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Insights
 

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

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