Release Date: July 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bossard Holding AG (XSWX:BOSN, Financial) achieved a satisfactory result in the first half of 2024 despite a challenging economic environment.
- The company saw new opportunities and customers in the electronics, semiconductor, and aerospace industries.
- Gross profit margins were higher than last year, supported by a lower cost base.
- Successful rollout of the new ERP system in France and South Africa, enhancing digital capabilities.
- Acquisition of Dejond Fastening in Belgium, strengthening market presence in Europe and expanding customer base in key industries.
Negative Points
- Sales decreased by 11.7% compared to the prior year, with a 9.3% organic sales drop.
- The economic and geopolitical situation remains volatile, impacting demand and financial performance.
- EBIT decreased by 16.6%, and the EBIT margin dropped from 12.1% to 11.4%.
- Net income decreased from CHF49.9 million to CHF42.4 million, with a return on sales falling to 8.3%.
- Sales in America fell by 20.4%, and Europe saw an 8.5% drop, reflecting cyclical downturns and normalization effects.
Q & A Highlights
Q: Can you provide insights on the revenue trends across regions for April, May, and June, and any preliminary insights into July numbers?
A: We observed slight improvements in Q2 compared to Q1 across all regions. In China, local customer business increased, while Europe saw the end of normalization and a slow restart of buying. The US experienced a flattening in large account activities. No insights into July numbers are available yet. (Daniel Bossard, CEO)
Q: Historically, EBIT margins in the second half are lower than the first half. Is this trend expected to continue?
A: While the environment remains challenging, we aim to maintain double-digit EBIT margins by staying cautious on costs. If sales stabilize, maintaining double-digit margins is achievable. (Stephan Zehnder, CFO)
Q: Regarding cost of goods sold (COGS) as a percentage of sales, is the recent reduction a new run rate or a one-time occurrence?
A: The reduction in COGS is partly due to cost-saving initiatives and fewer full-time equivalents (FTEs). Some costs, like internal travel and consultancy, may return once conditions normalize. (Stephan Zehnder, CFO)
Q: Can you quantify the interest result excluding FX effects?
A: The positive impact from currency was about CHF1.8 million, with an additional CHF800,000 from higher interest income and lower interest expenses due to reduced net debt. (Stephan Zehnder, CFO)
Q: CapEx was lower than expected. Will it accelerate in the second half of the year?
A: We expect total CapEx for the year to be between CHF34 million and CHF36 million, implying higher CapEx of CHF18 million to CHF20 million in the second half. (Stephan Zehnder, CFO)
Q: How is the Strategy 200 progressing, particularly in terms of acquisitions and digitalization?
A: We continue to pursue acquisitions, aiming for one-third of annual growth through this route. Digitalization efforts, including the rollout of Microsoft Dynamics 365, are ongoing, with significant investments planned until 2026. (Daniel Bossard, CEO)
Q: What are the key strategic initiatives under the Strategy 200?
A: Key initiatives include "Together We Create" for internal and external collaboration, a focus on growth verticals in the sales engine, and the operations engine's digitalization efforts. (Daniel Bossard, CEO)
Q: What is the outlook for the second half of 2024?
A: We remain cautiously optimistic, focusing on efficiency and productivity. While economic recovery signs are limited, we are winning new opportunities and maintaining a cautious approach to costs. (Daniel Bossard, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
