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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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Highlights

Gratifiying results in a difficult market environment

A year full of challenges ended above expectations. The results achieved reflect Bossard Group's resilience in a volatile and adverse market environment, which is rooted in its broadly diversified customer base in different industry segments.

 

At a glance

Net Sales
in CHF million
Geographic Sales Distribution
in %
EBIT
in CHF million
Net Income
in CHF million
 
 

Corporate Governance

Structure and corporate bodies

The Bossard Group’s organizational structure derives from international standards for corporate management. The Group’s corporate bodies and management follow the Directive on Information relating to Corporate Governance of SIX Swiss Exchange as well as the “Swiss Code of Best Practice for Corporate Govern­ance” of economiesuisse.

 

Board of Directors

Dr. Thomas Schmuckli-Grob
Chairman of the board of directors since 2007

Dr. Thomas Schmuckli-Grob currently works as a professional board member. Between 1993 and 2013, he held various management positions in the General Counsel division of Credit Suisse Group, initially in the Leu Bank Group and then from 1998 with a break at Credit Suisse. From 2005 to 2007, he headed the legal department of Corporate & Institutional Clients at Credit Suisse in Zurich, followed by Legal and Compliance Asset Management in Zurich (2007 to 2013). From 2000 to 2005, he was head of process and product management at Zuger Kantonalbank.

Anton Lauber
Member of the board of directors since 2006

Anton Lauber works as a professional board member since 2012. From 2008 to 2011, he headed the Schurter AG, the Schurter Group´s Electronic Components division in Lucerne as a delegate of the board of directors of Schurter AG. From 1993 to 2008, he was CEO of Schurter AG and from 1996, he was the delegate of the board of directors of Schurter AG, where he worked as the head of production and technology between 1988 and 1992. Prior to that, he managed the Generator Plant of ABB Switzerland. In the course of his professional activities, Anton Lauber gained experience in emerging markets, in particular in India, China, Brazil and Malaysia.

Dr. René Cotting
Member of the board of directors since 2015

Dr. René Cotting has held various positions in Switzerland and abroad for the ABB Group since 1995. From 2013 until the end of May 2017, he was CFO of ABB Switzerland. On March 1, 2017, he was named Head of Operation, Innovation and R&D for the ABB Group and Chairman of ABB Technology Ventures. In the course of his professional activities, René Cotting gained experience in emerging markets, in particular in India, China and Poland.

David Dean
Member of the board of directors since 2019

David Dean currently works as a professional board member. He was CEO of the Bossard Group from 2005 to 2019. From 1998 to 2004, he served as CFO of Bossard Group and has been with Bossard since 1992. Between 1990 and 1992, he was corporate controller and a member of the executive committee of an international logistics group. From 1980 to 1990, he worked for PricewaterhouseCoopers AG in various management functions in auditing and business consulting. In the course of his professional activities, David Dean gained experience in emerging markets, in particular in India, China, Malaysia, Thailand, Taiwan and South Korea.

Patricia Heidtman
Member of the board of directors since 2019

Patricia Heidtman is working for SIKA since her studies and is a member of the SIKA management team since 2017. She currently heads the research & development team for thermoplastic systems in Sarnen, Switzerland. Prior to this, Patricia Heidtman spent around 14 years in the USA, most recently as head of innovation management for products, processes and developments for the automotive industry.

Martin Kühn
Member of the board of directors since 2018

Since 2010 Martin Kühn is working for the KIBAG Group in Zurich, since 2014 as CFO and member of the executive committee. He is responsible for finance, ICT, human resources, real estate, KIBAG Marina and the technical services of the construction and building materials company. From 2002 to 2010, he had been employed at PricewaterhouseCoopers AG national and international as an auditor and M&A consultant for industrial clients. Prior to that, he worked two years for UBS.

Prof. Dr. Stefan Michel
Member of the board of directors since 2011

Prof. Dr. Stefan Michel is a professor for marketing and service management and director of the executive MBA at the IMD Business School in Lausanne, Switzerland since 2008. Between 2003 and 2008, he was as a professor at the Thunderbird School of Global Management in Arizona, USA. Prior to this, he taught as a professor at the Lucerne University of Applied Sciences and Arts, managed a family-run hotel and worked at Bank Leu in Zurich.

Maria Teresa Vacalli
Member of the board of directors since 2013

Maria Teresa Vacalli is CEO (Chief Executive Officer) of Bank Cler in Basel since September 2019. From 2018 until 2019, she was CDO (Chief Digital Officer) and Member of the Management Board of Basler Kantonalbank in Basel. From 2016 until 2018, she was CEO of Moneyhouse in Rotkreuz. Between 2008 and 2016, she has directed the wholesale unit at Sunrise Communications AG, Zurich, and was appointed executive director in 2014. Between 2002 and 2008, she worked in various executive positions at UPC Schweiz GmbH (formerly upc cablecom GmbH), Zurich. Before that, she had been employed in managerial posts in different companies.

Executive Committee

Dr. Daniel Bossard
Group CEO since 2019

From 2009 to 2018, Dr. Daniel Bossard was CEO Northern and Eastern Europe. From 2006 to 2008, he served as sales & marketing manager of Bossard Group and was responsible for the reorientation of Bossard’s sales strategy as well as the development of international customer relations. From 2003 until 2006, he was CEO of Bossard Denmark. Dr. Daniel Bossard joined Bossard in 2000 as an e-business manager, after having worked as a consultant for Accenture (formerly Andersen Consulting).

Stephan Zehnder
Group CFO since 2005

Stephan Zehnder took over the function as group controller of Bossard Group in 1998, remaining in this position until the end of 2004. From 1996 to 1997, he was a controller in Bossard’s corporate finance team. Prior to this, he was employed by various international companies in functions concerned with finance and controlling.

Beat Grob
CEO Central Europe since 2006

From 2005 to 2016 Beat Grob was managing director of Bossard Switzerland. He joined Bossard in 1995 as a project manager in logistics; the following year, he became head of logistics for Bossard Group.

Dr. Frank Hilgers
CEO Northern & Eastern Europe since 2019

Dr. Frank Hilgers has been CEO Northern and Eastern Europe since May 2019. Since 2015, he has been responsible for the group-wide management of branded products and high quality fastening solutions (Chief Category Officer, CCO). He has also headed the business units of KVT-Fastening since 2012. From 2009 to 2012, he was a member of the KVT-Koenig management team responsible for sales, product management and the fastening systems division. During his employment at Continental between 2007 and 2009, he was in charge of all national organizations of the spare parts business and key account management in the Commercial & Special Vehicle area. (For further functions refer to PDF annual report.)

Steen Hansen
CEO America since 2008

From 2006 to 2008, Steen Hansen served as the president of Bossard IIP, Cedar Falls, Iowa. He was responsible for the Group’s logistics between 2004 and 2006, having joined Bossard in 2001 as head of logistics for Bossard Denmark. Prior to joining Bossard, he filled various management positions, the last being supply chain manager at Nomeco Denmark, a leading wholesaler for pharmaceuticals.

Robert Ang
CEO Asia since 2009

From 2005 until 2009, Robert Ang was responsible for Bossard Greater China (China, Taiwan) and prior to that, the Southeast Asia region. From 1997 until 1999, he was CEO of Bossard Singapore. Robert Ang managed his own company from 1994 until it was acquired by Bossard in 1997. He spent the four years prior as a product manager for Conner Peripherals and Optics Storage Pte Ltd. in Singapore. Between 1986 and 1989 he worked as a buyer at Printronix AG.

 
 

Compensation Report

Compensations in the 2020 fiscal year

The compensation report describes the compensation principles and programs as well as the governance framework related to the compensation of the board of directors and the members of the executive committee of Bossard Holding AG. The report also provides details around the compensation awarded to those two bodies in the 2020 financial year.

 
 

Financial Report

Gratifying results in a difficult market environment

In financial year 2020, the Bossard Group posted sales of CHF 812.8 million, a decline of 3.3 percent in local currency and 7.2 percent in Swiss francs, respectively. EBIT was CHF 86.4 million (previous year: CHF 95.7 million). The EBIT margin was 10.6 percent, down from last year’s 10.9 percent: Yet, it is still within the long-term targeted range of 10 percent to 13 percent, in spite of an exceedingly difficult year. Group net income was CHF 67.8 million (previous year: CHF 76.0 million).

 
 

Sustainability

Social Responsibility

Bossard is committed to sustainable business development. We are convinced that only a corporate strategy aligned with sustainability and acceptable to all stakeholders can succeed in the long term. For generations, the Bossard family has demonstrated their special commitment to sustainability in 83 Bossard Group locations around the world.

 

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