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Report to the shareholders

Resilience and solid profitability in a tough environment

 
 

Dr. Thomas Schmuckli-Grob, Chairman of the board of directors and Dr. Daniel Bossard, CEO

Dear Shareholders,

We will remember the past financial year for a long time to come. The severe impact of the COVID-19 pandemic on our economic and social lives in 2020 was all-consuming.

Although demand in key sales markets plummeted periodically and the strong Swiss franc once again put a strain on the Bossard Group, we managed to maintain sales and profitability at a high level thanks to our remarkable resilience. The board of directors and the executive committee are pleased with the 2020 results: Sales totaled CHF 812.8 million (previous year: CHF 876.2 million). The EBIT was CHF 86.4 million (previous year: CHF 95.7 million), corresponding to an EBIT margin of 10.6 percent (prior year: 10.9 percent) – a good result in an extremely challenging year. This is equally true for net income, which reached CHF 67.8 million (previous year: CHF 76.0 million). 

Resilience thanks to broad diversification

The resilience of the Bossard Group in the midst of an unprecedented crisis is rooted in a variety of factors. First and foremost it based on the Group’s broad diversification. The crisis unleashed by the pandemic severely affected entire market segments and therefore many of our customers. Our many years of dedication to the pursuit of new areas of growth and activity proved beneficial in the “Year of Corona,” leading to strong momentum from the healthcare technology, semiconductor, railway, and electromobility sectors.

Likewise, our geographic diversification helped us to overcome the crisis in stages – starting in Asia, then in Europe and America, with the Chinese market approaching pre-crisis levels in June of 2020.

Bossard proved itself a reliable partner in every phase of this economic downturn. The dual purchasing strategy we have pursued for years to ensure alternative sources of procurement played a major role in our success. It allowed us to retain our ability to deliver in all world market regions even in the most turbulent months. Bossard made a significant contribution to ensuring that manufacturing processes could be maintained at customers' production sites. The business model, which has been consistently developed in recent years, has passed its test impressively. 

Digitalization success

Our investments in the field of digitalization paid off. They allowed us to continue our business activities largely without interruption even under difficult conditions.

The Smart Factory Logistics business, which sets up and operates automated warehouse management systems, moved forward virtually without a hitch, in some areas even expanding. The related expertise was in even greater demand in the past year. In a world dogged by the pandemic, systems that support machine-to-machine communication ultimately help reduce contact between employees and even automate entire processes. Thanks to our digitalization efforts, we were able to further expand our technical seminars as well as our engineering projects.

We are proud that our digital expertise allowed us to optimize the use of our sales channels at every stage of the crisis to deliver products and offer services to our customers in a new way.

Respectable performance in the regions

As you can imagine, dear Shareholders, the markets in the individual world regions and countries developed quite differently. In Europe, government restrictions massively limited our customers’ freedom of action in a number of countries over many weeks. Our widely diversified customer base was a substantial benefit, particularly in this extremely turbulent economic environment. Overall, we achieved a respectable performance in Europe and especially in Switzerland in 2020.

We continue to invest in the future, as evidenced by our November acquisition of a 40 percent stake in the start-up company MultiMaterial-Welding AG. The company stands out for its innovative technologies that enable novel fastening solutions for lightweight and multi-material designs. These are of particular interest to companies active in the transport sector where we see great potential.

In America, Bossard was already grappling with a substantially tougher market environment in the second half of 2019. The measures we undertook successfully halted the erosion in sales, as evidenced by the results in the first and especially the third quarter. We also launched several exciting projects in America that will generate new growth – in the electromobility sector, for instance.

In Asia, Bossard has been on a growth course for a number of years thanks to intensive investment activity. This success story was temporarily interrupted by the pandemic in the first quarter of 2020, but by the second quarter several of our regional companies were back on the path to growth. In the second half of the year, we again posted slight growth in local currency for the entire market region.

Sustainability and social responsibility

In this difficult market environment, the Bossard Group embraced its high level of social responsibility in the customary way. Our economic success rests with our employees, and we are committed to a motivating and positive work environment. In spite of falling sales, there were no workforce reductions, which would have improved profitability only short-term. On the contrary, Bossard is pursuing growth projects in all regions of the world, and we hope to unleash this potential together with our employees. In the 190-year history of the Bossard Group, we have learned that a mindset of sustainability pays off in human resource policy as well.

Bossard’s “Strategy 200”

The “Strategy 200” developed during business year 2020 makes clear that our company is ready and willing for another stage of expansion. Bossard will be pursuing ambitious plans in the upcoming decade, culminating in the company’s 200th anniversary in 2031.

This plan makes clear that the Group can open up rewarding avenues for profitable expansion in the coming years, thus achieving accelerated growth. Currently, our global market share is within the low single-digit range. This means that we have enormous opportunities for expansion in most markets. With our unique global range of products and services, we seek to improve our market position worldwide. Supported by seven initiatives, the Bossard Group aims to become a resolutely customer-oriented group of companies. For this transformation, we are wholeheartedly focusing on our strengths and will leverage them to drive further company growth.

Our internal motto, “Together We Create,” forms the foundation of this strategy. In this way, we want to further promote cooperation within the Bossard Group and take advantage of synergies. We want to concentrate on global growth segments even more and further improve and strengthen customer loyalty through premium products and services.

All of this will help us as a group reach even more ambitious goals in the coming years and further spread our Proven Productivity customer promise, along with sustainability and social responsibility, into the global industrial landscape. For more information on this topic, see from page 28 of this annual report.

Facing the future with confidence

Bossard is entering this next stage in the company’s history with great confidence. Over the last few months, the Group has demonstrated that it rests on a foundation that is strong enough to support further growth.

Right now, it is difficult for us to forecast how sales markets will evolve over the coming months. A great deal depends on people’s behavior, politics, and governmental measures in the individual countries – factors outside our scope of influence. Nonetheless, we are pleased that over the last few months governments have made every effort to support the economy and maintain the pace of production in companies.

The way in which Bossard tackled the crisis year of 2020 gives us confidence, and we view the future with optimism. Dedicated employees, stable cash flows and a solid balance sheet with an equity ratio of 50.3 percent, allow the Bossard Group to advance strategically important projects with full force. Last year, the board of directors reduced the dividend by 50 percent short-term due to major uncertainties surrounding the COVID-19 pandemic. Assuming optimal business performance in 2020, the board held out the prospect of paying a higher dividend at the 2021 annual general meeting of shareholders.

The current environment is still dominated by the pandemic and the accompanying uncertainties. The board of directors takes this situation into account. However, he includes the good result as well as the solid balance sheet into his considerations and has opted for a middle course. At the 2021 annual general meeting of shareholders, the board will propose a distribution of 50 percent of net income instead of the usual 40 percent. This corresponds to a gross dividend of CHF 4.40 for shareholders with registered A shares.

This confidence is ultimately based on the support and the encouraging commitment of all our stakeholders. We wish to express our deep gratitude to all our employees for their dedication, solidarity, team spirit, and enthusiasm. They are essential to the success of the Bossard Group. We thank our customers for their years of loyalty, and our partners and suppliers for their outstanding cooperation. And we thank you, valued Shareholders, for the trust you continued to place in us in 2020.

Dr. Thomas Schmuckli
Chairman of the board of directors

Dr. Daniel Bossard
CEO

Zug, February 26, 2021

Dear Shareholders,

We will remember the past financial year for a long time to come. The severe impact of the COVID-19 pandemic on our economic and social lives in 2020 was all-consuming.

Although demand in key sales markets plummeted periodically and the strong Swiss franc once again put a strain on the Bossard Group, we managed to maintain sales and profitability at a high level thanks to our remarkable resilience. The board of directors and the executive committee are pleased with the 2020 results: Sales totaled CHF 812.8 million (previous year: CHF 876.2 million). The EBIT was CHF 86.4 million (previous year: CHF 95.7 million), corresponding to an EBIT margin of 10.6 percent (prior year: 10.9 percent) – a good result in an extremely challenging year. This is equally true for net income, which reached CHF 67.8 million (previous year: CHF 76.0 million). 

Resilience thanks to broad diversification

The resilience of the Bossard Group in the midst of an unprecedented crisis is rooted in a variety of factors. First and foremost it based on the Group’s broad diversification. The crisis unleashed by the pandemic severely affected entire market segments and therefore many of our customers. Our many years of dedication to the pursuit of new areas of growth and activity proved beneficial in the “Year of Corona,” leading to strong momentum from the healthcare technology, semiconductor, railway, and electromobility sectors.

Likewise, our geographic diversification helped us to overcome the crisis in stages – starting in Asia, then in Europe and America, with the Chinese market approaching pre-crisis levels in June of 2020.

Bossard proved itself a reliable partner in every phase of this economic downturn. The dual purchasing strategy we have pursued for years to ensure alternative sources of procurement played a major role in our success. It allowed us to retain our ability to deliver in all world market regions even in the most turbulent months. Bossard made a significant contribution to ensuring that manufacturing processes could be maintained at customers' production sites. The business model, which has been consistently developed in recent years, has passed its test impressively. 

Digitalization success

Our investments in the field of digitalization paid off. They allowed us to continue our business activities largely without interruption even under difficult conditions.

The Smart Factory Logistics business, which sets up and operates automated warehouse management systems, moved forward virtually without a hitch, in some areas even expanding. The related expertise was in even greater demand in the past year. In a world dogged by the pandemic, systems that support machine-to-machine communication ultimately help reduce contact between employees and even automate entire processes. Thanks to our digitalization efforts, we were able to further expand our technical seminars as well as our engineering projects.

We are proud that our digital expertise allowed us to optimize the use of our sales channels at every stage of the crisis to deliver products and offer services to our customers in a new way.

Respectable performance in the regions

As you can imagine, dear Shareholders, the markets in the individual world regions and countries developed quite differently. In Europe, government restrictions massively limited our customers’ freedom of action in a number of countries over many weeks. Our widely diversified customer base was a substantial benefit, particularly in this extremely turbulent economic environment. Overall, we achieved a respectable performance in Europe and especially in Switzerland in 2020.

We continue to invest in the future, as evidenced by our November acquisition of a 40 percent stake in the start-up company MultiMaterial-Welding AG. The company stands out for its innovative technologies that enable novel fastening solutions for lightweight and multi-material designs. These are of particular interest to companies active in the transport sector where we see great potential.

In America, Bossard was already grappling with a substantially tougher market environment in the second half of 2019. The measures we undertook successfully halted the erosion in sales, as evidenced by the results in the first and especially the third quarter. We also launched several exciting projects in America that will generate new growth – in the electromobility sector, for instance.

In Asia, Bossard has been on a growth course for a number of years thanks to intensive investment activity. This success story was temporarily interrupted by the pandemic in the first quarter of 2020, but by the second quarter several of our regional companies were back on the path to growth. In the second half of the year, we again posted slight growth in local currency for the entire market region.

Sustainability and social responsibility

In this difficult market environment, the Bossard Group embraced its high level of social responsibility in the customary way. Our economic success rests with our employees, and we are committed to a motivating and positive work environment. In spite of falling sales, there were no workforce reductions, which would have improved profitability only short-term. On the contrary, Bossard is pursuing growth projects in all regions of the world, and we hope to unleash this potential together with our employees. In the 190-year history of the Bossard Group, we have learned that a mindset of sustainability pays off in human resource policy as well.

Bossard’s “Strategy 200”

The “Strategy 200” developed during business year 2020 makes clear that our company is ready and willing for another stage of expansion. Bossard will be pursuing ambitious plans in the upcoming decade, culminating in the company’s 200th anniversary in 2031.

This plan makes clear that the Group can open up rewarding avenues for profitable expansion in the coming years, thus achieving accelerated growth. Currently, our global market share is within the low single-digit range. This means that we have enormous opportunities for expansion in most markets. With our unique global range of products and services, we seek to improve our market position worldwide. Supported by seven initiatives, the Bossard Group aims to become a resolutely customer-oriented group of companies. For this transformation, we are wholeheartedly focusing on our strengths and will leverage them to drive further company growth.

Our internal motto, “Together We Create,” forms the foundation of this strategy. In this way, we want to further promote cooperation within the Bossard Group and take advantage of synergies. We want to concentrate on global growth segments even more and further improve and strengthen customer loyalty through premium products and services.

All of this will help us as a group reach even more ambitious goals in the coming years and further spread our Proven Productivity customer promise, along with sustainability and social responsibility, into the global industrial landscape. For more information on this topic, see from page 28 of this annual report.

Facing the future with confidence

Bossard is entering this next stage in the company’s history with great confidence. Over the last few months, the Group has demonstrated that it rests on a foundation that is strong enough to support further growth.

Right now, it is difficult for us to forecast how sales markets will evolve over the coming months. A great deal depends on people’s behavior, politics, and governmental measures in the individual countries – factors outside our scope of influence. Nonetheless, we are pleased that over the last few months governments have made every effort to support the economy and maintain the pace of production in companies.

The way in which Bossard tackled the crisis year of 2020 gives us confidence, and we view the future with optimism. Dedicated employees, stable cash flows and a solid balance sheet with an equity ratio of 50.3 percent, allow the Bossard Group to advance strategically important projects with full force. Last year, the board of directors reduced the dividend by 50 percent short-term due to major uncertainties surrounding the COVID-19 pandemic. Assuming optimal business performance in 2020, the board held out the prospect of paying a higher dividend at the 2021 annual general meeting of shareholders.

The current environment is still dominated by the pandemic and the accompanying uncertainties. The board of directors takes this situation into account. However, he includes the good result as well as the solid balance sheet into his considerations and has opted for a middle course. At the 2021 annual general meeting of shareholders, the board will propose a distribution of 50 percent of net income instead of the usual 40 percent. This corresponds to a gross dividend of CHF 4.40 for shareholders with registered A shares.

This confidence is ultimately based on the support and the encouraging commitment of all our stakeholders. We wish to express our deep gratitude to all our employees for their dedication, solidarity, team spirit, and enthusiasm. They are essential to the success of the Bossard Group. We thank our customers for their years of loyalty, and our partners and suppliers for their outstanding cooperation. And we thank you, valued Shareholders, for the trust you continued to place in us in 2020.

Dr. Thomas Schmuckli
Chairman of the board of directors

Dr. Daniel Bossard
CEO

Zug, February 26, 2021

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