• Negative impact of strong Swiss Franc calls for drastic actions
• 8% reduction of global headcount by 2013 mainly in Lausanne, without redundancy plan due to discontinuation of temporary and fixed term contracts, early retirements and normal staff turnover
• Back to satisfactory profit levels by 2013

Bobst Group, a leading supplier of equipment and services to packaging manufacturers based in Lausanne/Switzerland, is responding to the pressure of low and stagnating worldwide demand and a strong Swiss Franc by accelerating the implementation of its ongoing strategic Group transformation. As part of this acceleration, non-core activities will be outsourced and the current global headcount of 5,300 employees will be reduced by 8% by Q2 2013. Most of this reduction will occur at Bobst Group’s Lausanne sites. Besides the outsourcing of non-core activities, the job reductions are achieved mainly by discontinuing temporary and fixed-term contracts, as well as through early retirements and normal staff turnover. By introducing short-time working of 15%-30% from January 2012 for 6 months, the company intends to keep on as many staff as possible until the expected improvement in demand occurs, thus retaining these jobs and know-how for the long term. All these measures were worked out in close contacts with Bobst's social partners including the local authorities, our workers’ representative and the union Unia. Neither the company’s 270 apprentices, nor innovation/R&D related activities are affected by the restructuring program. Agreement were found with the local authorities to financially support the collaboration between the CFVI, Centre de Formation du Groupement Suisse de l’Industrie Mécanique (GIM-CH) and Bobst apprenticeship center.
 
The Group strategy is based on two strong pillars: the solid fundamentals of the packaging industry, illustrated by increasing worldwide packaging demand and consumption and the Group transformation as of 2010. The ongoing withdrawal from the production site in Prilly and the concentration of activities at the state-of-the-art production facility in Mex near Lausanne are key parts of this transformation process. The consolidation will lead to a significant improvement in the Group's profitability from next year. "We regret the effect that changes in worldwide demand and the impact of the exchange rates are having on the staffing situation" says CEO Jean-Pascal Bobst when explaining the decision to accelerate the Group transformation. "However, we believe these worldwide changes are largely irreversible. Suffering from the competitive disadvantage of having over 50% of our personnel costs in Switzerland but over 90% of sales in Europe, Asia and Americas, we are being forced to take drastic action to secure the competitiveness of our company and keep our leading position in our industries and markets for the long term". 
 
Owing to the exchange rate situation and the need for market proximity, activities and functions with low added value can no longer be carried out competitively in Switzerland. As part of the Group strategy such activities are being outsourced. During the last 2 years Bobst has acquired and expanded facilities in China and India to be able to now conduct these transfers. Bobst will concentrate research, innovation, development and manufacturing for high-end products in Mex/Switzerland, while using more competitive entry level equipment from China, India and Brazil. Thus the Group will soon be much better placed to ensure its competitiveness while simultaneously protecting its unique technological know-how.
 
Within the 2009-2011 ambitions, Bobst Group expects its costs improvement program to help the company save CHF 77 million in 2011, and CHF 85 million next year. With the short term unstable macro economy, the market demand is expected to stagnate at best. The compounded effect of all activities in the Group transformation program initiated here will bring Bobst back to satisfactory profitability levels by 2013. The necessary conditions are being put in place for the Group to substantially lower its breakeven point and thus return to a sustainable, profitable performance. Completion of all measures is scheduled for the end of 2013.
 
Changes in Group Management as of November 8
The Board of Bobst Group appointed Attilio Tissi, Group CFO ad interim since May 2, as the permanent Group CFO of Bobst Group and member of the Group Executive Committee. A Swiss national born in 1968, he joined Bobst Group in 2008.
In addition, the Board appointed Philippe Milliet, a Swiss national born in 1963 who joined Bobst Group in June 2011, Head of the Business Unit Sheet-fed and member of the Group Executive Committee. In his new function, Philippe Milliet follows Jean-Pascal Bobst who ad interim headed the Business Unit since May 2011.
Pierre-Yves Müller, Head of Group Supply, Production and Logistics (GSPL), member of the Group Executive Committee, and Head of the Lausanne site, has decided to give a new orientation to his career. He will leave the company on January 31, 2012.
  
Bobst Group will provide more detailed financial information at the investor day scheduled for December 6, 2011 in Zurich.

Bobst Group SA, Lausanne/Prilly, November 8, 2011
 
 
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