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Report to the shareholders

Solid results in a tough environment

 
 

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

Dear Shareholders,

In a globally challenging market environment, the Bossard Group achieved solid results in 2019. Even though demand was flagging and the Swiss franc was strengthening over the course of the year, Bossard managed to grow sales by 0.6 percent to CHF 876.2 million. Among other things, difficult economic conditions put greater pressure on the product margin. Together with investments in expanding our services in engineering and Smart Factory Logistics, this resulted overall in a lower EBIT of CHF 95.7 million. The EBIT margin amounted to 10.9 percent and hit the targeted range of 10 percent to 13 percent. The Bossard Group achieved a net income of CHF 76.0 million in financial year 2019. Our targeted investment policy, our willingness to invest in future markets, and last but not least our solid balance sheet create a firm basis on which our company can grow profitably in the future.

Respectable growth in Europe

Our committed acquisition policy in recent years contributed substantially to solidifying our market position in Europe. In 2019, we took over the distribution business of the German company Boysen, thus significantly expanding our presence in the aerospace industry. In addition, our acquisition of BRUMA broadened our expertise in the field of high-quality fastening solutions in Germany. Pursuing this acquisition policy helped Bossard to increase sales in Europe by 5.6 percent in local currency.

In America, we faced headwinds in 2019. Among other things, the decline in sales was due to lower demand from several major customers partly as a result of the trade dispute between the USA and China. Furthermore, the introduction of its third model series fundamentally changed the product mix of the largest US electric vehicle manufacturer, which had a negative impact on demand for our fastening solutions. To counter this trend and in order to generate new profitable growth, we are confidently focusing on future industrial segments, which are railway, robotics, medical technology and electric vehicles (cars, busses, scooters and battery technology).

In Asia, we reached further, satisfactory growth. We continued to benefit from the investments we have made in recent years to expand and modernize our infrastructures. In spite of the trade dispute between the USA and China, we recorded high growth rates, particularly in China but also in India and Taiwan.

Investments in growing industry and market segments

Dear Shareholders, acquisitions also pave our way to new, innovative companies and create opportunities to secure markets and industry segments more effectively. Bossard remained true to this strategy in the financial year 2019. We view our acquisition of Boysen as a milestone that has allowed us to substantially expand our position in the aerospace industry. We firmly believe that this sector, with its high quality and reliability requirements, is a perfect fit for Bossard. Bossard undertook appropriate efforts to this end in recent years, acquiring the necessary AS9120 aerospace certification in several countries. This includes the USA, France, Italy, Germany and Switzerland – countries with major aerospace industries and an associated network of suppliers.

Other investments include acquiring a financial stake of 30 percent in the Swiss company Ecoparts, a pioneer in the additive production of metal parts. Ecoparts has extensive expertise in this market of the future, especially in regard to the technologies and materials used. This allows us to support our customers from the design of complex metal and plastic parts all the way to their production. In addition, Bossard is also a competent partner when it comes to selecting suitable 3D printers and associated manufacturing techniques.

In 2019, we also signed a cooperation agreement with SES-imagotag, the global market leader for digital in-store technologies in the retail sector. This cooperation is represented in the joint venture PDi Digital GmbH in which Bossard holds a 30 percent stake. PDi Digital combines Bossard’s many years of experience in automated logistics solutions and SES-imagotag’s expertise in Electronic Shelf Label (ESL) technologies for the retail industry. The goal is to offer smart logistics solutions to non-industrial sectors.

Assembly Technology Expert – expanding our development partnership with customers

In 2019, Bossard introduced six engineering modules under the name Assembly Technology Expert. Based on our many years of technical experience in fastening technologies, Assembly Technology Expert helps us pursue a strategic cooperation with our customers. We want to show our customers right in the design phase of a new product how to reduce costs for C-parts, streamline product ranges, reduce complexity, and make entire production processes leaner. This results in cost savings that are typically many times higher than the cost of the fasteners used. In keeping with our promise of “Proven Productivity”, we thereby make a substantial contribution to increasing our customers’ competitiveness.

Digitalization projects – investments in the future

As a company with 188 years of experience, it is important to us to continue to optimize and enhance our business model and to grow in established business areas that perform well. At the same time, we keep an eye out for new areas of development so that we can actively invest in the future.

We remain true to our strategy and invest in digitalization projects following along our proven three-level concept: products, engineering, and logistics.

We are developing a new e-commerce platform to market products more efficiently. To expand our range of engineering services, we are currently working on a new platform using artificial intelligence to substantially increase the speed of the offering process towards our customers for drawing parts. As for customer logistics, we are investing in expanding of our proven Smart Factory Logistics solutions (hardware and software) to make C-parts logistics processes even more intelligent and cost-efficient.

In addition, we have launched a digital initiative in intelligent assembly designed not only to get fasteners to the right place at the right time but also to ensure the correct assembly sequence as well as a fully digitalized assembly documentation. This helps our customers to avoid mistakes and optimize costs even further. We are also investing in a new core system to bring our IT platform up to the latest state-of-the-art, to further increase our internal efficiency, and to improve our global processes.

These and other digitalization projects do mean higher investments and depreciation and amortization in the short term, but they will contribute significantly to the sustainable development of our company in the medium and long term.

Commitment and confidence

Bossard is a company with a rich tradition and a long history. These projects show how committed we are to ensure our success in the future. To this end, as already mentioned, we have analyzed various business fields where our company will grow in the coming years. Additionally, the global market for fasteners remains extremely fragmented, a fact that accommodates us in our acquisition strategy.

On the whole, we start the new decade with great confidence, even in the face of growing macroeconomic uncertainties. Demand for our products and services is showing solid growth, as evidenced in the capacity-based infrastructure expansions in China and France. Furthermore, our acquisition policy continues to bear fruit, especially in regions and industry sectors where we had little presence in the past. Finally, we are pursuing the digitalization projects mentioned earlier with great commitment and optimism.

On this path into the future, we are fortunate enough to rely on the support of many committed stakeholders, among them our loyal customers, our dedicated employees, our suppliers, and most especially you, our valued Shareholders. Thank you very much for your trust.

Dr. Thomas Schmuckli
Chairman of the board of directors

Dr. Daniel Bossard
CEO

Zug, February 28, 2020

Dear Shareholders,

In a globally challenging market environment, the Bossard Group achieved solid results in 2019. Even though demand was flagging and the Swiss franc was strengthening over the course of the year, Bossard managed to grow sales by 0.6 percent to CHF 876.2 million. Among other things, difficult economic conditions put greater pressure on the product margin. Together with investments in expanding our services in engineering and Smart Factory Logistics, this resulted overall in a lower EBIT of CHF 95.7 million. The EBIT margin amounted to 10.9 percent and hit the targeted range of 10 percent to 13 percent. The Bossard Group achieved a net income of CHF 76.0 million in financial year 2019. Our targeted investment policy, our willingness to invest in future markets, and last but not least our solid balance sheet create a firm basis on which our company can grow profitably in the future.

Respectable growth in Europe

Our committed acquisition policy in recent years contributed substantially to solidifying our market position in Europe. In 2019, we took over the distribution business of the German company Boysen, thus significantly expanding our presence in the aerospace industry. In addition, our acquisition of BRUMA broadened our expertise in the field of high-quality fastening solutions in Germany. Pursuing this acquisition policy helped Bossard to increase sales in Europe by 5.6 percent in local currency.

In America, we faced headwinds in 2019. Among other things, the decline in sales was due to lower demand from several major customers partly as a result of the trade dispute between the USA and China. Furthermore, the introduction of its third model series fundamentally changed the product mix of the largest US electric vehicle manufacturer, which had a negative impact on demand for our fastening solutions. To counter this trend and in order to generate new profitable growth, we are confidently focusing on future industrial segments, which are railway, robotics, medical technology and electric vehicles (cars, busses, scooters and battery technology).

In Asia, we reached further, satisfactory growth. We continued to benefit from the investments we have made in recent years to expand and modernize our infrastructures. In spite of the trade dispute between the USA and China, we recorded high growth rates, particularly in China but also in India and Taiwan.

Investments in growing industry and market segments

Dear Shareholders, acquisitions also pave our way to new, innovative companies and create opportunities to secure markets and industry segments more effectively. Bossard remained true to this strategy in the financial year 2019. We view our acquisition of Boysen as a milestone that has allowed us to substantially expand our position in the aerospace industry. We firmly believe that this sector, with its high quality and reliability requirements, is a perfect fit for Bossard. Bossard undertook appropriate efforts to this end in recent years, acquiring the necessary AS9120 aerospace certification in several countries. This includes the USA, France, Italy, Germany and Switzerland – countries with major aerospace industries and an associated network of suppliers.

Other investments include acquiring a financial stake of 30 percent in the Swiss company Ecoparts, a pioneer in the additive production of metal parts. Ecoparts has extensive expertise in this market of the future, especially in regard to the technologies and materials used. This allows us to support our customers from the design of complex metal and plastic parts all the way to their production. In addition, Bossard is also a competent partner when it comes to selecting suitable 3D printers and associated manufacturing techniques.

In 2019, we also signed a cooperation agreement with SES-imagotag, the global market leader for digital in-store technologies in the retail sector. This cooperation is represented in the joint venture PDi Digital GmbH in which Bossard holds a 30 percent stake. PDi Digital combines Bossard’s many years of experience in automated logistics solutions and SES-imagotag’s expertise in Electronic Shelf Label (ESL) technologies for the retail industry. The goal is to offer smart logistics solutions to non-industrial sectors.

Assembly Technology Expert – expanding our development partnership with customers

In 2019, Bossard introduced six engineering modules under the name Assembly Technology Expert. Based on our many years of technical experience in fastening technologies, Assembly Technology Expert helps us pursue a strategic cooperation with our customers. We want to show our customers right in the design phase of a new product how to reduce costs for C-parts, streamline product ranges, reduce complexity, and make entire production processes leaner. This results in cost savings that are typically many times higher than the cost of the fasteners used. In keeping with our promise of “Proven Productivity”, we thereby make a substantial contribution to increasing our customers’ competitiveness.

Digitalization projects – investments in the future

As a company with 188 years of experience, it is important to us to continue to optimize and enhance our business model and to grow in established business areas that perform well. At the same time, we keep an eye out for new areas of development so that we can actively invest in the future.

We remain true to our strategy and invest in digitalization projects following along our proven three-level concept: products, engineering, and logistics.

We are developing a new e-commerce platform to market products more efficiently. To expand our range of engineering services, we are currently working on a new platform using artificial intelligence to substantially increase the speed of the offering process towards our customers for drawing parts. As for customer logistics, we are investing in expanding of our proven Smart Factory Logistics solutions (hardware and software) to make C-parts logistics processes even more intelligent and cost-efficient.

In addition, we have launched a digital initiative in intelligent assembly designed not only to get fasteners to the right place at the right time but also to ensure the correct assembly sequence as well as a fully digitalized assembly documentation. This helps our customers to avoid mistakes and optimize costs even further. We are also investing in a new core system to bring our IT platform up to the latest state-of-the-art, to further increase our internal efficiency, and to improve our global processes.

These and other digitalization projects do mean higher investments and depreciation and amortization in the short term, but they will contribute significantly to the sustainable development of our company in the medium and long term.

Commitment and confidence

Bossard is a company with a rich tradition and a long history. These projects show how committed we are to ensure our success in the future. To this end, as already mentioned, we have analyzed various business fields where our company will grow in the coming years. Additionally, the global market for fasteners remains extremely fragmented, a fact that accommodates us in our acquisition strategy.

On the whole, we start the new decade with great confidence, even in the face of growing macroeconomic uncertainties. Demand for our products and services is showing solid growth, as evidenced in the capacity-based infrastructure expansions in China and France. Furthermore, our acquisition policy continues to bear fruit, especially in regions and industry sectors where we had little presence in the past. Finally, we are pursuing the digitalization projects mentioned earlier with great commitment and optimism.

On this path into the future, we are fortunate enough to rely on the support of many committed stakeholders, among them our loyal customers, our dedicated employees, our suppliers, and most especially you, our valued Shareholders. Thank you very much for your trust.

Dr. Thomas Schmuckli
Chairman of the board of directors

Dr. Daniel Bossard
CEO

Zug, February 28, 2020

READ ALL
 
 
 

Highlights

Slower growth – vigorous investment activity

Even in the face of deteriorating global market conditions, the Bossard Group again posted growth in the financial year 2019. The more challenging market environment, along with investments in expanding our engineering and Smart Factory Logistics services, brought about a lower annual result.

 

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 was CEO of the Bossard Group from 2005 to 2019. He was with Bossard since 1992 and served as CFO of Bossard Group from 1998 to 2004. 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

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

Beat Grob
CEO Central Europe since 2006

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

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 2019 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 2019 financial year and an outlook on the changes in the compensation of the board of directors 2020/21.

 
 

Financial Report

Slower growth – vigorous investment activity

Even in the face of deteriorating global market conditions, the Bossard Group again posted growth in the financial year 2019. Sales rose by 0.6 percent to a new high of CHF 876.2 million (in local currency: +1.9 percent). When adjusted for acquisitions, sales declined by 3.3 percent (in local currency: ‒2.1 percent). The more challenging market environment, along with investments in expanding our engineering and Smart Factory Logistics services, brought about a lower annual result. The EBIT fell from CHF 108.8 million in the previous year to CHF 95.7 million. The EBIT margin amounted to 10.9 percent (previous year: 12.5 percent), which is within the long-term targeted range of 10 percent to 13 percent. Net income was CHF 76.0 million compared to CHF 85.4 million in the previous year.

 
 

Proven 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 80 Bossard Group locations around the world.

 

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