzerland, and in 2017 alone we are proud to Bühler’s development of an innovative continuous mixing
report 75 fledgling companies benefiting from the initiative, process for battery slurry that is capable of cutting battery
bringing the total to 140 start-ups to date. manufacturers’ investment and operating costs by up to
60% is set to help companies meet the increasing demand
An example of the type of innovation that Bühler is support- for the lithium-ion batteries needed for electric vehicles.
ing through MassChallenge is Counting Carbon – an en-
gineering team that is developing a smart shopping as- In July 2017, Lishen’s new battery plant in Suzhou, China,
sistant that uses computer algorithms to raise consumer opened four industrial-scale production lines for battery
awareness by calculating the health and environmental im- slurry to be used in the production of a new generation of
pact of the food we buy. batteries that will be lighter, with a higher energy density,
and cheaper to produce. Bühler received Lishen’s Best
Taste of Kenya is another – in 2017, Bühler presented it with Equipment Supplier award at the inauguration ceremony.
its first Bühler Sustainability Award for its efforts to simplify It is anticipated that, thanks to Bühler technology, the new-
the coffee supply chain in Africa through direct trade bet- generation battery will increase the range of an electric
ween farmers and retailers. vehicle by a third.

ECONOMIC SUSTAINABILITY
SDG Materiality aspect Our commitment Sustainability goals

Long-term profitability We deliver long-term We remain a profitable and independent business.


profitability.

Corporate governance We ensure an effective We assure legal compliance and apply our Code
corporate governance of Conduct worldwide.
approach.

Contribution to local We contribute to local We contribute to the development of


economies economies. local communities.
SUSTAINABILITY
Bühler Annual Report 2017
105

VOLUNTEERING VIRTUALLY
FOR AFRICA’S DEVELOPMENT
Knowledge underpins sustainable success. The vast exper-
tise and experience of Bühler and the partner companies of
Partners in Food Solutions (PFS) – General Mills, Cargill,
DSM, Hershey, and Ardent Mills – is invaluable to food pro-
cessors in Africa. It improves food security, nutrition, and
economic development across the continent. Which is why
four years ago, Bühler began supporting the nonprofit orga-
nization PFS. It links industry experts with small and mid-
size food processors in Africa. In our interconnected world,
a volunteer using a computer can share knowledge that can
help train and build the capacity of a business thousands of
miles away.

The initiative supports Bühler’s desire to ensure every living


person has access to healthy food. To help achieve this,
Bühler has set up a working group to better match the right
expertise with the right company, while encouraging more
staff to become virtual volunteers. In September, Bühler
volunteers and other partner companies met for the first
time in Switzerland to hear from PFS partners working in
Africa how support networks can be better developed. It
was an opportunity to hear firsthand what sort of knowledge
local producers are looking for.

GRI G4- Target Baseline


Key performance indicator (KPI) related KPI 2020 2015 2016 2017

100 % own financing of growth. Additional 100 % 100 % 100 % 100 %


(related to G4-EC1)

Number of applications received per open position. Additional 30 16 23.0 22.4


Quote of terminations within the first 12 months of employment. Additional <5 9 3 8
Quote of terminations during the probation period. Additional <1 1 2 4
Quote of high potentials after two years of service. Additional 3% 2% 1% >1%
Percentage of employee turnover. G4-LA1 < 8% 8% 7.5 % 8.3 %

Percentage of new employees in the sales, purchasing, and G4-SO8 100 % 97 % 92 % 87 %


management functions who have attended the online training against
corruption and bribery.
Number of companies audited on corruption prevention. G4-SO8 10 8 9 11
Number of companies audited on fraud prevention. G4-SO8 10 8 9 11
Number of relevant compliance fines (higher than CHF 200,000). G4-SO8 0 0 0 0
Number of whistleblowing cases per year. Additional Best practice 11 5 2
(related to G4-SO8) in definition
with peers

Number of all compliance cases. Additional Best practice 64 47 11


(related to G4-SO5 in definition
and G4-SO8) with peers

Number of projects supported by Bühler employees through Partners Additional 10 0 Rollout 12


in Food Solutions and other nongovernmental organizations. (related to G4-EC6) ongoing
106
GOVERNANCE
Bühler Annual Report 2017
107

GOVERNANCE
Bühler follows international standards of corporate
governance. We base our corporate governance
activities on the principles of the Swiss Code of
Best Practice – a useful instrument for clearly
defining internal powers and responsibilities and
optimally designing the interaction between the
Board of Directors, the Executive Board, and the
Internal Audit Group.
108

GROUP STRUCTURE As a non-listed, family-owned, but economically significant


company, Bühler has decided to pay special attention to
Bühler follows international the design of its corporate governance. As a consequence,
Bühler’s corporate governance goes far beyond the statutory
standards of corporate requirements of Swiss corporate law and incorporates, to a
governance. great extent, the recommendations contained in the “Swiss
Code of Best Practice for Corporate Governance” issued by
economiesuisse.

Bühler’s Articles of Incorporation set material parameters


of the corporate governance system. The Articles of In-
corporation are complemented by Bühler’s Organizational
Regulations, which further specify the responsibilities,
competencies, and regulations of the governing bodies of
the company. Unless prescribed by law or the Articles of
Incorporation, the management is delegated by the Board
of Directors, with the power to subdelegate to the Chief
Executive Officer, the Executive Board, and its members.
Separate charters specify the organization of the Nomina-
tion and Compensation Committee and the Audit Committee.

The Board of Directors has also issued a regulation governing


the cooperation between the Board of Directors, the CEO /
Executive Board, and the Urs Bühler Innovation Fund.

Bühler remains a family-owned company


In 2014, Urs Bühler transferred his shares in Bühler to his
three daughters, Karin, Maya, and Jeannine Bühler, each
of whom now owns a third of the company. For the three
sisters, continuity is the top priority, as they want to build on
the strengths and values of Bühler. They continue to maintain
optimal general conditions for the company to operate in: a
stable shareholder structure, a long-term orientation, steady
company management that is not subject to the constraints
of quarterly reporting – but nevertheless a management style
pursuing business success. The three owners are represent-
ed on the Board of Directors and have a clear and unified
voice in relation to the company.
GOVERNANCE
Bühler Annual Report 2017
109

Board of Directors

Chairman Vice Chairman


Calvin Grieder Josef M. Müller1

Clemens Blum Jeannine Bühler Maya Bühler Ruth Metzler-Arnold


Frank N.J. Braeken Karin Bühler Konrad Hummler Linda Yang

Executive Board

CEO CFO Grains & Food Advanced Materials


Stefan Scheiber Andreas R. Herzog Johannes Wick Samuel Schär

CTO Manufacturing, Sales & Services2 Human Resources


Ian Roberts Logistics & Supply Chain Dieter Voegtli Dipak Mane
Holger Feldhege

Business Areas

Grains & Food Advanced Materials Haas Group2

Grain Quality & Supply2 Die Casting Wafer & CFT


(Convenience Food and Cones)

Milling Solutions2 Leybold Optics Biscuits

Value Nutrition Grinding & Dispersing Mixing Systems

Digital Technologies2 Non Food

Consumer Foods

Regions

North America South America Europe

Middle East & Africa South Asia Asia

Urs Bühler Innovation Fund

Founder Chairman
Urs Bühler Ian Roberts Hal Gurley Dr. Matthias Kaiserswerth Edward S. Steinfeld

1 2
Resigned effective February 6, 2018. Effective January 2018.
110

BOARD OF DIRECTORS
GOVERNANCE
Bühler Annual Report 2017
111
112

03 Karin Bühler 04 Jeannine Bühler


BOARD OF After obtaining her university entry After successfully completing her fed-

DIRECTORS qualifications, Karin Bühler acquired a


degree in Marketing. Following a num-
ber of activities in the fields of market-
eral vocational matriculation certificate
and passerelle (supplementary exam
certificate) in St. Gallen, Jeannine Bühler
ing, communications, and equestrian was awarded a Bachelor of Arts degree
sports, she became General Manager from the University of Zurich. She later
of Horse Vision AG as owner in 2008. received a Master of Arts in Social
She has been with UZE AG since 2011, Sciences in journalism and communi-
first as Manager Marketing, then as cation sciences and political science.
member of the General Management in While still a student, she worked with
charge of Human Resources & Market- foundations committed to charitable
ing, and since 2014 as General Manag- and sustainable projects. Following
er. Karin Bühler was re-elected to the completion of her studies, she joined
Board of Directors in 2017. Karin the development organization Helve-
Bühler was born in 1978 and is Swiss. tas Swiss Intercooperation. Jeannine
Bühler was elected to the Board of Di-
rectors of Bühler in 2016. Jeannine
Bühler was born in 1986 and is Swiss.

04

01 02 03

06 05

06 Calvin Grieder
01 Clemens Blum Chairman
Clemens Blum holds a degree in Elec- In 1980, Calvin Grieder started his ca-
tronic Engineering from Furtwangen reer as Marketing Manager with Georg
University (Germany) and Business Fischer Ltd. in Switzerland and contin-
Management from Pforzheim Universi- ued in various executive positions at
ty (Germany). After holding various po- Swiss and German companies, includ-
sitions in sales at different companies, 02 Linda Yang ing Bürkert Controls Ltd., Mikron Ma-
he joined the Swiss Industrial Group chines Ltd., Swiss Industrial Company
(SIG) as Sales Director of SIG Positec Linda Yang holds Bachelor’s degrees in (SIG) Ltd., and Swisscom Telecom
Automation in 1992 and was nominat- both Mathematics and Business/Fi- Ltd., where he served as Head of the
ed General Manager in 1997. In 2000, nance from Nan Kai University (Tianjin, Mobile and Internet business and
Schneider Electric acquired the SIG China). She graduated from the Execu- member of the Executive Board. He
Positec activities from SIG, and Clem- tive MBA program at the China Europe was CEO of the international engineer-
ens Blum then held various leading po- International Business School (CEIBS) ing group Bühler from 2001 to 2016. In
sitions within the Schneider Electric in 2009. Following various assignments 2014, he was elected Chairman of the
Group. From July 2010 until December in China in the fields of research, con- Board of Directors of Bühler and in
2016, he was Executive Vice President sulting, and marketing, at companies 2017, Chairman of the Board of Direc-
of the Industry Business located for such as Procter & Gamble (China) Ltd., tors of Givaudan. Calvin Grieder holds
two years in Foxborough (Massachu- she acted from 2001 to 2004 for Nestlé the following mandates in unlisted
setts/US) and is currently responsible (China) Ltd. as Head of Consumer In- companies: Member of the Board of
for specific mergers and acquisition sight. Since then, she has been the Trustees of Avenir Suisse, owner and
strategies, and key executive custom- General Manager of BSI (Tianjin) Foods Member of the Board of CGTech in
ers in the industrial automation market. Co. Ltd., a subsidiary of Savencia Fro- Küsnacht, and member of the Advisory
He is also a member of the Presiding mage & Dairy (previously known as Board of the ETH, Department of Me-
Committee and Chairman of the Work- Bongrain SA) in China. Thanks to her chanical and Process Engineering.
ing Group Information and Communi- experience and training, Linda Yang Calvin Grieder holds a Master of Sci-
cation of the IBC International Business has a proven understanding of the Chi- ence from ETH Zurich and has com-
Congress e.V. Berlin. He was elected a nese market. She has been a Member pleted an Advanced Management Pro-
Member of the Board of Bühler in De- of the Bühler Board of Directors since gram (AMP) at Harvard University. He is
cember 2015. Clemens Blum was born 2014. Linda Yang was born in 1971 a citizen of Switzerland and was born
in 1955 and is German. and is Chinese. in 1955 in the US.
GOVERNANCE
Bühler Annual Report 2017
113

05 Maya Bühler 10 Konrad Hummler


Maya Bühler studied Veterinary Sci- Konrad Hummler graduated in Law
ence at the University of Zurich. After from the University of Zurich and in
completing her studies, she held vari- Economic Science from the University
ous positions in the horse surgery de- of Rochester (US). In the eighties, he
partment of the animal hospital in Zu- acted as the personal assistant to Dr.
rich and became a Veterinary Specialist Robert Holzach, the Chairman of the
for Horses (FVH) in 2012. At the begin- Board of Directors of what is now UBS.
ning of 2013, she became the owner From 1991 to 2012, he was Managing
and Managing Director of Pferdeklinik Partner with unlimited liability at We-
Thurland in Uzwil. Maya Bühler was gelin & Co. Private Bankers (St. Gallen).
re-elected to the Board of Directors of In addition to his banking activities, he
Bühler in 2017. Maya Bühler was born was a member of the board of various
in 1981 and is Swiss. companies, including Neue Zürcher
Zeitung (NZZ), Swiss National Bank
(SNB), and the German Stock Ex-
change. Since 2013, Konrad Hummler
has headed M1 AG, a private think-
tank dealing with strategic issues of
current interest. Konrad Hummler was
appointed as Member of the Board of
Bühler in 2010 and as Chairman of the
Nomination and Compensation Com-
mittee in 2016. He is strongly commit-
ted to cultural and social projects.
Konrad Hummler was born in 1953
and is Swiss.

07 08 09 10

07 Frank N. J. Braeken 09 Ruth Metzler-Arnold


Frank N. J. Braeken graduated with a
degree in Law and holds an MBA de- Ruth Metzler studied Law at the Univer-
gree in Finance from the University of sity of Freiburg i. Ue. and is a Federally
Leuven (Belgium). He is an alumnus Certified Auditor. From 1990 to 1999,
of the Wharton Executive Program, she was active for Pricewaterhouse
08 Josef M. Müller* Coopers in St. Gallen. In addition, she
Penn University (Philadelphia, US). In Vice Chairman
his professional career, he specialized was a member of the Cantonal Govern-
in finance and in general management. Josef M. Müller holds a degree in Busi- ment of Appenzell IR (Director of Fi-
From 1996 to 2013, he held various ness Administration. He joined the nance) during three years. From 1999 to
management functions in different Nestlé Group in 1972, with subsequent 2003, she was member of the Swiss
countries for Unilever, including a posi- assignments in Switzerland, Europe, Government and headed the Federal
tion as Group Vice President of Unilever the US, and South Africa. He then Department of Justice and Police. Ruth
China (Shanghai), Executive Vice Pres- spent several years as a Sales and Metzler then held leading positions at
ident of Unilever Namca (Dubai), and Marketing Manager in the Far East. Novartis and was a Member of the
Executive Vice President of Unilever From 1992 to 1995, he headed Nestlé Board and of the Audit Committee of
Africa (Dubai/Durban). Subsequent to Pakistan, and from 1995 to 1998 the SIX Group. Ruth Metzler is Chair-
leaving Unilever, Frank N. J. Braeken Nestlé Korea. In mid-1998, Josef M. woman of the Board of Switzerland
has acted as investment advisor and Müller took charge of Nestlé China, Global Enterprise. She is also a Board
investor for large-scale agro and food and from mid-2000 to 2007 of the Member of AXA Winterthur, Fehr Ad-
enterprises on the African continent. In Nestlé Greater China Region. Josef M. vice, Reyl & Cie SA, Swiss Medical Net-
2016, he was elected Chairman of the Müller has been a Member of the Board work SA, and a member of the council
Board of Feronia Inc., a Toronto-listed of Bühler since 2007. From 2010 to of the University of St. Gallen (HSG).
palm oil producer on the African conti- 2017, he served as President of Pro- Since April 2016, Ruth Metzler has been
nent. He is also a nonexecutive board marca, the Swiss Association of Brand- a Member of the Board of Trustees of
member of Marie Stopes International ed Goods (Schweizerischer Marken- Avenir Suisse. She was elected as a
and Agra, both not-for-profit organi- artikelverband). He is also a Member of Member of the Board of Bühler in De-
zations. He was elected to the Board the Board of Crown Holdings Inc. (Phil- cember 2011 and as Chairwoman of
of Directors of Bühler in 2014. Frank adelphia / US) and of Packages Ltd. the Audit Committee in February 2014.
N. J. Braeken was born in 1960 and (Lahore / Pakistan). Josef M. Müller was Ruth Metzler-Arnold was born in 1964
is Belgian. born in 1947 and is Swiss. and is Swiss.

*
Resigned effective February 6, 2018.
114

EXECUTIVE BOARD
GOVERNANCE
Bühler Annual Report 2017
115
116

EXECUTIVE BOARD 03 Samuel Schär


CEO Advanced Materials
After obtaining a diploma as a Physics
Engineer from the Swiss Federal Insti-
tute of Technology in Lausanne (EPFL)
and accumulating three years of expe-
rience with the consultancy McKinsey,
Samuel Schär joined Bühler in 2002.
He took charge of the Nanotechnolo-
gy business unit in 2005. From 2009
to 2012, he bore overall responsibility
for the Grinding & Dispersing business
area. Samuel Schär has headed the
Advanced Materials business since
2013 and was appointed CEO of Ad-
vanced Materials as of September
2014. Samuel Schär was born in 1975
and is Swiss.

01 02 03 04

04 Stefan Scheiber
Chief Executive Officer
Stefan Scheiber graduated in Business
Administration from the University of
Applied Science in St. Gallen and later
01 Holger Feldhege continued his education at the Institute
COO Manufacturing, Logistics IMD Lausanne and Harvard Business
& Supply Chain School. From 1988, he worked for 15
years in various international manage-
Holger Feldhege studied Business ment positions worldwide, including
Administration and holds a PhD in East and South Africa, Eastern Europe,
Production Management. He has ex- and Germany. In 1999, he took charge
tensive experience in the sales and 02 Dieter Voegtli of the Brewing/Malting and Rice busi-
service business as well as production, President Sales & Services* ness units and thereafter assumed
engineering, and logistics. He worked overall responsibility for Bühler in Ger-
in various management positions at Dieter Voegtli is a Mechanical Engineer many. From mid-2005, Stefan Scheiber
Mannesmann and ThyssenKrupp El- (Swiss Federal Institute of Technolo- headed the Sales & Services division as
evator, spending more than seven gy in Zurich, ETH) and holds an MBA a Member of the Executive Board. In
years in Asia. Upon his return to Ger- from INSEAD. He started his career in 2009, he was assigned Division Manag-
many in 2010, Holger Feldhege took global power plant commissioning and er of the Engineered Products division,
on the position of CEO Manufacturing as a Software Development Manager which he reorganized into the Food
for the business unit Central, Eastern, for ABB. Following that, he worked Processing and the Advanced Material
and Northern Europe and later Senior for eight years as Technical Director divisions. He led the Food Processing
Vice-President Manufacturing Elevator of Roche China Ltd. Dieter Voegtli has division as of 2009. In 2014, Stefan
for the worldwide group. In 2014, Hol- been President of Bühler Group China Scheiber integrated the Food Process-
ger Feldhege joined Bühler as Head of and Asia Pacific since 2009, after serv- ing and the Grain Processing divisions,
Manufacturing & Logistics. In 2017, he ing as President of Bühler China since creating the Grains & Food business,
was named Chief Operations Officer re- 2004. He was named President of the which he led until 2016. He was ap-
sponsible for Manufacturing, Logistics Sales & Services organization as of Jan- pointed CEO of the Bühler Group on
& Supply Chain. Holger Feldhege was uary 1, 2018. Dieter Voegtli was born in July 1, 2016. Stefan Scheiber was born
born in 1968 and is German. 1958 and is Swiss. in 1965 and is Swiss.

* Effective January 2018.


GOVERNANCE
Bühler Annual Report 2017
117

06 Ian Roberts 07 Andreas R. Herzog 08 Dipak Mane


Chief Technology Officer Chief Financial Officer Chief Human Resources Officer
Ian Roberts graduated in Chemical After graduating with a degree in Busi- After completing his studies in Chem-
Engineering and obtained a PhD in ness Administration, Andreas R. Her- ical Engineering at the Indian Institute
Process Engineering from the Univer- zog continued his studies in various of Technology, Dipak Mane worked in
sity of Wales (Great Britain). From 1997 postgraduate courses in marketing India for several years as an engineer
to 2009, he held various management and finance management at business in various positions. He joined Bühler
positions at Nestlé, acting among other schools in France, Canada, and the US. India in 1992 as one of the first local
positions as internal management con- He has held management positions at employees. Step by step, he built up
sultant at Swiss headquarters, as Direc- Ciba-Geigy, Swatch, and Swarovski. Bühler India, starting in 2000 as Manag-
tor of Innovation for Nestlé Mexico, and During his professional career, he has ing Director and continuing from 2010
as Director of the Chocolate Centre of worked in Switzerland, Mexico, Co- onward as Head of Region South Asia.
Excellence in Switzerland. He has been lombia, Ivory Coast, and Germany. An- In July 2015, he took on the role of
Chief Technology Officer at Bühler since dreas R. Herzog has been the CFO of Chief Human Resources Officer for the
2011. He is also a board member of Bühler Group since 2002. He is also a Group. Dipak Mane was born in 1960
the academic institutions Wyss Insti- Member of the Board of Bertrams AG, and is Indian.
tute and IFNC-EPFL. Ian Roberts was CCS Holding AG, and the advisory
awarded European CTO of the Year board of Commerzbank in Germany.
2016 and is a Fellow of the Institute of Andreas R. Herzog was born in 1957
Chemical Engineers. Ian Roberts was and is Swiss.
born in 1970 and is British.

05 06 07 08

05 Johannes Wick
CEO Grains & Food
Johannes Wick joined Bühler in 2014
and took over the management of
Grain Milling, the largest business area.
He has led the Bühler Grains & Food
business since April 1, 2016. Before
joining Bühler, he worked for more than
twenty years in different management
positions in the energy and infrastruc-
ture sector at ABB, ABB Alstom Power,
Iberdrola, and Alstom. Johannes Wick
earned a Master’s degree in engineer-
ing at the ETH in Zurich with an ex-
change at the Technical University in
Madrid. He expanded his knowledge
with an MBA from IESE in Barcelona
with an exchange at Sloan Manage-
ment School of Business at the Mas-
sachusetts Institute of Technology (MIT)
in Boston. Johannes Wick was born in
1969 and is Swiss.
118

ADVISORY BOARD OF
Urs Bühler Innovation Fund

Urs Bühler Hal Gurley Dr. Matthias Kaiserswerth


Founder Automation intelligence expert and Managing Director,
Founding Member of UBIF Hasler Stiftung

Urs Bühler graduated as a mechanical en- Hal Gurley holds Bachelor’s and Master’s Dr. Matthias Kaiserswerth studied Com-
gineer from the Swiss Federal Institute of degrees in Electrical Engineering from the puter Science at the Friedrich-Alexander
Technology in Zurich (ETH). After holding Georgia Institute of Technology (US), and University in Erlangen-Nuremberg (Ger-
a number of positions in Switzerland and an Executive MBA from the Institute IMD many) and at McGill University in Montreal
abroad, he was appointed to the Corpo- (Switzerland). Before moving to Switzer- (Canada). He obtained his PhD in Engi-
rate Management of Bühler AG in 1975, in land in 1995, Gurley was President and neering from Erlangen University. From
charge of sales and development. From Founder of Automation Intelligence, an 1988 to 2015, Dr. Kaiserswerth worked
1980 to 1984, he was President of Bühler advanced systems integration and soft- for IBM. He has spent almost his entire
GmbH, Braunschweig (Germany). In 1986, ware development firm based in the US career as a researcher in the areas of high-
Urs Bühler was appointed CEO of Bühler specializing in real-time communications performing communication and securi-
in Uzwil. He handed over the executive and control systems for industrial, robotic, ty in Switzerland and the US apart from
management duties of the company to and military applications. Prior to joining mid-2002 to the end of 2005, when he
Calvin Grieder at the beginning of 2001. Cisco in 2000, Gurley was Director Inter- was responsible for global IBM business
Urs Bühler has been a Member of the net/IP at Swisscom. During his 17-year relations with a large international indus-
Board since 1981, from 1991 as its Vice career at Cisco, Gurley held executive trial customer. For more than 11 years Dr.
Chairman and from 1994 to 2014 as its leadership positions within Cisco’s pro- Matthias Kaiserswerth was Director of the
Chairman. He was a member of the board fessional services, management con- IBM Research Laboratory in Rüschlikon
of several Swiss companies. Urs Bühler sulting, and sales organizations. From (Switzerland) until he became Managing
was born in 1943 and is Swiss. 2013 until his retirement in late 2016, Hal Director of the nonprofit Hasler Stiftung in
Gurley had global responsibility for Cis- Berne, in May 2015. This foundation sup-
co’s Cloud/Network Management and ports education, research, and innovation
Automation software sales and go-to- in information and communication tech-
market execution. He also served as nologies. Dr. Matthias Kaiserswerth was
sole Managing Director and legal repre- born in 1956. He is Swiss and German.
sentative of Cisco Systems (Switzerland)
GmbH. Hal Gurley was born in 1955. He
is Swiss and American.
GOVERNANCE
Bühler Annual Report 2017
119

Urs Bühler The Urs Bühler Innovation Fund (UBIF) was established in 2014
to support the company’s innovation efforts. Bühler invests
Innovation Fund roughly 5% of its turnover in research and development every
year – developing breakthrough technologies and services
to strengthen Bühler’s market position as well as exploiting
new opportunities to stay ahead of the innovation curve. The
Advisory Board, managing the UBIF, focuses on accelerating
the innovation process within the company as well as on its
advancements in the field of the Internet of Things.

Edward S. Steinfeld Ian Roberts


Professor of Political Science; Chief Technology Officer, Bühler
Director, Thomas J. Watson, Jr. Insti-
tute for International Public Affairs,
Brown University

Edward S. Steinfeld studied Government Ian Roberts graduated in Chemical En-


and Political Science at Harvard Univer- gineering and obtained a PhD in Pro-
sity (US) and holds a PhD in Political Sci- cess Engineering from the University
ence. From 1996 to 2013, Steinfeld was a of Wales (Great Britain). From 1997 to
Professor of Political Economy and Man- 2009, he held various management po-
agement at the Massachusetts Institute sitions at Nestlé, acting among other
of Technology (US). He also served as a positions as internal management con-
visiting scholar at the Tsinghua University sultant at Swiss headquarters, as Direc-
School of Public Policy and Management tor of Innovation for Nestlé Mexico, and
in Beijing from 2012 to 2013. From 2005 as Director of the Chocolate Centre of
to 2013, he was Director of the China Excellence in Switzerland. He has been
Energy Program at the MIT Industrial Chief Technology Officer at Bühler since
Performance Center. In 2013, Steinfeld 2011. He is also a board member of the
moved to Brown University (US), where academic institutions Wyss Institute and
he currently directs the Watson Institute IFNC-EPFL. Ian Roberts was awarded
for International and Public Affairs as well European CTO of the Year 2016 and is
as the Brown China Initiative and is a a Fellow of the Institute of Chemical En-
Professor of the Department of Political gineers. Ian Roberts was born in 1970
Science. Beside his university engage- and is British.
ment, Edward Steinfeld is a member of
various boards of directors, academic
and advisory boards in the US, Asia, and
Europe. In 2012, he was appointed as a
member of the China Advisory Board of
Bühler Group. Edward Steinfeld was born
in 1966 and is American.
120

COLLABORATION Permitted external activities of the Board of


Directors and the Executive Board
principles Bühler’s Articles of Incorporation provide for a certain re-
striction of the permitted external activities of the members
of the Board of Directors. Members of the Board of Direc-
tors may not hold more than four additional mandates in
listed companies, eight additional mandates against remu-
neration in unlisted companies, and eight unpaid additional
mandates. Not included in these limitations are mandates
in companies affiliated with Bühler, corporate mandates
of Bühler, and mandates in associations, foundations, em-
ployee welfare foundations, charitable organizations, and
other comparable structures. However, no Board Member
shall hold more than 20 such additional mandates. Mandates
refers to mandates in the supreme governing body of a legal
entity registered in the commercial register in Switzerland
or elsewhere. Members of the Executive Board are limited
to two mandates at public companies or other legal entities
against remuneration and four unpaid mandates.

Elections and term of office of the Board


of Directors
Bühler’s Articles of Incorporation provide for the annual
election by the General Assembly of all Board Members, its
Chairman, and the members of its Nomination and Compen-
sation Committee. Term of office shall be one year, starting
with the General Assembly at which each individual member
is elected and ending with the next following General As-
sembly. The members of the Audit Committee are annually
elected by the Board of Directors.

Election date and attendance


For the year of first election to the Board of Directors, please
refer to the individual curriculum vitae of each Board Member
on pages 112–113. At the General Assembly, the Board of
Directors gives account to the shareholders on the atten-
dance of Board and Committee meetings by each individual
Board member.
GOVERNANCE
Bühler Annual Report 2017
121

Audit Committee Areas of responsibilities


The Audit Committee shall monitor the integrity of the finan- The Board of Directors is responsible for the ultimate direc-
cial statements of the Company, including its Annual Report. tion, strategic supervision, and control of the management
It promotes effective communication between the manage- of the Company, and for other matters which are, by law,
ment, internal and external audits. under its responsibility. Such inalienable duties include,
essentially, (i) the ultimate management of the Company,
The Audit Committee regularly reviews the functionality and (ii) the determination of its organization, (iii) the structuring
effectiveness of the internal control system. It supports the of its accounting system and of the financial controlling,
Board of Directors in corporate governance issues. (iv) financial planning, (v) the appointment, removal, and ulti-
mate supervision of persons entrusted with the management
Nomination and Compensation Committee and representation of the Company, (vi) the preparation of
The Nomination and Compensation Committee determines the business report as well as the General Assembly and the
and agrees with the Board of Directors on the policy for the implementation of its resolutions.
compensation of the Members of the Board of Directors
and of the Executive Board. It approves the design of, and Executive Board
determines targets for any performance-related compensa- The Executive Board is responsible for all areas of operational
tion schemes operated by the Company and approves the management of the Company that are not reserved to the
total annual payments made under such schemes. Within Board of Directors. The Executive Board is chaired by the
the parameters of the agreed policy the Nomination and Chief Executive Officer.
Compensation Committee determines the total individual
compensation package for each Member of the Board of Urs Bühler Innovation Fund (UBIF)
Directors as well as of the Executive Board and prepares The Advisory Board of the Urs Bühler Innovation Fund sup-
the renumeration report. ports and advises the Board of Directors in innovation strat-
egy matters as well as in defining and executing an innova-
Work method of the Board of Directors tion strategy that provides future-oriented answers to market
and its committees trends and the needs of current and future customers.
Board meetings are held as often as matters require or
upon the request of a Board Member, but at least four times External auditors
per year. The agenda of the meeting shall be announced The external auditors are appointed at the General Assembly
when it is convened, and pertinent information, if needed, and present the outcome of the audit to the Audit Committee.
shall be sent 10 days before the meeting to each Board
Member. On unannounced items the Board can only decide
if all members of the Board are in attendance. Decisions may
also be taken by circulation, provided that none of the Board
Members request a formal meeting.

Meetings of the Board Committees are convened separately


from the Board meetings and scheduled as often as business
requires. The Board of Directors receives verbal updates after
each meeting of its Committees by their Chairperson.
122

COMPLIANCE Effective corporate governance


Effective corporate governance is a precondition for Bühler to
ensure a long-term and sustainable increase of its corporate
value. We base this both on the Swiss Code of Best Practice
for Corporate Governance and the OECD Principles of Cor-
porate Governance. Corporate governance at Bühler is orga-
nized with the interests of its stakeholders in mind, including
customers, employees, suppliers, and public communities.
It also comprises compliance with environmental and social
standards as well as an uncompromising commitment to
financial integrity. As an international Swiss company, strict
observation of local laws on a global scale and systematic
and continuous monitoring of compliance in all markets are
indispensable for Bühler. This is the only way to prevent op-
erating risks and an impairment of reputation that might be
caused by violation of compliance rules.

An active Code of Conduct


The Code of Conduct is part of the so-called Bühler Essen-
tials. It serves all employees as a beacon, showing them how
to live the Group’s core corporate principles (Trust, Respect,
Recognition, Involvement, and Passion) in their day-to-day
jobs. It states what is expected of employees and business
partners, defines the standards governing compliance with
laws and regulations, and includes the fundamentals of
communications, employee rights, health and safety, and
financial integrity.

Bühler regularly reviews its own principles of corporate gov-


ernance to ensure that they are up to date. Our Code of
Conduct has been reviewed and now also includes binding
standards for our business partners. The Code of Conduct
is being continuously adjusted to ongoing changes in the
environment. Furthermore, a new Supplier Code of Conduct
has been introduced.

Clear rules against corruption and bribery


The so-called ABC (Anti Bribery & Corruption) rules against
bribery and corruption unmistakably state that no violations
will be tolerated. They concern, in particular, collaboration
with agents. It is mandatory for all employees in procurement,
sales, and management functions to undergo a comprehen-
sive online training program (Web Based Training, WBT) after
they have joined the company and to pass a final test.
GOVERNANCE
Bühler Annual Report 2017
123

Compliance organizational structure Group Internal Audit is responsible for reviewing Group-wide
proves its effectiveness compliance with the Code of Conduct. Violations are report-
Bühler further decentralized the organizational structure of ed to the Audit Committee and the Executive Board.
its compliance function. In eight Bühler regions a region-
al compliance officer acts as the first contact, except for Risk management
compliance cases involving special risks, which are handled Bühler reviews the risk geography of the company on a
directly by the Compliance Board. This decentralization has regular basis. The objective of the established risk process
greatly streamlined and accelerated the related processes. is to review − on a continuous basis − the consequences,
This is also because linguistic barriers have been eliminated, probabilities, impacts, and mitigation measures of the iden-
and the regional compliance officers are familiar with local tified risks. This process is the responsibility of the Board
regulations and conditions. of Directors.

Compliance reporting Quality system


Clear accountability and defined actions ensure that com- With the renewal of the certificates for another three years,
pliance-related incidents are systematically reported to the Bühler continues to meet the highest internationally recog-
central Compliance Board. This transparency is a precondi- nized quality and environmental standards. With the new ISO
tion for ensuring that the company can gain the necessary revision 2015, both the quality and environmental standards
insight from such incidents and take the required measures structures were harmonized with the focus on risk-based
in response. We are happy to report that awareness of the thinking in all business processes. This was the result of the
benefits of a transparent compliance reporting system have multi-site assessment sampling at our Bühler sites: Bühler AG
become increasingly acknowledged. (BUZ), Uzwil, Switzerland; Bühler Management AG (BMGT),
Uzwil, Switzerland; Bühler + Scherler AG (SCHS), St. Gal-
Trade compliance len, Switzerland; Bühler CZ s.r.o. Zamberk (BZAM), Czech
Free trade agreements can offer advantages in cross-border Republic; Bühler GmbH (BBIN), Reichshof, Germany;
traffic. In order to use these, high demands are placed on Buhler (China) Holding Co. Ltd. (BCHN), Wuxi, China;
the organization and documentation of the supply chain. In Wuxi Buhler Machinery Manufacturing Co. Ltd. (BWUX),
addition, strict guidelines are set for the export industry in the China; Buhler (Wuxi) Commercial Co. Ltd. (BCOM), Wuxi,
fields of export control, sanctions, and customs. Accordingly, China, which all successfully passed SGS audits. The
these tasks are steadily expanding and increasingly support- ISO 9001:2015 and ISO 14001:2015 certificates are valid
ed by technical systems. until November 16, 2020.

Group Internal Audit SEDEX/SMETA 4 Pillars recertification


The Internal Audit Department reports functionally to the In addition, Headquarters Bühler AG (BUZ), Uzwil, Swit-
Chairwoman of the Audit Committee and administratively to zerland successfully passed the SEDEX/SMETA 4 audit
the Chief Financial Officer. Meetings between internal and of the four main pillars (labor standards, health and safety
external auditors take place on a regular basis. The audit plan standards, environmental standards, and business ethics).
is aligned with the strategy and key business risks. A yearly SGS granted the letter of conformity, which is valid until Sep-
risk assessment is prepared by Group Internal Audit. It is tember 1, 2020.
the basis for the yearly audit plan, which is approved by the
Audit Committee. The results of the audits are discussed with
the management of the audited unit, and major topics are
presented to the Executive Board and the Audit Committee
and thereafter reported to the Board of Directors. In 2017, 15
worldwide audits were carried out.
124

REMUNERATION Recruit, develop, and align


Bühler practices excellence in human resources to motivate
report and develop its employees and in order to achieve the Bühler
mission. The Company wants to establish itself as the best
in class for employee development, across the entire career
span of its people. The Remuneration Policies are designed
with this purpose in mind.

Remuneration governance
Overview
The Members of the Nomination and Compensation Commit-
tee (NCC) are elected by the General Assembly. The Board
of Directors (BoD) appoints the Chairman from among the
elected members. The NCC supports the BoD in the re-
muneration issues defined here, with responsibilities being
retained by the BoD. The NCC is in charge of defining and
periodically reviewing the Remuneration Policy. It prepares
all the relevant decisions of the BoD in the area of remuner-
ation, for the Members of the BoD, Members of the Exec-
utive Board (EB), and submits its proposals (remuneration
type and annual remuneration) to the BoD. In addition, it
submits proposals to the BoD defining the annual goals for
success- and performance-related remuneration, and then
defines the circle of potential recipients of this success- and
performance-related remuneration.

Nomination and Compensation Committee


For the year under review, the members of the NCC were
Konrad Hummler (Chairman), Frank N. J. Braeken, Karin
Bühler, and Maya Bühler. Permanent invitees were Calvin
Grieder, Chairman of the Board of Directors; Stefan Scheiber,
CEO; Dipak Mane, Chief HR Officer; and Christof Oswald,
Head of HR. Four meetings were held. The NCC Chairman
reported to the BoD after each meeting, and the minutes
were kept and distributed in a timely manner.

Authority chart

Subject Recommendation Final approval

Definition of Remuneration System and Policy for NCC Board of Directors


remuneration paid to the Board of Directors and the
Executive Board

Development of variable remuneration schemes NCC Board of Directors


plus approval of all annually paid performance-related
remuneration at Bühler Group

Definition of individual remuneration, including bonus, NCC Board of Directors


variable portion, shares-related remuneration, etc., to the General Assembly
Executive Board and the Board of Directors
GOVERNANCE
Bühler Annual Report 2017
125

Remuneration principles
Bühler is committed to performance- and market-related
remuneration. Success as a result of sound individual per-
formance plus the success of the organization will impact
the remuneration.

All employees, including the Executive Board, shall un-


dergo a formalized annual performance appraisal process
(Employee Performance Management, EPM). The Individual
Performance Goals are defined and agreed upon jointly with
each employee at the start of the fiscal year. The financial
success of the organization, which is measured on the basis
of EBIT, also impacts performance-related remuneration.

Principles of Remuneration Policy

Fairness, The remuneration schemes shall be simple, clearly structured, and transparent.
consistency, and They give consideration to the responsibilities and powers of the individual functions,
transparency thereby ensuring fair remuneration at all levels.

Performance-related Variable remuneration is directly tied to the success of Bühler (EBIT) and to
remuneration individual performance (EPM).

Long-term Part of the remuneration of the Executive Board shall be paid in the form of blocked
success sharing phantom options in order to ensure long-term sharing in the success of Bühler.

Orientation toward the In order to attract and retain talent, qualified and dedicated management staff and
labor market employees, remuneration shall be oriented toward the market environment and be
regularly subjected to benchmarking.

Bühler values: The Remuneration Policy is oriented toward the Bühler values of TRRIP (Trust, Recognition,
TRRIP Respect, Involvement, Passion). These values are incorporated in the above-mentioned
principles and determine the “Bühler way of doing business” in all respects.
126

REMUNERATION
elements

Overall remuneration model for employees and the Executive Board

Instrument Purpose Influencing factors

Fixed annual Monthly cash Regular, predictable Sphere of work,


basic salary remuneration remuneration for the complexity, and
specific function responsibility of the
function, competen-
cies, and experience
of the function owner,
benchmarks

Performance- Annual cash Remuneration for Success of the


related variable remuneration performance organization (EBIT)
portion and individual per-
formance (EPM) on
an annual basis

Deferred compen- Deferred compensation Sharing in long-term Hierarchical position


sation plan plan with a vesting period success of the function within
of three years the organization

Other employee Pension and insurance Protection against Local legislation and
benefits schemes; other fringe risks and coverage of market practice
benefits expenses
GOVERNANCE
Bühler Annual Report 2017
127

Remuneration of the Board of Directors


The members of the Board of Directors shall receive a fixed
cash payment and be remunerated as Committee Members
(if applicable).

Office

Basic remuneration Membership in the Board of Directors

Additional Chairmanship of the Board of Directors


remuneration Vice Chairmanship of the Board of Directors

Chairmanship of the Audit Committee


Activity in the Audit Committee

Chairmanship of the Nomination and Compensation Committee


Activity in the Nomination and Compensation Committee

Other Committee Chairmanship/Memberships


Other activities

Expenses Only expenses incurred are reimbursed

Remuneration of the Executive Board


The Members of the Executive Board shall receive a basic
salary, a variable cash remuneration portion, employer con-
tributions to pension funds and social security institutions,
and long-term remuneration in the form of a deferred com-
pensation plan with a vesting period of three years. In addi-
tion, the remuneration package also includes transportation
and housing allowance plus a life insurance premium.
128
FINANCIAL REPORT
Bühler Annual Report 2017
129

FINANCIAL
REPORT
FINANCIAL REPORT BÜHLER GROUP 130
Consolidated income statement 131
Consolidated statement of other comprehensive income 132
Consolidated balance sheet 133
Consolidated statement of changes in equity 134
Consolidated statement of cash flows 136
Notes to the financial statements 137
Report of the group auditor Bühler Group 182
FINANCIAL STATEMENTS BÜHLER HOLDING AG 187
Income statement Bühler Holding AG 188
Balance sheet Bühler Holding AG 189
Notes to the financial statements Bühler Holding AG 190
Report of the statutory auditor Bühler Holding AG 192
130

Financial Report
Bühler Group
FINANCIAL REPORT
Bühler Annual Report 2017
131

Consolidated income statement

2017 2016
Notes CHF m CHF m

Revenue 3.1 2,671.7 2,448.6


Other operating income 3.2 21.4 22.0

Total operating income 2,693.1 2,470.6

Cost of materials –1,226.0 –1,047.4


Changes in inventories of finished goods and work in progress 55.2 5.1
Employee benefit expenses 3.3 –825.7 –793.2
Other operating expenses 3.4 –441.3 –408.2
Net result from associates 4.3 2.0 4.6

Operating result before interest, taxes, depreciation and amortization (EBITDA) 257.3 231.5

Depreciation and amortization 4.1/4.2 –52.5 –57.9

Operating result before interest and taxes (EBIT) 204.8 173.6

Interest income and expenses 3.5 2.7 3.0


Other financial income and expenses 3.5 10.7 3.2

Financial result 13.4 6.2

Profit before taxes 218.2 179.8

Income taxes 3.6 –44.0 –36.5

Net profit 174.2 143.3

Attributable to:
– Owners of the parent 168.3 136.3
– Non-controlling interests 5.9 7.0
132

Consolidated statement of other comprehensive income

2017 2016
Notes CHF m CHF m
Net profit 174.2 143.3

Other comprehensive income


Translation differences of foreign operations 6.2 –5.2
Net gain (loss) on hedge of net investment 20.9 –1.1
– Tax effect –1.6 0.1

Cash flow hedges


– Change in cash flow hedges 15.2 2.4
– Tax effect –2.5 –0.4

Other comprehensive income to be reclassified to profit or loss in subsequent periods 38.2 –4.2

Remeasurements of defined benefit plans 4.12.3 101.4 –1.0


– Tax effect –18.4 1.6

Other comprehensive income not to be reclassified to profit or loss in subsequent periods 83.0 0.6

Total other comprehensive income 121.2 –3.6

Total comprehensive income 295.4 139.7

Attributable to:
– Owners of the parent 289.0 133.5
– Non-controlling interests 6.4 6.2
FINANCIAL REPORT
Bühler Annual Report 2017
133

Consolidated balance sheet

2017 2016
Assets Notes CHF m CHF m

Property, plant and equipment 4.1 471.8 415.1


Intangible assets 4.2 266.6 261.6
Investments in associates 4.3 27.5 33.5
Long-term financial assets 4.4 175.8 108.9
Deferred tax assets 3.6.4 46.4 43.0

Non-current assets 988.1 862.1

Assets classified as held for sale 4.3 25.7 0.0


Inventories 4.5 445.3 365.6
Net assets of production orders in progress 4.6 376.1 326.9
Trade accounts receivable 4.7 583.9 532.3
Other accounts receivable, prepayments and accrued income 4.7 137.8 131.0
Current income tax assets 3.7 6.6
Marketable securities 2.3.2 63.4 60.2
Cash and cash equivalents 4.8 832.5 431.3

Current assets 2,468.4 1,853.9

Total assets 3,456.5 2,716.0

Equity and liabilities

Share capital 4.13 15.0 15.0


Capital reserves 185.1 185.1
Other reserves/retained earnings 1,321.2 1,048.2

Equity attributable to the owners of the parent 1,521.3 1,248.3

Non-controlling interests 28.5 28.2

Total equity 1,549.8 1,276.5

Long-term financial liabilities 2.2 530.8 122.7


Deferred tax liabilities 3.6.4 108.1 78.4
Defined benefit obligations 4.12.4 76.6 156.3
Long-term provisions 4.10 27.4 24.6

Non-current liabilities 742.9 382.0

Short-term financial liabilities 2.2 33.4 29.7


Trade accounts payable 4.9 266.8 242.2
Net liabilities of production orders in progress 4.6 367.7 366.0
Short-term provisions 4.10 55.3 44.7
Other short-term liabilities, accruals and deferred income 4.11 418.4 350.7
Current income tax liabilities 22.2 24.2

Current liabilities 1,163.8 1,057.5

Total liabilities 1,906.7 1,439.5

Total equity and liabilities 3,456.5 2,716.0


134

Consolidated statement of changes in equity

Retained
Share capital Capital reserve earnings
Notes CHF m CHF m CHF m

January 1, 2016 15.0 185.1 1,121.7


Dividends paid 6.4 –15.0
Net profit 136.3
Other comprehensive income 0.6

December 31, 2016 15.0 185.1 1,243.6

January 1, 2017 15.0 185.1 1,243.6


Dividends paid 6.4 –18.0
Changes in non-controlling interests 1.5 2.0
Net profit 168.3
Other comprehensive income 83.0

December 31, 2017 15.0 185.1 1,478.9


FINANCIAL REPORT
Bühler Annual Report 2017
135

Foreign Equity
Available- currency Total other attributable
for-sale translation reserves and to the owners Non-controlling
Hedge reserve reserve reserves retained earnings of the parent interests Total equity
CHF m CHF m CHF m CHF m CHF m CHF m CHF m

–3.8 0.8 –189.0 929.7 1,129.8 24.8 1,154.6


–15.0 –15.0 –2.8 –17.8
136.3 136.3 7.0 143.3
2.0 –5.4 –2.8 –2.8 –0.8 –3.6

–1.8 0.8 –194.4 1,048.2 1,248.3 28.2 1,276.5

–1.8 0.8 –194.4 1,048.2 1,248.3 28.2 1,276.5


–18.0 –18.0 –4.1 –22.1
2.0 2.0 –2.0 0.0
168.3 168.3 5.9 174.2
12.7 25.0 120.7 120.7 0.5 121.2

10.9 0.8 –169.4 1,321.2 1,521.3 28.5 1,549.8


136

Consolidated statement of cash flows

2017 2016
Notes CHF m CHF m

Profit before taxes 218.2 179.8


Financial result 3.5 –13.4 –6.2

Operating result before interest and taxes (EBIT) 204.8 173.6


Depreciation and amortization 4.1/4.2 52.5 57.9
Other items not affecting cash flow 5.9 1.8
Changes in provisions 8.6 –7.8
Changes in trade accounts receivable –46.6 –25.7
Changes in inventories –68.4 –17.4
Changes in trade accounts payable 24.1 1.2
Changes in net assets/liabilities of production orders in progress –43.4 –14.7
Changes in other net operating assets 53.1 23.3
Gains/losses on disposal of fixed assets 2.0 0.2
Interest received 4.4 3.6
Interest paid –1.6 –1.6
Income taxes paid –36.9 –32.4

Cash flow from operating activities 158.5 161.9

Purchase of property, plant and equipment –93.1 –67.7


Disposal of property, plant and equipment 7.9 9.5
Purchase of intangible fixed assets –6.7 –3.2
Cash flow from business combinations of group companies, net of cash acquired –18.0 –0.9
Purchase of marketable securities –21.5 –22.4
Disposal of marketable securities 30.4 29.9
Purchase of long-term financial assets –47.2 –6.2
Disposal of long-term financial assets 7.5 7.3
Dividends received 1.7 3.9

Cash flow from investing activities –139.0 –50.0

Proceeds from financial liabilities 420.8 0.0


Repayment of financial liabilities –17.6 –7.6
Dividends paid of Bühler Holding AG –18.0 –15.0
Dividends paid to non-controlling interests –4.1 –2.8
Acquisitions and other transactions with non-controlling interests –1.9 0.0

Cash flow from financing activities 379.2 –25.3

Translation differences 2.5 –0.8

Changes in cash and cash equivalents 401.2 85.8

Cash and cash equivalents at the beginning of period 431.3 345.5


Cash and cash equivalents at the end of period 832.5 431.3
FINANCIAL REPORT
Bühler Annual Report 2017
137

Notes to the financial statements

1. Group information

1.1 General information


The consolidated financial statements of the Bühler Group The consolidated financial statements of the Bühler Group
and its subsidiaries (collectively, the Group) for the year end- have been prepared in accordance with the International
ed December 31, 2017, were authorized for issue in accor- Financial Reporting Standards (IFRS) as issued by the Inter-
dance with a resolution of the Board of Directors on February national Accounting Standards Board (IASB) and comply
6, 2018. Bühler Holding AG (the Company or the parent) is with Swiss law. The consolidated financial statements are
a company incorporated and domiciled in Switzerland whose based on the single-entity financial statements of the Group
shares are privately held. The registered office is located at companies, which are prepared in accordance with consis-
Uzwil, Switzerland. tent accounting principles. The consolidated financial state-
ments are prepared under the historical cost convention.
The Group is a globally active solutions provider for the Any exceptions to this general rule are outlined in the respec-
industrial manufacturing of food and advanced materials. tive note. The overall accounting principles applied to the
The worldwide solutions portfolio contains engineering, ap- Annual Report as a whole are described below. The account-
plication development, manufacturing, services, and training. ing policies related to specific line items are described in the
notes to which they relate.
These financial statements are the consolidated financial
statements of Bühler Holding AG and its subsidiaries. The list Due to rounding, the numbers do not necessarily correspond
of significant Group companies can be found on page 141. exactly with the totals.

1.2 Use of estimates


The preparation of the consolidated financial statements in The estimates and assumptions that may have a higher risk
accordance with IFRS requires management to make esti- of causing a material adjustment to the carrying amounts of
mates and assumptions that affect the reported amounts of assets and liabilities within the next financial periods relate
revenue, expenses, assets, and liabilities and the related primarily to goodwill (Note 4.2) and, to a lesser extent, defined
disclosures at the date of the financial statements. These benefit obligations (Note 4.12), deferred tax assets (Note 3.6),
estimates are based on management’s best knowledge provisions, and contingent liabilities (Note 4.10) at the end of
of current events and possible future measures. However, the reporting period.
actual results could differ from those estimates.
Estimates related to specific line items are described in the
If in the future such estimates and assumptions, which are notes to which they relate.
based on management’s best knowledge at the date of the
financial statements, deviate from the actual circumstances,
the original estimates and assumptions will be modified as
appropriate in the year in which the circumstances change.
138

1.3 Foreign currency translation


The individual financial statements of the Group companies eign currencies are recognized in the income statement,
are measured using the currency of the primary economic except when they are deferred outside the income statement
environment in which the entity operates (“the functional cur- as qualifying cash flow hedges.
rency”) and are translated into Swiss francs for consolidation
purposes. Year-end exchange rates are used for the balance Foreign exchange differences arising on monetary items that
sheet and the average exchange rate for the income state- form part of a company’s net investment in a foreign opera-
ment, statement of other comprehensive income, and cash tion are reclassified to equity (currency translation adjust-
flow statement. ment) in the consolidated financial statements and are only
fully recycled to the income statement when the Group loses
Differences resulting from the application of these different control of a subsidiary or loses significant influence in an as-
exchange rates for the balance sheet and the income state- sociate.
ment and from equity transactions are recognized directly in
the consolidated statement of other comprehensive income. In 2016, the IASB issued IFRIC Interpretation 22, which be-
comes effective for annual periods beginning on or after
Goodwill arising on the acquisition of a foreign entity is ex- January 1, 2018. The interpretation clarifies the date of trans-
pressed in the functional currency of the foreign operation action for the exchange rate to be used for considerations
and is translated at the closing rate. received or paid in advance for foreign currency-denominat-
ed contracts. This interpretation is not expected to have a
Foreign currency transactions translated into the functional material impact on the income statement or the balance
currency are accounted for at the exchange rates prevailing sheet of the Group.
at the date of the transactions; gains and losses resulting
from the settlement of such transactions and from the trans- For foreign currency translation, the Bühler Group used the
lation of monetary assets and liabilities denominated in for- following exchange rates:

Average exchange rates Closing rates 31.12.


2017 2016 2017 2016
CHF CHF CHF CHF
ARS 0.0597 0.0669 0.0530 0.0660
BRL 0.3086 0.2842 0.2960 0.3140
CAD 0.7589 0.7439 0.7790 0.7570
CNY 0.1458 0.1483 0.1502 0.1477
CZK 0.0423 0.0403 0.0458 0.0398
EUR 1.1116 1.0902 1.1710 1.0760
GBP 1.2684 1.3355 1.3190 1.2620
INR 0.0151 0.0147 0.0153 0.0151
JPY 0.0088 0.0091 0.0087 0.0087
MXN 0.0522 0.0528 0.0499 0.0495
SGD 0.7132 0.7137 0.7337 0.7086
THB 0.0290 0.0279 0.0301 0.0285
USD 0.9846 0.9849 0.9820 1.0270
ZAR 0.0740 0.0672 0.0797 0.0738
FINANCIAL REPORT
Bühler Annual Report 2017
139

1.4 Principles of consolidation


Subsidiaries are all entities over which the Group has control. Subsidiaries are consolidated from the date on which control
The Group controls an entity when the Group is exposed to, is transferred to the Group and are no longer consolidated
or has rights to, variable returns from its involvement with the from the date that control ceases.
entity and has the ability to affect those returns through its
power to direct the activities of the entity. The cost of an ac- A change in the ownership interest of a subsidiary, without
quisition is measured at the fair value of the consideration a loss of control, is accounted for as an equity transaction.
transferred at the date of exchange. For each business com-
bination, the acquirer measures the non-controlling interest All intercompany transactions and balances between Group
in the acquiree either at fair value or at the proportionate companies are eliminated in full.
share of the acquiree’s identifiable net assets. Acquisition
costs incurred are expensed in the income statement. Iden- Investments in associated companies are accounted for us-
tifiable assets acquired and liabilities assumed in a business ing the equity method of accounting. These are companies
combination are measured initially at fair value at the date of over which the Group generally holds between 20 % and
acquisition, irrespective of the extent of any non-controlling 50 % of the voting rights and has significant influence but
interest assumed. When the Bühler Group acquires a busi- does not exercise control. Goodwill arising on the acquisition
ness, it assesses the financial assets and liabilities assumed is included in the carrying amount of the investment in asso-
for appropriate classification and designation in accordance ciated companies. The Group does not recognize further
with the contractual terms, economic circumstances, and losses when the carrying amount of the investment together
pertinent conditions as at the acquisition date. with any long-term interest in an associated company reach-
es zero, unless the Group has in addition either incurred or
If the business combination is achieved in stages, the acqui- guaranteed additional obligations in respect to the associat-
sition date fair value of the Group’s previously held equity ed company.
interest in the acquiree is remeasured to fair value at the date
control is obtained. Any gain or loss arising from such Investments below 20 % are recognized at fair value and clas-
remeasurement is recognized in the income statement. sified as available for sale. Changes in fair value are recog-
nized directly in other comprehensive income.
Any contingent consideration to be transferred by the Group
is recognized at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration are
recognized in the income statement.
140

1.5 Additions and disposals of Group companies

Additions

2017
Several small acquisitions are individually and in aggregate
not significant.

Refer to Note 4.3 for transactions with associates.

2016
There were no significant additions in 2016.

Disposals

Any non-current assets held for sale and discontinued oper- The income and expenses of discontinued operations are
ations are presented separately on the face of the balance separated from ordinary income and expenses in the income
sheet. This includes all those assets associated with the dis- statement for both the reporting period and the prior year
continuation of entire lines of business or geographical areas down to the “profit after tax” level. The resulting gain or loss
of operation, which are to be realized through a sale trans- (after taxes) is presented separately in the income statement.
action rather than through continued use. Reclassifications
are only made if management is committed to the sale and The amendments to IFRS 12 as part of the annual improve-
has started seeking buyers. In addition, the asset or dispos- ment cycle 2014–2016 became effective on January 1, 2017.
al group must be available for sale in its current condition These amendments do not have a material impact on the
and its sale must be highly probable within one year. Non- results or financial position of the Group.
current assets or disposal groups classified as held for sale
are no longer depreciated. If necessary, they are written There was no significant disposal in 2017 and 2016.
down for impairment.
FINANCIAL REPORT
Bühler Annual Report 2017
141

1.6 Significant Group companies


Share capital Holding/
in millions of Participation Financing
Name of company Country local currency rate Company Held by
Switzerland
Bühler Holding AG, Uzwil CH CHF 15.0 C
Bühler AG, Uzwil CH CHF 30.0 100.0% Bühler Holding AG, Uzwil
Bühler-Immo Betriebs AG, Uzwil CH CHF 0.1 100.0% Bühler Holding AG, Uzwil
Bühler Management AG, Uzwil CH CHF 0.1 100.0% Bühler Holding AG, Uzwil
UBIF AG, Uzwil CH CHF 4.0 100.0% Bühler Holding AG, Uzwil
Bühler Insect Technology Solutions AG, CH CHF 1.5 100.0% Bühler Holding AG, Uzwil
Uzwil
Bühler + Scherler AG, St. Gallen CH CHF 0.8 60.0% Bühler Holding AG, Uzwil
Europe
Bühler CZ s.r.o., Zamberk CZ CZK 265.2 100.0% Bühler Holding AG, Uzwil
Bühler Deutschland GmbH, Beilngries DE EUR 0.025 100.0% Bühler AG, Uzwil
Bühler GmbH, Beilngries DE EUR 16.0 100.0% Bühler Deutschland GmbH,
Beilngries
Bühler Deutschland Holding GmbH, DE EUR 0.025 100.0% C Bühler AG, Uzwil
Braunschweig
Bühler Barth GmbH, Freiberg a.N. DE EUR 1.137 100.0% Bühler Deutschland Holding GmbH,
Braunschweig
Bühler GmbH, Reichshof DE EUR 0.275 100.0% Bühler Deutschland Holding GmbH,
Braunschweig
Bühler GmbH, Braunschweig DE EUR 12.629 100.0% Bühler Deutschland Holding GmbH,
Braunschweig
Leybold Optics Verwaltungs GmbH, DE EUR 0.444 100.0% C Bühler Deutschland Holding GmbH,
Alzenau Braunschweig
Bühler Alzenau GmbH, Alzenau DE EUR 0.05 100.0% Leybold Optics Verwaltungs GmbH,
Alzenau
Bühler GmbH, Leingarten DE EUR 2.432 100.0% Bühler Deutschland Holding GmbH,
Braunschweig
Buhler S.A., Madrid ES EUR 0.06 100.0% Bühler Holding AG, Uzwil
Bühler Haguenau S.A.S., Haguenau FR EUR 0.2 100.0% Bühler Holding AG, Uzwil
Buhler UK Holdings Ltd., London GB GBP 3.6 100.0% C Bühler Holding AG, Uzwil
Buhler UK Ltd., London GB GBP 1.25 100.0% Buhler UK Holdings Ltd., London
Control Design & Development Ltd., GB GBP 0.0001 100.0% Buhler UK Holdings Ltd., London
Peterborough
Buhler Brescia s.r.l., Brescia IT EUR 0.01 100.0% Bühler AG, Uzwil
Buhler S.p.A., Milano IT EUR 2.665 100.0% Bühler Holding AG, Uzwil
Bühler B.V., Oldenzaal NL EUR 0.034 100.0% Bühler Holding AG, Uzwil
142

Share capital Holding/


in millions of Participation Financing
Name of company Country local currency rate Company Held by
North America
Buhler US Holding Inc., Minneapolis US USD 0.05 100.0% C Bühler Holding AG, Uzwil
Buhler Aeroglide Corporation, Cary US USD 0.004 100.0% Buhler US Holding Inc., Minneapolis
Buhler Inc., Minneapolis US USD 3.2 100.0% Buhler US Holding Inc., Minneapolis
BuhlerPrince Inc., Holland US USD 0.375 100.0% Buhler US Holding Inc., Minneapolis
Latin America
Buhler S.A., Buenos Aires AR ARS 1.1 100.0% Bühler Holding AG, Uzwil
Buhler S.A., Joinville BR BRL 20.685 100.0% Bühler Holding AG, Uzwil
Buhler Sanmak Industria BR BRL 10.0 100.0% Bühler Holding AG, Uzwil
de Maquinas Ltda., Blumenau
Buhler S.A. de C.V., Toluca MX MXN 50.0 100.0% Bühler Holding AG, Uzwil
Middle East and Africa
Buhler (Private Joint Stock Co.), IR IRR 9,250.0 100.0% Bühler Holding AG, Uzwil
Teheran
Buhler Limited, Nairobi KE KES 900.0 100.0% Bühler Holding AG, Uzwil
Buhler (Pty) Ltd., Johannesburg ZA ZAR 141.4 100.0% Bühler Holding AG, Uzwil
Buhler Properties (Pty) Ltd., ZA ZAR 0.0001 100.0% Buhler (Pty) Ltd., Johannesburg
Johannesburg
FINANCIAL REPORT
Bühler Annual Report 2017
143

Share capital Holding/


in millions of Participation Financing
Name of company Country local currency rate Company Held by
Asia
Bangsheng Bio-Technology Co. Ltd., CN CNY 8.51 100.0% Bühler Holding AG, Uzwil
Guangzhou
Buhler (Changzhou) Machinery Co. Ltd., CN CNY 320.0 100.0% Buhler (China) Holding Co. Ltd., Wuxi
Liyang City
Buhler (China) Holding Co. Ltd., Wuxi CN USD 123.6 100.0% C Bühler Holding AG, Uzwil
Buhler (China) Machinery CN CNY 150.0 100.0% Buhler (China) Holding Co. Ltd., Wuxi
Manufacturing Co. Ltd., Wuxi
Buhler (Guangzhou) Food CN CNY 51.0 100.0% Buhler (China) Holding Co. Ltd., Wuxi
Machinery Co. Ltd., Guangzhou City
Buhler (Wuxi) Commercial Co. Ltd., Wuxi CN USD 5.5 100.0% Buhler (China) Holding Co. Ltd., Wuxi
Buhler Sortex Optical Equipment CN CNY 18.0 100.0% Buhler (China) Holding Co. Ltd., Wuxi
(Hefei) Co. Ltd., Hefei
Buhler Aquatic Equipment (Changzhou) CN CNY 10.0 100.0% Buhler (China) Holding Co. Ltd., Wuxi
Co. Ltd., Liyang City
Wuhan Mingbo Electromechanical CN CNY 5.0 100.0% Buhler (China) Holding Co. Ltd., Wuxi
Equipment Co. Ltd., Wuhan
Buhler (Changzhou) Insect Technologies CN CNY 8.0 80.0% Buhler (China) Holding Co. Ltd., Wuxi
Co. Ltd., Changzhou
Buhler Equipment (Xian) Co. Ltd., Xi’an CN CNY 28.0 100.0% Bühler Holding AG, Uzwil
Buhler Food Ingredients CN USD 3.8 100.0% Bühler Holding AG, Uzwil
(Guangzhou) Co. Ltd., Guangzhou
Buhler Mechanical Equipment CN USD 4.0 100.0% Bühler Holding AG, Uzwil
(Shenzhen) Co. Ltd., Shenzhen
Wuxi Buhler Machinery CN USD 23.0 51.0% Bühler Holding AG, Uzwil
Manufacturing Co. Ltd., Wuxi
Buhler Leybold Optics Equipment (Beijing) CN CNY 10.1 100.0% Bühler Alzenau GmbH, Alzenau
Co. Ltd., Beijing
Buhler (India) Private Ltd., Bangalore IN INR 100.0 100.0% Bühler Holding AG, Uzwil
Buhler K.K., Yokohama JP JPY 250.0 100.0% Bühler Holding AG, Uzwil
Buhler Asia Private Limited, Singapore SG USD 14.375 100.0% C Bühler Holding AG, Uzwil
Buhler Asia Vietnam Limited, Long An VN VND 149,815.5 98.0% Buhler Asia Private Limited, Singapore
Buhler (Thailand) Ltd., Bangkok TH THB 110.0 100.0% Buhler Asia Private Limited, Singapore
PT Buhler Indonesia, Jakarta ID IDR 68,500 100.0% Buhler Asia Private Limited, Singapore

No significant change to prior year.


144

2. Financial risk management


The Board of Directors of the Group assesses corporate risks Exchange rate risk. The Group reports in Swiss francs and
by undertaking systematic risk identification and analysis. is therefore exposed to exchange rate movements primarily
Based on this assessment, the measures required for risk in European, North American, South American, and Asian
management in the Group are defined and monitored. The currencies. Various hedging contracts are concluded with a
corresponding meeting of the Board of Directors took place view to offsetting exchange-rate related changes in the value
on December 18, 2017. of assets, liabilities, and future sales and purchase transac-
tions. The Group uses currency forwards and options for this
Capital management. One of the Group’s main objectives purpose. In prior periods hedge accounting was applied for
is to apply a well-managed capital management system in transactions exceeding a certain threshold. To further reduce
order to continuously secure the Group's liquidity and gen- the volatility arising from exchange rate movements, begin-
erate added value for all stakeholders. Another goal is to ning in 2017 the threshold was reduced to zero. The Group
optimize the cost of capital. Group management reviews the continues to be exposed mainly to currency risks resulting
capital structure of the Group and the equity of Group com- from the translation of foreign subsidiaries into Swiss francs,
panies on a regular basis. As at December 31, 2017, the which are not hedged. Net investments in foreign Group
equity ratio stood at 44.8% (prior year: 47.0%). companies are longterm in nature. Their fair value changes
with exchange rates. Over the very long term, however, the
As a result of its global activities, the Group is exposed to change in the inflation rate should match the correspond-
financial market risks (currency risk, interest rate risk, and ing exchange rate movements, so that changes in the fair
price risk), credit risks, and liquidity risks. Financial risk man- value of foreign investments will offset the exchange- rate
agement focuses on the management of currency risk, cred- related changes in value. For this reason, the Group only
it risk, and liquidity risk. Derivative financial instruments are hedges its investments in foreign Group companies in ex-
used to hedge certain risks. The risk management function ceptional cases.
is exercised by the Group Treasury department in close col-
laboration with the operating units, as well as in accordance The following table shows the hypothetical repercussions of
with treasury directives. changes in the key currency pairs on profit after taxes. The
translation risks were for the first time considered in the vol-
Market risk. The Group is exposed to market risks that relate atility calculation in 2017. The comparison period was restat-
primarily to exchange rates. The Group monitors these risks ed according to the same principles. The volatility value used
on an ongoing basis and reports to the Finance Committee in the calculation is that of one year historical volatility as per
every month. In order to manage the volatility associated with December 31.
these risks, the Group employs financial derivative instru-
ments such as forward contracts and options.

Currency
2017 pair EUR/CHF USD/CHF CNY/CHF GBP/CHF

Volatility 6.2% 7.8% 7.0% 8.3%


Effect on profit after taxes (rate increase) CHF m 0.9 0.8 3.0 1.0
Effect on profit after taxes (rate decrease) CHF m –0.9 –0.8 –3.0 –1.0
Effect on equity (rate increase) CHF m 40.6 –7.1 5.0 –0.1
Effect on equity (rate decrease) CHF m –34.7 7.1 –5.0 0.1

Currency
2016 pair EUR/CHF USD/CHF CNY/CHF GBP/CHF

Volatility 7.5% 10.3% 10.4% 10.8%


Effect on profit after taxes (rate increase) CHF m 0.6 1.2 4.0 1.8
Effect on profit after taxes (rate decrease) CHF m –0.6 –1.2 –4.0 –1.8
Effect on equity (rate increase) CHF m 2.9 –5.3 –0.2 –0.2
Effect on equity (rate decrease) CHF m –2.9 5.3 0.2 0.2
FINANCIAL REPORT
Bühler Annual Report 2017
145

Commodity risk. The Group can be exposed to a certain Liquidity risk. Liquidity risk refers to the risk of the Group
degree to commodity price risk due to fluctuations in the being unable to fulfill its obligations when due or at a reason-
prices of commodities required in the production process. able price. The Group Treasury department is responsible
The Group does not conclude any significant futures, for- for monitoring liquidity, financing, and repayment. In addition,
wards, or options to hedge future commodity purchases. liquidity and financing risks and the related processes and
guidelines are checked by corporate management. The
Equity security risk. The Group can buy shares in other Group manages its liquidity risk on a consolidated basis,
companies or make investments in stock indices or funds in taking into account business policy, tax, financial, and regu-
order to invest its liquid funds. It does so in accordance with latory considerations. Free cash flow is used as a source of
the treasury strategy approved by the Board of Directors. financing. The proceeds from the bond issued in 2017 will
This sets precise limits, including investments in shares. be used exclusively to finance the acquisition of Haas, the
investments in the production and innovation site of Uzwil,
Interest rate risk. Interest rate risk arises from changes in and investments in digital business models. If required, the
interest rates that may affect the net assets and results. Group can use additional lines of credit from banks. Group
These risks are managed and monitored centrally. Commit- management monitors the Group’s net liquidity position by
ments from the bond obligation are interest rate fixed. The means of ongoing forecasts based on expected cash flows.
exposure of the Group to interest rate changes was not
material during the current and previous reporting period. Information on the maturity analysis is disclosed in Note 2.2.

Credit risk. Credit risks arise in connection with investments


of liquid funds, derivative financial instruments, and receiv-
ables from customers. In order to minimize potential losses
on customers’ receivables, an Operational Risk Management
(ORM) guideline has been drawn up. The evaluation of our
customers’ financial reliability and/or the terms of payment
and hedging on our deliveries are key concerns in this re-
spect. In addition, it can be stated that none of our custom-
ers has outstanding payments accounting for more than 5%
of Group sales. The nominal value of the trade accounts
receivable less valuation allowances is considered an ap-
proximation of the receivables’ fair value. The book values
stated represent the maximum credit risk. The default risk
on investments, derivative financial instruments, money mar-
ket contracts, current-account deposits, and time deposits
is minimized by selecting counterparties with at least an in-
vestment grade rating and adequate diversification. The risks
are monitored rigorously and kept within stipulated parame-
ters. Group guidelines ensure that the Group’s credit risk
vis-à-vis financial institutions is limited. The limits set are
regularly monitored and adjusted. The Group does not ex-
pect to incur any material loss as a result of its counterparties
being unable to meet their contractual obligations, nor does
it have any cluster risks with respect to individual sectors or
countries.

Information on the analysis of outstanding receivables and


allowance for bad debts is disclosed in Note 4.7.
146

2.1 Financial assets


A distinction is made between the following three categories: In 2014, the IASB issued the final version of IFRS 9 Financial
Instruments, which replaces IAS 39 and all previous versions
A Financial assets “at fair value through profit or loss” of IFRS 9. IFRS 9 is effective for annual periods beginning on
are generally acquired with the intention of generating or after January 1, 2018. The Group anticipates the following
a profit from short-term price fluctuations. impacts on the different financial statement line items:
A “Loans and receivables” include loans granted and
accounts receivable. A Cash and cash equivalents: Valuation continues to be
A All other financial assets are classified as “available for sale.” based on amortized costs and the Group therefore does
not expect any impact.
Financial assets “at fair value through profit or loss” are rec- A Trade accounts receivable and net assets from produc-
ognized on acquisition at cost and subsequently measured tion orders: The simplified approach will be used under
at fair value, with fair value changes recognized in the finan- the new impairment model. The Group expects an
cial result in the period in which they arise. immaterial increase in the allowance for bad debts
based on the historically low number of defaults as well
“Available for sale” financial assets are measured subsequent as the high rate of secured receivables. The new
to their initial recognition at fair value, with unrealized gains calculation methodology has not yet been internally
and losses recognized in other comprehensive income. approved by all required approval level and the impact
When the financial asset is either impaired or disposed of, can therefore not be quantified at this point in time.
the cumulative gain or loss previously recognized in the oth- A Financial assets: Valuation of financial assets without a
er comprehensive income is reclassified from equity to the quoted market price will change from at cost to fair
income statement. Provided that fair value cannot be reliably value through profit and loss as already applied for all
determined, available-for-sale financial assets are measured other financial assets. The Group does not expect any
at cost. This applies to financial assets that do not have a impact due to this change.
quoted market price in an active market and decisive param- A Financial liabilities: Valuation continues to be based on
eters cannot be reliably estimated to be used in valuation amortized costs, and the Group therefore does not
models for the determination of fair value. expect any impact.

Purchases and sales are recognized at the trade date rather Valuation and recording of the Group's hedge accounting is
than at the settlement date. not impacted by IFRS 9.

Cash and Receivables Financial Total Total


cash equivalents Securities and accruals assets book value market value
2017 CHF m CHF m CHF m CHF m CHF m CHF m

Cash and cash equivalents 832.5 832.5 832.5


Financial assets at fair value through profit or loss 50.2 50.2 50.2
Loans and receivables 721.7 93.0 814.7 814.7
Financial assets available for sale 47.4 3.5 50.9 50.9
Derivative financial instruments held for hedging 13.2 13.2 13.2

Total financial assets 832.5 110.8 721.7 96.5 1,761.5 1,761.5

As at December 31, 2017, capital commitments of CHF 13.4 mil-


lion (prior year: 13.0 million) have not yet been drawn.

Cash and Receivables Financial Total Total


cash equivalents Securities and accruals assets book value market value
2016 CHF m CHF m CHF m CHF m CHF m CHF m

Cash and cash equivalents 431.3 431.3 431.3


Financial assets at fair value through profit or loss 56.9 56.9 56.9
Loans and receivables 663.3 84.1 747.4 747.4
Financial assets available for sale 14.4 3.6 18.0 18.0
Derivative financial instruments held for hedging 3.3 3.3 3.3

Total financial assets 431.3 74.6 663.3 87.7 1,256.9 1,256.9


FINANCIAL REPORT
Bühler Annual Report 2017
147

2.2 Financial liabilities


Bond. Financial liabilities consist mainly of the dual tranche tween net proceeds and the principal value due on redemp-
bond issued in 2017, which were initially recognized at the tion being recognized in the income statement over the term
proceeds received, net of transaction cost incurred. Subse- of the borrowings. Financial liabilities are derecognized when
quently, the borrowings are measured at amortized cost the contractual obligations are discharged, cancelled, or ex-
using the effective interest method with any difference be- pired.

Financial Payables/accruals Total Total


liabilities and deferred income book value market value
2017 CHF m CHF m CHF m CHF m

Financial liabilities at amortized acquisition costs 543.2 685.2 1,228.4 1,228.8


Financial liabilities at fair value through profit and loss 13.5 13.5 13.5
Financial liabilities held for hedging 7.5 7.5 7.5

Total financial liabilities 564.2 685.2 1,249.4 1,249.8

Financial Payables/accruals Total Total


liabilities and deferred income book value market value
2016 CHF m CHF m CHF m CHF m

Financial liabilities at amortized acquisition costs 135.1 592.9 728.0 728.0


Financial liabilities at fair value through profit and loss 10.4 10.4 10.4
Financial liabilities held for hedging 6.9 6.9 6.9

Total financial liabilities 152.4 592.9 745.3 745.3

Maturity analysis Cash outflow


Book value
Dec 31, 2017 Total < 1 year 1–5 years > 5 years
2017 CHF m CHF m CHF m CHF m CHF m

Trade accounts payable to third parties 264.6 264.6 264.6


Liabilities to associates and related parties 124.8 124.8 5.6 76.2 43.0
Liabilities others/accruals and deferred income 440.3 440.3 439.8 0.5
Corporate bonds 420.8 433.9 1.6 186.5 245.8
Derivative financial instruments held for hedging 7.5 7.5 7.5

Total 1,258.0 1,271.1 719.1 263.2 288.8

Cash outflow
Book value
Dec 31, 2016 Total < 1 year 1–5 years > 5 years
2016 CHF m CHF m CHF m CHF m CHF m

Trade accounts payable to third parties 240.6 240.6 240.6


Liabilities to associates and related parties 137.4 137.4 6.3 76.1 55.0
Liabilities others/accruals and deferred income 374.2 374.2 373.0 1.2
Derivative financial instruments held for hedging 6.9 6.9 6.4 0.5

Total 759.1 759.1 626.3 77.8 55.0


148

Corporate bonds
Nominal Effective
value interest 2017 2016
Company Term Currency CHF m rate CHF m CHF m

Bond, Switzerland 0.1% Bühler Holding AG 12/2017 – 12/2022 CHF 180.0 0.11% 179.9 0.0
Bond, Switzerland 0.6% Bühler Holding AG 12/2017 – 12/2026 CHF 240.0 0.55% 240.9 0.0

Total corporate bonds 420.8 0.0

The corporate bonds are quoted at the SIX Swiss Exchange.

Reconciliation of liabilities arising from financing activities


Non cash-changes
Cash Acquisi- FX move- Reclassifi-
2016 flows tion ment cation 2017
CHF m CHF m CHF m CHF m CHF m CHF m

Short-term borrowings 29.7 –7.5 11.2 33.4


Long-term borrowings 122.7 410.7 –2.6 530.8

Total liabilities from financing activities 152.4 403.2 0.0 0.0 8.6 564.2

Non cash-changes
Cash Acquisi- FX move- Reclassifi-
2015 flows tion ment cation 2016
CHF m CHF m CHF m CHF m CHF m CHF m

Short-term borrowings 16.4 –7.1 20.4 29.7


Long-term borrowings 136.6 –0.5 –13.4 122.7

Total liabilities from financing activities 153.0 –7.6 0.0 0.0 7.0 152.4
FINANCIAL REPORT
Bühler Annual Report 2017
149

2.3 Marketable securities and derivative financial instruments


Derivative financial instruments and hedge accounting. The hedging of cash flows is undertaken for certain antici-
Derivative financial instruments with banks are mainly con- pated Group-internal transactions as well as for the foreign
cluded to hedge currency risks. They are initially recognized currency risk of firm commitments. The effective portion of
at cost and subsequently at fair value (replacement cost). The the change in fair value of derivatives used for the hedging
method applied in recognizing the resulting profits or losses of cash flows is recognized in other comprehensive income.
depends on whether a derivative was designated for hedging The ineffective portion of the hedging instrument is immedi-
purposes, and if so, on the type of position being hedged. ately recognized in the income statement.
Certain derivatives may be used to hedge foreign currency
risks in connection with a transaction that is highly likely to Amounts accumulated in other comprehensive income are
take place in future, or to hedge a fixed commitment (hedg- recycled in the income statement in the periods when the
ing of cash flows). When the hedge is implemented, the hedged item affects profit or loss. When a forecasted trans-
Group documents the relationship between the hedging in- action is no longer expected to occur, the cumulative gain or
strument and the risk being hedged, as well as setting out loss that was recorded in other comprehensive income is
risk management objectives and strategies. Furthermore, the immediately transferred to the income statement.
Group records its assessment of the effectiveness of the
hedging instrument with respect to the hedged cash flows, Derivatives not designated as hedging instruments are
both when the hedging transaction is concluded and on an accounted for at fair value through profit or loss. Changes in
ongoing basis. the fair value of these derivative instruments are recognized
immediately in the income statement.
The full fair value of a hedging derivative is classified as
a non-current asset or liability when the remaining maturity Marketable securities. Marketable securities include those
of the hedged item is more than 12 months; it is classified that are held for trading without participation features. Secu-
as a current asset or liability when the remaining maturity of rities included in financial assets are categorized as available
the hedged item is less than 12 months. Trading derivatives for sale.
are classified as a current asset or liability.
Futures and options were entered into with banks mainly to
hedge currency risks. The following positions were open as
of December 31, 2017:
150

Contract or underlying Positive fair values Negative fair values


principal amount
2017 2016 2017 2016 2017 2016
2.3.1 Derivative financial instruments CHF m CHF m CHF m CHF m CHF m CHF m

Currency-related instruments
Forward foreign exchange rate contracts 1,599.0 951.7 16.3 6.9 21.0 16.9
– held for trading 786.0 596.1 4.2 3.6 13.5 10.0
– cash flow hedges (effective part) 813.0 355.6 12.1 3.3 7.5 6.9
Over-the-counter currency options 174.5 16.1 1.1 0.1 0.0 0.1
Total of currency-related instruments 1,773.5 967.8 17.4 7.0 21.0 17.0

Equity-related instruments
Over-the-counter equity options 10.0 30.0 0.0 0.0 0.0 0.8

Total of equity-related instruments 10.0 30.0 0.0 0.0 0.0 0.8

Options 184.5 46.1 1.1 0.1 0.0 0.9


Futures 1,599.0 951.7 16.3 6.9 21.0 16.9

Sum of derivative financial instruments 1,783.5 997.8 17.4 7.0 21.0 17.8

Thereof included in securities and in 1,773.5 974.8 17.3 6.7 21.0 17.3
short-term financial liabilities
Thereof included in other long-term 10.0 23.0 0.1 0.3 0.0 0.5
financial assets and financial liabilities
FINANCIAL REPORT
Bühler Annual Report 2017
151

Other Total Total


USD EUR currencies 2017 2016
CHF m CHF m CHF m CHF m CHF m

Currency-related instruments
Forward foreign exchange rate contracts 393.3 899.9 305.8 1,599.0 951.7
– held for trading 260.7 384.4 140.9 786.0 596.1
– cash flow hedges 132.6 515.5 164.9 813.0 355.6
Over-the-counter currency options 0.0 174.5 0.0 174.5 16.1

Total of currency-related instruments 393.3 1,074.4 305.8 1,773.5 967.8

Equity-related instruments
Over-the-counter equity options 0.0 0.0 10.0 10.0 30.0

Total of equity-related instruments 0.0 0.0 10.0 10.0 30.0

Options 0.0 174.5 10.0 184.5 46.1


Futures 393.3 899.9 305.8 1,599.0 951.7

Sum of derivative financial instruments 393.3 1,074.4 315.8 1,783.5 997.8

Positive replacement values are included in securities or


long-term financial assets and negative replacement values
are included in financial liabilities.
152

2017 2016
2.3.2 Marketable securities CHF m CHF m

Equity securities 5.5 4.8


Bonds 6.2 9.5
Derivative financial instruments 17.3 6.7
Other securities 34.4 39.2

Total marketable securities 63.4 60.2

2.4 Estimation of fair values


The fair values of financial instruments that are actively trad- ment in question is classified as Level 2. If one or more pa-
ed on markets are based on the relevant trading exchange rameters are based on unobservable market data, the instru-
prices (offer prices) on the balance sheet reference date. ment is classified as Level 3. In the period under review as
Instruments of this nature are classified as Level 1. The fair well as in the prior year no transfer occurred within the Levels.
values of financial instruments that are not actively traded on In addition to the financial assets below, as of December 31,
markets (e.g., derivative OTC instruments) are determined 2017, the Group discloses an asset held for sale which is
using valuation models. If all the parameters required for the valued at fair value (Level 3). Refer to Note 4.3 for more de-
valuation are based on observable market data, the instru- tails.

2017 CHF m Level 1 Level 2 Level 3 Total

Financial assets at fair value through profit or loss 46.2 4.1 50.3
Derivative financial assets held for hedging 13.2 13.2
Financial assets available for sale 36.3 14.6 50.9

Total financial assets 46.2 53.6 14.6 114.4

Derivative financial liabilities 21.0 21.0

Total financial liabilities 0.0 21.0 0.0 21.0

2016 CHF m Level 1 Level 2 Level 3 Total

Financial assets at fair value through profit or loss 53.5 3.7 57.2
Derivative financial assets held for hedging 3.3 3.3
Financial assets available for sale 3.6 14.4 18.0

Total financial assets 53.5 10.6 14.4 78.5

Derivative financial liabilities 17.8 17.8

Total financial liabilities 0.0 17.8 0.0 17.8


FINANCIAL REPORT
Bühler Annual Report 2017
153

3. Detailed information on consolidated income statement

3.1 Revenue
Revenue is recognized when it is probable that the econom- CHF 2,118.2 million (prior year: CHF 1,777.9 million) of the
ic benefits associated with the transaction will flow to the total operating income was determined using the percent-
entity and the amount of the revenue can be measured reli- age-of-completion method in the reporting period.
ably. Revenue is measured at the fair value of the consider-
ation received net of sales taxes and discounts. Revenue The Group will apply IFRS 15 (Revenue from Contracts with
from the sale of goods is recognized when delivery has taken Customers) starting on January 1, 2018, using the full retro-
place and the transfer of risks and rewards of ownership has spective approach. Under IFRS 15, revenue is recognized as
been completed. the control of the goods or services is transferred to the
customer. This can occur at a point in time or over time.
The Group accounts for customer projects using the per-
centage-of-completion method. Revenue (including an esti- For projects/plants and services/maintenance, the Group will
mated share of the outcome of the contract) is recognized continue to recognize revenue over time. For single machines
by reference to the stage of completion. The stage of com- and spare parts, the Group will recognize revenue at a point
pletion is determined according to the cost-to-cost method. in time. The main impact of IFRS 15 is that revenue recogni-
The percentage-of-completion method involves the use of tion for single machines changes from over time to a point
estimates and forecasts concerning future costs; actual in time. This will lead to a revenue shift to later periods com-
costs may differ from these estimates. The forecasts are pared to the currently applied IFRS guidance. Prior reporting
reviewed on a regular basis and adapted where necessary. periods presented will be restated and thus the effect of
These changes affect costs, the stage of completion, and initial application of IFRS 15 will be recognized directly in
both realized and anticipated profits. Any changes in esti- equity of the earliest period presented.
mates are recognized in the period in which they occur. Loss-
es identified on long-term construction contracts are recog- The Group is currently finalizing the calculation of the re-
nized as an  expense immediately. Losses on long-term statement net impact on its 2017 financial statement, which
construction contracts occur when the expected contract is expected to increase annual revenues by +2.9%, increase
costs exceed the expected revenue. EBIT by +7.6% and decrease total equity by –2.0% compared
to the currently disclosed figures.

3.2 Other operating income


2017 2016
CHF m CHF m

Earnings from coordination of consortium business 1.4 0.0


Interest income from trade finance 1.4 2.1
Rental income 1.2 0.9
Gains from sale of fixed assets 2.4 2.3
Other operating income related parties 2.0 0.7
Dividend income 0.4 0.6
Gains from sale of scrap materials 2.7 1.5
Supplier discounts 1.4 1.1
Government grants 2.0 0.0
Others 6.5 12.8

Total 21.4 22.0

Others comprises a number of individually immaterial items.


154

3.3 Employee benefit expenses


2017 2016
CHF m CHF m

Wages and salaries 640.8 607.7


Social security and employee benefit expenses 117.1 116.9
Other personnel expenses 67.8 68.6

Total 825.7 793.2

3.4 Other operating expenses


2017 2016
CHF m CHF m

Administration expenses 108.1 104.0


Rental and leasing expenses, dues 31.8 31.1
Energy, maintenance and repairs 32.6 29.3
Travel expenses 82.8 79.4
Outbound freight costs 76.0 66.6
Consultancy fees 15.1 13.4
Marketing costs 21.1 17.7
Agency fees 13.3 15.5
Other operating expenses related parties (Note 6.2 Related parties) 23.9 25.2
Losses on sales of fixed assets 5.0 1.0
Fixed assets < 10 kCHF 2.3 1.6
Contributions and memberships 2.3 1.5
Others 27.0 21.9

Total 441.3 408.2


FINANCIAL REPORT
Bühler Annual Report 2017
155

3.5 Financial result


2017 2016
CHF m CHF m

Interest income 3.8 4.1


Interest income from related parties 0.6 0.7
Interest expenses –0.3 –0.3
Interest expenses from related parties –1.4 –1.5

Total interest income and expenses 2.7 3.0

Total other financial income 10.7 3.2

Total financial result 13.4 6.2

The continuously low interest rates in most major currencies


resulted in an interest result including interest from related
parties of CHF 2.7 million (prior year: CHF 3.0 million). Other
financial income mainly comprised foreign exchange gains
of CHF 6.9 million (prior year: CHF –1.1 million).
156

3.6 Taxes
Income taxes comprise the tax expense in respect of all Deferred tax assets are only recognized for temporary differ-
recognized profits for the reporting period. They include cur- ences and unused tax loss carry-forwards to the extent that
rent and deferred income taxes. Current income taxes are it is probable that future taxable profit will be available against
calculated on taxable profit. Provisions for deferred taxes are which temporary differences or unused tax losses can be
calculated according to the liability method. Deferred taxes are utilized. This assessment is based on estimates, which could
recognized for temporary differences between the carrying differ from actual results and require a valuation allowance.
amounts of assets and liabilities in the balance sheet and their
tax base taking into account actual or substantially enacted The amendments to IAS 12 became effective on January 1,
tax rates. Changes in deferred tax balances are recognized in 2017. The amendments clarify the accounting for deferred
the income statement, except when they relate to items rec- taxes where an asset is measured at fair value and that fair
ognized outside the income statement, in which case the de- value is below the asset’s tax base. These amendments do
ferred tax is treated accordingly. not have a material impact on the income statement or bal-
ance sheet. The IASB issued IFRIC 23, which becomes ef-
Current income tax relating to items recognized directly in fective on January 1, 2019. The interpretation clarifies how
equity is recognized in equity. to apply the requirements in IAS 12 when there is uncertain-
ty over income tax treatment. The Group does not expect a
significant impact from this clarification.

2017 2016
3.6.1 Income taxes CHF m CHF m

Income taxes relating to the reporting period –39.7 –40.1


Income taxes relating to prior periods 0.4 –1.1
Deferred taxes due to temporary differences –11.0 3.4
Deferred taxes due to recognition of tax loss carry-forwards 0.9 1.4
Deferred taxes due to changes in tax rates 5.4 –0.1

Total –44.0 –36.5


Deferred taxes recognized in other comprehensive income –22.5 1.3

2017 2016
3.6.2 Reconciliation of income taxes CHF m CHF m

Profit before taxes 218.2 179.8

Components of tax expenses:


Income taxes at anticipated tax rate –48.6 –40.1
Income and expenses not subject to tax 1.3 0.7
Income taxes relating to prior periods 0.4 –1.1
Deferred taxes due to changes in tax rates 5.4 –0.1
Effect of tax loss carry-forwards 1.9 1.2
Effect of losses without recognition of deferred tax assets –2.0 –2.7
Other impacts –2.4 5.6

Income taxes disclosed (current and deferred) –44.0 –36.5

Total income taxes in % of profit before taxes 20.2% 20.3%

The anticipated tax rate was 22.3 % (prior year: 22.3 %) and to 20.2 % in 2017 from 20.3 % in 2016. Contributory factors
consisted of the weighted average of the applicable local for the resulted tax rate included sustainable tax manage-
tax rates for income taxes. The tax rate decreased slightly ment and a special effect due to the US tax reform.
FINANCIAL REPORT
Bühler Annual Report 2017
157

2017 2016
3.6.3 Tax loss carry-forwards CHF m CHF m

Expiry
Unlimited 93.0 86.4
In more than five years 22.2 22.7
In two to five years 30.1 34.7
Within one year 1.9 1.3

Total 147.2 145.1

Tax loss carry-forwards accounted for in deferred taxes 116.4 110.5


Tax loss carry-forwards not accounted for in deferred taxes 30.8 34.6
Tax effect on tax loss carry-forwards unaccounted for 7.7 8.5

The change in tax loss carry-forwards results from the use many, as well as from the impact of additional tax loss car-
of tax losses in particular in China, South Africa, and Ger- ry-forwards in particular in Germany, China, and Brazil.

2017 2016
CHF m CHF m
3.6.4 Breakdown of deferred taxes per line item Assets Liabilities Assets Liabilities

Property, plant and equipment 6.5 16.2 7.8 15.8


Post-employment benefits 16.1 12.8 39.7 10.8
Provisions 3.2 7.9 3.3 13.1
Other items (mainly inventory, construction contracts and other current 109.9 191.9 64.7 141.7
liabilities)
Tax loss carry-forwards 31.4 0.0 30.5 0.0

Total deferred taxes gross 167.1 228.8 146.0 181.4


Offset –120.7 –120.7 –103.0 –103.0

Total deferred taxes net 46.4 108.1 43.0 78.4

Deferred tax assets and liabilities are offset if there is a legal-


ly enforceable right to set them off and if the calculations of
income taxes relate to the same taxation authority.
158

3.7 Research and development costs


Research costs are recognized in the income statement in Research and development costs directly charged to the
the period in which they are incurred. Development costs are income statement in the reporting period amounted to
capitalized only if, and to the extent that, the IFRS criteria are CHF 119.0 million (prior year: CHF 108.5 million).
met and it is probable that the present value of the expected
returns will exceed the development costs. Capitalized de-
velopment costs are amortized on a systematic basis over
the period in which the returns are expected to flow to the
Group.
FINANCIAL REPORT
Bühler Annual Report 2017
159

4. Detailed information on consolidated balance sheet

4.1 Property, plant and equipment


Property, plant, and equipment is valued at acquisition or Impairment of assets. At each reporting date, the Group
construction cost less depreciation and write-downs for im- assesses whether there is any indication that an asset may
pairment. Items of property, plant, and equipment are depre- be impaired. If any such indication exists, the recoverable
ciated on a straight-line basis over their estimated useful life, amount of the asset is estimated in order to determine the
except for land, which is not depreciated. Estimated useful extent of the impairment loss, if any. Where it is not possible
lives of major classes of depreciable assets are as follows: to estimate the recoverable amount of an  individual asset,
the Group estimates the recoverable amount of the smallest
A Building shell: 40 – 80 years cash-generating unit to which the asset belongs. The recov-
A Installations / extensions: 20 – 25 years erable amount is the higher of an asset’s or cash-generating
A Machinery and technical equipment: 10 years unit’s fair value less costs to sell and its value in use. If the
A Other tangible fixed assets: 3 –10 years recoverable amount of an  asset or cash-generating unit is
estimated to be less than its carrying amount, the carrying
The estimated useful life of the assets is regularly reviewed amount of the asset or cash-generating unit is reduced to its
and, if necessary, the future depreciation charge is acceler- recoverable amount. Impairment losses are recognized im-
ated. mediately in the income statement.

Costs are only included in the asset’s carrying amount when Where an impairment loss is subsequently reversed, the car-
it is probable that economic benefits associated with the item rying amount of the asset or cash-generating unit is in-
will flow to the Group in future periods and the cost of the creased to the revised estimate of its recoverable amount.
item can be measured reliably. However, this increased amount cannot exceed the carrying
amount that would have been determined had no impairment
Borrowing costs. Borrowing costs which are directly at- loss been recognized for that asset or cash-generating unit
tributable to the acquisition, construction, or production of in prior periods. A reversal of an impairment loss is recog-
a  qualified asset are capitalized as part of the cost of that nized immediately in the income statement.
asset.
160

Machinery Other Assets


Land and and technical tangible under
buildings equipment assets construction Total
Acquisition cost CHF m CHF m CHF m CHF m CHF m

January 1, 2016 311.6 290.2 139.5 19.5 760.7


Additions 15.0 16.3 12.7 23.8 67.8
Disposals –0.8 –19.6 –12.2 –2.2 –34.8
Reclassifications 11.9 0.1 1.9 –14.0 –0.1
Translation differences –2.7 –0.2 0.2 –0.1 –2.8

December 31, 2016 335.0 286.8 142.1 26.9 790.8

Additions 7.8 23.7 10.9 50.6 93.0


Disposals –1.4 –22.1 –8.5 –2.3 –34.3
Reclassifications 40.5 4.1 3.4 –48.0 0.0
Translation differences 11.9 7.6 3.9 0.0 23.4

December 31, 2017 393.8 300.0 151.8 27.2 872.8

Depreciation

January 1, 2016 –84.5 –166.6 –108.8 –0.4 –360.3


Additions –9.5 –19.2 –11.7 –0.2 –40.6
Disposals 0.4 14.3 10.5 0.0 25.2
Impairment 0.0 –0.1 0.0 0.0 –0.1
Reclassifications –0.5 0.2 0.0 0.2 –0.1
Translation differences 0.4 0.1 –0.3 0.0 0.2

December 31, 2016 –93.7 –171.3 –110.3 –0.4 –375.7

Additions –10.4 –19.4 –9.9 –0.1 –39.8


Disposals 1.3 15.5 7.7 0.0 24.4
Impairment 0.0 0.0 0.1 0.0 0.1
Reclassifications 0.2 1.1 –1.0 –0.3 0.0
Translation differences –2.5 –5.0 –2.8 0.3 –10.0

December 31, 2017 –105.2 –179.1 –116.2 –0.5 –401.0

Net book values

January 1, 2017 241.3 115.5 31.8 26.5 415.1


December 31, 2017 288.6 120.9 35.6 26.7 471.8

As in the previous year, the Group did not enter in financial plant, and equipment, which are not shown in the balance
lease contracts as lessee. Net loss on disposal of tangible sheet, amounted to CHF 33.6 million (prior year: CHF 53.8 mil-
fixed assets amounted to CHF –2.0 million (prior year: net lion) and are mainly related to application centers (in Switzer-
loss CHF – 0.2 million). Commitments relating to property, land and United States).
FINANCIAL REPORT
Bühler Annual Report 2017
161

Off-balance sheet obligations under operating leases

2017 2016
CHF m CHF m

Leasing obligation up to one year 20.3 16.2


Leasing obligation as of one to five years 25.5 19.7
Leasing obligation over five years 14.2 8.7

Total 60.0 44.6

Leases. Leases of property, plant, and equipment where the Assets under finance leases where the Bühler Group acts as
Group has substantially all the risks and rewards of owner- lessor are recognized as receivables in the amount of the net
ship are classified as finance lease. Property, plant, and investment. The risks and rewards incidental to ownership
equipment acquired through a finance lease is capitalized at are transferred to the lessee. Lease income from these
the date of the commencement of the lease term at the pres- finance leases is subsequently recognized over the term of
ent value of the minimum future lease payment or, if lower, the lease based on the effective interest method.
at the amount equal to the fair value of the leased asset as
determined at the inception of the lease. The associated lia- In 2016, the IASB issued the final version of IFRS 16 Leases,
bilities are recognized as either current or non-current finan- which replaces IAS 17. IFRS 16 is effective for annual periods
cial liabilities, depending on their due dates. beginning on or after January 1, 2019. The Group is current-
ly assessing the impact of IFRS 16 and plans to adopt the
Leases where substantially all the risks and rewards of own- new standard on the required effective date.
ership are not transferred to the Group are classified as op-
erating leases. Payments under operating leases are charged This item mainly includes obligations under long-term leasing
to the income statement on a  straight-line basis over the agreements relating to properties in Germany, China, and
period of the lease. Switzerland.
162

4.2 Intangible assets


Goodwill represents the excess of the aggregate of the con- Goodwill on acquisitions of subsidiaries and interests in joint
sideration transferred and the amount recognized for the ventures is allocated to cash-generating units for the purpose
non-controlling interest over the fair value of the net identi- of impairment testing. Impairment losses relating to goodwill
fiable assets acquired and liabilities assumed. Goodwill on cannot be reversed in future periods.
acquisitions of subsidiaries is included in intangible assets.
Goodwill on acquisitions of associates is included in invest- Acquired patents, licenses, trademarks, and similar rights are
ments in associates. initially recorded at cost and amortized on a straight-line ba-
sis over their estimated useful life or a period not exceeding
Goodwill is tested annually for impairment or whenever there 15 years. Intangible assets acquired through business com-
are impairment indicators and is carried at cost less accu- binations are carried in the balance sheet at the fair value
mulated impairment losses. allocated in the acquisition accounting and amortized over
their estimated useful life.
If the consideration transferred is less than the fair value of
the net assets of the subsidiary acquired, the difference is Other intangible assets mainly comprise customer relation-
recognized directly in the income statement. ships, technologies, patents, and software.

On disposal of a subsidiary, associate, or joint venture, the


related goodwill is included in the determination of profit or
loss on disposal.
FINANCIAL REPORT
Bühler Annual Report 2017
163

Other
intangible
Goodwill assets Total
Acquisition cost CHF m CHF m CHF m

January 1, 2016 258.3 154.0 412.3


Additions 0.9 3.1 4.0
Disposals 0.0 –0.6 –0.6
Reclassifications 0.0 0.4 0.4
Translation differences 1.1 0.5 1.6

December 31, 2016 260.3 157.4 417.7

Additions 0.0 6.8 6.8


Disposals 0.0 –4.6 –4.6
Reclassifications 0.0 –0.1 –0.1
Translation differences 11.3 7.1 18.4

December 31, 2017 271.6 166.6 438.2

Amortization

January 1, 2016 –27.9 –110.7 –138.6


Additions 0.0 –17.3 –17.3
Disposals 0.0 0.6 0.6
Reclassifications 0.0 –0.2 –0.2
Translation differences –0.3 –0.3 –0.6

December 31, 2016 –28.2 –127.9 –156.1

Additions 0.0 –12.7 –12.7


Disposals 0.0 4.6 4.6
Reclassifications 0.0 0.1 0.1
Translation differences –0.9 –6.6 –7.5

December 31, 2017 –29.1 –142.5 –171.6

Net book values

January 1, 2017 232.1 29.5 261.6


December 31, 2017 242.5 24.1 266.6
164

Goodwill impairment test

Goodwill is allocated to the identifiable cash-generating units Revenue growth – The assumptions used in the calculation
of the Group. The Group changed its organization structure reflect the expected order backlog at year-end as well as
by centralizing key functions and reorganizing one of its op- the expected market development based on the strategic
erating segments. This change in the organization structure priorities set by the Group.
led to a reassessment and redefinition of the cash-generating
units compared to 2016. Starting in 2017 the definition of the EBIT margin growth – The EBIT margin growth used in the
cash-generating unit changed from a legal entity to a busi- calculation reflects the margin goal as defined in the Group’s
ness perspective. vision and is based on the margin improvement projects
initiated.
The recoverable amounts have been determined based on
a  value-in-use calculation per cash-generating unit. This Result of the impairment test. The impairment tests
calculation uses cash flow projections based on financial performed on December 31, 2017, support the value of the
budgets approved by management covering a  five-year carrying amount. As in prior year, no impairment was recog-
period. nized.

Key assumptions used in value-in-use calculations. The Sensitivity to changes in assumptions. The value in use
calculations of values in use are most sensitive to the follow- of the cash-generating unit Nutrition equals its carrying
ing assumptions: amount. For Grain Logistics the following change in key as-
sumptions would result in a value in use equal to the carrying
A Discount rate amount:
A Growth rate
A Revenue growth Grain
A EBIT margin growth Key assumptions Logistics

Discount rate +1.336%


Discount rate – The discount rates which are used to calcu-
Growth rate –2.044%
late the discounted present value of the future cash flows are
derived from a capital asset pricing model using market data Revenue growth –3.998%
such as the yield on a 10-year government bond of the re- EBIT margin growth –0.169%
spective country or specific country risk premiums.
For all other cash-generating units a possible increase in the
Growth rate – The assumptions used in the calculation reflect discount rate of 1 percentage point or a drop in revenue of
the long-term expected growth rate of the operational busi- 5  percentage points result in the carrying amount not ex-
ness and are based on the growth strategy of the Group. ceeding its recoverable amount.
FINANCIAL REPORT
Bühler Annual Report 2017
165

Base data used


Book value Long-term Revenue EBIT margin
Goodwill 2017 CHF m Discount rate growth rate growth growth

Grain Milling 12.3 10.7% 1.5% 4.4% 0.9%


Grain Logistics 40.1 10.6% 2.0% 8.6% 0.9%
Sortex & Rice 7.2 13.4% 2.1% 6.9% 0.1%
Feed 3.4 11.1% 1.4% 13.2% 2.0%
Pasta & Noodles 2.5 9.5% 0.7% 7.0% 1.0%
Nutrition 6.1 10.7% 1.6% 3.5% 0.9%
Aeroglide 60.9 10.1% 1.8% 10.6% 1.1%
Consumer Foods 22.0 9.4% 1.0% 6.0% 1.6%
Die Casting 1.8 9.3% 0.8% 6.4% 0.2%
Grinding & Dispersion 0.7 9.6% 0.9% 8.1% 1.0%
Leybold Optics 85.5 9.8% 1.7% 4.9% 1.1%

Total at December 31, 2017 242.5

Base data used


Book value Long-term Revenue EBIT margin
Goodwill 2016 CHF m Discount rate growth rate growth growth

Leybold Optics Verwaltungs GmbH, Alzenau 78.6 8.8% 1.2% 7.2% 0.6%
Buhler Aeroglide Corporation, Cary 63.7 9.6% 1.2% 11.2% 1.5%
Bühler Deutschland GmbH, Beilngries 36.9 8.8% 1.2% 5.0% 1.7%
Bühler Barth GmbH, Freiberg a.N. 15.9 8.8% 1.2% 16.8% 4.2%
Buhler Yijiete Color Sorting Machinery (Hefei) Co. Ltd., 7.0 11.2% 3.1% 14.8% 2.8%
Hefei
Bangsheng Bio-Technology Co. Ltd., Guangzhou 6.7 11.2% 3.1% 13.3% 0.3%
Wuhan Mingbo Electromechanical Equipment Co. Ltd., 6.0 11.2% 3.1% 18.3% 1.5%
Wuhan
Bühler Haguenau S.A.S., Haguenau 5.1 9.2% 1.2% 10.5% 2.9%
Bühler GmbH, Leingarten 4.3 8.8% 1.2% 19.0% 7.5%
Others 7.9 9.2%–11.0% 0.9%–2.5% –2.2%–23.9% –0.6%–7.7%

Total at December 31, 2016 232.1


166

4.3 Investments in associates


Share in
equity Goodwill 2017 2016
Net book values CHF m CHF m CHF m CHF m

January 1 21.2 12.3 33.5 29.0


Reclassifications –5.1 –4.2 –9.3 0.0
Share of net profit 2.0 0.0 2.0 4.6
Dividends received –0.9 0.0 –0.9 0.0
Translation differences 1.5 0.7 2.2 –0.1

December 31 18.7 8.8 27.5 33.5

Translation differences are recognized in other comprehen- ues of the associated companies are disclosed as only one
sive income. The attributable net result is shown under other of the associated companies is material to the Group.
operating income in the income statement. Cumulative val-

2017 2016
Cumulative values of the associated companies CHF m CHF m

Share of revenue 23.3 33.4


Share of net profit 2.0 4.6

Balance sheet values:


Non-current assets 10.7 14.4
Current assets 11.7 23.9
Non-current liabilities 1.3 8.4
Current liabilities 2.5 8.7
Shareholders' equity 18.6 21.2

The associated companies comprise two companies located to sell the remaining 20% by January 1, 2021. The transaction
in South Europe. The Group has a shareholding of 26% and is subject to the approval of the authorities. The closing of
49%, respectively. The figures are based on available pre- the transaction is expected in early 2018.
view closing data as of December 31, 2017.
The Group applied the shortcut method from IFRS 5. The
On July 19, 2017, the Group acquired all remaining outstand- interests in Polymetrix Holding AG were reclassified from in-
ing shares of Polymetrix Holding AG (prior year: 35%) with vestments in associates to assets classified as held for sale
the intent to sell a majority stake to an engineering group and valued at fair value less cost to sell as of December 31,
active in the polymer industry. On November 10, 2017, the 2017. The revaluation resulted in an immaterial loss that was
Group sold 80% of Polymetrix Holding AG with a put option recognized in the income statement.
FINANCIAL REPORT
Bühler Annual Report 2017
167

4.4 Long-term financial assets


Due
1–5 years > 5 years Total
December 31, 2017 CHF m CHF m CHF m

Securities 0.0 47.5 47.5


Loans to associated companies 12.3 0.0 12.3
Other non-current financial assets 80.7 3.5 84.2
Overfunding of post-employment benefit plans 0.0 31.8 31.8

Total 93.0 82.8 175.8

Due
1–5 years > 5 years Total
December 31, 2016 CHF m CHF m CHF m

Securities 0.0 14.4 14.4


Loans to associated companies 9.3 0.0 9.3
Other non-current financial assets 74.8 3.5 78.3
Overfunding of post-employment benefit plans 0.0 6.9 6.9

Total 84.1 24.8 108.9


168

4.5 Inventories
Inventories are carried at the lower of cost or net realizable In prior year, value adjustments deducted from inventories
value. The cost of finished goods, semi-finished goods, and amounted to CHF –37.7 million. No material reversals of
work in progress includes raw materials, direct labor, and value adjustments of the prior year were recognized in the
other directly attributable costs and overheads based on the reporting year.
normal capacity of production facilities, excluding borrowing
costs. Cost is determined using the standard cost method. Advance payments to suppliers are also included in inven-
Standard costs are regularly reviewed and, if necessary, re- tories.
vised in light of current conditions. Net realizable value is the
estimated selling price less cost to completion and selling
expenses. Obsolete inventories and goods with a low rate of
inventory turnover are written down.
Value
Gross value adjustments 2017 2016
CHF m CHF m CHF m CHF m

Raw materials and supplies 141.8 –22.2 119.6 137.8


Unfinished goods 61.5 –10.1 51.4 40.4
Finished goods and merchandise 105.1 –5.6 99.5 73.0
Work in progress 126.5 –2.1 124.4 78.0
Advance payments to suppliers 50.4 0.0 50.4 36.4

Total 485.3 –40.0 445.3 365.6

4.6 Production orders in progress


2017 2016
CHF m CHF m

Production orders in progress 626.0 482.0


Advance payments from customers –249.9 –155.1

Net assets of production orders in progress 376.1 326.9

Production orders in progress 3.2 13.7


Advance payments from customers –370.9 –379.7

Net liabilities of production orders in progress –367.7 –366.0


Accumulated costs and recognized profits 1,923.0 1,965.9
FINANCIAL REPORT
Bühler Annual Report 2017
169

4.7 Accounts receivable


Trade and other accounts receivable are carried at the orig- Trade accounts receivable include supplier credits of
inal invoice amount less allowances made for doubtful ac- CHF  60.1  million (prior year: CHF  84.4  million), which are
counts, trade discounts, volume rebates, and similar items. financed in accordance with the treasury strategy.
Financing of customer orders using the Group’s own funds
as part of its treasury strategy is included in this item.

2017 2016
CHF m CHF m

– from third parties 591.1 542.1


– from associates 0.1 0.3
– from related parties 1.5 0.0
Allowance for bad debts –8.8 –10.1

Total trade accounts receivable 583.9 532.3

2017 2016
CHF m CHF m

Value added tax credits 47.5 36.4

Other accounts receivable


– from third parties 52.8 56.4
– from associates 0.2 0.0
Prepayments and accrued income 37.4 38.3
Allowance for bad debts –0.1 –0.1

Total other accounts receivable 137.8 131.0


170

Receivables outstanding analysis


Overdue
Total
book value <3 4–6 7–9 10–12 > 12
Dec 31, 2017 Not due months months months months months
2017 CHF m CHF m CHF m CHF m CHF m CHF m CHF m

Accounts receivable trade and other 728.8 553.1 87.3 24.5 17.8 7.9 38.2
Allowance for bad debts –8.9 0.0 –0.5 0.0 0.0 0.0 –8.4
Associated companies and other related parties 1.8 1.8

Total accounts receivable, net 721.7 554.9 86.8 24.5 17.8 7.9 29.8

Overdue
Total
book value <3 4–6 7–9 10–12 > 12
Dec 31, 2016 Not due months months months months months
2016 CHF m CHF m CHF m CHF m CHF m CHF m CHF m

Accounts receivable trade and other 668.2 527.4 64.9 32.8 11.3 7.4 24.4
Allowance for bad debts –10.2 0.0 –0.4 0.0 –0.5 –0.2 –9.1
Associated companies and other related parties 5.3 5.3

Total accounts receivable, net 663.3 532.7 64.5 32.8 10.8 7.2 15.3

Allowance for bad debts

2017 2016
CHF m CHF m

January 1 –10.2 –10.1


Additions –2.1 –4.5
Consumption 2.9 1.5
Release 1.1 2.7
Translation differences –0.6 0.2
December 31 –8.9 –10.2

4.8 Cash and cash equivalents


In the consolidated cash flow statement, cash and cash
equivalents includes cash in hand, deposits held at call with
banks, other short-term highly liquid investments with original
maturities of three months or less, and bank overdrafts. In
the consolidated balance sheet, bank overdrafts are shown
within borrowings in current liabilities.

Cash and cash equivalents include bank accounts and time


deposits with an original maturity of a maximum of three
months.
FINANCIAL REPORT
Bühler Annual Report 2017
171

4.9 Trade accounts payable


2017 2016
CHF m CHF m

Trade accounts payable


– to third parties 264.6 239.7
– to associates 0.7 0.7
– to related parties 1.5 1.8

Total 266.8 242.2

4.10 Provisions and contingent liabilities


Provisions are recognized when the Group has a  legal or counting is used, the increase in the provision due to the
constructive obligation arising from past events, an outflow passage of time is recognized as a finance cost.
of resources embodying economic benefits to settle the
obligation is probable, and a reliable estimate can be made Warranty provisions are created with a view to meet potential
of this amount. Actual expenses may differ from the accrued guarantee obligations arising from the sale of machinery and
amounts. technical equipment. The calculation is based on historic
values as well as recognized claims.
A contingent liability is disclosed when there is a possible
obligation that arises from a past event and whose existence Provisions for personnel expenses mainly include long-term
will be confirmed only by the occurrence or non-occurrence employee benefits, such as long-service benefits, partial re-
of one or more uncertain future events not wholly within the tirement, jubilee benefits, and deferred compensation plans.
control of the Group. A contingent liability is also disclosed
when there is a present obligation that arises from past Among other things the other provisions include provisions
events but is not recognized, because an outflow of resourc- for pending legal cases, other project risks as well as a 
es embodying economic benefits to settle the obligation is provision for restructuring of CHF  0.2  million (prior year:
not probable, or the respective amount of the obligation CHF 1.8 million).
cannot be measured with sufficient reliability.
Approximately 43 % (prior year: 37 %) of the cash outflows of
When the Group expects some or all of a  provision to be the long-term provisions are expected to materialize within
reimbursed, for example, under an insurance contract, the the next three years.
reimbursement is recognized as a separate asset, but only
when the reimbursement is virtually certain. The expense The Group recognizes a collective valuation allowance based
relating to a provision is presented in the income statement on its past experience of warranty costs on projects with
net of any reimbursement. similar conditions. Other known risks and risks related to
projects with special conditions are estimated on a case-by-
If the effect of the time value of money is material, provisions case basis and measured individually. The actual warranty
are discounted using a  current pre-tax rate that reflects, costs incurred may differ from the costs provided for.
when appropriate, the risks specific to the liability. When dis-
172

Provisions for
Provisions for personnel Other
warranties expenses provisions 2017 2016
CHF m CHF m CHF m CHF m CHF m

January 1 31.0 28.4 9.9 69.3 71.2


Additions 22.6 18.1 24.0 64.7 55.9
Utilization –16.1 –5.7 –25.5 –47.3 –43.7
Release –4.9 –0.4 –0.4 –5.7 –13.7
Translation differences 0.6 0.7 0.4 1.7 –0.3

December 31 33.2 41.1 8.4 82.7 69.3

Thereof short-term 29.2 18.9 7.2 55.3 44.7


Thereof long-term 4.0 22.2 1.2 27.4 24.6

Contingent liabilities
2017 2016
CHF m CHF m

Sureties, guarantees and other obligations 1.6 2.0


Total 1.6 2.0
FINANCIAL REPORT
Bühler Annual Report 2017
173

4.11 Other short-term liabilities, accruals and deferred income


2017 2016
CHF m CHF m

Value added tax owed 18.3 13.3


Advance payments 168.9 140.1

Other liabilities
– to third parties 53.7 39.0
– to related parties 0.6 0.9
Personnel-related accruals 90.4 78.6
Other accruals and deferred income 86.5 78.8

Total 418.4 350.7

4.12 Defined benefit obligations


The Group’s main defined benefit pension plans are in Swit- Swiss pension law requires the Board of Trustees to take
zerland and Germany. The defined benefit plans in Switzer- measures to resolve a statutory underfunding. The possible
land are funded through legally separate trustee adminis- measures affect both employers and employees (risk sharing).
tered funds. The cash funding of these plans, which may
from time to time involve special payments, is designed to Pension plans in Germany. The Group’s German pension
ensure that present and future contributions should be suf- plans have defined benefit rights based on their length of
ficient to meet future liabilities. The defined benefit plans in service and / or final pensionable pay. The employer gives
Germany are partially unfunded. a direct promise to the employee to pay him a certain amount
once he retires. At retirement date the value of the employ-
Pension plans in Switzerland. The Group’s Swiss pension ee's benefits is paid as an annuity. The Group is required by
plans contain a cash balance benefit formula, accounted for German law to increase pensions all three years according
as a defined benefit plan. Employer and employee contribu- to price inflation, as measured by the Consumer Price Index
tions are defined in the pension fund rules in terms of or according to comparable pay grades. Direct pension
an age-related sliding scale of percentages of salary. Under promises are usually funded via book reserve accruals. In
Swiss law the pension fund guarantees the vested benefit 2008, the Group set up a  trust fund to fund their pension
amount as confirmed annually to members. Interest may be liabilities for Bühler GmbH, Braunschweig. No material busi-
added to member balances at the discretion of the Board of ness combinations / curtailments / settlements occurred
Trustees. At retirement date members have the right to take during the reported financial period.
their retirement benefit as a lump sum, an annuity, or part as
a lump sum with the balance converted to a fixed annuity at Status of the Group’s defined benefit plans. The status of
the rates defined in the fund rules. The Board of Trustees the Group’s defined benefit plans using actuarial assump-
may change the annuity at their discretion subject to the tions determined in accordance with IAS 19 is summarized
plan’s funded status including sufficient free funds as deter- below.
mined according to Swiss statutory valuation rules.
174

Employee benefits – defined benefit plans. These plans assets (excluding interest based on the discount rate) and
are generally funded through payments to legally indepen- any change in the effect of an asset ceiling are also record-
dent pension or insurance funds. ed in this item. Remeasurements of employee benefits are
not recycled through the income statement at any later point
The aggregate of the present value of the defined benefit in time.
obligation and the fair value of plan assets for each plan is
recorded in the balance sheet as net defined benefit liability Pension assets and pension liabilities in different defined
or net defined benefit asset under long-term financial assets. benefit plans are not offset unless the Group has a legally
The defined benefit obligation is determined annually by in- enforceable right to use the surplus in one plan to settle
dependent actuaries using the projected unit credit method. obligations in the other plan.
If the fair value of the plan assets exceeds the present value
of the defined benefit obligation, only a net pension asset is Employee benefits – defined contribution plans. In addi-
recorded, taking account of the asset ceiling. tion to the defined benefit plans described above, some
Group companies sponsor defined contribution plans based
Pension costs consist of three elements: service costs, net on local practices and regulations. The Group’s contributions
interest, and remeasurements of employee benefits. to defined contribution plans are charged to the income
statement to which the contributions relate.
Service costs are part of personnel expenses and consist of
current service costs, past service costs (including gains/loss- Employee benefits – other long-term employment bene-
es from plan amendments or curtailments) and gains / losses fits. Other long-term employment benefits include jubilee,
from plan settlements. early retirement, or other long-term service benefits, as well
as deferred compensation, if not due to be settled within
Net interest is recorded as part of personnel expenses and 12 months after the year-end.
is determined by applying the discount rate to the net defined
liability or net defined asset that exists at the beginning of the The obligations for other long-term employment benefits are
year. disclosed as provisions for personnel expenses. The mea-
surement of these obligations differs from defined benefit
The gains and losses resulting from the actuarial valuation plans in that all actuarial gains and losses are recognized
are immediately recorded in other comprehensive income as immediately in the income statement.
remeasurements of employee benefits. The return on plan

4.12.1 Actuarial assumptions 2017 2016

Discount rate (weighted) 0.8% 0.7%


Future salary increases 1.0% 1.5%
Future pension increases 0.2% 0.2%

The discount rates are determined by referencing market Risk Sharing. As in prior year the defined benefit obligation
yields at the end of the reporting period on AA- and AAA- was valued using a risk sharing approach. This approach
rated corporate bonds. In recent years, longevity has reflects the shared burden among employer and employees
increased in all major countries in which the Group sponsors to keep the pension fund balanced in case this is necessary.
pension plans. The Group sets mortality assumptions after The assumptions changed relate to the possible measures
considering the most recent statistics available and uses provided by Swiss pension law.
generational mortality tables to estimate probable future
mortality improvements.
FINANCIAL REPORT
Bühler Annual Report 2017
175

Sensitivities of significant actuarial assumptions. The The sensitivity analysis is based on realistically possible
discount rate and the future increase in salaries were identi- changes as of the end of the reporting year.
fied as significant actuarial assumptions. The following im-
pacts on the defined benefit obligation are to be expected: The average duration of the defined benefit plan obligation
at the end of the reporting period is 13.8 years (prior year:
A 0.25 % increase / decrease in the discount rate would 14.3 years).
lead to an increase of 3.3 % (prior year: 3.5 %) /
a decrease of 3.6 % (prior year: 3.8 %) in the defined The cost of defined benefit pension plans and other long-
benefit obligation. term employee benefits is determined using actuarial valua-
A 0.25 % increase / decrease in the expected increase tions. Actuarial valuations involve making assumptions about
in salaries would lead to a  decrease of less than 0.2 % discount rates, future salary increases, mortality rates, and
(prior year: 0.3 %) / increase of less than 0.2 % future pension increases. Due to the long-term nature of
(prior year: 0.4 %) in the defined benefit obligation. these plans, such estimates are subject to significant uncer-
tainty.

2017 2016
4.12.2 Reconciliation of defined benefit obligation and fair value of plan assets CHF m CHF m

Defined benefit obligation at January 1 1,391.1 1,341.5


Interest costs 9.4 20.6
Current service costs (employer) 22.6 24.1
Contributions by plan participants 17.6 17.9
Past service costs –2.6 0.0
Benefits (paid)/deposited –71.1 –63.5
Other effects 0.9 0.7
Remeasurements on obligations 17.6 54.9
Currency translation adjustments 8.6 –5.1

Defined benefit obligation at December 31 1,394.1 1,391.1

Reconciliation of the fair value of plan assets


Fair value of plan assets at January 1 1,241.7 1,190.7
Interest 8.1 18.1
Contributions by the employer 28.1 28.9
Contributions by plan participants 17.6 17.8
Benefits (paid)/deposited –71.1 –63.5
Return on plan assets (excluding interest) 119.0 53.9
Currency translation adjustments 5.9 –4.2

Fair value of plan assets at December 31 1,349.3 1,241.7


Actual return on plan assets 127.1 72.0
176

2017 2016
4.12.3 Remeasurements of employee benefits CHF m CHF m

Return on plan assets excluding interest income –119.0 –53.9

Current-year actuarial loss (gain) on benefit obligation:


– change in demographic assumptions –0.2 –5.3
– change in financial assumptions –29.7 133.2
– experience adjustments 47.5 –73.0
Remeasurements recognized in other comprehensive income –101.4 1.0

Cumulative amount recognized in other comprehensive income 184.6 286.0

2017 2016
4.12.4 Reconciliation of the amount recognized in the statement of financial position at year-end CHF m CHF m

Present value of funded defined benefit obligation 1,394.1 1,391.1


Fair value of plan assets 1,349.3 1,241.7
Deficit/(surplus) 44.8 149.4

Liability (asset) recognized in the statement of financial position 44.8 149.4

Thereof recognized as separate asset –31.8 –6.9


Thereof recognized as separate liability 76.6 156.3

2017 2016
4.12.5 Pension expenses recognized in the statement of income CHF m CHF m

Current service costs (employer) 22.6 24.1


Net interest employee benefit 1.3 2.6
Past service costs –2.6 0.0
Other effects 0.8 0.7

Expenses recognized in the statement of income 22.1 27.4

Thereof service costs and administration costs 20.8 24.8


Thereof net interest on the net defined benefit liability (asset) 1.3 2.6

2018
4.12.6 Best estimate of contributions CHF m

Contributions by the employer 29.5


FINANCIAL REPORT
Bühler Annual Report 2017
177

2017 2016
4.12.7 Plan assets at fair value consist of CHF m CHF m

Equity instruments third parties 391.9 337.7


Debt instruments third parties 374.5 368.8
Real estate 378.2 369.8
Cash and cash equivalents 63.2 38.8
Others 141.5 126.6

Total plan assets at fair value 1,349.3 1,241.7

Thereof quoted 1,349.2 1,241.5


Thereof unquoted 0.1 0.2

2017 2017 2016 2016


4.12.8 Information about significant plans Switzerland Germany Switzerland Germany

Discount rate 0.7% 1.9% 0.6% 1.3%


Future salary increases 1.0% 1.5% 1.5% 1.5%
Costs of defined benefit plans 19.8 1.5 25.1 1.7
Remeasurements employee benefits –82.1 –15.0 –13.4 10.0

2017 2016
4.12.9 Defined contribution plan CHF m CHF m

Expenses for defined contribution plan 6.2 6.3

4.13 Share capital


As of December 31, 2017, share capital amounted to
CHF 15.0 million (prior year: CHF 15.0 million) and consisted
of 105,000 (prior year: 105,000) registered shares with nom-
inal value of CHF 100 each and 112,500 (prior year: 112,500)
with nominal value of CHF 40 each.
178

5. Segment reporting
Segment information. The Group consists of two reportable such as the processing of grains, rice, cocoa, coffee, and
segments which are identified on the basis of internal busi- other raw materials for intermediate and finished products.
ness updates that are regularly reviewed by the Chief Exec-
utive Officer (CEO). The CEO, being the Chief Operating Advanced Materials: Engineering and sale of solutions for
Decision Maker, regularly reviews the allocation of resources die-casting, grinding and dispersion, and surface-coating
to the two operating segments. The group is managed under technologies in high-volume application areas such as auto-
its businesses Grains & Food and Advanced Materials. motive, optics, inks, and batteries.

Grains & Food: Engineering and sale of industrial process


technologies and solutions for the food and feed industry,

5.1 Segment reporting


Grains & Advanced Corporate
Foods Materials Functions Group
Segment reporting 2017 CHF m CHF m CHF m CHF m

Segment revenue 2,000.2 640.4 32.7 2,673.3


Less intersegment revenue –0.8 –0.8 0.0 –1.6

Total segment revenue third parties 1,999.5 639.6 32.7 2,671.7

EBIT 136.5 57.5 10.8 204.8


in % of revenue 6.8% 9.0% 32.9% 7.7%

Non-current assets 532.7 173.0 60.2 765.9

Grains & Advanced Corporate


Foods Materials Functions Group
Segment reporting 2016 CHF m CHF m CHF m CHF m

Segment revenue 1,874.5 537.5 38.3 2,450.2


Less intersegment revenue –1.3 –0.3 0.0 –1.6

Total segment revenue third parties 1,873.2 537.1 38.3 2,448.6

EBIT 121.0 45.4 7.2 173.6


in % of revenue 6.5% 8.4% 18.9% 7.1%

Non-current assets 488.4 160.2 61.5 710.2

Internal and external reporting are both based on the same


valuation and accounting principles, and there is therefore
no need to provide a reconciliation.

The business results are carried over to the Group's consol-


idated figures by including the results of units with no market
operations as well as consolidation effects.
FINANCIAL REPORT
Bühler Annual Report 2017
179

5.2 Geographical information


2017 2016
Segment revenue CHF m CHF m

North America 426.6 422.5


South America 171.1 147.4
Europe 773.8 746.4
Middle East & Africa 413.1 370.2
South Asia 147.7 148.0
Asia 739.4 614.1

Total 2,671.7 2,448.6

– thereof Switzerland 46.9 80.0


– thereof USA 283.6 306.9
– thereof China 436.7 339.9

2017 2016
Segment non-current assets CHF m CHF m

North America 101.4 111.1


South America 3.9 3.4
Europe 443.5 410.3
Middle East & Africa 16.6 16.9
South Asia 12.6 13.3
Asia 187.9 155.2

Total 765.9 710.2

– thereof Switzerland 134.8 128.6


– thereof USA 100.7 110.5
– thereof China 178.8 147.2

The information about geographical areas is determined


based on the Group’s operations. The Group operates in six
geographical areas: North America, South America, Europe,
Middle East & Africa, South Asia, and Asia. Revenues are
shown based on the physical location of the equipment.
180

6. Other disclosures

6.1 Assets pledged or assigned to secure own liabilities


In connection with the long-term loan from related parties of
CHF 43.0 million and open legal cases, assets of CHF 45.0 mil-
lion and CHF 1.2 million, respectively (prior year: CHF 45.0 mil-
lion and CHF 1.4 million) serve as collateral for own liabilities
where the right of disposal is limited.

6.2 Related parties


Related-party transactions. A loan toward the sharehold- Key management compensation. Key management (de-
ers in the amount of CHF 74.5 million (prior year: CHF 70.0 mil- fined as Group Management and Board of Directors) re-
lion) is disclosed under other non-current financial assets. ceived a  total short-term compensation of CHF  7.7  million
Loans from the shareholders of CHF 109.5 million (prior year: (prior year: CHF 8.2 million). In addition, pension and social
CHF  121.5  million) are disclosed under long-term financial security contributions of CHF  1.0  million (prior year:
liabilities and of CHF 12.4 million (prior year: CHF 12.4 million) CHF  1.0  million) are recorded as expense. The provisions
under short-term financial liabilities. for other long-term benefits amount to CHF 17.5 million (prior
year: CHF 5.6 million).
Lease payments to related parties amounted to CHF 23.9
million (prior year: 25.2 million) and are included in other op- The Bühler Group operates deferred compensation plans for
erating expenses. Other related-party positions are disclosed members of the management. The deferred compensation
separately in the notes. plans comprise a vesting period of 3 years and an execution
period of 10 years from the grant date. The amounts are
Liabilities to pension plans amounted to CHF 0.2 million as charged to the income statement over the relevant vesting
per 2017 (prior year: CHF 0.2 million). This amount is includ- periods and are adjusted to reflect actual and expected
ed in other short-term liabilities. levels of vesting. The value of the deferred compensation is
determined annually based on the Group’s net profit for the
3 preceding years and equity at year-end.

6.3 Government grants


Government grants are offset with the items of expense
which they finance. Government grants related to assets are
deducted from the assets in deriving the carrying amount of
the asset. In 2017 the Group received government grants of
CHF 2.0 million (prior year: nil).
FINANCIAL REPORT
Bühler Annual Report 2017
181

6.4 Proposal of the Board of Directors


At the General Meeting, the Board of Directors proposes per registered share with a  nominal value of CHF 40. The
a dividend of CHF 21.0 million (prior year: CHF 18.0 million) dividend payment to the shareholders of Bühler Holding AG
or CHF 140 (prior year: CHF 120) per registered share with amounted to CHF 18.0 million in the financial year 2017 (pri-
a nominal value of CHF 100 and CHF 56 (prior year: CHF 48) or year: CHF 15.0 million).

6.5 Release for publication of the consolidated financial statements


The consolidated financial statements were released for pub-
lication by the Board of Directors of Bühler Holding AG on
February 6, 2018.

6.6 Subsequent events


Acquisition of Haas Group, Vienna, Austria.
On January 9, 2018, the Group acquired 100% of the Haas
Group, a privately owned world market leader of wafer, bis-
cuits, and confectionery production systems. Total revenue
of the Haas Group in 2016 amounted to EUR 305 million.
Updated financial figures are not yet available.
182

Report of the statutory auditor


to the General Meeting of Bühler Holding AG
Uzwil

Report on the audit of the consolidated financial statements

Opinion
We have audited the consolidated financial statements of Bühler Holding AG and its subsidiaries (the
Group), which comprise the consolidated income statement and consolidated statement of comprehensive
income for the year ended 31 December 2017, the consolidated balance sheet as at 31 December 2017, the
consolidated statement of cash flows and consolidated statement of changes in equity for the year then
ended and notes to the consolidated financial statements, including a summary of significant accounting
policies.
In our opinion, the consolidated financial statements (pages 131 - 181) give a true and fair view of the
consolidated financial position of the Group as at 31 December 2017 and its consolidated financial perfor-
mance and its consolidated cash flows for the year then ended in accordance with the International Finan-
cial Reporting Standards (IFRS) and comply with Swiss law.

Basis for opinion


-
We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISAs) and
Swiss Auditing Standards. Our responsibilities under those provisions and standards are further de-
scribed in the “Auditor’s responsibilities for the audit of the consolidated financial statements” section of
our report.
We are independent of the Group in accordance with the provisions of Swiss law and the requirements of
the Swiss audit profession, as well as the IESBA Code of Ethics for Professional Accountants, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our audit approach

Overview Overall Group materiality: CHF 10,900,000


• We concluded full scope audit work at 17 Group companies in
11 countries.
• These group companies represented 79% of the Group's revenue.

As key audit matters the following areas of focus have been identi-
fied:
• Accounting of production orders
• Impairment testing of goodwill

PricewaterhouseCoopers AG, Birchstrasse 160, Postfach, CH-8050 Zürich, Switzerland


Telefon: +41 58 792 44 00, Telefax: +41 58 792 44 10, www.pwc.ch


        
       
 
        
FINANCIAL REPORT
Bühler Annual Report 2017
183

Audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion
on the consolidated financial statements as a whole, taking into account the structure of the Group, the
accounting processes and controls, and the industry in which the Group operates.
The audit strategy for the audit of the consolidated financial statements was determined taking into ac-
count the work performed by the component auditors. As Group auditor, we performed the audit of the
consolidation, disclosures and presentation of the consolidated financial statements and of the impair-
ment testing of goodwill. Where audits were performed by component auditors, we ensured that, as
Group auditor, we were adequately involved in the audit in order to assess whether sufficient appropriate
audit evidence was obtained from the work of the component auditors to provide a basis for our opinion.
Our involvement comprised communicating the risks identified at Group level, specifying the audit proce-
dures relating to the accounting of production orders, specifying the materiality thresholds to be applied,
making visits to selected subsidiaries and component auditors abroad, conducting telephone calls with the
component auditors during the interim audit and the year-end audit and analysing the reporting.

Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide
reasonable assurance that the consolidated financial statements are free from material misstatement.
Misstatements may arise due to fraud or error. They are considered material if, individually or in aggre-
gate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, in-
cluding the overall Group materiality for the consolidated financial statements as a whole as set out in the
table below. These, together with qualitative considerations, helped us to determine the scope of our audit
and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements,
both individually and in aggregate, on the consolidated financial statements as a whole.

Overall Group materiality CHF 10,900,000

How we determined it 5% of profit before taxes

Rationale for the materiality We chose profit before taxes as the benchmark because, in our view,
benchmark applied it is the benchmark against which the performance of the Group is
most commonly measured, and it is a generally accepted benchmark
for materiality considerations.

We agreed with the Audit Committee that we would report to them misstatements above CHF 450,000
identified during our audit as well as any misstatements below that amount which, in our view, warranted
reporting for qualitative reasons.

Key audit matters


Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the consolidated financial statements of the period under review. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
184

Accounting of production orders

Key audit matter How our audit addressed the key audit matter
The Bühler Group has production orders, which Our audit of the production orders using the PoC
are accounted for using the percentage-of-com- method mainly comprised of the following proce-
pletion (PoC) method in accordance with IAS 11 dures:
‘Construction Contracts’. In the year under re-
view, revenue from production orders in the • We assessed the design and the existence of the
amount of CHF 2,118.2 million were recorded key controls regarding the production orders and
on the basis of the PoC method. The percentage tested the effectiveness of selected controls.
of completion is determined based on the in-
• We assessed whether the internal guidelines re-
curred direct costs attributable to the contracts.
garding the approval of the costs and margins had
Management estimates the progress of projects been respected.
as of the balance sheet date and the costs to be
incurred until their completion. An incorrect es- • We selected various production orders (sample
timate could have a significant impact on the testing based on the contract volumes, the contri-
recorded revenue and the net profit of the bution margin and changes in the margin com-
Group. pared with prior year and the planning phase)
and focussed our testing on the following, in par-
Please refer to pages 137 (Use of estimates), ticular:
page 153 (Revenue) and page 168 (Production
orders in progress) in the notes to the consoli- – We assessed the contract-related calculations
dated financial statements. to determine whether the contractual terms
and the approved planned costs had been rec-
orded appropriately.
– We discussed with the project controllers and
project managers the progress of the projects
based on the latest project accounts, the costs
still to be incurred until their completion and
changes in the margin.
– We obtained written information from the le-
gal representatives of the Group. We inspected
this written information with regard to indica-
tions of potential quality deficiencies or penal-
ties for non-performance and assessed
whether these matters were presented appro-
priately in the consolidated financial state-
ments.
• For the production orders completed during the
year under review, we compared various final pa-
rameters with the estimates made in the planning
phase or those as of the previous balance sheet
date in order to assess, with hindsight, the accu-
racy of the estimates made by Management.
• In addition, we examined and discussed the re-
sults of the reviews performed by Internal Audit
of the production orders.
Our audit approach allowed us to make an adequate
assessment of the accounting applied to the produc-
tion orders.
FINANCIAL REPORT
Bühler Annual Report 2017
185

Impairment testing of goodwill

Key audit matter How our audit addressed the key audit matter
The impairment testing of goodwill was deemed In our audit of the impairment testing of goodwill,
a key audit matter for the following two reasons: we performed the following main audit procedures:
Goodwill is a significant item on the consoli- • We assessed the design and the existence of the
dated balance sheet (CHF 242.5 million); it is key controls regarding the impairment testing of
not amortised but tested for impairment at least goodwill. Further, we checked whether the Board
annually. In calculating the value-in-use for of Directors approved the impairment tests.
these tests, the Board of Directors and Manage-
ment have significant scope for judgement in • We assessed how the CGUs were defined, taking
defining the cash-generating units (CGUs), in into account the accounting standards and our
allocating the goodwill and net operating assets knowledge of the organisation of the Group.
to the CGUs and in determining the underlying
assumptions (discount rate, growth rates, reve- • We assessed the appropriateness of the procedure
nue growth and EBIT margin growth). for allocating goodwill and net operating assets to
the CGUs.
Management adopted an established process in
order to forecast the cash flows. The Board of • We compared the revenue and the EBIT of the
Directors monitored adherence to this process year under review with the budget approved by
and approved the impairment tests conducted the Board of Directors in order to identify, in ret-
by Management. rospect, any forecasts that were too optimistic
and to assess the accuracy of the estimates that
Please refer to page 137 (Use of estimates) and were made.
pages 162 - 165 (Intangible assets) in the notes
to the consolidated financial statements. • We performed plausibility checks on the key as-
sumptions Management used for the impairment
tests as well as on the changes in net working cap-
ital resulting from the application of these as-
sumptions. To this end, we involved our internal
valuation experts, who compared the assump-
tions with data from analogous companies and
market data. Further, we assessed the technical
and arithmetical correctness of the valuation
model.
• In addition, we assessed the sensitivity analyses
carried out by Management. Further, we per-
formed our own sensitivity analyses using differ-
ent discount rates, revenues and gross profit mar-
gins. These analyses enabled us to assess any po-
tential impairment of the goodwill.
• We assessed the appropriateness of the disclo-
sures in the notes to the financial statements in
accordance with IAS 36 ‘Impairment of Assets’.
We consider the valuation process and the assump-
tions applied by Management to be an appropriate
and adequate basis for the impairment testing of the
goodwill.

Other information in the annual report


The Board of Directors is responsible for the other information in the annual report. The other infor-
mation comprises all information included in the annual report, but does not include the consolidated fi-
nancial statements, the stand-alone financial statements of Bühler Holding AG and our auditor’s reports
thereon.
186

Our opinion on the consolidated financial statements does not cover the other information in the annual
report and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information in the annual report and, in doing so, consider whether the other information is materi-
ally inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.

Responsibilities of the Board of Directors for the consolidated financial statements


The Board of Directors is responsible for the preparation of the consolidated financial statements that
give a true and fair view in accordance with IFRS and the provisions of Swiss law, and for such internal
control as the Board of Directors determines is necessary to enable the preparation of consolidated finan-
cial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Board of Directors either intends to liquidate
the Group or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the consolidated financial statements


Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s re-
port that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with Swiss law, ISAs and Swiss Auditing Standards will always de-
tect a material misstatement when it exists. Misstatements can arise from fraud or error and are consid-
ered material if, individually or in the aggregate, they could reasonably be expected to influence the eco-
nomic decisions of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is lo-
cated at the website of EXPERTsuisse: http://expertsuisse.ch/en/audit-report-for-public-companies.
This description forms part of our auditor’s report.

Report on other legal and regulatory requirements

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that
an internal control system exists which has been designed for the preparation of consolidated financial
statements according to the instructions of the Board of Directors.
We recommend that the consolidated financial statements submitted to you be approved.

PricewaterhouseCoopers AG

René Rausenberger Philipp Gnädinger


Audit expert Audit expert
Auditor in charge

Zürich, 6 February 2018


FINANCIAL REPORT
Bühler Annual Report 2017
187

Financial Statements
Bühler Holding AG
188

Income statement Bühler Holding AG

2017 2016
Notes CHF m CHF m

Investment income 11 58.3 48.2


Financial income 12 19.8 16.4
Exchange gains on foreign currency valuation 13 16.7 0.0
Other operating income 14 10.3 4.4

Total operating income 105.1 69.0

Investment expenses 15 –11.6 0.0


Financial expenses 16 –7.1 –0.8
Exchange losses on foreign currency valuation 13 0.0 –8.6
Other operating expenses 17 –8.0 –11.3

Operating expenses –26.7 –20.7

Profit before taxes 78.4 48.3

Taxes –1.8 –0.6

Net profit 76.6 47.7


FINANCIAL REPORT
Bühler Annual Report 2017
189

Balance sheet Bühler Holding AG

2017 2016
Assets Notes CHF m CHF m

Cash and cash equivalents 440.4 26.1


Other accounts receivable third parties 0.2 0.2
Other accounts receivable group 5 97.7 81.6
Current loans third parties 0.2 0.3
Current loans group 5 49.4 52.4
Accrued income and prepaid expense 0.1 0.0

Current assets 588.0 160.6

Non-current securities 4.3 0.0


Other financial assets third parties 2.3 0.0
Other financial assets related parties 8 82.3 79.3
Other financial assets group 6 377.2 346.3
Investments 18 706.3 697.1

Non-current assets 1,172.4 1,122.7

Total assets 1,760.4 1,283.3

Equity and liabilities

Financial liabilities group 7 22.2 48.7


Accounts payables related parties 0.6 0.6
Accounts payables group 7 134.2 120.3
Short-term provisions 10 26.0 20.0
Other liabilities group 7 0.0 0.1
Deferred income and accrued expense 3.0 0.3

Current liabilities 186.0 190.0

Financial liabilities third parties 9 420.0 0.0


Financial liabilities related parties 8 66.5 66.5
Long-term provisions 10 2.5 0.0

Non-current liabilities 489.0 66.5

Total liabilities 675.0 256.5

Share capital 15.0 15.0


Legal reserves 7.5 7.5
Other free reserves 275.6 275.6
Available earnings brought forward from prior year 710.7 681.0
Net profit 76.6 47.7

Shareholders’ equity 1,085.4 1,026.8

Total shareholders’ equity and liabilities 1,760.4 1,283.3


190

Notes to the financial statements


Bühler Holding AG

1 General information 6 Other financial assets group


The financial statements of Bühler Holding AG, domiciled in Financial assets mainly include loans to Group companies,
Uzwil SG, were prepared in accordance with the regulations which are granted at market conditions and are long-term
of Swiss financial reporting law. (more than one year).

Bühler Group prepares consolidated financial statements on


a Group level according to International Financial Reporting 7 Liabilities group
Standards (IFRS). Therefore, Bühler Holding AG does not Liabilities Group consist primarily of short-term liabilities re-
publish additional notes, a cash flow statement, and man- lated to cash pooling (mainly Bühler AG, Uzwil) as part of the
agement reporting according to article 961d Swiss Code of Groups' cash management.
Obligations.

8 Other financial assets/liabilities related parties


2 Valuation principles These loans are owed from and to the shareholders as well
The financial statement accounting policies meet the require- as from other related parties (associates).
ments of Swiss financial reporting law. The main financial
statement line items are accounted for as described below.
9 Financial liabilities third parties
The balance sheet positions in foreign currency have been This position contains corporate bonds issued to third par-
valued at the following closing rates: ties.

2017 2016
CHF CHF Nominal Interest Period Expiration
amount in CHF Valor rate of validity nominal value
CNY 0.1502 0.1477
180 Mio. 38‘960‘607 0.10% 12/21/2017 – 12/21/2022
EUR 1.1710 1.0760 12/21/2022
GBP 1.3190 1.2620 240 Mio 38‘960‘608 0.60% 12/21/2017 – 12/21/2026
USD 0.9820 1.0270 12/21/2026

Loans to Group subsidiaries are recorded at their nominal


value. If necessary, value adjustments are made for potential
impairment losses. 10 Provisions
This item mainly includes provisions for currency risks relat-
ing to loans to Group companies and accounts receivable
3 Number of full-time equivalents from Group companies.
The number of full-time equivalents is on average less than
10 employees (prior year: less than 10 employees).
11 Investment Income
This position mainly contains dividend income from subsid-
4 Definition of related parties and Group companies iaries and other participations.
Related parties are companies which are directly or indirect-
ly owned by the Bühler family. Also included are members of
the Bühler family as well as the Board of Directors and com- 12 Financial income
panies owned by members of the Board of Directors of the Financial income mainly includes interest income on loans to
Bühler Group. Group companies.

Group companies are companies in which Bühler Group


holds direct or indirect investments and are included in the 13 Exchange gains/losses on foreign currency valuation
consolidated Group financial statements. Exchange gains/losses on foreign currency valuation con-
tains currency gains and losses. In previous years gains were
shown in financial income and expense.
5 Other accounts receivable and current loans group
Accounts receivable and current loans Group mainly include
short-term loans to Group companies for working capital 14 Other operating income
financing purposes. Other operating income contains licence fee income.
FINANCIAL REPORT
Bühler Annual Report 2017
191

15 Investment expenses 17 Other operating expenses


Investment expenses include the liquidation loss of a Group Other operating expenses predominantly include negative
company and impairments. value adjustments of loans as well as service fee expenses.

16 Financial expenses 18 Investments


Financial expenses primarily include interest on foreign ex- Investments are recorded at cost less economically neces-
penses paid to Group companies. sary adjustments. The principal investments that are held
directly or indirectly by Bühler Holding AG are shown in the
table on page 141. The participation rate is equal to the vot-
ing rights and share in capital.

19 Contingent liabilities
2017 2016
CHF m CHF m
Sureties, guarantees and other obligations in favor of Group companies 548.4 487.0
Sureties, guarantees and other obligations in favor of third parties 84.4 70.8

20 Proposal of the Board of Directors for the appropriation of available earnings


2017 2016
CHF m CHF m

Balance brought forward from prior year 710.7 681.0


Net profit of the year 76.6 47.7
Available earnings at the disposal of the General Meeting 787.3 728.7

The Board of Directors proposes to the General Meeting:

– The distribution of a dividend 21.0 18.0


– Allocation to other reserves 0.0 0.0

– Carry forward to new accounting period 766.3 710.7

The statutory obligation of appropriation to reserves is waived


as the legal reserve amounts to 50% of the paid-in share
capital.

21 Deviation from the continuity of the presentation all times. The issued letter of comfort is valid as long as
In 2017 exchange gains/losses on foreign currency valuation Bühler Barth GmbH belongs to the Bühler Group, at the
are disclosed net in one financial statement account line item. latest until December 31, 2020.
In previous year's gains were reflected in financial Income
and the losses in financial expenses.
23 Significant events after the balance sheet date
22 Letter of comfort On January 9, 2018, Bühler Holding AG acquired 20% of
Bühler Holding AG issued a letter of comfort for Bühler the Haas Group, a privately owned world market leader in
Barth GmbH, Germany on 17 August 2017. With this letter wafer, biscuits, and confectionery production systems.
of comfort, Bühler Holding AG commits itself to financially
support Bühler Barth GmbH in order that Bühler Barth
GmbH is able to meet its current and future obligations at
192

Report of the statutory auditor


to the General Meeting of Bühler Holding AG
Uzwil

Report on the audit of the financial statements

Opinion
We have audited the financial statements of Bühler Holding AG, which comprise the income statement for
the year ended December 31, 2017, the balance sheet as at 31 December 2017 and notes, including a sum-
mary of significant accounting policies.
In our opinion, the financial statements (pages 188 - 191) as at 31 December 2017 comply with Swiss law
and the company’s articles of incorporation.

Basis for opinion


We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Our responsibilities
under those provisions and standards are further described in the “Auditor’s responsibilities for the audit
of the financial statements” section of our report.
We are independent of the entity in accordance with the provisions of Swiss law and the requirements of
the Swiss audit profession and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to pro-
vide a basis for our opinion.

Our audit approach

Overview Overall materiality: CHF 17,600,000

We tailored the scope of our audit in order to perform sufficient


work to enable us to provide an opinion on the financial statements
as a whole, taking into account the structure of the entity, the ac-
counting processes and controls, and the industry in which the entity
operates.

As key audit matter the following area of focus has been identified:
Impairment testing of investments in subsidiaries

PricewaterhouseCoopers AG, Birchstrasse 160, Postfach, CH-8050 Zürich, Switzerland


Telefon: +41 58 792 44 00, Telefax: +41 58 792 44 10, www.pwc.ch


        
       
 
        
FINANCIAL REPORT
Bühler Annual Report 2017
193

Audit scope
We designed our audit by determining materiality and assessing the risks of material misstatement in the
financial statements. In particular, we considered where subjective judgements were made; for example,
in respect of significant accounting estimates that involved making assumptions and considering future
events that are inherently uncertain. As in all of our audits, we also addressed the risk of management
override of internal controls, including among other matters consideration of whether there was evidence
of bias that represented a risk of material misstatement due to fraud.

Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide
reasonable assurance that the financial statements are free from material misstatement. Misstatements
may arise due to fraud or error. They are considered material if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of the financial
statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, in-
cluding the overall materiality for the financial statements as a whole as set out in the table below. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually
and in aggregate, on the financial statements as a whole.

Overall materiality CHF 17,600,000

How we determined it 1% of total assets

Rationale for the materiality We chose total assets as the benchmark because, in our view, it is a
benchmark applied relevant benchmark against which holding companies can be as-
sessed, and it is a generally accepted benchmark with regard to ma-
teriality considerations in holding companies.

We agreed with the Audit Committee that we would report to them misstatements above CHF 450,000
identified during our audit as well as any misstatements below that amount which, in our view, warranted
reporting for qualitative reasons.

Report on key audit matters based on the circular 1/2015 of the Federal Audit Oversight
Authority
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the period under review. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
194

Impairment testing of investments in subsidiaries

Key audit matter How our audit addressed the key audit matter
Investments in subsidiaries represent a significant In our audit of the investments in subsidiaries, we
balance sheet line item (CHF 706.3 million). performed the following main audit procedures:
The Board of Directors uses business valuations in • We assessed the design and the existence of the
order to test these investments for impairment. key controls regarding the valuation of the in-
The business valuations are calculated using the vestments.
‘practitioner’s method’. In cases were indications
of impairment exist, the book values of the invest- • We compared the book value of the invest-
ments are compared with the impairment test ap- ments in the year under review with the results
plied to assess the goodwill at the Group level. In from using the practitioner’s method of valua-
calculating these business valuations, there is sig- tion. If there were indications of impairment,
nificant scope for judgement in determining the we compared the book values of the invest-
underlying assumptions, particularly with regard ments with the impairment test applied to as-
to the future business results and the discount rate sess the goodwill at the Group level.
to apply to the forecast cash flows.
• We performed plausibility checks on the key
Management adopts a specified impairment test- assumptions applied by Management used for
ing process to identify the potential need for the the impairment tests (discount rate, growth
impairment of investments. rates, revenue growth and EBIT margin
growth). To this end, we involved our internal
Please refer to pages 191 (investments) in the valuation experts, who compared the assump-
notes to the financial statements. tions with data from analogous companies and
market data. Further, we assessed the technical
and arithmetical correctness of the valuation
model.
We consider the valuation process and the as-
sumptions used to be an appropriate and adequate
basis for the impairment testing of investments in
subsidiaries as at 31 December 2017.

Responsibilities of the Board of Directors for the financial statements


The Board of Directors is responsible for the preparation of the financial statements in accordance with
the provisions of Swiss law and the company’s articles of incorporation, and for such internal control as
the Board of Directors determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the entity’s abil-
ity to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Board of Directors either intends to liquidate the entity
or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements


Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that in-
cludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Swiss law and Swiss Auditing Standards will always detect a material mis-
statement when it exists. Misstatements can arise from fraud or error and are considered material if, indi-
vidually or in the aggregate, they could reasonably be expected to influence the economic decisions of us-
ers taken on the basis of these financial statements.
FINANCIAL REPORT
Bühler Annual Report 2017
195

A further description of our responsibilities for the audit of the financial statements is located at the web-
site of EXPERTsuisse: http://expertsuisse.ch/en/audit-report-for-public-companies. This description
forms part of our auditor’s report.

Report on other legal and regulatory requirements

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that
an internal control system exists which has been designed for the preparation of financial statements ac-
cording to the instructions of the Board of Directors.
We further confirm that the proposed appropriation of available earnings complies with Swiss law and the
company’s articles of incorporation. We recommend that the financial statements submitted to you be ap-
proved.

PricewaterhouseCoopers AG

René Rausenberger Philipp Gnädinger


Audit expert Audit expert
Auditor in charge

Zürich, 6 February 2018