The Bossard Group continued to face challenging market conditions in the third quarter 2019. Nonetheless, sales rose by 2.7% to CHF 218.5 million compared to the previous year (+3.2%in local currency). For the first nine months, the group posted sales of CHF 669.4 million, an increase of 1.6% (+2.7% in local currency). Adjusted for acquisitions, sales declined slightly by 0.6% 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% to CHF 127.1 million, which corresponds to a plus of 9.6% 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% in local currency. In the first nine months, business in Europe grew by 3.6% to CHF 391.9 million (+6.4% in local currency). Excluding the acquisitions made in 2019, the increase in sales amounted to 2.1% 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% to CHF 53.8 million (-11.8% 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 U.S. purchasing managers’ indices, led to lower demand from a number of major customers. Moreover, the product mix of the largest U.S. 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% to CHF 37.6 million (+8.0% 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% in Asia (+11.4% in local currency). Without the acquisition effect, the increase was 5.9% in local currency.
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 10-13%.
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.