Bossard Holding AG

Welcome to our annual Financial Analyst and Media Conference 2026. We are streaming this event and will make it available later this afternoon. Stefan Zehnder, our CFO, and I would like to guide you through the following agenda. I will start with the Key Developments 2025. Stefan Zehnder will then navigate you through the financials. I will continue with our Strategy 200 progress and our strategic priorities for 2026. For those that are not familiar with Bossart, the Strategy 200 defines our strategic ambition towards 2031, when Bossart turns 200 years old. The strategy and its initiatives are also described in detail in our Investors Manual available online. After this, I will briefly reiterate our mid-term financial targets, and we will then be happy to answer your questions. So let me start with the Key Developments 2025. I'd like to split those in two sections, Market Developments and Boss-out-related Key Developments. From a market perspective, we were faced with another challenging market environment with ongoing geopolitical and economic uncertainties. Asia, particularly India and Malaysia, showed positive market dynamics, whereas Europe and the Americas only stabilized in the second half of the year, partially supported by tariff-related price increases in the US. We were faced with weakening demand, especially in export-oriented and cyclical industries. These were offset by solid momentum in sunrise industries such as aerospace, railway, data center, energy, semiconductor, and automation industries. The lack of staff, higher cost pressure, and ongoing digitalization led to an increasing demand for automated, data-driven, sea parts management solutions. Throughout the year, we experienced a significant Swiss franc appreciation versus most currencies. From a Basel perspective, we benefited from a strong pipeline in Sunrise Industries. Our activities led to slight growth over the year with acceleration in the second half. Our service sales activities resulted in accelerated implementation of smart factory services across the globe. with a five-year compound annual growth rate of 5.1% for smart factory logistics and over 100% for smart factory assembly, strengthening customer relationships and differentiation. The acquisition of Ferdinand Gross, a major fastener distributor in Germany with €80 million in sales and 250 employees, enforced our market position in Europe, namely in Germany, Poland and Hungary. We strengthened our operations engine with the rollout of Microsoft Dynamics 365 in six additional countries. And finally, a group reorganization led to a leaner group executive board and lower cost, moving from seven to currently five members. With Susan Salzbrenner, head of global P&O, leaving Bossart as per October last year, we decided to reallocate our group, people and organization activities into the regions. With the departure of Rolf Ritter, CEO of Passat Central Europe, end of last year, we decided not to replace the function and to redistribute responsibilities in Europe. From a financial perspective, we are back to over 1 billion Swiss franc in sales at 10% EBIT margin in 2025. The red areas show a global purchase manager index below 50%, And looking at the history, this only happened five times in the last 20 years. In 2009, in 2020, COVID, and three years in a row since 2023, due to the normalization in supply chains and geopolitical turmoil, and we are still in stormy waters globally. Yet we continuously see lots of opportunities with our business model, which will allow us to outgrow the market, but more to this later. Stefan Zehnder, our CFO, will now navigate you through the financial review 2025 more in detail. Stefan, please. Thank you.

Good afternoon, ladies and gentlemen. The past financial year was characterized by a demanding markets environment, largely due to geopolitical uncertainties and tariff issues. which increased planning uncertainties for many market participants. Additionally, the sharp rise of the Swiss franc against most other currencies affected the group's performance negatively. Despite the market conditions, we remain committed to strengthen the group's key positions in the industries, expanding our regional reach and further implementing the new IT platform. From a financial perspective, there are a few notable achievements in 2025 to be mentioned. The group delivered a resilient financial performance and sustained progress in its strategic objectives. Solid profitability was achieved while maintaining a stable gross profit margin, reflecting disciplined pricing and cost management. A strong equity ratio underscores the robustness of the balance sheet and financial resilience. Cash flow from operating activities before changes in networking capital remained stable, providing a sound basis for funding operations and strategic initiatives. And the acquisition of Ferdinand Gross was executed successfully and strengthened the group's long-term growth and value creation potential. In this volatile environment, Bosset achieved sales of 1 billion and 68.9 million Swiss francs, an increase of 8.6% compared to the prior year, whereby the appreciation of the Swiss franc impacted the sales development negatively by 3.6%. The group was able to generate an organic growth of 2%. Whereas the first half of 2025 was characterized by trade conflicts and tariff discussions, in the second half, gradual stabilization became apparent in Europe and America. Acquisitions contributed 10.2% to the sales growth. Bossert again benefited from its broad and global customer base and its limited dependency on a single industry. The Bosscher Group grew well in the railway, aerospace, energy and the semiconductor-related electronics industries. At the same time, demand for digitalized and automated C-parts management system persisted. In 2025, the business performance was not only influenced by the economic environment, but also by accounting adjustments related to the acquisitions. The so-called purchase price allocation, in short PPA, is mainly related to inventory with a temporary negative impact on gross profit of 5.1 million Swiss francs in 2025. Despite higher volatility and price intensity, the adjusted gross profit margin excluding PPA effects was at 32.8%, representing only a marginal decrease compared to the prior year's level of 33%. The gross profit margin including PPA effects was at 32.3%. Though in line with the group's growth, sales and administrative expenses increased, but under proportionally by 6.3%, from 227 million to 241.4 million Swiss francs. At the same time, the number of full-time equivalents increased from 2,924 to 3,156, mainly due to the acquisition of Ferdinand Gross. The increase in cost was primarily due to dimension acquisition and investments in the rollout of the new ERP system. This included also higher license fees to accommodate with a greater number of system users and expanded commercial support required during the implementation phase, in addition to higher wage costs. Regardless of the market conditions, the gross profit margin caused by the PPA effect and higher operating expenses had an impact on profitability. Including PPA effects, EBIT was at 106.6 million Swiss francs, corresponding to an EBIT margin of 10%. The adjusted EBIT, which includes PPA effects on inventories and intangible assets, reached 112 million in comparison to 100.1 million Swiss francs in the prior year, which results in an EBIT margin of 10.5%. The financial results amounted to 9.2 million in comparison to 5.5 million Swiss francs in the previous year. Even though net debt increased markedly, this disproportionate increase in the financial result is entirely due to the strengthening of the Swiss franc, which led to a negative currency impact. While a positive contribution of 1.5 million Swiss franc resulted from the foreign currency valuation in the previous year, we experienced the negative impact of 2 million Swiss franc in 2025. Compared to prior year, net income decreased slightly from 75.3 million to 74.6 million Swiss francs, whereas the net income margin decreased from 7.7 to 7%. The currency impact in 2025 was not insignificant. As mentioned in the past, the Bosse Group has a relatively good natural hedge. This is because income and expenses are typically occurred in the same currency areas. However, currency fluctuations during the 2025 financial year impacted the consolidated financial statements. Consequently, the sales and profits of our foreign subsidiaries were reduced when translated into our reporting currency, the Swiss franc. This currency effect can clearly be seen at the sales and EBIT level. excluding the translation effect, meaning applying the 2024 exchange rate to the period 2025, sales would amount to 1 billion and 104.2 million Swiss francs, which corresponds to an increase of 12.2% instead of 8.6%. On a comparable exchange rate basis, excluding valuation effects from the appreciation of the Swiss franc EBIT 2025, would amount to 112.5 million, which would represent an increase of 12.4% to prior year. The corresponding EBIT margin would be in line with the 10.2% achieved in 2024. This short analysis shows particularly the EBIT growth would be on an equal currency basis at 12.4% instead of 6.5, and equivalent to an EBIT With PPA effect adjustment, EBIT would be at 117.9 million, equivalent to an EBIT margin of 10.7% and the growth of 17.8%. Of course, the numbers are what they are. But from an operational perspective, it shows that we were able to increase this EBIT disproportionately on a comparable basis. From profit back to sales. A look at the sales development in the individual market regions shows a diverse picture. In America, sales declined by 3% to 228.6 million in the financial year 2025. However, in local currency, sales growth of 3.3% was achieved. Industrial sectors of electronics, railway and medical technology made a positive contribution to sales. In addition, the pass-through of import tariffs supported the sales growth. An increased stabilization was noticeable in this region over the course of the second half of the year. In the fields of electromobility and agriculture, demand remained subdued. The appreciation of the Swiss franc against the US dollar had a negative impact on the overall sales development. In Europe, the group achieved a sales increase of 14.4% to 646.9 million Swiss franc. In local currency, the sales growth amounted to 15.7%. The economic environment continued to be marked by uncertainties. However, gradual stabilization became apparent in the second half of the year, also in this region. In this volatile market environment, sales growth was achieved in the industrial sectors of railway, aerospace, as well as electronics and energy. The German Ferdinand Gross Group, consolidated since the beginning of 2025, made a significant contribution to the growth of the Bosse Group. Adjusted for acquisitions, sales for the full year declined by 1.6% in local currency. In Asia, sales increased by 5.6% to 193.4 million, while sales growth in local currency was at 12.1%. This growth was driven by the industrial sectors of mechanical engineering, railway and energy. At the regional level, The gradual recovery in demand in China continued, though remained volatile. In India, BOSA benefited from the Make in India initiative, while in Malaysia from nearshoring trends, which had a positive impact on the semiconductor and electronics industries. In addition, further attractive opportunities were identified in this region, among others in the sectors of automation and robotics. and new local customers were acquired. However, the appreciation of the Swiss franc against Asian currencies resulted in a negative currency effect also in this region. Upon review of the balance sheet, total assets rose from 844 million to 902 million Swiss franc, primarily attributable to the acquisition of Ferdinand Gross made at the beginning of 2025. During the period, the equity ratio decreased from 46.5% in the prior year to 43.2%. This reduction was caused by two factors. The negative translation impact resulting from the appreciation of the Swiss franc and the netting of the goodwill from the acquisition against the equity. This in accordance with the applicable accounting standards used by Bossart. Despite the decrease in equity ratio, it still highlights the group's solid capital structure. The operating network in capital increased from 470 million in 2024 to 499 million in 2025. On the one hand, this was due to the acquisition effect of Ferdinand Gross, and on the other hand, due to the higher sales in Q4 2025, in comparison to Q4 2024, which resulted in higher accounts receivables and therefore in a higher network in capital. However, in relation to sales, the capital intensity slightly decreased from 47.7% in 2024 to 46.7%. With a focus on the balance sheet ratios, year-on-year net debt increased from 245 million to 311 million Swiss francs. The increase was primarily related to the mentioned acquisition and the higher operating network in capital, as indicated before. The gearing net debt measures against equity increased from 0.6 to 0.8, whereas net debt in relation to EBITDA increased from 1.9 to 2.3 times and exceeding our conservative set long-term funding ratio of two. The KPI is closely watched and managed and did improve after it reached 2.8 times by mid-year 2025. Total capital expenditures amounted to 35.6 million in 2025. Thereof, 3.2 million was spent on office and warehouse maintenance and investments related to ESG initiatives. We invested 6.2 million in smart devices, installing them at our customer sites as part of our smart factory solutions. An amount of 8.6 million was allocated for replacement investments within the ongoing operations. And we invested another substantial amount of 17.6 million Swiss francs into our digitalization initiatives. The biggest share of this investment was again dedicated to the rollout of the new ERP system. In 2025, we successfully completed another six rollouts. Additional deployments are planned in Switzerland, Spain, and China in 2026. Finally, a look at the cash flow statements. Despite the lower profitability, the cash flow from operating activities before changes in networking capital increased slightly from 99.8 million to 102.9 million. On the opposite, the cash flow from operating activities decreased clearly from 126.8 million to 84.4 million Swiss franc. As mentioned before, this is because of the acquisition effect and the higher sales in Q4 2025 in comparison to 2024. Cash flow from investing activities totaled 93.2 million compared to 95 million Swiss franc in the prior year. and was therefore pretty much equal to the cash out for tangible and intangible assets, as well as for acquisitions. Overall, the 2025 resulted in a negative free cash flow of 8.8 million Swiss franc, after the prior year's positive free cash flow of 31.2 million. Without considering the cash out for acquisitions, a free cash flow of 49.6 million was achieved. As always, finally, a word on the dividends. At the upcoming Annual General Meeting of Shareholders, the Board of Directors will propose a dividend of 3,90 Swiss francs per registered A-share, unchanged from the prior year and in line with the Group's dividend policy of a 40% payout of net income. Ladies and gentlemen, with this brief review, I conclude my comments on the financial year 2025. Thank you very much for your attention. And back to you, Daniel. Thank you.

Thank you, Stefan. I now would like to give you an overview of our strategy 200 progress and focus areas for 2026. As you know, we follow a strategy of accelerated, profitable and sustainable growth based on a proven business model organically and through acquisitions to achieve relevant market shares in our key markets and this through seven strategic initiatives. I will not go through all the initiatives, but would like to highlight the five initiatives marked white on the slide. Together we create the sales engine, the operations engine, innovation and sustainability. In a fast changing world, global collaboration is more important than ever. Sharing expertise across regions, functions and hierarchies is essential to avoid staff replacements and hiring new people for new tasks and adding cost. It is therefore we strongly foster our guiding principles, namely collaboration. Succession planning, young talent and leadership development are the key to ensure a sustainable organization for the future. We invest in leadership training programs and place young talents in new leadership functions. Focusing on growth verticals enables us to accelerate sales and outgrow the market, namely in markets like aerospace, agriculture, automation, robotics and semiconductor equipment. Examples of this are recently won projects from existing and new customers. In January, Pilatus Aircraft placed a mid-double-digit million Swiss franc order for the PC24 private jet. Given the current high market demand for aerospace products, imagine lead times of up to 18 months for a fastener, Pilatus decided to place orders five years in advance to secure the supply of fasteners. We see similar demand patterns now with other aerospace customers worldwide. Two weeks ago, we visited Airbus helicopters in Germany. They are also in growth pain, as they said, and we're glad to be one of their key suppliers. So you see, the aerospace business is literally taking off. Then we won a global contract with ACCO, a global agricultural equipment company headquartered in the U.S., producing tractors, namely brands like Massey Ferguson, Fendt or Valtra. The reason for winning this account was our smart factory capabilities, winning over a competitor. And by the end of last year, we installed a couple of thousand smart bins in four locations across the United States. Starting with a high single digit million dollar contract this year in America, we are currently exploring new opportunities in France, Germany and Finland. Another example of a growth opportunity is Lam Research, a US-based semiconductor equipment company, where we were awarded a high single digit million US dollar business in Malaysia last year. with full year sales impact in 2026 on a multiple year contract. We're currently exploring further opportunities in the US. More opportunities are provided in the data center ecosystem. Many of the well-known brands shown on the slide are existing BossHut customers with significant upside potential. For example, Dell, visible on the top right, second to the top, producing server racks for AI data centers. Dell is an existing customer in the US and Ireland. Three weeks ago, we visited their headquarter in Austin, Texas, including a server rack producing site. One rack about the size of a living room closet or for the Swiss people, a toy toilet size. costs about two to three million US dollars and weighs almost two tons. Dell's production rate has been growing significantly in the last months. We're happy to be a key supplier to Dell and many other well-known brands you see on the chart, such as Eaton, Le Grand, Carrier, Siemens, ABB or Schneider Electric. Besides the focus on growth industries, we are following a concerted global effort to penetrate international customers deep and wide. In a program called G60, we defined 60 global customers, which we serve at least in one country and see a potential to win and scale in other countries across the globe. Two examples were already mentioned before. ACCO and LAM research. Another example would be SEW Eurodrive on the bottom right with the red logo. It stands for Süddeutsche Elektromotorenwerke in Bruchsal, which is a German customer producing electrical engines and growing double digit as well. We're currently serving them very successfully in US and Italy, including smart factory services. I have visited both sites personally in the last four weeks, and I'm almost sure we have great opportunities to scale. We see big potential in Germany, where we have started acquisition activities using the existing success stories. There is a global team for each of these defined G60 companies with clear acquisition targets and regular global progress reporting. Another element in our sales engine is the shift towards more digital lead generation and a higher sales conversion rate. For this, and in order to monitor the progress of our sales acceleration activities, we introduced the global KPI dashboard last October. What you see here is just an example dashboard for a business unit, so no need to read and understand. but showing basically the sales performance, the year-to-day growth rate, sales per product for each customer vertical, service sales development, like engineering and smart factory service development, the open opportunities, and on the bottom right in the green field, the growth potential in a defined stage gate structure called watch list in BossArt terminology. And we have this for each business unit. You can aggregate it by group, by customer verticals, by key account managers, etc. This allows for global transparency, performance tracking, visibility and internal benchmarking. Along with this, we have started a sales acceleration coaching program for sales managers to ensure the tools are used in a structured way following a defined sales planning process, globally aligned. As one of our sales trainers always says, sales is not an art, it is more a skill set and actually a structured procedure. And the last piece in our sales engine is our emphasis on smart factory automated data-driven C-parts management solutions. What you see here on the right is a picture taken at the aforementioned site of SCW Eurodrive, remember the red logo, in Italy last week. By the way, what you see also is in front of our smart bin rack, an automated guided vehicle produced by SCW themselves. I asked them, where do you produce this? Where do you buy it? They said, well, we produce it ourselves. And in this factory, they had 50 employees and 45 HEVs. And each HEV also is used as an assembly table. So just to give you a bit of glimpse of how advanced even Italian companies can be. Sorry, I'm not sure there are any Italians in here. The four strategic advantages we see with our smart factory installations are the following. They create customer stickiness. They enable cross-selling potential for other services or products in the same factory. They enable to tap different customer wallets, for example, in logistics and assembly, besides product sales. And they are simply a door opener for new customers. After the sales engine, the operations engine is an initiative which enables us to streamline processes, increase transparency and reduce total cost. By the end of 2025, we introduced Microsoft D365 in 20 business units across the globe. And with this, we reached a global sales coverage of 42%. Three more rollouts are following in Europe and Asia this year. This will provide us with a global sales coverage of 61% by end of 2026. We're using AI to further increase our internal efficiency, for example, by introducing a global document processing application, which enables us to automate processing purchase orders, invoices, certificates, drawings, or delivery notes, and save valuable time of our employees to dedicate more time to internal and external customers. For those that joined the Capital Markets Day this year in Biel, It was also presented by our AI colleague more in detail. We regard AI not as artificial intelligence, but more as augmented intelligence, helping everybody to work smarter and to improve our customer services and to reduce fears from eliminating jobs. In addition, we analyzed our supply chain and pricing processes and have introduced tools for internal benchmarking of best global practices and applications for speeding up quoting and pricing processes. Bossert is not a fastener innovator, but we are driven by innovating cutting edge services, supporting customers in increasing their productivity, focusing on C parts management in production and logistics. Our innovation team, together with the global innovation community, explores new opportunities. On top, we have been investing in partnerships with leading institutes for technology development, for example, with ETH in Zurich. Last year, we participated in the ETH Exploration Lab project, where we had eight engineering students, different mechanical, electrical, etc., in-house for three months, working on 40 internal ideas, resulting in six tangible products, which are now in the process of being implemented and commercialized. For example, a rechargeable and easily replaceable smart pin battery, or a camera system for smart factory assembly, which enables a customer to record a production process on video, and through AI, generate work instructions within minutes. We will continue this journey with the ambition to remain the innovation leader in smart factory solutions for sea parts. Last but not least, Bossart committed itself to a CO2 footprint reduction of 50% from 2023 to 2031. We are on track and will continue to measure our progress globally. Besides, we are compliant with global standards and regulations like the CSRD for non-financial reporting. Some of you may have seen our non-financial report already. And requirements like CBAM, the, for example, carbon border adjustment mechanism and other regulations. This leads me to the midterm financial targets. which we would like to reiterate. Organic sales growth of bigger than 5%. And we know the number sounds high, yet this is still our midterm targets going through the cycles towards the strategy 2031. EBIT margin of between 12% and 15%, equity ratio above 40%, and the dividend payout ratio, as Stefan already iterated, 40% of net income. With this, I would like to close my elaboration on the strategy process and our focus areas forward. And now we're very happy to take your questions. Thank you.