Bossard Group says it continued to face challenging market conditions in Q3 2019. Sales in the quarter were up 2.7% year on year to CHF 218.5 million (+3.2% in local currency). American business conditions were difficult.
For the first nine months, Bossard posted sales of CHF 669.4 million, an increase of 1.6% (+2.7% in local currency). Adjusted for acquisitions, sales declined 0.6% year on year in local currency. 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 says the economic environment in Europe is becoming more challenging. Third quarter sales rose 8.1% to CHF 127.1 million (+ 9.6% in local currency). The increase includes the acquisition of Boysen, consolidated since July 2019. Adjusted for acquisitions, third quarter growth was 1.6% in local currency. In the first nine months, European business grew 3.6% to CHF 391.9 million (+6.4% in local currency). Excluding acquisitions sales were up 2.1% in local currency.
Bossard described American business conditions as difficult. Net sales declined 10.9% to CHF 53.8 million (-11.8% in local currency). Bossard identifies several reasons. Some customer projects, stimulating growth in 2018, were finally concluded. The slowing economy led to lower demand from a number of major customers. Additionally, the product mix of the largest US electric vehicle manufacturer has changed markedly since the introduction of its new model series, driving sales down.
Bossard says the effects of the trade dispute between the USA and China are becoming increasingly tangible in Asia. The Group was still able to increase Q3 sales by 8.4% to CHF 37.6 million (+8% in local currency). The continued growth is also due to previous years’ investments in expanding the distribution network and in modernising infrastructures. In the first nine months, Bossard posted growth of 9.2% in Asia (+11.4% in local currency). Without acquisitions the increase was 5.9% in local currency.
In the short term, Bossard says, it expects market conditions to remain challenging. The purchasing managers’ indices in key markets are trending downward, pointing to “rather modest demand” and Bossard says “little has changed with respect to political uncertainties”. Bossard cites particularly the trade dispute between the USA and China and BREXIT.
Bossard expects full year sales full year between CHF 860 million and CHF 880 million (2018: CHF 871.1 million) with an EBIT margin at the lower end of the target range of 10 to 13%.
The Group concludes: “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.”
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 17 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.