The Bossard Group continues on its growth track: ongoing increase in performance led to record highs in sales as well as EBIT and net income. EBIT rose by 12.1% to CHF 108.8 million, while net income grew by 6.5% to CHF 85.4 million. Excluding the non-operating result in the previous year, net income rose by 12.8%. The increase in performance is based on record sales of CHF 871.1 million (+10.8%). CEO David Dean underscores the results: “The 2018 financial year once again confirms our strategy of profitable growth.” Year-on-year the EBIT margin rose from 12.3-12.5%.
Brisk demand for fastening solutions as well as logistics and engineering services fueled the Bossard Group’s solid showing. The above-average sales growth in all three market regions in 2018 reflects development efforts over recent years. The gratifying results in the first half of the year benefited from a noticeably improved economic environment, which visibly flattened out in the second half of the year, however. In Europe, the Bossard Group boosted sales by 10.8% to a record CHF 493.0 million. Bossard did record double-digit growth rates in many countries. It also posted high single-digit growth rates in its two biggest European markets: Switzerland and Germany. Overall, growth in Europe was broad-based.
The same is true for business in America where sales in 2018 rose by 9.4% to CHF 240.9 million (in local currency: +10.1%). Bossard saw increased demand in America in the second half of the year. Contributing to this trend was the largest U.S. electric vehicle manufacturer who considerably boosted production output of its third model series. The successfully integrated acquisitions of the previous years also contributed to solid performance in America. Sales growth of 55.6% in Canada and 9.3% in Mexico complete the largely positive picture.
In Asia, too, the Bossard Group made remarkable progress, thus reaping the fruits of its continuous multi-year investment policy. Sales in this market region rose by no less than 13.4% to CHF 137.2 million (in local currency: +12.5%). The company posted double-digit growth in Bossard’s most important Asian markets China and India. Thailand, Taiwan, and Australia achieved double-digit growth rates as well.
EBIT reaches new record high
EBIT grew by 12.1% over the previous year to CHF 108.8 million. With this record result, the Bossard Group broke the CHF 100 million mark for the first time in its history.
The operating profit improved in regular increments in recent years, demonstrating a remarkable consistency in performance. The EBIT margin trended upward over the last decade. Substantially this trend was only broken for a short time by the financial crisis in 2009. In the 2018 financial year, the Bossard Group was again able to boost the EBIT margin from 12.3-12.5%. “Year after year, we make investments to ensure constant and profitable growth for the long term. With that in mind, 2018 was further confirmation of our investment-driven commitment in various countries and markets that promise above-average profitability. It is not without reason that our EBIT margin is well above the industry average,” stresses Dean.
Increased profit – higher dividend
The solid and broad-based performance increase yielded a net income of CHF 85.4 million (+6.5%). Excluding the non-operating result of CHF 4.5 million net from a real-estate sale in previous year, net income grew by a considerable 12.8%. On this adjusted basis, the return on sales rose from 9.6-9.8%.
The gains the Bossard Group made in 2018 will be evident in a dividend increase. Bossard’s dividend policy is clear and transparent: 40% of net income is distributed to shareholders. At the annual general meeting of shareholders on April 8, 2019, the board of directors will propose a dividend increase from CHF 4.20 to CHF 4.50 per registered A share.
Solid balance sheet despite vigorous investment activity
In the 2018 financial year, the brisk growth of the Bossard Group boosted total assets by 11.9% to CHF 604.1 million. This development stems from continuous investment activity combined with an increase in operating net working capital. The rise in inventory, due in part to higher sales volumes, should be noted here. The deliberate increase in capital commitment intended to ensure security of supply to customers.
In spite of vigorous investment activity and the rise in operating net working capital, the Bossard Group’s balance sheet structure remains solid. The equity ratio in the 2018 financial year continued to climb: it reached 51.3% – compared to the previous year’s 48.9% – and is well above the long-term target of 40%. Bossard’s firm financial footing is also reflected in the gearing (the ratio of net debt to equity), which fell from 0.5 to 0.4 even though net debt in the reporting period rose from CHF 124.0 million to CHF 130.2 million.
Cautious optimism for 2019
The Bossard Group is well positioned. It is also aiming for growth in 2019 and wants to take a further step forward in business. However, it remains aware that the economy, especially in the European markets, has lost momentum since the second half of 2018. The uncertainties surrounding Brexit, declining sales figures in the automotive industry, and last but not least, the trade disputes between the USA and China may all have a dampening effect.
Bossard is aware that this year’s economic development is pegged at a significantly lower level than in 2017 and 2018. In view of these challenging conditions it is the company's goal to exceed the sales mark of CHF 900 million in the current financial year. At the same time, it wants to maintain the profitability at an above-average level for the industry. This outlook does assume that there will be no fundamental shake-ups in the markets and that currency fluctuations will not drastically affect results.
