In a challenging market environment, the Bossard Group increased sales in the first quarter of 2016 by 0.9% 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 the company's 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 American 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% of the total sales volume of the Bossard Group, is seeing positive developments in a number of sales markets. In particular, it recorded growth in key markets such as Germany, France and Denmark. This encouraging business development has been a major reason why Bossard was able to compensate for a drop in demand in Switzerland. Overall, sales in Europe rose by 2.5% to CHF 103.6 million (+1.4% in local currency). A major reason for its resilience in a challenging market environment is the company's targeted acquisition policy, which has solidified Bossard’s competitive position in Europe over the past years.
Contrasting America business
In its America business, sales dropped by 0.9% over the previous year to CHF 43.8 million. In local currency, this corresponds to a decrease of 4.8%. These numbers underscore the demand situation at two of its key customers: While sales to the leading U.S. 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, the company benefitted from an increase in business from the largest U.S. electric vehicle manufacturer. Thanks to planned production increases, Bossard is 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, Bossard recorded sales of CHF 23 million, slightly below the previous year. In local currency, it recorded a slight increase in sales of 0.9%. 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.
“After a weak third and fourth quarter of 2015, we had a good start into 2016. On average, sales were 7% 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,” emphasizes CEO David Dean.
SALES FIRST QUARTER 2016
The leading indicators relevant to Bossard's business, such as the purchasing manager indices in major sales markets, suggest a slight improvement. The company will find out in the weeks and months to come if these positive signals are sustainable. Based on its current understanding of these markets, the company expects that 2016 will bring positive growth, assuming the currency situation remains unchanged.