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Report to the shareholders

Record result thanks to solid development efforts

 
 

Dr. Thomas Schmuckli, Chairman of the board of directors and David Dean, CEO

Dear Shareholders,

The Bossard Group has had an exceptionally successful 2017 fiscal year. Our solid, targeted development efforts in recent years, our dedicated endeavors to open new markets and an increasing favorable economic environment helped the entire Group to markedly improve its performance. EBIT grew no less than 23.6 percent to CHF 97.0 million. Net income rose 28.4 percent to CHF 80.2 million, which includes an extraordinary gain of CHF 4.5 million net from the real-estate sale of the former location in Austria. At 12.3 percent, our EBIT margin reached a record high, still considerably outperforming the industry average. Underlying this impressive surge in performance is a lively interest in our products and services – as reflected in a 13.1 percent increase in sales to CHF 786.2 million. 

Substantial progress in Europe

We are very pleased with the significant progress the Bossard Group made in all three market regions. Our past investments in acquisitions and new infrastructures are clearly paying off. This is especially evident in the progress we made in the European market, the source of nearly 60 percent of our sales. This is proof of the sustainability of our targeted investment strategy. In 2017, all European countries contributed to this growth. In Southern and Eastern Europe, the Bossard Group hit double-digit growth rates on multiple fronts. Even business in Switzerland, which had long suffered the effects of the appreciation of the Swiss franc, made a major contribution to our overall performance.

Of course, our European business also benefited from the positive economic developments. In past years, political events had repeatedly weighed on the markets. Not so in 2017: The European economy was able to disengage from political developments, giving us added momentum.

Profitable growth is on the upswing in America and Asia as well. The America business posted marked gains. Our major acquisitions in the last two years consolidated our market presence in the West and Northeast of the USA. The acquisition of Arnold Industries in September 2016 contributed substantially to the boost in results in America. Our established business grew significantly as well, partly thanks to the positive environment enjoyed by our two major US customers.

Business in Asia likewise benefited from the ground-work laid in past years. We expanded our capacities in China, South Korea, Thailand and Malaysia, thus creating a solid foundation for the double-digit growth we registered in most markets in this part of the world. Our infrastructure expansion led to a positive impact on our results – particularly in China, our most important market in Asia. In India, however, unfavorable developments in the wind energy segment and regulatory influences caused business there to fall short of expectations.

Acquisitions support profitable growth

Through its current acquisition strategy, the Bossard Group intends to consolidate its market position, spur new growth, and make headway in new industry segments. The acquisitions we have made in the past several years have proven very rewarding. We invested in companies with a great deal of expertise and premium product portfolios that were successfully integrated into our corporate structure. Because we approached our acquisition policy with purpose and caution, we had no need to put the acquired companies through cost-intensive restructuring. On the contrary: The acquired companies met expectations from the very beginning, making a meaningful contribution to our solid performance. We will adhere to this proven acquisition strategy going forward, without neglecting organic growth in the process.

We are pursuing additional impulses for growth, particularly in the area of electromobility within the automotive industry. As a partner to the largest US electric vehicle manufacturer, we have gained a great deal of experience and competence in this field. We will leverage this experience to explore this line of business with even greater dedication. Electromobility is an important topic for us for a variety of reasons. We can leverage our expertise in public bus projects, the development of scooters, and autonomous driving initiatives and we are also collaborating with battery manufacturers. However, it should be noted that these projects represent an investment into the future. It is unlikely that they will yield sizeable results in 2018 already. We know from past experience that such projects have a lead time of two to three years, which we gladly accept in light of our long-term growth strategy. Our new Bossard Design Center, which we opened in Milpitas, California, last year plays an important role in our increased activities in the electromobility field.

Much recognition for Smart Factory Logistics

Also the topic Industry 4.0, i.e. automating and networking the production processes of our industrial customers with our own supply processes, remains of vital interest to us. As you know, we are cooperating with various universities and technical institutions in this area around the world. Our expertise in Smart Factory Logistics is clearly in demand by customers restructuring their industrial facilities because it delivers substantial results, in particular increased productivity and lower production costs. With our Smart Factory Logistics solutions, we play a pioneering role and, as a result, enjoy growing demand from industrial companies. Now we want to market this expertise beyond the boundaries of industrial production. A pilot project is currently underway in a major Swiss hospital. Bossard is convinced that our intelligent systems can be used anywhere where materials are used, transported and processed to realize gains in productivity. In keeping with this view, we are actively branching out into other sectors to offer our solutions through our new subsidiary Effilio AG.

In addition, we are exploring the challenges and opportunities associated with 3D printing. In Switzerland, for example, Bossard gained the right to distribute the 3D plastic printers of a German manufacturer. We also intend to gain a foothold in 3D metal printers. This commitment aims to make our expertise in these innovative production methods available to customers. In this respect, it is important that we interact closely with customers and focus on their needs. It does not appear that 3D printing will gain major significance in the production of our fastening solutions because it is still too cost-intensive and slow, even from a longer-term perspective.  Nonetheless, 3D printing is helping to bring new materials into specific sectors, such as the aerospace and automotive industry. We are working with these materials and offering customers new fastening solutions especially for these applications.

Many things are happening within Bossard. Our 2017 fiscal year results confirm our strategic guidelines, which are focused on long-term growth and sustainability. Building up new capacities and infrastructures in various regions of the world is also additionally paying off in a healthier economic environment. All of our stakeholders ultimately benefit from this commitment: Our solid performance in the last years creates stability within the Group, preserves jobs, and creates the conditions that allow us to meet the demanding requirements from our customers. Finally, the strong performance of the entire Group results in steadily increasing dividends for our shareholders. The 2017 fiscal year will again lead to a substantial increase in dividends.

Well positioned for further growth

We view the near and distant future with optimism. The economic environment is reawakening higher expectations. Our past investments leave us well positioned to meet growing demand worldwide. We are able to offer our customers added value through innovative solutions and services in line with our Proven Productivity concept. Thanks to our tightly woven supplier network, which meets highest demands, we can avoid supply bottlenecks and take full advantage of the economic upturn. This touches on yet another pillar of the Bossard strategy: guaranteed supply security, especially when demand for fastening solutions is high – like it is now. We are able to ensure supply security and constantly endeavor to make improvements within our partner network.

Bossard is on a strong course for the future. We hope that our customers, our employees, and especially you, our valued shareholders, will continue to accompany us on this path. Thank you for the trust and loyalty you place in our company.

Dr. Thomas Schmuckli
Chairman of the board of directors

David Dean
CEO

Zug, February 23, 2018

Dear Shareholders,

The Bossard Group has had an exceptionally successful 2017 fiscal year. Our solid, targeted development efforts in recent years, our dedicated endeavors to open new markets and an increasing favorable economic environment helped the entire Group to markedly improve its performance. EBIT grew no less than 23.6 percent to CHF 97.0 million. Net income rose 28.4 percent to CHF 80.2 million, which includes an extraordinary gain of CHF 4.5 million net from the real-estate sale of the former location in Austria. At 12.3 percent, our EBIT margin reached a record high, still considerably outperforming the industry average. Underlying this impressive surge in performance is a lively interest in our products and services – as reflected in a 13.1 percent increase in sales to CHF 786.2 million. 

Substantial progress in Europe

We are very pleased with the significant progress the Bossard Group made in all three market regions. Our past investments in acquisitions and new infrastructures are clearly paying off. This is especially evident in the progress we made in the European market, the source of nearly 60 percent of our sales. This is proof of the sustainability of our targeted investment strategy. In 2017, all European countries contributed to this growth. In Southern and Eastern Europe, the Bossard Group hit double-digit growth rates on multiple fronts. Even business in Switzerland, which had long suffered the effects of the appreciation of the Swiss franc, made a major contribution to our overall performance.

Of course, our European business also benefited from the positive economic developments. In past years, political events had repeatedly weighed on the markets. Not so in 2017: The European economy was able to disengage from political developments, giving us added momentum.

Profitable growth is on the upswing in America and Asia as well. The America business posted marked gains. Our major acquisitions in the last two years consolidated our market presence in the West and Northeast of the USA. The acquisition of Arnold Industries in September 2016 contributed substantially to the boost in results in America. Our established business grew significantly as well, partly thanks to the positive environment enjoyed by our two major US customers.

Business in Asia likewise benefited from the ground-work laid in past years. We expanded our capacities in China, South Korea, Thailand and Malaysia, thus creating a solid foundation for the double-digit growth we registered in most markets in this part of the world. Our infrastructure expansion led to a positive impact on our results – particularly in China, our most important market in Asia. In India, however, unfavorable developments in the wind energy segment and regulatory influences caused business there to fall short of expectations.

Acquisitions support profitable growth

Through its current acquisition strategy, the Bossard Group intends to consolidate its market position, spur new growth, and make headway in new industry segments. The acquisitions we have made in the past several years have proven very rewarding. We invested in companies with a great deal of expertise and premium product portfolios that were successfully integrated into our corporate structure. Because we approached our acquisition policy with purpose and caution, we had no need to put the acquired companies through cost-intensive restructuring. On the contrary: The acquired companies met expectations from the very beginning, making a meaningful contribution to our solid performance. We will adhere to this proven acquisition strategy going forward, without neglecting organic growth in the process.

We are pursuing additional impulses for growth, particularly in the area of electromobility within the automotive industry. As a partner to the largest US electric vehicle manufacturer, we have gained a great deal of experience and competence in this field. We will leverage this experience to explore this line of business with even greater dedication. Electromobility is an important topic for us for a variety of reasons. We can leverage our expertise in public bus projects, the development of scooters, and autonomous driving initiatives and we are also collaborating with battery manufacturers. However, it should be noted that these projects represent an investment into the future. It is unlikely that they will yield sizeable results in 2018 already. We know from past experience that such projects have a lead time of two to three years, which we gladly accept in light of our long-term growth strategy. Our new Bossard Design Center, which we opened in Milpitas, California, last year plays an important role in our increased activities in the electromobility field.

Much recognition for Smart Factory Logistics

Also the topic Industry 4.0, i.e. automating and networking the production processes of our industrial customers with our own supply processes, remains of vital interest to us. As you know, we are cooperating with various universities and technical institutions in this area around the world. Our expertise in Smart Factory Logistics is clearly in demand by customers restructuring their industrial facilities because it delivers substantial results, in particular increased productivity and lower production costs. With our Smart Factory Logistics solutions, we play a pioneering role and, as a result, enjoy growing demand from industrial companies. Now we want to market this expertise beyond the boundaries of industrial production. A pilot project is currently underway in a major Swiss hospital. Bossard is convinced that our intelligent systems can be used anywhere where materials are used, transported and processed to realize gains in productivity. In keeping with this view, we are actively branching out into other sectors to offer our solutions through our new subsidiary Effilio AG.

In addition, we are exploring the challenges and opportunities associated with 3D printing. In Switzerland, for example, Bossard gained the right to distribute the 3D plastic printers of a German manufacturer. We also intend to gain a foothold in 3D metal printers. This commitment aims to make our expertise in these innovative production methods available to customers. In this respect, it is important that we interact closely with customers and focus on their needs. It does not appear that 3D printing will gain major significance in the production of our fastening solutions because it is still too cost-intensive and slow, even from a longer-term perspective.  Nonetheless, 3D printing is helping to bring new materials into specific sectors, such as the aerospace and automotive industry. We are working with these materials and offering customers new fastening solutions especially for these applications.

Many things are happening within Bossard. Our 2017 fiscal year results confirm our strategic guidelines, which are focused on long-term growth and sustainability. Building up new capacities and infrastructures in various regions of the world is also additionally paying off in a healthier economic environment. All of our stakeholders ultimately benefit from this commitment: Our solid performance in the last years creates stability within the Group, preserves jobs, and creates the conditions that allow us to meet the demanding requirements from our customers. Finally, the strong performance of the entire Group results in steadily increasing dividends for our shareholders. The 2017 fiscal year will again lead to a substantial increase in dividends.

Well positioned for further growth

We view the near and distant future with optimism. The economic environment is reawakening higher expectations. Our past investments leave us well positioned to meet growing demand worldwide. We are able to offer our customers added value through innovative solutions and services in line with our Proven Productivity concept. Thanks to our tightly woven supplier network, which meets highest demands, we can avoid supply bottlenecks and take full advantage of the economic upturn. This touches on yet another pillar of the Bossard strategy: guaranteed supply security, especially when demand for fastening solutions is high – like it is now. We are able to ensure supply security and constantly endeavor to make improvements within our partner network.

Bossard is on a strong course for the future. We hope that our customers, our employees, and especially you, our valued shareholders, will continue to accompany us on this path. Thank you for the trust and loyalty you place in our company.

Dr. Thomas Schmuckli
Chairman of the board of directors

David Dean
CEO

Zug, February 23, 2018

READ ALL
 
 
 

Highlights

All-time highs – record-breaking profitability

Bossard continues on its growth track: Sales, EBIT, and net income rose to new heights also in 2017. This development confirms our investment policy that targets profitable growth.

 

At a glance

Net Sales
in CHF million

Sales rises by

0%

to a new record level of CHF 786.2 million.

Geographic Sales Distribution
in %
EBIT
in CHF million

Targeted investments pay off – EBIT increases by 23.6 percent to a new record high.

Net Income
in CHF million

+28.4 percent
Net income at record high – basis for future growth.

 
 

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 Bank Leu 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, afterwards he was Managing Director of the Legal and Compliance Asset Management division 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.

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.

Daniel Lippuner
Member of the board of directors since 2015

Daniel Lippuner has been Chief Operating Officer of the Meyer Burger Group in Thun, Switzerland, since 2017. From 2013 to 2015, he headed the Saurer Group in Shanghai, China, and Wattwil, Switzerland, as Group Chief Executive Officer. He took over this position after posts in finance, sales and marketing as well as in general management with OC Oerlikon, Hilti AG and Autoneum (formerly Rieter Automotive).

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 of Moneyhouse in Rotkreuz since 2016. 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.

Helen Wetter-Bossard
Member of the board of directors since 2002

Helen Wetter-Bossard is responsible for the operational management of her own family business. Between 2005 and 2011, she was a member of the auditing committee of the Corporation of Zug, which she has chaired since 2009. From 1996 to 1999, she worked as a clerk to Canton Lucerne’s administrative court.

Executive Committee

David Dean
Group CEO since 2005

From 1998 to 2004, David Dean 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.

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. Daniel Bossard
CEO Northern & Eastern Europe since 2009

From 2006 to 2008, Dr. Daniel Bossard 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).

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.

Dr. Frank Hilgers
Group CCO since 2015

Since 2015 Dr. Frank Hilgers 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 in charge of 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.)

 
 

Compensation Report

Compensations in the 2017 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 2017 fiscal year.

 
 

Financial Report

All-time highs – record-breaking profitability

The Bossard Group can look back on another very successful fiscal year: Sales, EBIT and net income rose significantly, setting new record highs. Sales grew by 13.1 percent over the previous year to CHF 786.2 million. All market regions contributed to this remarkable performance with double-digit growth rates. EBIT rose by 23.6 percent to CHF 97.0 million while the EBIT margin climbed from 11.3 percent to a record-high of 12.3 percent, pushing it well above the industry average. Net income also improved markedly, growing no less than 28.4 percent to CHF 80.2 million. Overall, not only did we post a high level of growth in 2017, we were also able to further consolidate our above-average profitability.

 
 

Proven Productivity

Making our customers more competitive

David Dean, CEO Bossard Group

Getting ahead together with our customers means developing solutions that are better, faster, more efficient and more cost-effective and hence help our customers outperform their competition. At Bossard, we call this holistic view "Proven Productivity".

Realize the vision of Smart Factory Logistics

Bossard Smart Factory Logistics not only provides smooth and reliable B- and C-part management, but enables the transformation of your production. The time tested and proven methodology builds on the Internet of Things, thus uncovering hidden potential for productivity improvements and facilitating your supply chain optimization. Position your company ahead of others with Smart Factory Logistics.

How customers benefit from Bossard solutions

Thomas Siegenthaler

Production Manager Traction Converters, ABB Switzerland Ltd.

Successful partnership for a lean factory

“The traction converter is at the heart of every train. We produce such converters in the ABB plant in Turgi. Our customers – train anufacturers – have high expectations of us. To cope with, we need lean workflows, flexible processes and, of course, maximum productivity. Since the implementation of SmartBin, I haven't come across any missing C-parts. This ensures reliability and lies at the heart of process stability and timely handling and delivery of our products. I firmly believe that the close partnership between Bossard and ABB was a crucial factor in the project’s success, a quantifiable success that is evident each and every month. That’s what I call Proven Productivity.”

YD Meng

General Manager Bühler (China) Machinery Manufacturing Co., Ltd.

We chose Bossard not just because of their products but their philosophy of Proven Productivity.

“Bühler is a world-leading producer of food processing machinery. There are many successful cases of our cooperation with Bossard in joint project teams. We are working together on our global supply chain. This includes products as well as efficient processes. Bossard shows us product solutions and logistic concepts, like SmartBin, that help us to reduce costs and to improve productivity. I think this is the biggest value Bossard brings to us.”

Shi Yanyu

General Manager Excavator Division, SDLG Construction Machinery Co., Ltd.

Close cooperation increases product safety and reduced inventory by 75 %.

“At SDLG’s headquarters in Linyi, we produce 20,000 excavators and 50,000 wheel loaders every year. For us, safety is our top priority. Initially, screws from other uppliers were breaking during the assembly. Now, the fastener solutions from Bossard guarantee the safety of our machines, which helped us to lower process costs and to increase productivity. In addition, by introducing SDLG to SmartBin, we were able to reduce our stock level by 75% without compromising availability. We will for sure strengthen our cooperation with Bossard for improved product solutions and logistics.”

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