The Bossard Group has significantly increased its sales volume in the first quarter of 2015. In local currency, sales grew by as much as 8.2% compared to the first quarter of 2014; in Swiss francs this represents an increase of 5.1% to CHF 168.8 million. CEO David Dean regards the figures for the first quarter as affirmation of the investment policy that has been implemented. He explains the pleasing development as follows: “Acquisitions and other investments have enabled us to consolidate our market position in various countries.”
The Bossard Group continues on a growth trajectory, despite having to contend with a significant revaluation of the Swiss franc in the first quarter following the Swiss National Bank’s abolition of the minimum exchange rate against the Euro. A significant proportion of the 8.2% sales growth (in local currency) can be attributed to acquisitions and the increased collaboration with the largest U.S. manufacturer of electric vehicles. Without acquisitions, there would have been a decline in sales of 1.5% in local currency, corresponding to a downturn of 4.3% in Swiss francs.
Acquisition-related growth in Europe
In Europe, the Bossard Group is facing inconsistent market trends. As expected, there is some headwind to be felt following the significant revaluation of the Swiss franc, particularly in Switzerland: Sales on the home market are clearly in decline, owing to reduced sales volume and rebates resulting from the change in currency relations. Nevertheless, sales in Europe improved by 3.1% in local currency compared to the strong first quarter of 2014. In Swiss francs, however, this resulted in a decline of 4.4% to CHF 101.1 million due to the exchange rate adjustment. Without acquisitions, the sales figure would have fallen by 8.4% in Swiss francs (in local currency: -1.3%).
Sharp rise in sales in America
Business in America contributed significantly to the pleasing growth in the overall group. In this world region, Bossard’s sales soared up 30.4% to CHF 44.2 million (in local currency: +22.4%). The acquisition of the U.S. distributor Aero-Space Southwest, Inc. played a significant part in the upward sales trend. Without acquisition, there would have been a decline of 1.8% (in local currency: -7.8%). As expected, one major customer is continuing to operate under difficult business conditions, also resulting in reduced sales for Bossard. This is offset by the other U.S. business areas and is also being counteracted by the cooperation with the largest U.S. manufacturer of electric vehicles, a company distinguished by significantly rising sales volumes.
Further progress in Asia
In Asia, Bossard continues its success story of the previous quarters, though sales growth in China was below average in the first quarter. Overall, revenues increased by respectable 12.4% to CHF 23.5 million (in local currency: +7.8%), even though the group was not able to rely on additional volume from acquisitions in the Asian markets. It is clear that the investments made in the last few years are helping to open up individual markets.
A promising outlook
The Bossard management is expecting to see substantial sales growth for the overall year 2015, supported by the acquisition activity of the past few months. “We are aiming for sales of CHF 660 to 680 million, which would correspond to growth of between 13 and 16% in local currency,” emphasizes Dean. This is assuming, however, that the exchange rates do not undergo any further significant shifts. In Europe, Bossard is working on the assumption that the weak Euro will have a positive effect on demand over the course of the year. In America, the conditions for improved performance are in place: The acquisition of Aero-Space Southwest Inc., the growth in volume from collaboration with the largest U.S. manufacturer of electric vehicles and the positive trend in the traditional business will more than compensate for the fall in revenue from the collaboration with one other major customer. In Asia, the company is seeing further positive growth thanks to its development work.