Bossard's interim report for the first half 2019, reflects "noticeable signs of a slowdown in economic growth" in industrialised markets.
Bossard reported a 3.2% fall in sales to CHF 218.7 million (-1.6% in local currency) for its second quarter. For the first half Bossard posted a 1.0% increase to CHF 450.9 million (+1.9% in local currency).
Bossard says the slowing economy plus the renewed strength of the Swiss Franc are notably affecting business in Europe. European sales in the second quarter were 1.9% down on same period 2018, at CHF 125.9 million. For the first half of 2019 the European business posted 1.7% growth to CHF 264.8 million (4.2% increase in local currency). Bossard describes a mixed overall demand picture with some business units posting double-digit growth rates, whereas others felt the effects of a weaker economic environment.
Bossard says that, following pleasing business performance in 2017 and 2018, it is now also fighting headwinds in America in recent months. For the second quarter, net sales fell 9.9% to CHF 55.3 million (-11.2% in local currency). First half sales declined 5.1% to CHF 113.4 million (-8.3% in local currency). Bossard says one reason is that a number of customer projects from the previous year have now completed. However, it also notes that in general it faced weaker demand from major US customers.
Asian sales in the second quarter increased 3.9% to CHF 37.5 million (+7.1% in local currency). First half sales increased 9.7% to CHF 72.7 million (+12% in local currency). Bossard says the effects of the US-China trade dispute can be felt but it continued to post growth in China, India and Taiwan.
Bossard reported a net income of CHF 41.6 million for the first half 2019 (previous year CHF 49 million). Return on sales dropped to 9.2%, from 11% in same period previous year. Bossard cites waning demand, plus additional investments to expand the services portfolio in Smart Factory Logistics and Engineering. These long-term and targeted investments in expansion of services, the company said, mean high initial expenses, especially in personnel costs. It also said it was currently observing a rise in labour costs as a direct result of high employment levels in various industrialised countries.
Based on the declining trend in purchasing manager indices, Bossard expects demand is also likely be moderate in the second half of the year. Against this backdrop, it says, the EBIT margin for 2019 is expected to be at the lower end of the 10% - 13% target range.
Bossard's detailed semi-annual report will be published on 22nd August.
Having held senior management roles in leading automotive and fastener businesses, Phil joined Fastener + Fixing Magazine as editor in 2002. Convinced there is no substitute for ‘being there’, over 15 years of visits and interviews around the world means he has accumulated an extraordinary knowledge and perspective of the global fastener industry, reflected in his incisive and thought provoking reporting.