Solid sales growth despite weakening economic momentum

The Bossard Group continues on its growth track: Sales in the first quarter of 2019 rose by 5.4 percent to CHF 232.2 million. These results put Bossard on a solid footing for the start of the year even in the face of markedly more challenging business conditions. The broad diversification of the industrial segments we supply once again supported the Group’s growth stability. Activities in Europe and Asia contributed substantially to the Group’s positive sales development, while business in America stagnated. The first quarter’s overall solid performance is even more remarkable because it was achieved in a weakening economic environment and the comparative baseline from the previous year was already very high.

Good start in Europe
Bossard’s development efforts over recent years were especially evident in the European markets, where the Group was able to post gains and boost market share in spite of lackluster economic conditions. In this challenging market environment, Bossard increased sales by 5.1 percent to CHF 138.9 million compared to the first quarter of 2018. In local currency, the sales growth was a healthy 7.3 percent. The economic development in Europe overall varies widely. Some regional companies continued to post above-average growth rates, whereas others felt the effects of the weaker economic environment.

Drop in sales to major customers in America
After enjoying a dynamic business development in America 2017 and 2018, Bossard was unable to realize any further sales growth. At CHF 58.1 million, sales in the first quarter were at the previous year’s level; in local currency, sales decreased by 4.9 percent. The reason for the decline is twofold: Last year, Bossard had benefited from several customer projects that unfortunately did not result in follow-on projects. In addition, we were confronted with a subdued sales development with several major customers which could not be compensated by the encouraging growth in new business.

Dynamic business in Asia
In Asia, the preliminary work and especially the capacity expansion of previous years continue to pay off. Sales volume in this market region rose by no less than 16.6 percent to CHF 35.2 million (+17.7 percent in local currency). The regional companies in China and India were the main drivers behind this gratifying growth. Over recent years, Bossard made significant investments particularly in China, expanding its business accordingly.

Further growth in fiscal year 2019
For the overall year, the Bossard Group is targeting sales of CHF 900 million to CHF 920 million. The sales growth during the first quarter means we are on track. The weakening economic momentum evident from the falling purchasing managers’ indices in recent weeks, however, makes achieving this goal increasingly challenging. Should the issues that contributed substantially to general uncertainty and hence the weakening of the economy be resolved satisfactorily, then we are confident that the effect on the global economy will be a positive one. Regardless of the external factors, the Bossard Group will continue to actively invest in market development, which will be reflected in higher sales and earnings over the medium to long term, just as it has in the past.

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