First half of 2020 results

Solid performance in spite of COVID-19 pandemic

The Bossard Group performed well in a market weighed down by the COVID-19 pandemic. Currency-adjusted sales in the first half of 2020 fell by 7.4 percent to CHF 399.4 million. The 11.4 percent sales drop in Swiss francs resulted from the stronger Swiss currency. The consequences of the global collapse in demand and production were manifestly evident especially in the second quarter. Despite the difficult market conditions, Bossard’s ability to supply its customers never flagged. For the first six months, the Bossard Group expects an EBIT of approximately CHF 41.0 million, which is equivalent to an EBIT margin of 10.3 percent. This solid performance is based especially in the measures taken early on, the broadly diversified customer base, and the consistently sound liquidity.

The Group recorded a noticeable decline in sales, particularly in the second quarter. Currency-adjusted sales in the period under comparison fell by 13.7 percent to CHF 180.5 million, mostly owing to the measures taken by numerous governments to curb the pandemic, which led to a substantial decline in demand from our customer. In addition, the appreciation of the Swiss franc in all market regions also adversely affected Group sales.

Resilience in Europe
In Europe, Bossard generated sales of CHF 102.6 million in the second quarter, a drop in local currency of 15.1 percent (in CHF: -18.5 percent). In the first half of the year, currency-adjusted sales declined by 7.1 percent to CHF 235.7 million (in CHF: -11.0 percent). The widely diversified customer base in the various industrial segments proved valuable, especially in Europe. In medical technology, for example, we saw above-average growth rates. Last year’s acquisition of Boysen also had a compensating effect: adjusted for acquisitions, the decline in sales in local currency was 11.6 percent.

Difficult environment in America
Bossard was already facing considerable headwinds in America in the second half of 2019. Although the erosion in sales did slow in the first quarter of the current fiscal year, the second quarter was more difficult again due to the pandemic. As a result, sales in the second quarter in local currency fell by 19.5 percent to CHF 42.8 million (in CHF: -22.6 percent). In the first half of 2020, the decline in sales in local currency was 11.5 percent (in CHF: -14.6 percent).

Asia showing signs of normalization
After having enjoyed a long phase of uninterrupted growth in Asia, Bossard experienced a substantial drop in demand in the first quarter resulting from the COVID-19 pandemic. However, the second quarter did show some signs of normalization, with demand visibly improving. Sales in the second quarter reflected this development, and at CHF 35.1 million, matched the previous year’s level in local currency. Owing to the negative currency effect, however, the amount in Swiss francs fell by 6.4 percent. Sales in Asia for the first half of the year amounted to CHF 66.9 million, a slight decline of 1.6 percent in local currency (in CHF: -8.0 percent). In spite of the pandemic and restrictive measures instituted in multiple countries, there were a few highlights. We managed to achieve positive growth rates in South Korea, Malaysia and Singapore, and even hit a new sales record in Taiwan.

Bossard responded offensively to the challenges of COVID-19 pandemic at an early stage. These measures to protect employees, ensure profitability and hence sustain operational performance paid off. In addition, our dual purchasing strategy, which for years has ensured alternative sources of procurement, proved valuable during the COVID-19 pandemic. It meant that our ability to deliver to our customers was never at risk.

Thanks to our solid balance sheet and profit position, we were able to keep up our strategic projects. From an operations perspective, our focus remained on our customers and partners, in spite of all the market vagaries. To service the market, we applied the principles of Proven Productivity from our respective home offices in the form of video conferences and webinars: be it in the area of product development, the implementation of engineering projects and services up to providing virtual support in setting up on-site logistic solutions at the customer.

A challenging outlook
Overall, we see evidence that our broad-based measures to manage the COVID-19 pandemic are effective. This gives us confidence for demand development in the second half of the year. We are already seeing signs, which among other things has prompted us to end the short-time working at the Zug site as of August 1, 2020. Meanwhile, it is difficult to predict how a possible normalization will affect the Bossard Group’s business in the second half of the year. This will also depend on government measures, which will likewise influence the process of economic recovery.

We do see our performance in the first half of 2020 as confirmation of our medium- and long-term growth strategy. It is rooted in our investments in infrastructure over recent years, in innovative solutions like Smart Factory Logistics and Engineering Services, as well as in digitalization. The economic principle still stands: the investments of today are the foundation for sustainable growth tomorrow. We are also heartened by the fact that, even in these challenging times, we maintained our ability to supply our customers and provide them with our logistics and engineering services in full, thereby managing to contribute to their economic recovery.

Bossard will publish the detailed 2020 semi-annual report on August 25, 2020.

Press Release as PDF