Sales 1st quarter 2016

Slight growth in a difficult environment

In a challenging market environment, the Bossard Group increased sales in the first quarter of 2016 by 0.9 percent over the same period last year to CHF 170.4 million. The sales development was in particular held back by the business in Switzerland, where the appreciation of the Swiss franc has sustainably affected the competitive position of many of our industrial customers. On a positive note, Bossard was able to more than offset the decrease in sales in Switzerland through additional business in other European markets. While our America business was challenging at the beginning of the year, the outlook is positive that sales volumes will rise in the coming months.

Business in Europe, which accounts for approximately 61 percent of the total sales volume of the Bossard Group, is seeing positive developments in a number of sales markets. In particular, we recorded growth in key markets such as Germany, France and Denmark. This encouraging business development has been a major reason why we were able to compensate for a drop in demand in Switzerland. Overall, sales in Europe rose by 2.5 percent to CHF 103.6 million (+1.4 percent in local currency). A major reason for our resilience in a challenging market environment is our targeted acquisition policy, which has solidified Bossard’s competitive position in Europe over the past years.

Contrasting America business
In our America business, sales dropped by 0.9 percent over the previous year to CHF 43.8 million. In local currency, this corresponds to a decrease of 4.8 percent. These numbers underscore the demand situation at two of our key customers: While sales to the leading US electric vehicle manufacturer continued to rise, demand from a major customer in the agricultural technology sector decreased as expected. That customer continues to be confronted with a difficult business environment, which led to a lower sales volume for Bossard. In contrast, we benefitted from an increase in business from the largest US electric vehicle manufacturer. Thanks to planned production increases, we are expecting business to continue to grow strongly for the rest of the year. Another negative development in America was slightly lower demand from the electronics industry.

Growth in major Asian markets
In Asia, we recorded sales of CHF 23 million, slightly below the previous year. In local currency, we recorded a slight increase in sales of 0.9 percent. This shows that the Bossard Group’s investment policy and its associated efforts in the various markets continue to pay off, as reflected in double-digit growth rates in India, Singapore and Taiwan. In contrast, business in China showed a slight decrease in sales. Demand from the electronics industry is weaker in Asia as well.

Outlook
“After a weak third and fourth quarter of 2015, we had a good start into 2016. On average, sales were 7 percent above the second half of 2015. The biggest uncertainty for the remainder of the year is the general development of the economy, which is not yet on solid footing”, emphasized CEO David Dean.

The leading indicators relevant to our business, such as the purchasing manager indices in our major sales markets, suggest a slight improvement. We will find out in the weeks and months to come if these positive signals are sustainable. Based on our current understanding of our markets, we expect that 2016 will bring positive growth, assuming the currency situation remains unchanged.