The Swiss Bossard Group continued to face challenging market conditions in the third quarter 2019. Nonetheless, sales rose by 2.7 percent to CHF 218.5 million compared to the previous year (+3.2 percent in local currency). For the first nine months, the Group posted sales of CHF 669.4 million, an increase of 1.6 percent (+2.7 percent in local currency). Adjusted for acquisitions, sales declined slightly by 0.6 percent in local currency in comparison to the same period last year. In spite of the waning economy and the economic tension between the USA and China, Bossard recorded sales growth in both Europe and Asia. In America, however, the Group battled persistent headwinds.
Bossard remains on a growth course in Europe, although the economic environment is becoming more challenging. Sales in the third quarter rose by 8.1 percent to CHF 127.1 million, which corresponds to a plus of 9.6 percent in local currency. This sales increase includes the acquisition of Boysen, which has been in consolidation since July 2019. With this strategically valuable takeover, the Bossard Group has significantly solidified its position in the aerospace industry. When adjusted for acquisitions, growth in the third quarter reached 1.6 percent in local currency. In the first nine months, business in Europe grew by 3.6 percent to CHF 391.9 million (+6.4 percent in local currency). Excluding the acquisitions made in 2019, the increase in sales amounted to 2.1 percent in local currency.
Difficult
environment in America
In the America business, Bossard faced continued headwinds in the third
quarter. Net sales declined by 10.9 percent to CHF 53.8 million (-11.8 percent
in local currency). There are several reasons for this development: Some
customer projects that stimulated growth last year were finally concluded. The
slowing economy, also reflected in the US purchasing managers’ indices,
led to lower demand from a number of major customers. Moreover, the product mix
of the largest US electric vehicle manufacturer has changed markedly since the
introduction of its new model series, driving sales down.
Lively growth in
Asia
The effects of the trade dispute between the USA and China are becoming increasingly
tangible in Asia. Bossard was still able to increase sales in the third quarter
by 8.4 percent to CHF 37.6 million (+8.0 percent in local currency). The
continued growth is also due to previous years’ investments in expanding the
distribution network and in modernizing infrastructures. In the first nine
months of 2019, Bossard posted growth of 9.2 percent in Asia (+11.4 percent in
local currency). Without the acquisition effect, the increase was 5.9 percent
in local currency.
Cautious outlook
In the short term, the Bossard Group expects the market conditions to remain
challenging. The purchasing managers’ indices in Bossard’s key markets, are
trending downward, pointing to rather modest demand. Furthermore, little has
changed with respect to political uncertainties. This is especially true for
the trade dispute between the USA and China and the United Kingdom’s expected
exit from the EU. For the entire year, the Group anticipates sales between CHF
860 million and CHF 880 million (2018: CHF 871.1 million) and an EBIT margin at
the lower end of the target range of 10 percent to 13 percent.
Despite the currently challenging market environment, we are confident of exploiting further growth potential by focusing on growth segments and concentrating on engineering services and innovative logistics solutions to increase our customers’ productivity.
| Net sales 3rd quarter | change in % | |||
| in CHF million | 2019 | 2018 | in CHF |
in local currency |
| Europe | 127.1 | 117.6 | 8.1% | 9.6% |
| America | 53.8 | 60.4 | -10.9% | -11.8% |
| Asia | 37.6 | 34.7 | 8.4% | 8.0% |
| Group | 218.5 | 212.7 | 2.7% | 3.2% |
| Net sales January – September | change in % | |||
| in CHF million | 2019 | 2018 | in CHF |
in local currency |
| Europe | 391.9 | 378.1 | 3.6% | 6.4% |
| America | 167.2 | 179.9 | -7.1% | -9.1% |
| Asia | 110.3 | 101.0 | 9.2% | 11.4% |
| Group | 669.4 | 659.0 | 1.6% | 2.7% |