PROVEN PRODUCTIVITY Together We Create. ANNUAL REPORT 2020 PROVEN PRODUCTIVITY Bossard’s global team is fully commited to Proven Productivity. Together we create sustainable values for our customers. Short profile The Bossard Group is a leading global provider is considered a pioneer in developing intelligent of product solutions and services in industrial production facilities in line with Industry 4.0. fastening and assembly technology. More than 1 million items as well as proven expertise in With 2,500 employees at 83 locations in 31 technical consulting and inventory manage- countries throughout the world, the Bossard ment distinguishes the Bossard Group. Group generated CHF 812.8 million in sales in the financial year 2020. Bossard is listed on the Bossard was founded in Zug in 1831. Today SIX Swiss Exchange. local and multinational companies count on Bossard’s expertise to increase their producti- vity – with success. Bossard calls this concept, which is also a promise to its customers, “Proven Productivity.” This includes, among other things, optimizing processes and reduc- ing inventories to increase the efficiency and productivity sustainably. In addition, Bossard CONTENTS 02 At a glance 04 Report to the shareholders 07 Together We Create The Company 22 Business Model 26 Business Resilience and Strategy 200 28 Values and Sustainability 46 Risk Management 48 Corporate Governance 76 Compensation Report 95 Financial Report PDF Online report Annual report Video stories You can access the Online Report and the Annual Report in PDF format at annualreport.bossard.com AT A GLANCE Gratifiying results in a difficult market environment A year full of challenges ended above expecta- tions. The results achieved reflect Bossard Group's resilience in a volatile and adverse market envi- ronment, which is rooted in its broadly diversified customer base in different industry segments. Key figures in CHF 1,000 2020 2019 Net sales 812,792 876,224 Change to prior year in % -7.2 0.6 Gross profit 248,730 273,253 Personnel expenses 165,728 180,920 in % of net sales 20.4 20.6 EBITDA 105,863 113,612 in % of net sales 13.0 13.0 EBIT 86,386 95,705 in % of net sales 10.6 10.9 Net income 67,751 75,959 in % of net sales 8.3 8.7 Cash flow 1) 87,228 93,866 in % of net sales 10.7 10.7 Capital expenditures 23,927 34,649 Operating net working capital 2) 346,982 359,745 in % of net sales 42.7 41.1 Net debt 155,655 187,716 Shareholders’ equity 322,340 304,524 in % of total assets 50.3 46.7 Total assets 641,308 652,729 Return on equity 21.6 24.7 Return on average capital employed (ROCE) 14.7 16.8 Dividend yield in % (Basis: share price at Dec. 31) 2.5 1.1 1) Net income + depreciation and amortization Earnings per share 3) 4) 2) Accounts receivable, inventories, Registered A share in CHF 8.73 9.73 less accounts payable Registered B share in CHF 1.75 1.95 3) Basis: Average capital entitled to dividend Price/earnings ratio (Basis: share price at Dec. 31) 20.4 18.0 4) Basis: Share attributable to Price/book value per share 4.3 4.4 shareholders of Bossard Holding AG Annual weighted average number of employees 5) 2,410 2,447 5) Average full time equivalent 6) Basis: Annual weighted average 6) Net sales per employee 337.3 358.1 number of employees 2 BOSSARD ANNUAL REPORT 2020 | AT A GLANCE Net Sales Geographic in CHF million Sales Distribution 2018 2019 in % 871 876 2020 2017 18 813 As ia 786 2016 695 2 5 5 7 A E m u r e o r i p c e a EBIT Net Income in CHF million in CHF million 2018 2018 2017 2017 109 2019 85 2019 80 97 96 2020 76 2020 2016 2016 86 68 79 62 Cost pressure is forcing many industrial en- customers. With our Assembly Technology terprises to focus on leaner processes and cost Expert services, we support our customers structures. Together with our customers, we with engineering expertise from product analyze ways and opportunities to optimize design to production. In addition, our Smart costs and reduce lead times, thus boosting Factory Logistics solutions offer our custom- efficiency and productivity. Our methods and ers not only a smooth and reliable supply of technologies support this effort and today are B- and C-parts but also make their production core elements of profitable growth for our ready for the future. AT A GLANCE | BOSSARD ANNUAL REPORT 2020 3 REPORT TO THE SHAREHOLDERS Resilience and solid profitability in a tough environment Dear Shareholders, We will remember the past financial year for a long time to come. The severe impact of the COVID-19 pandemic on our economic and social lives in 2020 was all-consuming. Although demand in key sales markets plummeted periodically and the strong Swiss franc once again put a strain on the Bossard Group, we managed to maintain sales and profitability at a high level thanks to our remarkable resilience. The board of directors and the executive committee are pleased with the 2020 results: Sales totaled CHF 812.8 million (previous year: CHF 876.2 million). The EBIT was CHF 86.4 million (previous year: CHF 95.7 million), corre- sponding to an EBIT margin of 10.6 percent (prior year: 10.9 percent) – a good result in an extremely challenging year. This is equally true for net income, which reached CHF 67.8 million (previous year: CHF 76.0 million). Dr. Thomas Schmuckli Resilience thanks to broad diversification Chairman of the board of directors The resilience of the Bossard Group in the midst of an unprecedented crisis is rooted in a variety of fac- tors. First and foremost it based on the Group’s broad The business model, which has been consistently diversification. The crisis unleashed by the pandem- developed in recent years, has passed its test impres- ic severely affected entire market segments and sively. therefore many of our customers. Our many years of dedication to the pursuit of new areas of growth Digitalization success and activity proved beneficial in the “Year of Corona,” Our investments in the field of digitalization paid leading to strong momentum from the healthcare off. They allowed us to continue our business activi- technology, semiconductor, railway, and electromo- ties largely without interruption even under diffi- bility sectors. cult conditions. Likewise, our geographic diversification helped us to The Smart Factory Logistics business, which sets up overcome the crisis in stages – starting in Asia, then and operates automated warehouse management in Europe and America, with the Chinese market ap- systems, moved forward virtually without a hitch, proaching pre-crisis levels in June of 2020. in some areas even expanding. The related expertise was in even greater demand in the past year. In a Bossard proved itself a reliable partner in every phase world dogged by the pandemic, systems that sup- of this economic downturn. The dual purchasing port machine-to-machine communication ultimate- strategy we have pursued for years to ensure alter- ly help reduce contact between employees and even native sources of procurement played a major role in automate entire processes. Thanks to our digitaliza- our success. It allowed us to retain our ability to tion efforts, we were able to further expand our tech- deliver in all world market regions even in the most nical seminars as well as our engineering projects. turbulent months. Bossard made a significant con- tribution to ensuring that manufacturing processes We are proud that our digital expertise allowed us could be maintained at customers' production sites. to optimize the use of our sales channels at every stage of the crisis to deliver products and offer ser- vices to our customers in a new way. 4 BOSSARD ANNUAL REPORT 2020 | REPORT TO THE SHAREHOLDERS by the results in the first and especially the third quarter. We also launched several exciting projects in America that will generate new growth – in the electromobility sector, for instance. In Asia, Bossard has been on a growth course for a number of years thanks to intensive investment ac- tivity. This success story was temporarily interrupt- ed by the pandemic in the first quarter of 2020, but by the second quarter several of our regional compa- nies were back on the path to growth. In the second half of the year, we again posted slight growth in lo- cal currency for the entire market region. Sustainability and social responsibility In this difficult market environment, the Bossard Group embraced its high level of social responsibility in the customary way. Our economic success rests with our employees, and we are committed to a mo- tivating and positive work environment. In spite of falling sales, there were no workforce reductions, Dr. Daniel Bossard which would have improved profitability only short- CEO term. On the contrary, Bossard is pursuing growth projects in all regions of the world, and we hope to unleash this potential together with our employees. Respectable performance in the regions In the 190-year history of the Bossard Group, we As you can imagine, dear Shareholders, the markets have learned that a mindset of sustainability pays in the individual world regions and countries devel- off in human resource policy as well. oped quite differently. In Europe, government restric- tions massively limited our customers’ freedom of Bossard’s “Strategy 200” action in a number of countries over many weeks. The “Strategy 200” developed during business year Our widely diversified customer base was a substan- 2020 makes clear that our company is ready and tial benefit, particularly in this extremely turbulent willing for another stage of expansion.