Board of directors maintains dividend – but at a reduced levelMarch 30, 2020 - Ad hoc announcement pursuant to Art. 53 LR
The board of directors of the Bossard Group has been thoroughly assessing the impact of the coronavirus crisis. After an in-depth analysis of the challenges that have arisen, the board is convinced that all necessary measures have been taken to protect employees while ensuring business continuity. As a result, Bossard continues to be a reliable supply partner in all its sales markets. At the moment, it is impossible to estimate the long-term impact of the coronavirus crisis. In this volatile market environment, the board of directors is determined to safeguard the Group’s liquidity in case of a longer-lasting market slump. At the same time, the board wants shareholders to participate in the solid 2019 results, taking into account the current challenges. At the annual general meeting of shareholders, the board will therefore propose reducing its original dividend request by half, to CHF 2.00 per registered A share and CHF 0.40 per registered B share.
In an increasingly challenging market environment, the Bossard Group has performed well in the first weeks of the current financial year. After the first two months, the EBIT margin was near the upper end of the targeted range of 10 percent to 13 percent. Thanks to our global procurement network and risk management, which provides for alternative suppliers, our customers will continue to receive the best possible supply of fasteners. However, the acute worsening of the coronavirus crisis in virtually all industrialized countries has significantly changed Bossard’s market environment. Currently, it is not possible to predict how quickly the various countries – and hence our major sales markets – will recover in the course of this year and beyond. For this reason, the board of directors and the executive committee have completed a detailed assessment of the situation in order to counteract the turbulence caused by this crisis and to plan ahead.
In addition to various measures designed to maintain operating performance and profitability, the focus will be on far-sighted liquidity planning should the economic weakness persist. At the same time, the board wants shareholders to participate in the solid 2019 result as much as is appropriate given the current challenges. At the annual general meeting of shareholders on April 8, 2020, the board of directors of Bossard Holding AG will therefore propose reducing its original dividend request (agenda item 2.4 of the invitation to the annual general meeting of shareholders) by half, to CHF 2.00 per registered A share and CHF 0.40 per registered B share.
With an equity ratio of more than 40 percent and a gearing – the ratio of net debt to equity – of 0.7, the Bossard Group is on firm financial footing and has the necessary liquidity. For this reason, the board of director’s revised dividend payout request for the 2019 financial year is entirely preventive in nature; it aims to provide solid support for the Group’s financial planning and help absorb additional market upheavals. Ultimately, the board of director’s decision is based on the conviction that this measure is in the interest of all stakeholders, especially Bossard shareholders. Provided the market environment recovers significantly, the board of directors reserves the right to propose at the annual general meeting of shareholders in 2021 a higher dividend for the 2020 financial year than the current practice of paying out 40 % of net income to shareholders.
Regardless of the current market environment, Bossard is confident about the company’s medium- and long-term development: The Group is represented in all major industrial locations worldwide and supplies a broadly diversified customer base in high-growth industrial sectors. The recent investments in increasing office and warehouse capacities and the expansion of the product and services portfolio in Smart Factory Logistics and Engineering Services will additionally contribute to the Group’s future growth and competitiveness. In the current crisis, Bossard’s Smart Factory Logistics solutions give our customers visibility into their C-parts inventories and availability and allow them to proactively plan for changes in demand – perfectly in line with our Proven Productivity concept.