SFS receives the "Global Supplier Award" from Bosch

News – 24 August 2021

With the "Global Supplier Award", the Bosch Group recognizes worldwide suppliers for outstanding performance in the manufacture and supply of products or services. SFS received the award in the category "Direct Purchasing – Mobility Solutions", making it one of the 46 award winners and at the same time best of Bosch's totally around 23,000 suppliers.

For years, now, SFS has been successfully positioning itself as a development partner for customers from the automotive industry. Innovations are being driven by trends toward greater comfort, better safety and increased efficiency as well as the overarching trend toward autonomous driving. For Bosch – an important, long-standing customer of the SFS Group – the company develops, produces and delivers ready-to-install components and assemblies for a variety of mobility solutions in the area of safety-relevant braking systems, for example, as well as active passenger protection.

Global production platform supplies customers locally
SFS was honored for its outstanding performance as one of Bosch’s most reliable suppliers. Other factors that contributed to this award include the company’s constant willingness to promote innovation and further development as well as its ability to act as a local supplier through its global production platform.

Award as an expression of a cooperative partnership
Already for the 17th time, the Bosch Group awarded its 46 best suppliers out of more than 23,000 service providers. The coveted awards were presented in a total of four categories. SFS accepted its distinction with pride in the "Direct Purchasing – Mobility Solutions" category as an expression of the companies’ reliable, longstanding and cooperative partnership. Today SFS experts are already working hard to develop innovative solutions for the projects of tomorrow and help write the next chapter of this success story.

SFS with significant sales and profit increase in 1H 2021

Ad hoc announcement pursuant to Art. 53 KR – 20 July 2021

Carried by a dynamic market environment, SFS Group generated a strong half-year result. Since SFS refrained predominantly from making redundancies during the pandemic, capacity was quickly ramped up again. SFS was therefore able to react quickly and flexibly to the increased demand from its customers. The focus on protecting employee health remained unchanged. Sales of CHF 957.8 million were generated in the first half of the year, which corresponds to year-on-year growth of 23.8%. The EBIT margin amounted to 17.1%. Thus, SFS emerged stronger from the crisis than before.

The signs of recovery in the market environment showing from the third quarter of 2020 continued unchanged during the first half of 2021. All three segments participated in the solid demand seen in nearly all end markets and regions, with some business units actually exceeding the expectations substantially.

Development by end market
in CHF million 1st half 2021
share
1st half 2020
share
Growth Organic growth
Automotive sector 225.6
23.6%
149.8
19.4%

50.6%

45.7%
Construction sector 314.9
32.9%
255.9
33.1%

23.0%

23.4%
Electro and electronics 170.8
17.8%
137.5
17.8%

24.2%

28.7%
Medical device industry 68.1
7.1%
66.8
8.6%

2.0%

7.1%
Other sectors 178.4
18.6%
163.7
21.1%

9.0%

6.1%

The SFS Group’s long-term ‘Local-for-Local’ strategy and its decision to make predominantly temporary adjustments to production capacity during the COVID-19 pandemic have proven to be prudent. By using the instruments available to temporarily reduce capacity during the financial year 2020, the Group was able to preserve jobs, expertise and production capabilities. That, in turn, enabled it to respond swiftly to the recovery in demand and benefit from the economic environment. Short-time working was discontinued during the reporting period in all areas except Aircraft.

In this market environment, SFS generated gross sales of CHF 957.8 million in the first half of 2021, which corresponds to year-on-year growth of 23.8%. Currency effects reduced sales growth by –1.2%. Compared with the first half of 2019 – before the COVID-19 pandemic – gross sales increased organically by 10.1%. Unfavourable currency effects and acquisition effects neutralised each other.

Influencing factors in CHF million Growth
Gross sales 1st half 2020 773.7
Currency impact –9.0 –1.2%
Change in scope* 10.7 1.4%
Organic growth 182.4 23.6%
Gross sales 1st half 2021 957.8 23.8%

*Truelove & Maclean, Inc (T&M, since 1.4.2020)

High capacity utilisation has positive impact on profitability
The dynamic market demand resulted in a high level of capacity utilisation, which had a significantly positive impact on profitability. The EBIT margin of 17.1% in the first half of 2021 corresponds to a year-on-year increase of 7.9 percentage points. Net income amounted to CHF 134.1 million. This development was supported by prudent cost management and the fact that higher prices for raw materials and transport were passed on through the value chain. Innovation programmes and investments made to implement growth projects continued unchanged during the reporting period. Capital expenditure for the first half year amounted to CHF 46.9 million, which corresponds to 4.9% of sales (prior-year period: 7.3%).

Engineered Components (EC) segment
Participated at strong market recovery

The Engineered Components segment benefited from high demand across the board that exceeded expectations in most end markets. This positive development was particularly strong in the Automotive and Electronics divisions. Overall, this resulted in organic growth of 29.1% compared with the first half of 2020. Investment to expand production capacity at the sites in Hallau (Switzerland) and Heerbrugg (Switzerland), which had been launched in response to good order intake for growth projects in the previous year, proceeded according to plan and the additional space will be occupied over the course of the year (Hallau) and 2022 (Heerbrugg). To ensure that it can continue to provide sufficient capacity for implementation of customer projects in Asia, SFS is currently planning to expand the production capacity of the factory in Nantong (China). The expansion will enlarge the production area by approx. 70%. Work will start in the first quarter of 2022 and the space will be ready for occupancy 18 months later. Driven by strong demand and correspondingly high capacity utilisation, the segment achieved an EBIT margin of 18.7% in the first half of 2021, which corresponds to a year-on-year increase of 9.6 percentage points.

Fastening Systems (FS) segment
Dynamic market environment harnessed

Both divisions in the Fastening Systems segment succeeded in taking advantage of the extraordinarily dynamic market environment and pent-up demand. Strong demand in the construction industry caused delivery bottlenecks and cost increases along the entire supply chain. The Riveting division operated in a similarly challenging environment. It benefited not only from pent-up demand in the automotive industry, but also good recovery in demand from industrial customers. In the first half of the year the Riveting division completed the relocation of its Chinese production site from Nansha (China) to Nantong (China), the production platform also used by other divisions. This relocation will allow the division to benefit from the established production and management processes in Nantong and improve its efficiency further. Total segment sales amounted to CHF 293.1 million, corresponding to year-on-year growth of 25.3%. Thanks to the high level of capacity utilisation and the comprehensive measures of the previous years to improve performance an EBIT margin of 17.7% was achieved (prior-year period: 9.5 %).

Distribution & Logistics (D&L) segment
Positive trend sustained

The good market demand that benefited the Distribution & Logistics segment in the previous year persisted during the first half of 2021. Demand from the construction industry remained positive. This, combined with an overall recovery in the business activities of Swiss industrial customers, enabled the segment to grow its revenue across all product groups. Revenue from retail customers, which serve primarily private end customers, remained stable. Sales through the nationwide network of 29 specialist hardware stores (Handwerk-Stadt branches) also recovered year-on-year. Some of these branches were hit by the mandatory business closures during the first half of 2020.

The segment generated total sales of CHF 172.6 million, up 8.1% compared to the prior-year period. EBIT came to CHF 16.2 million, which corresponds to an EBIT margin of 9.2% (prior-year period: 8.9 %).

Development by segments
in CHF million 1st half 2021
share
1st half 2020
share
Growth Organic growth
Engineered Components 492.1
51.4%
380.1
49.1%

29.5%

29.1%
Fastening Systems 293.1
30.6%
234.0
30.2%

25.3%

25.5%
Distribution & Logistics 172.6
18.0%
159.6
20.6%

8.1%

7.8%

Sustainability-related priorities systematically pursued
In early June, SFS published its Sustainability Report 2020 in accordance with the GRI Standards (‘Core’ option). Ambitious targets, such as a reduction in CO2 emissions by more than 90% by 2030, are being pursued and a corresponding roadmap has been drawn up. The number of occupational accidents was reduced by another -13.3% during the period under review, which takes SFS closer to its medium-term goal of halving these by 2025 compared with the baseline 2019. The goal of engaging 5–7% of the entire workforce in an apprenticeship or a dual education activity was achieved again in 2020.

Outlook: expectations raised thanks to dynamic business performance
Assuming a continuous dynamic development in the second half of the year, SFS expects sales growth to a level of around CHF 1.9 billion for the full 2021 financial year at an EBIT margin of approximately 15%.This corresponds to sales growth of approx. 5% per year since 2019, which is in line with the medium-term growth targets announced. The outlook for full-year 2021 remains fraught with uncertainties and risks due to the ongoing COVID-19 pandemic. Management’s focus on protecting employee health and safeguarding delivery capacity, with further efforts to pursue investment and innovation projects, will still be given top priority.

Link to the half-year report 2021

SFS expands its production platform in China to enable future growth

News – 8 July 2021

The SFS Group will expand its production platform in Nantong (China) in order to provide sufficient capacity for future growth. The floor space will increase by approx. 70% to 130.000sqm in total and overall investment will amount to CHF 32 million. The expansion will be commissioned in Autumn 2023.

The production platform located in Nantong (China), north of Shanghai, is the second largest site in the SFS Group and key for its business activities in China. Built in 2018, it is the first site to offer all SFS core technologies under one roof, including cold forming, stamping, machining or extensive surface finishing treatments. The presence of several SFS divisions in Nantong facilitates know-how and technology transfer and helps to gain economies of scale.

High capacity utilization
Earlier than anticipated, the current production and warehouse capacities at the Nantong plant show a high level of utilization. The continued growth of the Electronics division in the areas of mobile devices and lifestyle electronics as well as the increasing demand for production capacities from other divisions, e.g. the Automotive division, are the main drivers for this development. The relocation of the Riveting division's production site from Nansha (China) to Nantong in the first semester 2021 further accelerated this trend. The site in Nansha was sold subsequent to the relocation.

Extension ready by 2023
Floor space will increase by approx. 70% (53.000sqm) to 130.000sqm in total. The construction work is scheduled to start in the first quarter of 2022 and shall be completed within 18 months. Commissioning of the expansion is expected in Autumn 2023. The project includes the purchase of additional land reserves to allow for further expansion. Total investment cost for land and construction of the buildings will amount to approx. CHF 32 million.

Thanks to this extension, SFS will further strengthen its competitive position and be able to provide sufficient capacity to realize attractive projects and future growth in China with local customers.

SFS expands its range of fastening solutions in Denmark

News – 17 June 2021

With Jevith A/S, SFS takes over a leading provider of fastening solutions for application in high-quality building envelopes in Denmark. With this acquisition, SFS is expanding its market access in the Northern European construction industry.

Jevith A/S was founded in 2001 and primarily supplies the Danish construction industry with high-quality fastening solutions for the building envelope. Thanks to their high technology and application competence as well as the distinctive services, Jevith A/S has established a strong market position in Denmark.

With the acquisition of the company on July 1, 2021, SFS will gain access to customers from the Danish construction industry which will further strengthen the position of the Construction Division securing future market growth as a specialist in fastening solutions in the building envelope. For their part, the customers of Jevith A/S will benefit from the complementary SFS product range. In 2020 the company achieved a turnover of almost 5 million euros with around 10 employees.

Jevith A/S will in future operate as part of the Construction Division within the Fastening Systems segment. The existing Jevith A/S management team will continue to run the daily operations, ensuring business continuity.

SFS Group increases expectations for 2021

Ad hoc announcement pursuant to Art. 53 KR – 10 June 2021

In the current financial year, the sustained high demand, which had already been observed since the third quarter of 2020, has continued. The development of demand is broad-based and has even intensified in some areas in the current year. As a result of the good capacity utilization, profitability shows a distinct positive development. In the light of this situation and the assumption of a sustained dynamic development in the second half of the year, SFS Group expects sales of around CHF 1.9 billion and an EBIT margin of around 15% for the 2021 financial year.

The sustained high demand had been observed since the third quarter of 2020 and has continued in the current financial year. The development of demand is broad-based in terms of markets, divisions and regions. It intensified in some areas and is above the initial expectations for 2021.

As a result of the good capacity utilization and paired with strict cost management, profitability shows a distinct positive development. In some areas the very high demand puts a considerable strain on the supply chains, which leads to price increases that have to be passed on to the market.

Assuming a continuous dynamic development in the second half of the year, SFS expects organic sales growth to a level of around CHF 1.9 billion for the 2021 financial year at an EBIT margin of approximately 15%. Due to the persisting COVID-19 pandemic, the outlook for the full financial year 2021 remains subject to risks and uncertainties. Detailed information on the course of business will be published in the 2021 half-year report on July 20, 2021.

SFS aims to reduce its emissions by more than 90% by 2030

News – 31 May 2021

Despite the significant challenges of the last year – triggered by the COVID-19 pandemic – SFS still continued to systematically pursue its priorities in the area of sustainability. Ambitious targets were adopted, including a more than 90% reduction in emissions by 2030 and a roadmap on how to reach that goal. The number of work-related accidents was reduced by another –13.3%, thus putting the Group closer to reaching its medium-term goal of cutting this number by half by 2025.

Ambitious goals defined for the five material topics
As a member of the UN Global Compact, SFS is committed to the Sustainable Development Goals (SDGs) and currently prioritizes four of those goals: SDG 4 – Quality education, SDG 8 – Decent work and economic growth, SDG 12 – Responsible consumption and production, and SDG 13 – Climate action. This prioritization reflects the five material topics as determined in the materiality assessment conducted in 2019. During the year under review, the main focus was on achieving improvements in these areas and on making an important contribution to the global SDGs through the Group’s set goals.

CO2 emissions (Scope 1 and 2) to be reduced by ≥90% by 2030
One particularly important milestone during the year under review was the development and approval of the roadmap, which contains measurable objectives for reducing CO2 emissions. In specific terms, this means SFS aims to reduce carbon emissions within the company (Scope 1) and emissions from the generation of energy purchased from an external source (Scope 2) by ≥90% by 2030. By 2040, the company also intends to reduce its CO2 emissions along the entire supply chain (Scope 3) by ≥90%. Emission reductions are calculated in CO2 tonnes in relation to the value added (contribution margin 2 in CHF).

Number of work-related accidents reduced by –13.3%
In the area of occupational health and safety, SFS successfully reduced the number of work-related accidents by another –13.3% to a total of 85 accidents in 2020 (2019: 98). That puts the company one step closer to reaching its medium-term goal for 2025 of cutting the number of work-related accidents by half compared to 2019.

Five percent of employees participated in a dual education program in 2020
SFS is a strong advocate of the dual-track system of vocational education and training. The company’s goal is to have 5–7% of the workforce enrolled in a dual education program as apprentices or employees and it achieved that goal once again in 2020 (5.0%; 2019: 6.3%). Unfortunately, due to the pandemic, it was not possible to expand these education programs. In fact, some of them had to be curtailed, which explains the year-on-year decline.

Outlook: review of material topics in 2021
Direct, continuous dialog with stakeholders forms the basis of the “Inventing Success Together” value proposition that SFS actively pursues inside and outside the company. SFS critically evaluates the relevance of its material topics and their position in the materiality matrix every two years. Extensive interviews with the identified stakeholder groups are scheduled to take place again in 2021, and the results of this analysis and any changes to the priorities will be presented in the Sustainability Report 2021.

SFS shareholders approve all proposals with a large majority

News – 22 April 2021

At the 28th Annual General Meeting of SFS Group AG, the shareholders approved all proposals of the Board of Directors with a large majority and elected Manuela Suter as an additional Board member. Volker Dostmann assumed the role of CFO from Rolf Frei as of the Annual General Meeting.

In accordance with article 27 of the Swiss Federal Council’s Ordinance 3 on measures to combat the coronavirus (COVID-19 Ordinance 3), the Board of Directors of SFS Group AG instructed shareholders to exercise their voting rights at the Annual General Meeting of 22 April 2021 by issuing a power of attorney to the independent proxy in writing or electronically.

Physical shareholder presence at the Annual General Meeting was therefore not permitted, as had already been the case last year. The Annual General Meeting on 22 April 2021 was held at the headquarters of SFS Group AG in the presence of the independent proxy and a representative of the statutory auditor. A total of 31'354'594 voting shares were represented, which corresponds to 83.61% of total share capital.

All proposals with a large majority approved, Manuela Suter elected as an additional board member
Shareholders approved the management report, the annual financial statements and the consolidated annual financial statements. The proposal to elect Manuela Suter, currently CFO of Bucher Industries and a member of its Executive Board, as an additional member of SFS’s Board of Directors was approved by a large majority of shareholders. With her many years of experience at international, multi-divisional and listed industrial companies, Manuela Suter is a valuable enhancement and the Board of Directors is looking forward to working with her.

The existing members of the Board of Directors were re-elected to their former roles and the compensation for the members of the Board of Directors and the Group Executive Board was approved. Members of the Board of Directors and the Group Executive Board were granted discharge from liability for the past financial year.

Distribution to shareholders held at prior-year level
The proposed dividend of CHF 1.80 per share was approved. The amount of the dividend was thus unchanged compared to the prior-year level; last year the dividend had been reduced by 10% from the 2019 payout as a sign of solidarity with the company and its em-ployees during the first wave of the COVID-19 pandemic.

CFO succession process concluded
In the interests of early and diligent planning, the Board of Directors of the SFS Group appointed Volker Dostmann at the end of April 2020 to succeed Rolf Frei as CFO. Volker Dostmann joined the Group Executive Board on 1 November 2020 and assumed the function of CFO at the Annual General Meeting on 22 April 2021.

After handing over his duties as CFO, Rolf Frei stepped down from the Group Executive Board and will continue to support the Group on selected strategic projects until his ordinary retirement in 2023.

The Board of Directors and the Group Executive Board thank Rolf Frei for his many years of successful service and his steadfast loyalty to the company. Over the years, he has played an important role in the successful development of SFS Group through his vast expertise, his tireless efforts, his consistent focus on customer needs and his personal touch.

SFS turns to climate-neutral energy for its Swiss manufacturing locations

News – 16 March 2021

Electricity consumption is the largest source of the company’s CO₂ emissions, accounting for about 80% of SFS Group's global carbon emissions. To further improve the company’s sustainability profile, SFS is turning to exclusively climate-neutral electricity for its Swiss production locations. A new photovoltaic system is being installed at company headquarters in Heerbrugg which will produce approximately 8.5% of the electrical energy that the company needs in Switzerland. The remaining electricity consumed by the company’s production sites in Switzerland is sourced exclusively from hydroelectric power stations as of 2021.

New photovoltaic system will cover 8.5% of the company’s electricity needs
SFS will generate 8.5% of the electricity it needs for its Swiss manufacturing sites through the significant expansion of the existing photovoltaic power system at its headquarters in Heerbrugg (CH). The installation of the new system will be completed within the next few weeks and the system will be completely operational in the first quarter 2021. With a maximum output of 4,000 kWp (kilowatts peak), it will be one of the largest photovoltaic systems in eastern Switzerland. This corresponds to the annual electricity consumption of approximately 3,000 to 4,000 single family homes.

Transition to climate-neutral electricity initiated
SFS's remaining electricity requirements will be satisfied by hydroelectric power producers from 2021 on and SFS intends to be fully committed to climate-neutral electricity at all of its Swiss production sites in the future. In doing so, the company underscores not only its endeavor to continuously reduce its ecological footprint, but also is making a contribution to the Swiss government’s national climate policy (net zero greenhouse gas emissions by 2050).

SFS establishes global manufacturing platform for medical devices business

News – 26 October 2020

SFS is expanding its successful strategy of leveraging a global manufacturing platform to its medical devices business. By making use of additional sites within SFS Group’s global manufacturing platform, customers across North America, Europe and Asia will be served locally under the Tegra Medical brand. As part of this expansion, Walter Kobler, a long-standing member of the Group Executive Board of SFS Group and Head of the Industrial division, will additionally assume management responsibility for the Medical division effective 1 January 2021.

The MedTech industry is a fast-growing global market. This growth is being fueled by demographic developments, strong demand for healthcare services, better access to healthcare systems and high rates of innovation. Sustained strong market demand, SFS Group’s steady growth momentum in the medical device business, and customer need for a manufacturing partner with a global reach formed the basis of management's decision to establish a global manufacturing platform for the Tegra Medical brand.

Initially operating out of North and Central America, Tegra Medical, a premiere contract manufacturer for medical device companies, has been a part of the SFS family as the Medical division since 2016. Intensified collaboration and access to five existing SFS production sites in Switzerland, Malaysia and China will enable Tegra Medical to offer its services to medical device customers in Europe and Asia as a local supplier.

All of SFS Group’s current medical device activities, which up to now were conducted in the Medical and Industrial divisions, will be organizationally situated within the Medical division under the Tegra Medical brand. Jens Breu, CEO of SFS Group: “It is in our DNA to maintain a partnership and trust-based relationship with our customers. We are therefore very pleased to announce the global expansion of our medical device activities, which will allow us to extend our local presence across the globe and deepen our relationships with customers in Europe and Asia.”

As part of this expansion, SFS is announcing a change in management responsibility for the Medical division: Walter Kobler, Head of the Industrial division and a long-standing member of the Group Executive Board, will additionally assume responsibility for the Medical division effective 1 January 2021. Jens Breu, CEO of SFS Group, had previously managed the Medical division ad interim. “This expansion enables us to take full advantage of Tegra Medical’s growth momentum,” says Walter Kobler. “We have set the stage for the next level of growth with the expansion of our production site in Hallau (Switzerland) and with the purchase of a property in Franklin (USA) – a strategically important location due to its proximity to Boston – and are now working towards the division’s sustained positive development by expanding into Asia and Europe.”

SFS achieved a significant improvement in the second half of the year

News – 5 March 2021

The year 2020 posed major challenges to the SFS Group: it was marked by the COVID-19 pandemic and the measures taken to contain the outbreak. The tremendous commitment and flexibility of its employees helped SFS to overcome these challenges. After a steep decline in demand in the first half of the year, a significant recovery took place in several end markets and regions from the summer months. Full year sales amounted to CHF 1,704.9 million, a slight decline of 4.3% from the previous year. SFS achieved an EBIT margin of 13.3%, unchanged from the prior-year level. Net income amounted to CHF 184.8 million.

The COVID-19 pandemic posed considerable challenges to the SFS Group and its employees. In contrast to previous economic crises, the focus in the past financial year additionally was on protecting the health of employees and their environment. The Group had to cope with extreme fluctuations in demand and reduce its cost base, but also maintain flexibility and supply capability. This demand-side volatility is evident in a comparison of results for the first and second half of 2020: in the second half, consolidated sales rose by 20.4% compared with the first half of the year. This development was supported by the company's well-balanced market and regional presence, the diversified sales channels and the clear focus on customer needs and innovation trends. SFS successfully defended its competitive position and remains well positioned amid the pandemic.

Despite an organic decline of –10.4% in sales in the first half of the year compared with the same period of the previous year, SFS was able to narrow the year-on-year decline in organic sales for 2020 as a whole to –3.2%. Consolidation effects contributed 3.0% to full-year sales, while currency translation effects had a negative effect of –4.1%. Gross sales for the financial year 2020 amounted to CHF 1,704.9 million.

Significantly higher profitability in the second half of the year
Thanks to the sustained recovery in demand and positive seasonal effects in the second half of the year, production capacity utilization improved significantly. Higher capacity utilization, strict cost management and positive mix effects lifted the operating profit margin for the second half of the year to 16.8% of net sales. November and December were particularly strong months. Full-year operating profit (EBIT) amounted to CHF 227.4 million, which corresponds to an unchanged EBIT margin of 13.3% compared with the previous year. Net income fell to CHF 184.8 million (previous year: CHF 206.5 million), which also reflects the absence of the positive one-off tax effects from the prior-year period.

Income statement CHF million 2020 2019 2018 2017 2016
Third party sales
Change to previous year in %

thereof currency impact
thereof change in scope
thereof organic growth
1,704.9
–4.3
–4.1
3.0
–3.2
1,781.4
2.5
–1.3
4.4
–0.6
1,738.6
6.5
1.4
0.8
4.3
1,632.7
13.7
0.5
5.8
7.4
1,436.5
4.4
0.9
1.5
2.0
Net sales 1,707.1 1,782.1 1,736.9 1,634.8 1,436.7
EBITDA
As a % of net sales
327.6
19.2
331.7
18.6
332.8
19.2
323.5
19.8
306.2
21.3
Operating profit (EBIT)
As a % of net sales
227.4
13.3
236.3
13.3
243.1
14.0
197.7
12.1
159.8
11.1
Operating profit (EBIT) adjusted
As a % of net sales
225.3
13.2
239.1
13.4
243.1
14.0
233.3
14.3
210.1
14.6
Net income
As a % of net sales
184.8
10.8
206.5
11.6
193.9
11.2
159.1
9.7
124.8
8.7

Balance sheet in CHF million
Assets
Net cash (+)/(-debt) (–)
1,684.1
144.3
1,638.6
68.7
1,619.3
59.1
1,519.0
34.7
1,469.7
0.5
Average Capital Employed
Invested Capital
1,134.0
2,149.5
1,134.9
2,153.2
1,070.8
2,058.3
947.4
1,960.9
846.6
1,692.2
Equity
As a % of assets
1,278.2
75.9
1,237.2
75.5
1,204.6
74.4
1,087.0
71.6
987.8
67.2

Strategy tested by COVID-19 pandemic
The COVID-19 pandemic put the effectiveness of SFS's business strategy to the test. The strategic alignment has proven to be robust and correct:

  • For SFS, close customer relationships are essential for the successful realization of its value proposition. In keeping with the ‘local for local’ strategy, the company is steadily building up its global development and production platform. SFS and its customers benefit from superior supply reliability thanks to short and robust supply chains.
  • Thanks to its balanced focus on different end markets, regions and sales channels, SFS successfully cushioned the consequences of the decline in demand.
  • With its increased focus on the medical device industry – a market that is growing worldwide – SFS is attractively positioned for the future.
  • Thanks to its good profitability and solid balance sheet, the company has the means and the ability to pursue its long-term strategy and to make the associated investments even in such a crisis.

Investments in future growth continued
A large part of the investments went into expanding the production infrastructure of the Automotive and Medical divisions in order to realize growth projects. At CHF 104.1 million, the investment volume remained at a similar level as in the previous year (CHF 116.7 million).

Engineered Components segment – a challenging year
Business at the Engineered Component segment was clearly impacted by the COVID-19 pandemic. Segment sales increased sharply by 36.3% in the second half of the year compared with the first half of the year. Full-year sales amounted to CHF 898.3 million, which corresponds to a decline of –6.1% compared with the previous year. Negative currency effects of –4.7% were partially offset by positive consolidation effects of 2.6%. Due to the steady improvement in capacity utilization as of summer, the operating profit margin increased to 20.2%. This resulted in an EBIT margin of 15.5% for the year as a whole (previous year: 17.0%, adjusted).

Key figures Engineered Components

in CHF million
2020 +/- PY 2019 2018
Third party sales
Sales growth comparable
898.3 –6.1%
–4.0%
957.1 967.0
Net sales
910.4 –5.6% 964.2 972.5
EBITDA
As a % of net sales
210.8
23.2
0.3% 210.1
21.8
234.8
24.1
Operating profit (EBIT)
As a % of net sales
141.2
15.5
–3.9%
147.0
15.2
176.6
18.2
Operating profit (EBIT) adjusted
As a % of net sales
141.2
15.5
–14.0% 164.1
17.0
176.6
18.2
Average capital employed 720.5 2.9% 700.4 652.1
Investments 83.1 –11.7% 94.1 116.3
Employees (FTE) 7,293 2.0% 7,153 6,977
ROCE (%) 19.6 23.4 27.1

Fastening Systems segment – performance improved
Sales in the Fastening System segment for the period under review amounted to CHF 489.7 million, corresponding to a decline of –1.7% compared with 2019. Positive consolidation effects arising from the acquisition of Triangle Fasteners Corporation Inc. in the spring of 2019 and MBE Moderne Befestigungselemente GmbH at the start of 2020 contributed 6.0% to reported sales. Negative currency effects lowered reported sales by –5.3%. During the second half of the year, the segment benefited from improved capacity utilization, continued strict cost management and the considerable efforts made in previous years to improve efficiency. Thanks to the positive momentum and the newly acquired companies, an adjusted EBIT margin of 11.5% (previous year: 9.2%) was achieved for the full year 2020.

Key figures Fastening Systems

in CHF million
2020 +/- PY 2019 2018
Third party sales
Sales growth comparable
489.7 –1.7%
–2.4%
498.3 437.1
Net sales
500.7 –2.1% 511.5 452.4
EBITDA
As a % of net sales
78.6
15.7
16.4% 67.5
13.2
63.2
14.0
Operating profit (EBIT)
As a % of net sales
59.7
11.9
26.7%
47.1
9.2
44.2
9.8
Operating profit (EBIT) adjusted
As a % of net sales
57.6
11.5
22.3% 47.1
9.2
44.2
9.8
Average capital employed 270.9 –8.9% 297.4 273.6
Investments 10.9 –37.4% 17.4 16.5
Employees (FTE) 2,438 0.4% 2,429 2,267
ROCE (%) 21.3 15.8 16.1

Distributions & Logistics segment – stable development
The Distribution & Logistics segment's well-balanced sales channel mix and product portfolio helped to limit the negative impact of the pandemic on its business operations. The segment generated sales of CHF 316.9 million for the full year, representing a decline of –2.8% compared with the prior year. Currency translation had a negative effect of –0.6%.Overall stable demand, swift action taken to temporarily adjust capacity, the good results from the e-shop and strict cost management had a positive impact on profitability. EBIT for the year under review showed an increase of 9.4% to CHF 28.7 million compared to the previous year period.

Key figures Distribution & Logistics

in CHF million
2020 +/- PY 2019 2018
Third party sales
Sales growth comparable
316.9 –2.8%
–2.2%
326.0 334.5
Net sales
321.6 –2.8% 330.9 339.7
EBITDA
As a % of net sales
34.1
10.6
–26.6% 46.5
14.1
31.7
9.3
Operating profit (EBIT)
As a % of net sales
28.7
8.9
–29.3%
40.5
12.3
25.8
7.6
Operating profit (EBIT) adjusted
As a % of net sales
28.7
8.9
9.4% 26.2
7.9
25.8
7.6
Average capital employed 126.9 –4.4% 132.8 142.2
Investments 4.1 73.7% 2.3 6.2
Employees (FTE) 598 –3.9% 622 621
ROCE (%) 22.6 19.7 18.1

Change in the CFO position
In the interests of early and diligent planning, the Board of Directors of the SFS Group appointed Volker Dostmann at the end of April 2020 to succeed Rolf Frei as CFO. Volker Dostmann joined the Group Executive Board on 1 November 2020 and will assume the function of CFO at the Annual General Meeting on 22 April 2021.

The Board of Directors and Group Executive Board thank Rolf Frei for his many years of successful service and his steadfast loyalty to the company. Over the years, he has played an important role in the successful development of SFS Group through his vast expertise, his tireless efforts, his consistent focus on customer needs and his personal touch.

Proposal to elect Manuela Suter to the Board of Directors
At the Annual General Meeting 2021, the Board of Directors of SFS Group will propose the election of Manuela Suter, currently CFO of Bucher Industries and a member of its Executive Board, for election to the Board of Directors. With her many years of experience in multi-divisional, international and listed industrial companies, the Board of Directors is confident she will be a valuable addition to the Board.

Payout to shareholders
In view of the robust earnings, the very solid balance sheet and the cautiously optimistic outlook for future business activity, the Board of Directors will propose an unchanged dividend of CHF 1.80 per share to the Annual General Meeting. Last year’s dividend was reduced by 10% compared with the payout in 2019, as a sign of solidarity with the company and its employees during the first wave of the COVID-19 pandemic.

Outlook for the financial year 2021
In the current financial year, attention will remain focused on protecting the health of the employees and managing the effects of the COVID-19 pandemic on the course of business. Investments in the selective expansion of production capacity and thus the implementation of growth projects will continue. In February 2021, for example, construction began on an additional production hall at the Heerbrugg site (Switzerland) to realize growth projects in the Automotive division. Another strategic priority is the expansion of the global production platform for medical device applications.

For the financial year 2021 SFS expects to return to organic growth and achieve an EBIT margin in the range of the previous year. This outlook is based on the assumption of an ongoing recovery of the global economy and no further global waves of COVID-19 infections leading to a deterioration of the economic conditions.

SFS shows a distinct recovery in the second half year

News – 29 January 2021

SFS Group achieved organic growth of 3.7% in the second half of the year, driven by a distinct recovery in demand and seasonal effects. Sales for the 2020 financial year amounted to CHF 1,705 million. Higher production capacity utilization and strict cost management as well as mix effects supported profitability in the second half of the year. For the 2020 financial year an operating profit of approximately CHF 227 million was realized, which corresponds to an EBIT margin of 13.3%.

While demand in the first half of the year fell sharply in some areas due to the COVID-19 pandemic, there was a clear and sustained recovery in demand in various end markets and regions from the summer months onward. Especially the automotive-related business are-as that had been heavily impacted by the collapse in demand and factory shutdowns at key customers during the first half of the year showed a strong recovery. In the second half of the year, sales momentum also profited from successful product launches with customers from the electronics industry.

Sales grew organically by 3.7% in the second half of the year compared to the previous year period. In the first half of the year, sales showed a decline of –10.4% in organic terms. For the full year, organic sales growth was a negative –3.2%. Consolidation effects contributed 3.0% to full-year sales, while currency translation had a negative effect of –4.1%. Gross sales for the 2020 financial year amounted to CHF 1,704.9 million.

Growth factors 1st half
2020
2nd half
2020

2020

2019
Currency effect –3.8% –4.5% –4.1% –1.3%
Change in scope of consolidation 3.4% 2.7% 3.0% 4.4%
Organic growth –10.4% 3.7% –3.2% –0.6%
Total –10.8% 1.9% –4.3% 2.5%
Sales by segment
Gross sales
in CHF million
1st half
2020
2nd half
2020

2020

2019

±PY
Engineered Components 380.1 518.2 898.3 957.1 –6.1%
Fastening Systems 234.0 255.7 489.7 498.3 –1.7%
Distribution & Logistics 159.6 157.3 316.9 326.0 –2.8%
Gross sales 773.7 931.2
1'704.9 1'781.4 –4.3%

Engineered Components: Significant increase achieved in the second half of the year

The increase in sales at SFS Group in the second half of the year is largely due to the recovery at the Engineered Components (EC) segment, which accounts for more than 50% of total sales. With its focus on industrial applications, and particularly on the automotive industry, the EC segment was hit hard by the effects of the COVID-19 pandemic in the first half of the year. A recovery began in July and gained momentum during the second half of the year, particularly in automotive-related areas. The course of business also benefited from the very successful product launches of important customers in the electronics industry. Organic sales growth at the Medical division supported the segment's development throughout the year. The situation remains challenging in the aircraft industry due to the restrictions the COVID-19 pandemic has caused.

Segment sales increased sharply by 36.3% in the second half of the year compared to the first half of the year. In the period under review, SFS generated sales of CHF 898.3 million which corresponds to a decrease of –6.1% compared to the previous year. The negative currency effect of –4.7% was partially offset by a positive consolidation effect of 2.6%.

Fastening Systems: Profited from robust demand in the construction sector

The Construction division, which focuses on the construction industry, was subject to less severe restrictions related to COVID-19 during the first half of the year, reflected in an only limited reduction in demand. In organic terms sales matched the level from the previous year. The Riveting division, however, which focuses primarily on applications in industrial and automotive-related areas, experienced a significant decline in sales.

Sales in the FS segment for the period under review amounted to CHF 489.7 million, which corresponds to a decline of –1.7% compared to 2019. Positive consolidation effects added 6.0% to the reported sales figure, while negative currency effects reduced reported sales by –5.3%.

Distribution & Logistics: Stable development thanks to diversified sales channels

The Distribution & Logistics (D&L) segment primarily does business with customers from the construction and industrial manufacturing sectors in Switzerland. D&L's well-balanced sales channel mix and product portfolio helped to limit the impact of the pandemic on its business operations. Strong demand especially in the areas of building materials and personal protective equipment compensated for the weaker development with industrial manufacturing customers. The overall stable course of business observed during the first half of the year continued in the second half.

The D&L segment generated sales of CHF 316.9 million in the period under review, a decline of –2.8% compared to the prior year. Currency translation contributed –0.6% to the decline in reported sales.

Sales by region

In CHF million

2020

2019

±PY
% share
2020
% share
2019
Switzerland 332.2 346.0 –4.0% 19.5% 19.4%
Europe 603.2 694.3 –13.1% 35.4% 39.0%
Americas
386.9 384.5 0.6% 22.7% 21.6%
Asia 377.7 351.6 7.4% 22.2% 19.7%
Africa, Australia 4.9 5.0 –2.6% 0.2% 0.3%
Total 1,704.9 1,781.4 –4.3% 100.0% 100.0%

Sales by region: Geographic sales mix influenced by developments in end markets

The regional sales mix was influenced by developments in the end markets. Driven by strong demand in the electrical and electronics industry, which is conducted almost exclusively in Asia, the Asian share of total Group sales increased by 250 basis points to 22.2% for the year under review.

Sales in the Americas benefited from growth in the medical device business and the solid development of the construction industry. Acquisitions in the Automotive and Construction divisions contributed 10.0% to the positive development. The Americas share of total Group sales in 2020 was 22.7%.

Thanks to the – in view of the pandemic – stable business at D&L, the share of sales generated in Switzerland increased slightly to 19.5%.

Sales in Europe, by far the largest market for SFS, showed a sharp decline. While the construction sector developed robustly in 2020, the pandemic had a very negative impact on customers in the automotive, aircraft and industrial areas, but SFS was nevertheless able to defend its market position in these industries. Sales in Europe declined by CHF 91.1 million in 2020 compared to the previous year and the region’s share of total Group sales contracted to 35.4%.

Profitability significantly increased in the second half of the year

Thanks to an ongoing recovery in demand and positive seasonal effects in the second half of the year, production capacity utilization improved significantly in the second half. Higher capacity utilization, strict cost management and positive mix effects lifted the operating profit margin for the second half of the year to 16.8% of net sales. Operating profit benefit-ed in particular from a strong performance in November and December. Based on unaudited results, SFS expects operating profit (EBIT reported) to amount to CHF 227 million, which corresponds to a stable EBIT margin of 13.3% compared to the previous year. In absolute terms, expected operating profit is below previous year's result of CHF 236.3 mil-lion, but above the forecast given in mid-November.

The detailed and audited financial statements for the 2020 financial year and guidance for the 2021 financial year will be presented at the online conference for the media and analysts on 5 March 2021.

28th Annual General Meeting on 22 April 2021 without physical attendance

In view of the COVID-19 situation, the Board of Directors of SFS Group has decided to limit shareholder participation in the 28th Annual General Meeting of SFS Group AG on 22 April 2021 to the exercise of their voting rights in writing or electronic remote voting and issuing powers of attorney to the independent proxy. Physical attendance of shareholders is therefore not possible. The Annual General Meeting will be held at the headquarters of SFS Group AG in Heerbrugg (Switzerland) in the presence of the independent proxy and a representative of the Company’s external auditor.

SFS reports good sales dynamics

News – 17 November 2020

Demand in several end markets and regions has been recovering more quickly than expected since August. This has improved production capacity utilization, which has had a positive effect on the company’s operating results. Based on the most current information available, SFS expects its operating results for the second half of the year to be significantly better than previously projected. The course of business thereafter remains subject to considerable uncertainty due to the COVID-19 pandemic.

After experiencing a sharp drop in demand in the first half of the year due to COVID-19, business activity in various markets has displayed a sustained positive trend since the summer months. This pleasing development has continued into the final quarter of the year. SFS is benefiting here from its balanced exposure in terms of end markets and regions. Automotive-related business areas that had been heavily impacted during the first half have shown a particularly strong recovery. In the electronics industry, SFS profited from successful product ramp-ups at key customers. The situation in the aviation industry remains challenging, however.

The significant improvement in demand has improved production capacity utilization, which has had a positive effect on the company’s operating results. Based on the latest available data, SFS expects sales for the 2020 financial year to range between CHF 1.63 to 1.68 billion. Operating profit (EBIT) for the full year is forecast to range between CHF 180 million and CHF 200 million. Sales and operating profit for the 2020 financial year are thus expected to be lower compared to the previous financial year, but better than initially projected during the release of half-year results. Due to the COVID-19 pandemic, the course of business beyond the current financial year remains subject to considerable uncertainty.

SFS establishes global manufacturing platform for medical devices business

News – 26 October 2020

SFS is expanding its successful strategy of leveraging a global manufacturing platform to its medical devices business. By making use of additional sites within SFS Group’s global manufacturing platform, customers across North America, Europe and Asia will be served locally under the Tegra Medical brand. As part of this expansion, Walter Kobler, a long-standing member of the Group Executive Board of SFS Group and Head of the Industrial division, will additionally assume management responsibility for the Medical division effective 1 January 2021.

The MedTech industry is a fast-growing global market. This growth is being fueled by demographic developments, strong demand for healthcare services, better access to healthcare systems and high rates of innovation. Sustained strong market demand, SFS Group’s steady growth momentum in the medical device business, and customer need for a manufacturing partner with a global reach formed the basis of management's decision to establish a global manufacturing platform for the Tegra Medical brand.

Initially operating out of North and Central America, Tegra Medical, a premiere contract manufacturer for medical device companies, has been a part of the SFS family as the Medical division since 2016. Intensified collaboration and access to five existing SFS production sites in Switzerland, Malaysia and China will enable Tegra Medical to offer its services to medical device customers in Europe and Asia as a local supplier.

All of SFS Group’s current medical device activities, which up to now were conducted in the Medical and Industrial divisions, will be organizationally situated within the Medical division under the Tegra Medical brand. Jens Breu, CEO of SFS Group: “It is in our DNA to maintain a partnership and trust-based relationship with our customers. We are therefore very pleased to announce the global expansion of our medical device activities, which will allow us to extend our local presence across the globe and deepen our relationships with customers in Europe and Asia.”

As part of this expansion, SFS is announcing a change in management responsibility for the Medical division: Walter Kobler, Head of the Industrial division and a long-standing member of the Group Executive Board, will additionally assume responsibility for the Medical division effective 1 January 2021. Jens Breu, CEO of SFS Group, had previously managed the Medical division ad interim. “This expansion enables us to take full advantage of Tegra Medical’s growth momentum,” says Walter Kobler. “We have set the stage for the next level of growth with the expansion of our production site in Hallau (Switzerland) and with the purchase of a property in Franklin (USA) – a strategically important location due to its proximity to Boston – and are now working towards the division’s sustained positive development by expanding into Asia and Europe.”

SFS confirms upturn in business activity

News – 9 September 2020

Business at SFS has picked up in the ongoing third quarter compared to the second-quarter levels amid persisting volatile economic environment. Given the risk of a second massive wave of COVID-19 infections worldwide, the outlook for the fourth quarter remains subject to considerable uncertainty. SFS plans to expand its location in Heerbrugg (Switzerland) to realize growth projects. This investment project documents SFS' good competitive position and innovation leadership.

After a significant downturn in the second quarter in the wake of the COVID-19 pandemic, business at SFS picked up during the first two months of the current third quarter. Sales for July and August extended the recovery that commenced in June. Business with customers in the automotive industry that had been affected the most by precautionary measures, showed the greatest improvement during these two months. Compared to the corresponding numbers from the previous year, total Group sales for July and August declined by mid-single-digit percentage figures. While sales in local currency at the Fastening Systems and Distribution & Logistics segments almost matched the prior-year levels, the Engineered Components segment was about 10% below the prior-year level. Earnings in all three segments have shown positive developments in the ongoing third quarter.

Given the growing risk of a second big wave of COVID-19 cases worldwide, the forecast for the fourth quarter is fraught with considerable uncertainty. Against this background, SFS is leaving its forecast for the second half given with the company’s first-half results unchanged despite the aforementioned positive developments and corresponding upward revision potential.

More detailed information can be found in the presentation for today’s SFS Investor Day ( link to the presentation).

Additional capacity to be created for growth projects in the automotive business

Over the years SFS has successfully positioned itself as a preferred development partner for customers in the automotive industry. Trends towards greater comfort, safety and efficiency and, in general, trends associated with autonomous vehicles are spurring innovation. The ongoing electrification of vehicles, including vehicle brake systems, is an attractive and growing business area, in which SFS has established a leadership position. SFS's successful acquisition of new projects for assemblies used in electronic brake systems lays the groundwork for further growth.

In order to realize the acquired customer projects, SFS is investing in the expansion of its production capacities with an additional production facility at its Heerbrugg location (Switzerland). The investment volume for the new building will amount to CHF 25−30 million. Preparations are already under way and construction is scheduled to begin in early 2021. With this investment project the company continues its efforts to focus its operations in Switzerland on particularly know-how-intensive and innovative products that require capital-intensive and highly automated processes.

SFS expects solid half year results despite COVID-19 pandemic

News – 3 July 2020

After a solid first quarter, business is, as expected, negatively affected in the second quarter by the economic repercussions of the COVID-19 pandemic. Focus is placed on protecting employee health, maintaining business continuity and implementing extensive measures to protect profitability. Innovation-driven projects continued as before.

Thanks to organic growth at two divisions and a well-balanced positioning, the decline against prior year sales of CHF 867.8 million is limited to approximately –11%. The negative currency effect offsets the positive acquisition effect.

Despite the contraction in sales, SFS expects the EBIT margin for the first half year to be at around 9% (prior-year period, adjusted: 12.6%) and the EBITDA margin at approximately 15% (prior-year period: 17.6%).

Detailed financial figures for the first half of 2020 and a revised guidance for the full financial year 2020 will be released on 21 July 2020.

SFS defends its profitability despite a difficult second quarter

News – 21 July 2020

The first half of the year was impacted by the COVID-19 pandemic, which had a clearly negative effect on the course of business in the second quarter. Amid this extraordinary situation, management’s focus was on employee health and safety, temporary production capacity adjustments, strict cost management in order to defend profitability, and continued innovation activities. Sales for the period benefited from the Group's well-balanced exposure to different end markets and regions, and organic growth in some divisions. Gross sales amounted to CHF 773.7 million. This corresponds to a decline of –10.8% compared to the prior-year period. Despite this decline in first-half year sales, SFS achieved a robust EBITDA margin of 15.5% and an EBIT margin of 9.2%.

After slightly positive organic growth in the first quarter, the course of business at SFS Group was, as expected, materially impacted in the second quarter by the repercussions of the COVID-19 pandemic. Strict measures were taken early on to protect employee health, to ensure the company’s ability to fulfill customer orders, and to reduce the impact of lower capacity utilization rates on profitability.

Strongly divergent developments in end markets

While the Electronics and Medical divisions increased their sales compared to the prior-year period, demand from customers in the automotive industry and other industrial sectors weakened, in some cases considerably. The well-balanced range of activities across different end markets and regions helped to offset the impact of the COVID-19 pandemic on SFS’ sales. Sales for the first-half year amounted to CHF 773.7 million. This corresponds to a decline of –10.8% compared to the prior-year period. Changes in the scope of consolidation had a positive effect of 3.4% on reported sales. The currency effect was –3.8%.

Influencing factors in CHF million Growth
Gross sales 1st half 2019 867.8
Currency impact –33.0 –3.8%
Change in scope* 29.5 3.4%
Organic growth –90.6 –10.4%
Gross sales 1st half 2020 773.7 –10.8%

*First-time consolidation of Triangle Fastener Corporation, Inc (TFC, as of 1.4.2019), MBE Moderne Befestigungselemente GmbH (MBE, as of 1.1.2020), Truelove & Maclean, Inc (T&M, as of 1.4.2020)

Development by end market
in CHF million 1st half 2019
share
1st half 2020
share
Growth Organic growth
Automotive sector 224.0
25.8%
149.8
19.4%

–33.%

–30.6%
Construction sector 260.5
30.0%
256.0
33.1%

–1.7%

–6.5%
Electro and electronics 134.3
15.5%
137.5
17.8%

2.4%

7.0%
Medical device industry 65.3
7.5%
66.8
8.6%

2.2%

5.9%
Other sectors 183.7
21.2%
163.6
21.1%

–10.9%

–10.0%

Thanks to extensive measures robust profitability defended

The downturn in demand beginning in the second quarter and the ensuing decline in capacity utilization rates had a material impact on profitability. Thanks to its fundamentally good margins and the early and resolute implementation of countermeasures, SFS was able to generate solid operating profits amid this extraordinary situation. EBIT amounted to CHF 71.0 million, which corresponds to an EBIT margin of 9.2% (prior-year period, adjusted: 12.6%), and the EBITDA margin came in at 15.5% (prior-year period: 17.6%). Group net income amounted to CHF 53.9 million.

SFS is in a very sound financial situation with a high equity ratio of 72.7% and has ample liquidity, which benefits its sustainable corporate development.

Investments made to realize growth projects

Capital expenditure focused on innovation projects and production capacity to implement growth projects. Capital expenditure for the first-half year amounted to CHF 56.6 million, which corresponds to 7.3% of sales (prior-year period: 6.5%). In order to continue to implement customer projects and the associated growth in the Industrial and Medical divisions, SFS is investing in significant site expansions in Switzerland and the US. This increased the investment rate by 230 basis points.

Engineered Components Segment (EC) – Divisional performance varied

The various end markets targeted by the EC segment showed clearly divergent developments. Demand in the Electronics and Medical divisions was less affected than the other divisions and both achieved positive sales growth. The Automotive and Industrial divisions were confronted with major customers’ temporary plant shutdowns and in some cases with sharply lower order inflows. Total segment sales amounted to CHF 380.1 million, which corresponds to a decline of –16.3% versus the prior-year period. Consolidation effects had a positive effect of 1.3% on sales, while the currency translation effect lowered reported sales by –4.1%. The EC segment's positioning in its target markets remains solid, as reflected in the ongoing commitment of its customers to growth projects. Against this background, the EC segment generated an EBIT of CHF 35.1 million, which corresponds to an EBIT margin of 9.1% (prior-year period, adjusted: 16.1%).

Fastening Systems Segment (FS) – Continued expansion of market reach

Investments to expand the segment's reach, namely the acquisition of Triangle Fastener Corporation, Inc (TFC) and MBE Moderne Befestigungselemente GmbH (MBE), had a positive effect on the segment’s results. The restrictions imposed on the construction industry to limit the spread of the pandemic were comparatively less drastic than on the key markets addressed by the Riveting division. Therefore, the resulting decline in demand was clearly greater in magnitude in the Riveting division, than in the Construction division. Segment sales for the first half of 2020 amounted to CHF 234.0 million, which corresponds to a decline of –5.8% versus the prior-year period. Changes in the scope of consolidation had a positive effect of 9.5% on reported sales. The currency effect was –5.3%. The EBIT margin of 9.5% was slightly higher than the 9.4% margin reported for the prior-year period.

Distribution & Logistics Segment (D&L) – Positive development in a difficult environment achieved

The D&L segment profited in the first half from its balanced positioning in terms of customer segments and product categories. Sales of construction and personal protective equipment products showed the most positive trends. The segment's multi-channel sales approach proved to be an important strategic cornerstone. Sales through its online shop was a valuable alternative to the segment's other sales channels during the lockdown period. Segment sales of CHF 159.6 million were –3.4% below the figure from the first half of 2019. Currency translation had a negative effect of 0.8% on reported sales. First-half EBIT of CHF 14.5 million and the corresponding EBIT margin of 8.9% exceeded the prior-year figures (prior-year period, adjusted: 7.9%).

Slight improvement in demand expected in the second half year

Due to the unclear further course of the COVID-19 pandemic and the still volatile political and economic environment, it is difficult to assess further business development. SFS expects slightly higher sales in the second half of the year, with an approximately comparable EBIT margin for the first half of 2020. This assessment is based on currently available in-formation and the assumption that no second massive global wave of COVID-19 pandemic further affects economic development.

Management will continue to focus on protecting the health of employees, ensuring the company’s supply capabilities, keeping costs under control and pushing innovation projects forward.

SFS Board of Directors proposes election of Manuela Suter

News – 29 June 2020

The Board of Directors of SFS Group AG proposes the election of Manuela Suter at the Annual General Meeting on 22 April 2021.

Manuela Suter is the CFO and member of the Group Executive Board of Bucher Industries. She has many years of experience in this role in a multi-divisional, international, listed industrial company.

After completing a degree in economics at the University of Zurich, Ms Suter trained as an accountant and worked in this role for a leading auditing company for several years. After this she worked in the areas of accounting, controlling and reporting in industrial companies, at SIX Exchange Regulation and, since 2011, at Bucher Industries.

The Board of Directors of the SFS Group considers the planned election of Manuela Suter as a valuable addition to its body.

SFS increases focus on sustainability

News – 4 June 2020

Sustainable thought and action have belonged to the DNA of SFS right from the beginning. In order to report more comprehensively on sustainability at SFS, the topic is receiving its own platform ( sustainability.sfs.biz). In future SFS will therefore publish a Sustainability Report each year. In the reporting year SFS focuses on five significant topics. Successes are visible in every area and further measures for improvement are being launched.

The visions "every employee an entrepreneur" and "together we are striving towards sustainable success" visions come from the early years of SFS and have characterised the path the company has taken to this day: this is expressed by the value proposition "Inventing success together", which is actively practised internally and externally.

Focus on sustainability increased

In order to increase the focus on sustainability at SFS, the topic is receiving its own website and is published separately to the annual report. "I am really looking forward to provide you an exciting and transparent look "behind the scenes" with the new format of the Sustainability Report and invite you to continue the dialogue with us", explains Jens Breu, CEO SFS Group. In future SFS will publish its Sustainability Report annually and according to the internationally recognised guidelines by GRI Standards (option "Core").

Materiality matrix updated in the reporting year

The materiality matrix has been adjusted to the GRI requirements and updated. To this end SFS carried out comprehensive interviews with the identified stakeholder groups in the reporting year. The subsequent consolidation and prioritisation of the results yielded the significant topics on which SFS has focussed in the reporting year:

  • Economic performance
  • Occupational health and safety
  • Training and education
  • Emissions
  • Socioeconomic compliance

Progress made and further improvements pursued

SFS achieved good successes in all five significant topic areas and launched further measures for various improvements.

In 2019 SFS was able to prove its solid economic performance and slightly increased the added value once again. In accordance with its medium term planning SFS is pursuing the goal of continuously expanding its economic performance until 2025, while the share of added value for each of the stakeholder groups shall remain stable. The economic effects of the COVID-19 pandemic on the planned economic performance cannot be comprehensively assessed yet.

In the occupational health and safety area the number of workplace accidents fell by 19% worldwide, compared to 2018, to a total of 113 occupational accidents. This corresponds to an occupational accident rate of 12.5 per 1,000 employees. SFS has set itself the goal of reducing workplace accidents by 50% by 2025 in order to gradually get closer to the long-term goal of zero occupational accidents.

SFS is a strong supporter of the dual training and education system. The long-term goal of 5–7% of all employees being trainees or employees in a dual educational activity was once again confirmed by the company in 2019 with 6.3% (2018: 6.6%). In particular in the German-speaking region the dual training and education system is taking place on a very good level. SFS continues to expand this educational standard across the entire Group.

Along with the effort to continuously reduce emissions, SFS is developing a roadmap for the entire Group by the end of 2020. This roadmap serves as the basis for systematic reduction of CO₂ and will be presented in the next Sustainability Report. Furthermore, SFS is pursuing the steady continuation of certifying production platforms according to ISO 14001 (environmental management): currently 15 out 27 production sites are already certified according to ISO 14001. Further production sites are to follow in 2020.

The SFS Code of Conduct describes the basic requirements for being an exemplary, reliable and fair business partner and employer. In order to uphold the requirements of the Code of Conduct the company has established an effective compliance system. In the reporting year the SFS Group was not affected by any sanctions in the area of socioeconomic compliance. This is also clearly the objective for 2020.

SFS announces new management responsibility for the Medical division

News – 27 May 2020

J. Mark King decided to retire and resign as Head of the Medical division. Until nomination of a successor, Jens Breu, CEO of the SFS Group, will temporarily assume responsibility for the Medical division. Strengthening the position in the MedTech industry is a key priority for the SFS Group and will be supported by substantial investments in employees and capacities.

After almost 10 years of service as the CEO of Tegra Medical and as Head of Medical division within the SFS Group, J. Mark King decided to retire as of 1 August 2020. The Board of Directors and the Group Executive Board thank J. Mark King for his many years of services.

The MedTech industry is an important market segment for the SFS Group. It is the strategic goal to further strengthen and to grow SFS' position in the MedTech market. Substantial investments to support the initiated growth project are planned in order to pursue this goal.

Until the nomination of successor, Jens Breu, CEO of the SFS Group, will assume temporarily the responsibility for the Medical division.

SFS names successor for CFO position

News – 29 April 2020

Volker Dostmann is the designated new CFO of SFS. He will succeed the long-serving CFO Rolf Frei at SFS Group’s Annual General Meeting in 2021.

The Board of Directors of SFS Group has appointed Volker Dostmann as successor to Rolf Frei as CFO. Volker Dostmann will join the Group Executive Board on 1 November 2020 and officially assume the position of CFO at the Annual General Meeting (AGM) on 22 April 2021.

Volker Dostmann is ideally qualified for this position having held several positions as CFO during his more than 20 years of experience in the industrial sector. The long onboarding process for the 49-year-old Swiss citizen will ensure a smooth CFO transition at the 2021 AGM.

Rolf Frei joined SFS in 1981 and, as its long-standing CFO and Head of Corporate Services, he has helped to shape the company’s overall development significantly. After relinquishing his role as CFO, Rolf Frei will continue to serve the company in selected strategic projects until he retires.

The Board of Directors and Group Executive Board thank Rolf Frei for his many years of successful service and his strong loyalty to SFS Group.

SFS received shareholder approval for all proposals and is prepared for the anticipated economic downturn

News – 23 April 2020

Shareholders at the 27th Annual General Meeting of SFS Group AG approved all proposals of the Board of Directors by a large majority. Thanks to its solid quarterly results, robust financial position and an extensive package of measures, SFS is prepared to cope with the economic effects of the COVID-19 pandemic.

Based on article 6a of the COVID-19 Ordinance 2 issued the Swiss Federal Council on 13/16 March 2020, the Board of Directors of SFS Group AG made use of the option to order written or electronic voting and the granting of power of attorney to the independent proxy as the only way to participate in the Annual General Meeting of 23 April 2020.

Physical participation of shareholders in the Annual General Meeting was thus prohibited. The Annual General Meeting on 23 April 2020 was held at the headquarters of SFS Group AG in the presence of the independent proxy and a representative of the external auditor. A total of 30'653'423 voting shares were represented. This corresponds to 81.74% of total share capital.

All proposals approved by a large majority

Shareholders approved the management report, the financial statements and the consolidated financial statements. All members of the Board of Directors were re-elected and the compensation for the members of the Board of Directors and the Executive Board was approved. Members of the Board of Directors and the Group Executive Board were granted discharge.

The law firm Bürki Bolt in Heerbrugg was re-elected as independent proxy and PricewaterhouseCoopers AG in St. Gallen was re-elected as statutory auditor.

Dividend reduced by 10% from the previous year in a sign of solidarity

The dividend proposal of CHF 1.80 per registered share was also approved by a large majority. The Board of Directors had revised its initial dividend proposal and proposed a CHF 0.20 or 10% reduction in the dividend compared to the previous year as a sign of solidarity in view of the extraordinary situation triggered by the COVID-19 crisis, which calls for sensible and responsible action.

Solid results achieved in the first quarter of 2020

Thanks to the solid results achieved in the first quarter of 2020, robust financial position and an extensive package of measures, SFS is prepared for the economic slowdown. Despite the obvious effects of the COVID-19 pandemic from mid-March on, the company achieved solid results in the first quarter. Organic growth was slightly positive and profits were in line with the prior-year results.

Due to the unprecedented economic consequences of the COVID-19 pandemic, SFS expects a significant downturn in business in the second quarter. The impact of the corona crisis on the current financial year cannot yet be determined. Capacity has been downsized to reflect reduced demand, primarily by introducing short-time work. Additional measures to lower costs and capital expenditure were taken. Innovation activities continue unabated.

Thanks to its well-diversified end markets, its good market position and robust finances, SFS is prepared to overcome the economic consequences of the COVID-19 pandemic.

SFS' Board of Directors is proposing a reduction in the dividend as a sign of solidarity

News – 17 April 2020

The Board of Directors of SFS Group has reduced its dividend proposal by 14% compared to its original proposal as a sign of solidarity. The Board of Directors and the Group Executive Board will also take a temporary 10% cut in pay.

Thanks to its well-balanced portfolio of activities, good market positions and robust financial strength, SFS Group is well-positioned to cope with the impacts of the COVID-19 pandemic. Nevertheless, customer and employee needs during this extraordinary situation must be taken into consideration and the uncertainties caused by the COVID-19 crisis must be addressed in a sensible and responsible manner.

Besides introducing short-time work and cutting the base pay of the Board of Directors and the Group Executive Board, further measures have been swiftly taken to reduce costs and investment spending. In addition, the Board of Directors of SFS Group is now proposing a dividend of CHF 1.80 per registered share at the pending 27th Annual General Meeting (AGM). Compared to its initial dividend proposal, this represents a reduction of CHF 0.30 or 14%; compared to last year's payout, this represents a reduction of CHF 0.20 or 10%.

The board's proposed reduction in the dividend represents an amendment to the agenda for the AGM. Approval of this proposal will therefore be determined by the voting instructions given with respect to “Additional or amended proposals”. Voting instructions can be issued to the independent proxy electronically and also changed until the period for submitting instructions ends (17 April 2020, 11.59 p.m. CET).

The Board of Directors encourages shareholders to support this amendment to the AGM agenda and thanks them for their solidarity.

SFS is temporarily reducing its operations due to the COVID-19 pandemic

News – 23 March 2020

In connection with the COVID-19 pandemic and government decrees as well as production plant shutdowns by major customers, SFS is temporarily scaling back its operations to protect its employees and their health. Work towards the realization of new projects will continue.

Due to the COVID-19 pandemic and in order to protect the health of its employees, SFS is temporarily adjusting its operations. The company is introducing short-time work at several sites, mostly in Europe and North America. This action is also being taken in response to the temporary production plant shutdowns or drastically reduced operations of several important customers. Work towards the realization of new projects will continue.

Protecting employee health and securing jobs

When the measures will be lifted depends on the course of the COVID-19 pandemic and the customer demand. With these measures, SFS is protecting the health of its employees and securing their jobs.

SFS increased sales and net income in the financial year 2019

News – 6 March 2020

SFS Group coped well with the challenges of the financial year 2019. This was achieved thanks to strong innovation power on the one hand – true to its claim of “Inventing success together” – and thanks to its balanced target market portfolio on the other hand. Sales grew by 2.5% to CHF 1,781.4 million. The adjusted EBIT margin of 13.4% was better than projected. Full-year results were driven by a significant improvement during the second half. Consolidated net profit rose by 6.5% to CHF 206.5 million.

SFS Group’s financial year 2019 was marked by considerable challenges, such as weak demand from customers in the automotive and electronics markets. Over the course of the year this weakness spread to related market segments, while trade conflicts and political tension put an additional strain on business. Against this backdrop, we can affirm that the SFS Group coped well with the financial year 2019. That was clearly reflected in the significant improvement of its performance during the second half of the year. SFS profited from its presence across a balanced range of different markets and from its clear focus on customer needs and innovation trends. The company is well positioned and successfully defended its competitive position. This was evident in the ramp-up of major projects, in particular during the second half. Thanks to these projects, SFS returned to organic growth as expected. Sales in the second half were 3.5% above the figure of the prior-year period. Organic growth accounted for 1.1% of that growth. Organic sales growth in the first half of 2019 was still negative at –2.4%.

Consolidated third party sales for the full financial year of 2019 amounted to CHF 1,781.4 million. This corresponds to an increase of 2.5% from the previous financial year. Changes in the scope of consolidation had a positive effect of 4.4% on sales growth. Foreign currency translation had a negative effect of –1.3%. Organic sales growth for the full year was slightly negative at –0.6%.

Share of sales from Americas region significantly increased

SFS Group’s targeted markets are broadly based geographically. Sales in Asia, Europe and Switzerland were slightly lower, pressured on the one hand by negative currency effects and on the other hand by decreasing momentum. The sharp increase in sales from the Americas region is attributable to the acquisition of Triangle Fastener Corporation (TFC) and to the organic growth of successful products and services for the construction industry and, in particular, the medical device industry. Total sales in the Americas rose by 25.0% (organic 5.0%) and accounted for 21.6% of consolidated sales.

Operating profit improved in the second half

With an adjusted EBIT margin of 14.2%, SFS Group managed to significantly improve its operating performance in the second half. Compared to the first-half EBIT margin, this represented an increase of 160 basis points. Higher profitability was fueled by sales growth in the Engineered Components segment, by measures taken to strengthen the profitability and by positive seasonal effects. Adjusted operating profit amounted to CHF 239.1 million (previous year: CHF 243.1 million). The corresponding adjusted EBIT margin of 13.4% is better than the guidance given at mid-year 2019. Reported operating profit amounted to CHF 236.3 million. The difference in the adjusted figure is attributed to non-recurring effects. Consolidated net profit was positively impacted by a one-term effect of CHF 17.2 million arising from the capitalization of deferred tax assets. Group net profit of CHF 206.5 million (previous year: CHF 193.9 million) corresponds to 11.6% of Group sales.

Erfolgsrechnung FY19

Engineered Components segment – solid performance in a challenging year

Reported sales in the Engineered Components segment (EC) amounted to CHF 957.1 mil-lion (previous year: CHF 967.0 million). Taking the negative currency translation effect of –1.2% into consideration, organic sales growth was slightly positive at 0.2%. The Medical division displayed steady and dynamic growth throughout the year, whereas the other divisions experienced subdued demand. In the financial year 2019, the EC segment generated an adjusted operating profit of CHF 164.1 million, which corresponds to an adjusted EBIT margin of 17.0% (previous year: 18.2%). A sharp improvement in the second half highlighted the segment's operating performance. Its adjusted EBIT margin widened by 170 basis points during the second half compared to the first half and stood at 17.8%.

Kennzahlen EC FY19

Fastening Systems segment – market position strengthened

In the Fastening Systems segment (FS), the Construction division benefited from a stable market environment. Its position in the US market was significantly strengthened through the acquisition of TFC. The Riveting division had to contend with headwinds from the automotive industry in Germany and the UK. Segment sales amounted to CHF 498.3 million (previous year: CHF 437.1 million), which corresponds to an increase of 14.0% compared to the previous year. Changes in the scope of consolidation had a positive effect of 18.5% on the Construction division’s sales growth. Organic sales growth was slightly negative at –2.1%. Foreign currency translation had a negative impact of –2.4%. Segment operating profit amounted to CHF 47.1 million, which corresponds to an increase of 6.7% compared to the previous year. The full-year EBIT margin came in at 9.2% (previous year: 9.8%).

Kennzahlen FS FY19

Distributions & Logistics segment – profitability improved

The Distribution & Logistics (D&L) segment generated full-year sales of CHF 326.0 million (previous year: CHF 334.5 million), an organic decline of –0.8% from the previous year. Changes in scope of consolidation and foreign-currency translation had a negative effect on sales of –1.7%. The segment continued to improve its profitability despite the challenging economic environment. The D&L segment generated an adjusted operating profit (EBIT) of CHF 26.2 million, which corresponds to an EBIT margin of 7.9% (previous year: 7.6%).

Kennzahlen D&L FY19

Payout to shareholders

In view of the robust earnings, the very solid balance sheet and the guardedly optimistic outlook for future business activity, the Board of Directors will propose a dividend of CHF 2.10 per share (previous year: CHF 2.00) at the Annual General Meeting.

Outlook for the 2020 financial year

Looking ahead to the 2020 financial year, SFS expects subdued demand in key markets, such as the automotive industry. Management also expects the political and economic environment to remain volatile. Thanks to its strong market position and attractive project pipeline, SFS is guiding for a 0–2% increase in sales in local currencies and including changes in the scope of consolidation. Amid the challenging environment, SFS expects the EBIT margin for the 2020 financial year to range between 12–14%. This forecast is based on the assumption that economic conditions do not worsen significantly.

It is still too early to provide an accurate assessment of the full impact of the COVID-19 virus.

Due to a shift in SFS’s sales mix and a downturn in global economic activity, we have set a new comparable mid-term sales growth target of 3–6%. Our mid-term EBIT margin target is 13–16%.

SFS expands its global manufacturing platform for deep drawing through a North American acquisition

With the acquisition of Truelove & Maclean (“T&M”), SFS is methodically implementing its “local for local” strategy and adding the manufacturing process of deep drawing to its existing manufacturing and development platforms in North America. T&M, located in Watertown, Connecticut, is a leading supplier of deep-drawn components, primarily for the automotive industry. The company generated sales of about USD 36 million in 2019 and employed approx. 110 people.

T&M celebrated its 75-year anniversary in 2019 and has been managed by its owner Richard Bouffard since 1981. The US firm has considerable expertise in deep drawing and generates most of its sales with companies in the US, followed by Mexico and Brazil. Besides the automotive sector, T&M also serves customers in the HVAC (heating, ventilation, and air conditioning) industry and other sectors.

Expertise in deep drawing technology expanded through T&M acquisition

The mechanical fastening systems and the precision components SFS offers are based on high levels of technical and process expertise as well as a detailed knowledge of end-product applications. Being close to where the customers are is therefore essential. SFS is steadily enlarging its global R&D and manufacturing platform through its “local for local” strategy. While SFS already boasts a strong presence in the US in the manufacturing processes of cold forming, precision machining and heat treatment, T&M’s extensive know-how in deep drawing represents an ideal opportunity for SFS to also establish and expand its presence in the USA in this core technology. Thus SFS will be able to supply deep-drawn components to its North American customers as a local manufacturer in the future.

T&M will become part of the Automotive division within the Engineered Components segment. The company will continue to be managed by its current executives to ensure continuity. Closing is expected until end of March 2020.

SFS shows clear improvement in operating results in the second half

News – 24 January 2020

SFS Group returned to organic growth in the second half – in the face of continuing adverse market conditions – thanks to project ramp-ups. Group profitability also showed a strong improvement over the course of the year. Sales for the full 2019 financial year increased by 2.5% and was fueled primarily by the first-time consolidation of Triangle Fasteners Corporation (TFC). Adjusted operating profit amounted to approx. CHF 239 million, which corresponds to 13.4% of net sales.

Guided by its clear focus on customer needs and innovation trends, SFS is well positioned and was able to defend its competitive positions despite the continuing challenging environment in key markets. This achievement was supported by the ramp-up of major projects, especially during the second half. Sales increased by 3.5% in the second half compared to the figure for the prior-year period, of which 1.1% was organic growth. Organic sales growth in the first half was a negative –2.4%.

Consolidated sales for the full financial year of 2019 amounted to CHF 1,781.4 million. This corresponds to an increase of 2.5% from the previous financial year. Changes in the scope of consolidation had a positive effect of 4.4% on sales growth. Foreign currency translation had a negative effect of –1.3%. In organic terms, full-year sales showed a slight decline of –0.6%.

20200124_growth factors
20200124_Sales by segment

Engineered Components: Challenges well mastered
The improvement in SFS Group’s operating performance in the second half was driven in particular by the Engineered Components segment, which accounts for more than half of SFS Group's total sales. This segment’s sales rose by 10.7% in the second half compared to the first half. Its significant growth was broadly based and supported by the seasonal ramp-up of several projects as well as a recovery in the Electronics sector.

Full-year 2019 sales for the Engineered Components segment amounted to CHF 957.1 million. Taking the negative currency translation effect of –1.2% into consideration, organic sales growth was slightly positive at 0.2%. The overall flat sales growth is attributed to weak market demand. SFS nevertheless defended or even strengthened its position with its customers in all of its business areas. Its sustained strong competitive position is also reflected in the acquisition of substantial new projects and the healthy project pipeline.

Fastening Systems: Market position further expanded
Sales at the Fastening Systems segment amounted to CHF 498.3 million, an increase of 14.0% from the previous financial year. The aforementioned first-time consolidation effects contributed 18.5% to sales growth. In organic terms, sales growth was slightly negative at –2.1%. The Construction division profited from a stable market environment and generated slightly positive organic growth. Sales in the Riveting division, by contrast, were pressured by the very challenging situation in the German and British automotive markets. Currency effects reduced reported sales by –2.4%.

Thanks to innovative products and the successful acquisition of TFC (in April 2019), the segment strengthened its competitive position in the construction business.

Distribution & Logistics: Solid course of business achieved
Organic sales in the D&L segment declined slightly by –0.8% from the previous year. Reported sales amounted to CHF 326.0 million.

The reason for the slightly negative growth is a general downturn in demand over the course of the year, especially from customers in industrial sectors. D&L is focused on the Swiss market and its market position was strengthened through the acquisition of new customers and intensified multi-channel activities. Changes in the scope of consolidation led to a –1.3% decline in sales while the stronger Swiss franc reduced sales by –0.4%.

Sales by region: Share of sales from Americas region significantly increased
SFS had a broad geographic sales exposure. Some regions showed slightly lower sales due on the one hand to negative currency effects and on the other hand to a weakening of global economic momentum. The disproportionate increase in sales from the Americas region is attributable to the acquisition of TFC and to the organic growth in the construction and, in particular, the medical device industries. Total sales in the Americas rose a sharp 25.0% (organic 5.0%) and accounted for 21.6% of consolidated sales.

20200124_Sales by region

Adjusted second-half operating profit significantly increased
With an adjusted EBIT margin of 14.2%, SFS Group achieved a significant improvement in the second half. Compared to the first-half EBIT margin, this represented an increase of 160 basis points. Higher profitability was fueled by sales growth in the Engineered Components segment and measures taken to strengthen the profitability throughout SFS Group as well as by positive seasonal effects.

Based on the available preliminary results, SFS estimates that its adjusted operating profit will amount to approx. CHF 239 million (previous year, adjusted: CHF 243.1 million). The corresponding adjusted EBIT margin of 13.4% exceeds the projection given at mid-year 2019.

Reported EBIT for 2019 was additionally impacted by several expected non-recurring effects. On the positive side, profits from the sales of real estate in Switzerland. On the negative side, costs related to the transfer of operations to the new site in Nantong (China). These costs were significantly lower than budgeted. The sum of these effects in the financial year was a net negative figure of approx. CHF 2.8 million.

At the bottom line, net income will be positively impacted by a one-term effect of approx. CHF 17 million arising from the recognition of deferred tax assets. The expected significant improvement in the operating results of the North American activities led to the use of tax-loss carry-forwards and the amortization of goodwill for tax purposes. A change in Swiss tax rates also had a positive effect on net income.

The detailed and audited financial statements for the 2019 financial year will be presented at a conference for analysts and the media on 6 March 2020.

SFS expands its fastening system business for façades in Germany

News – 20 December 2019

SFS is acquiring mbe – Moderne Befestigungselemente GmbH (“mbe”) – a leading supplier of painted fasteners for high-performance façade systems. mbe generated about EUR 10 million in sales with just under 70 employees in 2018. This acquisition expands SFS’s offering of fastening systems and its market reach in central Europe. The completion of the acquisition is subject to regulatory approvals.

mbe was established in Menden, North Rhine-Westphalia, Germany, in 1979 and it supplies mainly the German specialty retailers with painted fasteners for ventilated façade systems. In addition to its strong, long-standing customer relationships with specialty retailers, mbe has vast expertise in painting technology and differentiates itself on its very quick response and delivery times. Customers can individualize the colour of the fasteners they order and partly in small quantities can be fulfilled within 24 to 48 hours.

Acquiring mbe gives SFS direct access to specialty retailers for premium façade solutions. Customers and distribution partners of mbe will benefit from availability of the broad product range of SFS.

mbe will remain based in Menden and it will become part of the Construction division within the Fastening Systems segment. Its previous management will stay with the company throughout the transition period and thereby ensure the necessary continuity. The completion of the acquisition is subject to regulatory approvals.

SFS initiates a CFO succession plan

News – 11 December 2019

Rolf Frei will step down as CFO of SFS Group at the Annual General Meeting in 2021. His early announcement gives SFS enough time to plan and execute a smooth succession.

After serving as CFO for 18 years, Rolf Frei has decided to relinquish his position at the 2021 Annual General Meeting. He will continue to support the company on selected strategic projects until he reaches normal retirement age. Rolf Frei joined SFS in 1981 and, as its long-standing CFO and Head of Services, he has had a major impact on the company’s overall development.

The Board of Directors and Group Executive Board thank Rolf Frei for his many years of successful service and his steadfast loyalty to SFS Group.

SFS achieves first-place ranking in the Swiss Employer Award

News – 23 August 2019

With its first-place ranking, SFS achieved a very gratifying result in the large companies category at the 19th Swiss Employer Awards.

Largest employee survey in Switzerland

For the past 19 years, the Swiss Employer Award has been awarded to the best employers in Switzerland and the Principality of Liechtenstein. In total more than 28,000 employees from 121 companies took part in the largest employee survey in Switzerland this year.

First-place ranking in the category large companies achieved

Within the SFS Group in Switzerland, the Automotive division and the Construction division employees answered questions about key aspects of their work situation. In particular, the topics dealing with change, work-life-balance as well as corporate strategy were evaluated positively by SFS employees. In the category of large companies (1000 and more employees), SFS achieved a top 3 ranking for the third time in a row, placing first this year.

Important tool for company development

Company management and the entire organization acknowledge the pleasing result as feedback and appreciation and thank all employees for their daily commitment and loyalty. They are the basis for SFS’s strong competitiveness. The results of this survey not only reflect the opinions of employees within and about the company, they also provide valuable insights that are used to improve and develop the company. True to our value proposition 'Inventing success together'.

20190823Awardübergabe SAA 2019
Award ceremony with Mr. Beutler, HR Business Partner, Mr. Hämmerle, General Manager Production and host Dr. Santschi (from left to right)
20190823SAA 2019 Haemmerle_Beutler
S. Hämmerle & A. Beutler celebrating the award

SFS honored as one of Continental's top suppliers

News – 19 August 2019

Continental honored its 14 very best suppliers out of a pool of more than 900 strategic suppliers by presenting them with the prestigious 'Supplier of the Year 2018' award.

Continental is a long-standing and major customer for which SFS Group develops and manufactures a number of components that are for example in use in electronic brake systems. These components meet demanding technical specifications, are of outstanding quality and are produced in large quantities at competitive prices.

Customer satisfied on all levels

Continental confers its 'Supplier of the Year Awards' after conducting a comprehensive evaluation of its collaboration with series suppliers based on quality, technology, commitment, costs and purchasing conditions. Suppliers who have excelled in customer satisfaction are presented with an award. SFS achieved a consistently top rating in the metal parts product category therefore ranked among Continental's 14 best suppliers.

Inventing success together

Alfred Schneider, Head of the Automotive division, and Sandro Rossi, Head of Key Account Management, were honored to be presented with the award on behalf of all employees at the Automotive division during an official ceremony in Regensburg, Deutschland. “This award reflects our strong teamwork and confirms that we're on the right track,” says Alfred Schneider. “We're truly pleased to receive this award and to have made such a significant contribution to Continental’s success. This is a perfect example of how we are ‘Inventing success together’, true to our value proposition.”

Continental award ceremony
Award ceremony with Mr. Fella, Mr. Setzer, Mr. Rossi, Mr. Schneider, Mr. Schulte, Mr. Braunstetter and Mr. Reinshagen (from left to right)
Continental award supplier of the year 2018
Award 'Supplier of the Year 2018'

SFS realizes slight growth in a challenging environment

News – 19 July 2019

SFS was confronted with a challenging business environment during the first half of 2019 yet managed to defend its strong position and sharp competitive edge. Group sales increased 1.4% versus the first half of the previous year due to positive consolidation effects. Changes in the scope of consolidation included the acquisition of Triangle Fastener Corporation (TFC), a transaction that significantly enlarged SFS’s market presence and customer base in the US construction sector. Operating profit was impacted by mix effects and capacity utilization fluctuations and led to an adjusted EBIT margin of 12.6%.

With its clear focus on customer needs and innovation trends, SFS is attractively positioned and the wide variety of end markets it addresses gives it a sturdy footing. Nonetheless, SFS was confronted with a challenging business environment during the first half of 2019. Besides the general slowdown in economic growth, a further escalation in trade tensions left a mark on markets around the globe.

Consolidated sales for the first half of 2019 amounted to CHF 867.8 million. This corresponds to an increase of 1.4% from the first half of the previous year. On a like-for-like basis, sales declined 2.4%. Changes in the scope of consolidation contributed 4.6% to sales growth and currency effects had a negative impact of –0.8%. Besides the first-time consolidation of HECO, sales of TFC have been consolidated since 1 April 2019 as well.

Konzernumsatz 1H 2019_EN
Development of consolidated sales

Earnings marked by mix effects and fluctuations in capacity utilization

The sales mix effects arising from the divergent growth and EBIT contributions left a mark on Group earnings. Diminished productivity caused by demand-driven fluctuations in capacity utilization rates also burdened earnings. SFS generated an adjusted EBIT of CHF 109.2 million. This corresponds to an adjusted EBIT margin of 12.6% (PY 13.6%, adjusted). To maintain and increase profitability, far-reaching action plans were implemented.

Earnings for the period under review were impacted by the expected one-time effects. On the positive side, there was the book gain on the sale of real estate in Switzerland. On the negative side, non-recurring costs related to the relocation to the new site in Nantong (China) were incurred. The approximate net effect of these two extraordinary items was a negative CHF 3.7 million. Reported EBIT for the period amounted to CHF 105.5 million.

SFS Group generated a net profit of CHF 88.6 million in the first half of 2019 (PY CHF 88.9 million). This result was positively impacted by recent tax reforms in Switzerland, which practically compensated for the negative one-time effect (net) at Group profit level.

Investments made to realize new projects

SFS invested CHF 56.4 million or the equivalent of 6.5% of sales in plant and equipment during the period under review. The realization of new projects was the main driver of this investment activity. SFS expects a slight increase in investment activity in the second half and full-year capital expenditure is projected to amount for 6–7% of net sales.

Engineered Components: Challenging markets and attractive new projects

Sales trends in the Engineered Components segment were distinguished by the challenging situation in the Automotive and Electronics markets. The decline is attributable to the generally lower market demand for customer products and a strong base effect. That said, SFS’s standing with its customers has not changed and remains as solid as before. This was clearly reflected by the attractive new projects SFS acquired over the reporting period. Sales in the Industrial division were slightly lower, despite the anticipated trend reversal in the Aircraft business. The Medical division was able to maintain and even increase its dynamic growth momentum. Against the background described above, the Engineered Components segment delivered sales of CHF 454.2 million. This figure is 4.0% less than its performance in the prior-year period, whereof negative currency effects amounted to –0.4%.

The segment generated an adjusted EBIT of CHF 73.9 million, which corresponds to an adjusted EBIT margin of 16.1% (PY 17.6%). The contraction in its EBIT margin is attributed to sales mix effects and was also affected by demand-driven fluctuations in utilization rates. To offset the lower utilization rates, corrective action has been taken and will support profitability in the second half. Engineered Components expects business in the second half to be slightly stronger.

Fastening Systems: Market position in the US strengthened

The Fastening Systems segment witnessed divergent trends at its two divisions. The Construction division, which serves customers from the construction industry, benefited from the continuing stable market environment. Through the acquisition of TFC, a leading supplier of fasteners and other products, the Construction division substantially expanded its market and customer access in the US. Conversely, the Riveting division, which primarily does business with customers from the automotive industry and the European industrial sector in general, experienced a significant drop in demand amid a challenging market environment.

Segment sales nevertheless rose by 16.6% versus the previous-year period to CHF 248.3 million. Positive consolidation effects stemming from the increase in the interest in HECO and the acquisition of TFC (consolidated since 1 April 2019) fueled this growth and accounted for 20.4% of reported sales growth. Like-for-like sales showed a slight decline (–1.8%) and were impacted by a negative currency effect of –2.0%. Segment EBIT amounted to CHF 24.0 million, an increase of 15.5% versus the prior-year period. The EBIT margin matched the year-ago level of 9.4%. The Fastening Systems segment expects overall business in the second half to be stable.

Distribution & Logistics: Customer base enlarged

As in previous years, the D&L segment continued to steadily expand its customer base and organic sales increased for the period under review 0.3% compared to the previous year's high level. The divestment of the segment’s security systems business and currency effects burdened sales by –2.9%. Segment sales amounted to CHF 165.3 million. Within the segment, the development was broadly based. In particular, the tools sector and the sales channels HandwerkStadt and e-Shop showed a positive development.

The trend from the previous year was successfully sustained in the first half. Adjusted EBIT amounted to CHF 13.3 million, which corresponds to an EBIT margin of 7.9%. This represents an increase of 70 basis points from the prior-year margin. The reported EBIT margin of 10.8% was additionally influenced by the book profit from the disposal of a warehouse in Switzerland. The D&L segment expects its business trends to continue in the second half.

Slightly positive business trends expected

SFS assumes that the volatile political and economic environment and the trade tensions in particular will persist during the second half. Against this background, SFS has reviewed its assumptions and expects an uncertainly development for the relevant markets. In contrast to its initial guidance, the Group only expects a slight positive development to take place, which will be supported by the ramp-up of new projects.

SFS expects gross sales including acquisition effects to grow by 3–6% in 2019. Based on these expectations and no further headwinds from the simmering trade tensions, SFS expects its full-year adjusted EBIT margin to stand at approximately 13%. The one-time effects that burdened EBIT in first semester by CHF 3.7 million, are expected to cause a further negative effect in the magnitude of an upper single digit million amount in the second half of the year.

You can find the half year report 2019 in our downloadcenter.

SFS decides on a new head in Riveting division

News – 24 June 2019

Urs Langenauer, current head of Automotive North America, is taking over management of Riveting division and becomes a member of the Group Executive Board of SFS Group AG.

Thomas Bamberger leaves the SFS Group by mutual consent in order to take on new professional challenges. The Board of Directors and the Group Executive Board would like to thank Mr. Bamberger for his many years of service to division Riveting.

The Board of Directors of SFS Group AG names Urs Langenauer as the new Head of Division Riveting and, as of 1 July 2019, as a member of the Group Executive Board of SFS Group AG.

In Mr. Langenauer, SFS is relying on a long-serving employee with broad management experience. He has been working at SFS since 1995 and has been responsible for the business activities of Automotive division in North America since 2013. Urs Langenauer will use his expertise and experience to strengthen Riveting division and support it in the expansion of the fastener business.

SFS shareholders approve all proposals at the AGM.

News – 2 May 2019

971 shareholders attended the 26th Annual General Meeting of SFS Group AG, which took place yesterday. They represented 79.74% of total voting rights. All of the Board of Directors’ proposals were approved by a large majority.

Heinrich Spoerry, the Chairman of the Board of Directors, welcomed 971shareholders to the 26th Annual General Meeting (AGM) of SFS Group AG on 1 May 2019 at the Aegeten sports center in Widnau, Switzerland. They represented 29,903,408 shares or 79.74% of the share capital.

Solid business performance

In his welcome speech Heinrich Spoerry commented on the company’s solid performance in the 2018 financial year. SFS Group achieved sales growth of 6.5% in 2018. This attractive sales growth was broadly based in terms of end markets and geographies. The Fastening Systems segment's above-average performance was particularly pleasing. Within the scope of an informal interview conducted by two apprentices, Jens Breu (CEO) and Rolf Frei (CFO) spoke about new projects that will generate growth for the company in future years and the key financial numbers for 2018.

All proposals approved

In the statutory part of the AGM, the shareholders approved the management report, the financial statements and the consolidated financial statements. All members of the Board of Directors were re-elected and the compensation for the members of the Board of Directors and the Group Executive Board was approved. Members of both boards were released from liability for their activities during the past year.

Likewise the independent proxy Bürki Bolt Rechtsanwälte in Heerbrugg (Switzerland) as well as the statutory auditor PricewaterhouseCoopers AG in St. Gallen were re-elected.

Payout to shareholders

Shareholders also approved the dividend of CHF 2.00 per registered share. This distribution consists of the remaining capital contribution reserves (CHF 1.66 per share) and an ordinary dividend payout (CHF 0.34 per share) from retained earnings.Thus, the approved dividend is 5.3% more than the previous year’s dividend (CHF 1.90).

SFS GV 2019_Chairman Board of Directors Heiri Spoerry
SFS AGM 2019: Heinrich Spoerry, Chairman of the Board of Directors
SFS GV 2019_ Talkshow
SFS AGM 2019, impressions talkshow, on screen: CEO Jens Breu
SFS GV 2019_Impressions_Talkshow_Rolf Frei
SFS AGM 2019: impressions talkshow, on screen: CFO Rolf Frei
SFS GV 2019_Impressions
SFS AGM 2019: impressions talkshow: the apprentices Milena Ciardo & Yannick Haselbach with Rolf Frei, CFO & Jens Breu, CEO (from left to right)

SFS strengthens market position in U.S. construction industry

News – 2 April 2019

SFS Group acquires Triangle Fastener Corporation (TFC). TFC, with headquarters in Pittsburgh, USA, is a leading provider of fasteners and other products for the commercial construction industry. TFC produced sales of more than $ 70 million in 2018 and has approximately 200 employees. Thanks to this acquisition, SFS will be able to expand access to the market and its customers in the American building sector.

TFC was founded in 1977 and supplies end-users in the commercial construction industry with a comprehensive assortment of customer-specific fasteners, as well as other application solutions. TFC sells its products to roughly 6,000 active customers through 23 separate branch locations in 15 states, and is one of the leading suppliers in the Eastern United States.

TFC will operate as a part of the Construction division within the Fastening Systems segment. The company will be led by the existing management, thus ensuring its continuity.

SFS looks back on a solid financial year in 2018

News – 8 March 2019

SFS Group achieved sales growth of 6.5% in 2018. This attractive growth was broadly based in terms of end markets and geographies. The Fastening Systems segment's above-average performance is particularly pleasing. Operating profit reached 14.0 % of net sales and stays with CHF 243.1 million 4.2% above the comparable prior-year figure.

SFS Group achieved solid sales growth of 6.5% in the 2018 financial year, lifting its consolidated sales to CHF 1,739 million. Sales growth was driven by organic growth of 5.0% in the Group's core business activities (4.3% including the Engineered Components segment's trading activities). This growth reflects SFS’ strong position as a provider of customer-specific solutions in selected niche markets. Growth for the period was broadly based and the Fastening Systems segment showed the strongest development. Growth in the second half was slower than in the first half. This can be traced to the challenging comparison base – sales growth in the prior-year period was strong – and to an unexpected decline in demand during the fourth quarter, especially from customers in the automotive and electronics industries.

Changes in the scope of consolidation contributed 0.8% to top-line growth, which mostly reflects the first-time consolidation of HECO in the second half. Currency movements had a positive effect of 1.4% on reported sales growth.

Operating profit increased by 4.2% to CHF 243.1 million

Operating profit increased by 4.2% on a comparable basis to CHF 243.1 million. Profitability improved considerably during the second half (EBIT margin of 14.4%) compared to the first half (EBIT margin of 13.6%). The EBIT margin for the year as a whole stood at 14.0%, which is slightly below the comparable year-ago margin of 14.3%. This contraction is primarily attributed to sales mix effects arising, for example, from the stronger growth rates of the Fastening Systems and Distribution & Logistics segments and the strong decline in demand during the final quarter of the year. Net profit for the year rose by 21.9% to CHF 193.9 million, which corresponds to 11.2% of net sales.

20190308 Erfolgsrechnung_en

Broadly based growth

SFS continues to expand its position in key application areas. Broadly based sales growth led to a robust sales mix in terms of regions and end markets. Sales growth in Europe (+9.6%) stemmed from solid organic growth as well as positive consolidation and currency effects. The good performance in Americas (+9.3%) can be traced to strong demand in the construction, industrial and medical device sectors. Sales growth in Switzerland (+3.8%) was fueled by innovation and promising new customer wins. Due to subdued market demand in the electronics sector, sales rose 1.1% in Asia.

Engineered Components segment – growth in all four divisions

The Engineered Components segment generated sales of CHF 967.0 million despite a challenging market environment. This increase of 4.4% from the previous year was largely driven by the ramp-up of new projects. A significant improvement in the second-half EBIT margin resulted in an attractive full-year margin of 18.2% (previous year 19.8%, adjusted).

20190308 Kennzahlen_Engineered_Components_en

Fastening Systems segment – strong progress achieved

Thanks to its innovative products, the Fastening Systems segment continued to strengthen its competitive position and captured more market share. Sales grew by 13.8% year-on-year to CHF 437.1 million. The launch of new products was a strong sales driver, with additional support coming from the good market environment. SFS increased its stake in HECO, a specialist for structural timberwork, to 51% to further strengthen this strategic partnership. HECO has been fully consolidated by SFS Group since 1 July 2018 and it contributed 5.8% to the segment's sales growth. Fastening Systems made considerable progress towards improving its profitability during the period under review. At 9.8% (previous year 7.6%), the segment's EBIT margin for the reporting period nearly reached the targeted mid-term margin of 10%.

20190308 Kennzahlen_Fastening_Systems_en

Distribution & Logistics – acceleration in growth

Sales in the Distribution & Logistics segment rose by 3.6% year-on-year to CHF 334.5 million. Organic sales growth, taking into consideration the divestment of the segment’s security systems' business unit, amounted to 5.1%, which clearly exceeds the growth rate of Switzerland's gross domestic product. Tools and the construction-related product groups displayed particularly strong growth. Profitability improved during the year under review. EBIT rose to CHF 25.8 million, which corresponds to an EBIT margin of 7.6% (previous year 6.9%, adjusted).

20190308 Kennzahlen_Distribution&Logistics_en

Dividend payment shall be increased by 5.3%

In view of the robust earnings, the very solid balance sheet with an equity ratio of 74.4%, and the guardedly optimistic outlook for future business activity, the Board of Directors will propose an increase in the payout to CHF 2.00 per share (previous year: CHF 1.90) at the pending Annual General Meeting. The distribution will include the remaining capital contribution reserves (CHF 1.66 per share) and an ordinary dividend payout (CHF 0.34 per share) from retained earnings. The payout from capital contribution reserves is not subject to withholding or income tax for natural persons whose tax domicile is in Switzerland.

Negotations on a strategic collaboration with Triangle Fasteners

Since October 2018 SFS Group has been engaged in discussions on a strategic collaboration with Triangle Fasteners Corporation in USA. The negotiations are well advanced. SFS expects final results in the next few weeks.

Outlook for financial year 2019

SFS expects the market environment in 2019 to be volatile given the trade tensions between the US and China and the recent slowdown in global economic activity. Thanks to its healthy project pipeline, SFS expects to achieve top-line growth of 3% ─ 5% despite the challenging environment. Taking into consideration the uncertain economic situation, SFS expects the adjusted EBIT margin for financial 2019 to be in a range from 13% ─ 15%. Expenditures in connection with the commissioning of the new manufacturing platform in Nantong (China) will result in one-off costs in the low double-digit millions in 2019. Conversely, accounting gains on the disposal of real estate are likely to be recognized. The negative net effect of these one-off effects on reported EBIT for 2019 is likely to range from the high single-digit to low double-digit million amount.

SFS wins a major contract with a long-standing customer

News - XX. March 2019

A major contract with a customer in the automotive industry marks another mile-stone for SFS: Modules for a new generation of electronic brake systems will be manufactured at SFS’s factory in Heerbrugg (Switzerland) under a ten-year contract with a volume of more than CHF 200 million. Winning this contract demonstrates SFS’s highly competitive standing as a R&D partner.

Over the years SFS has successfully positioned itself as a preferred development partner for customers in the automotive industry. Trends towards greater comfort, safety and effi-ciency and, from an overarching perspective, trends associated with autonomous vehicles are spurring innovation. The increasing electrification of vehicles, which is also being ob-served in vehicle brake systems, is a promising fast-growing market segment and SFS is profiting from it.

Building on its many years of successful, close cooperation with the customer, SFS has developed a convincing second-generation version of a key module for electronic brake systems. The awarded contract will be realized over the next ten years and represents a sales volume of more than CHF 200 million. The newly developed innovative module is distinguished by reduced complexity and greater cost-effectiveness, which heralds market share gains for the customer. This project win is another example of SFS’s successful strategy implementation and it represents a platform for future growth.

With the development of these next-generation modules for electronic brake systems, SFS deepened its partnership with this customer and at the same time set another milestone for sustained growth.

SFS realizes solid sales growth

News – 25. January 2019

SFS Group achieved solid sales growth of 6.5% in the 2018 financial year, lifting its consolidated sales to CHF 1,739 million. This attractive sales development was broadly based in terms of end markets and geographies. Operating profit rose to CHF 243 million, which corresponds to 14% of net sales.

Sales growth was carried forward by a solid and balanced organic growth rate of 5.0% in the Group's core business activities and reflects the strength of SFS’s customer-specific solutions for selected niche markets. Growth for the period was broadly based and led by the Fastening Systems segment. The growth rate in the second half was slower than in the first half. This can be traced to the challenging comparison base – sales growth in the previous year was strong – and to an unexpectedly sharp, temporary decline in demand during the fourth quarter, especially from customers in the automotive and electronics industry.

Sales growth attributable to changes in the scope of consolidation amounted to 0.8%, which primarily reflects the first-time consolidation of HECO (Ludwig Hettich GmbH & Co. KG) for the second half of the year. Currency movements had a positive effect of 1.4% on reported sales growth.

20190125_Sales by segment
20190125_Growth factors

Sales by region: Broadly based growth
SFS has a broad, balanced presence in its various geographic markets and the sales mix in the individual regions showed stable trends during the period under review. Besides the solid organic sales growth, the pleasing performance in Europe (+9.6%) is attributable to positive consolidation and currency effects. The good results in Americas (+9.3%) are primarily allocable to strong demand in the construction, industrial and medical sectors. In Switzerland (+3.8%), the positive development was fueled by innovation and promising new customers.

20190125_Sales by region

Engineered Components: Robust growth generated
The Engineered Components (EC) segment generated sales of CHF 967.0 million despite a challenging market environment, which corresponds to an increase of 4.4% versus the previous year. All divisions contributed to the sales growth. The ramp-up and launch of new projects were a major growth factor.

Sales momentum of the EC segment experienced a temporary weakness, particularly in the fourth quarter. Amongst others this can be traced to delays in the homologation of new engines in the automotive industry, a general market saturation in the smartphone business and an increasing uncertainty among market participants caused by US-China trade tensions.

Fastening Systems: Strong sales growth realized
Thanks to its innovative products, the Fastening Systems (FS) segment strengthened its competitive position and captured a larger share of its targeted markets. Sales grew by 13.8% to CHF 437.1 million. The launch of new products was a strong sales driver, with additional support coming from a good market environment. Organic growth amounted to 5.6% year-on-year.

SFS increased its stake in HECO to 51% to further strengthen this strategic partnership. Consequently, HECO has been consolidated by SFS Group since 1 July 2018 and it contributed 5.8% to reported sales growth for the FS segment.

Distribution & Logistics: Balanced sales trend continued
Sales in the Distribution & Logistics (D&L) segment rose by 3.6% year-on-year to CHF 334.5 million. Organic sales growth, taking into consideration the divestment of the segment’s security systems business, amounted to 5.1%, which clearly exceeds the growth rate of Switzerland's gross domestic product (a key benchmark for measuring the performance of D&L). Especially the tools sector and construction-related products displayed strong growth.

Operating profit increased to CHF 243 million
Based on the available preliminary results, SFS Group expects operating profit to show an increase of 23% (+4.2% on a like-for-like basis) to CHF 243 million. The corresponding EBIT margin of 14% of net sales will be slightly less than the given guidance of >14.3%. This is attributed primarily to mix effects, for example, from the faster rate of growth in the Fastening Systems and Distribution & Logistic segments.

The detailed and audited financial figures for the 2018 financial year will be presented at the conference for analysts and the media on 8 March 2019.

SFS receives supplier excellence award from Bosch

News – 12. December 2019

SFS is proud to receive the “Crazy for SuCCess” award for the second time. This prestigious award was given to six of the more than 1,000 suppliers that Bosch does business with its Chassis Systems Control Division in recognition of their status as a “most valuable and loyal supplier”.

Bosch (Robert Bosch GmbH) is a long-standing, key customer of SFS Group for whom it develops, manufactures and delivers ready-to-fit components, for example for ABS systems. These components meet demanding technical specifications, are of impeccable quality, and are produced in high quantities at competitive prices.

A local supplier for international customers

SFS was honored as one of Bosch’s most valuable and reliable suppliers. Tireless efforts to innovate and optimize and a global production platform, which allows SFS to act as a local supplier to its customers across the globe, were also cited as reasons for honoring SFS with this prestigious award. SFS was pleased to receive this award already for the second time in the short history of Bosch's “Crazy for SuCCess” award.

Participation in panel discussion

This year's award ceremony was held at Bosch’s Blaichach factory in Germany and Jens Breu, CEO of SFS Group, was invited to participate in a panel discussion there. The main topics discussed by the panel were innovation and technology challenges in today’s markets, supplier agility during project execution, and the steadily growing business complexity.

Inventing success together

SFS also took the opportunity to inform Bosch managers about its latest innovative developments and its new production platform in China, thus underscoring its constant commitment to seek success in collaboration with the customer.

SFS expands its Group Executive Board

News – 10. December 2018

SFS Group AG is strengthening its leadership team. Claude Stadler will become a member of the Group Executive Board in his current role as Head of Corporate Services, effective 1 January 2019.

The Board of Directors has resolved to give the Corporate Services unit, which comprises the Human Resources, Corporate Development and Communications departments, direct representation on the Group Executive Board. Claude Stadler, Head of Corporate Services, will therefore become a member of the Group Executive Board of SFS Group, effective 1 January 2019.

SFS is pleased to employ an executive with as much experience as Claude Stadler, who has been with SFS since 2013. He first served as Head of Corporate Communications and Investor Relations before assuming responsibility for the Corporate Services unit at the beginning of 2018.

SFS discusses strategic cooperation

News – 4. October 2018

The SFS Group is discussing the potential of a strategic collaboration with Triangle Fastener Corporation in USA.The talks are at an early stage. SFS expects first results from the discussions by the end of 2018.

Label Schweizer Arbeitgeber Award

SFS amongst the top 3 at the Swiss Employers' Award

News – 20. September 2018

The SFS Group reached 3rd place in the large companies category at the 18th Swiss Employers' Award.

At this year's Swiss Arbeitgeber Award 46'130 employees from 140 companies were rating their employer. The SFS employees from the Distribution & Logistics, Industrial and Services areas also took part in the comprehensive employee survey and answered questions on central aspects of their working situation, their work satisfaction and their commitment towards SFS. The best employers were ultimately derived from the answers from all participating companies. The SFS Group reached 3rd place in the large companies category (1000 or more employees) and therefore, as at the last participation in 2016, finished in the top 3.

The management and the whole organisation happily accept the good finish as feedback and appreciation on the part of the employees and take this opportunity to thank them for their dedication and loyalty. SFS can draw valuable indications for further development and improvement from these responses. In a broadly based process the indications will be discussed in the teams and appropriate measures taken.

The Baumann Koelliker Gruppe and the Luzerner Kantonalbank AG reached 1st and 2nd place in the large companies category.

SFS reports dynamic sales growth in 2017

News – 26. January 2018

Driven by strong organic growth of 7.4% and the first-time consolidation of Tegra Medical, SFS Group increased its sales in the 2017 financial year by 13.7% to CHF 1,632.7 million and its operating profit by 12.5%.

Strong organic growth of 7.4% fueled the positive sales developments. All segments contributed to the pleasing results. Currency movements had a marginally positive effect of 0.5% on reported sales, while changes in the scope of consolidation added a significant 5.8% to the reported sales growth.

20180126 Tabelle Umsatzentwicklung EN
20180126 Tabelle Wachstum EN

Engineered Components: Strong sales growth
The Engineered Components segment reported sales of CHF 925.8 million, an increase of 20.5% versus the previous year. Another significant acceleration in sales development was achieved during the second half compared to the first-half sales. This pleasing development is attributed equally to the first-time consolidation of Tegra Medical and to strong growth momentum at the Automotive and Electronics divisions. The realization of challenging new projects was a key factor behind the reported sales growth. Advance outlays associated with these projects resulted in additional costs. These outlays as well as project delays originating with customers temporarily lower operating profit margin.

Fastening Systems: Good momentum sustained
The Fastening Systems segment sustained its good momentum from the first half into the second half of the year and achieved sales of CHF 384.0 million. This corresponds to a growth rate of 8.0%. In an overall strong market environment, demand was high, especially for the Construction division in Europe and North America. Thanks to the market success of innovative products, the segment expanded its market share once again. Key transformational projects are nearing completion. The related cost-savings will become visible in the coming years.

Distribution & Logistics: Sales lifted by new customer projects
The Distribution & Logistics segment strengthened its market position thanks in particular to the execution of new customer projects. The business units tools and fastening systems showed very good growth. Segment sales grew a solid 3.2% to CHF 322.9 million. This increase is well above the growth rate of Switzerland's gross domestic product, which serves as an important benchmark. The strengthening of the euro led to a significant increase in procurement costs for third-party merchandise, but there was a time lag before the necessary price adjustments could be passed on to customers.

Sales by region: More balanced sales mix
In the 2017 financial year, sales showed positive growth in every region. Thanks to the successful integration of Tegra Medical, the share of sales generated in the Americas rose 39.9% and amounted to CHF 281.4 million. This acquisition has altered the regional sales mix and raised the sales contribution from the Americas region to 17.2%. Significant progress towards the targeted diversification was thus made during the year under review.

In Asia, too, year-on-year sales growth was a high 16.6%, bringing full-year sales from this region to CHF 353.9 million. Growth here is primarily attributed to the Electronics division. Business trends at the other units active in Asia were also very positive.

20180126 Tabelle Umsatz Regionen EN

Operating profit increased by 12.5%
Based on the provisional results now available, SFS Group expects its adjusted operating profit (EBITA calculated in accordance with IFRS) to increase by 12.5%. The adjusted EBITA margin is projected to be at the lower end of the given range of 14.2–15.2% due to the aforementioned extraordinary operating effects.

The detailed and audited financial accounts for the 2017 financial year, prepared in accordance with Swiss GAAP FER for the first time, will be released on 9 March 2018.

SFS launches a new online store

News – 12. February 2018

SFS’s Distribution & Logistics segment focuses on the Swiss market and offers professionals in the skilled trades and manufacturing sectors a comprehensive range of fastening systems, architectural hardware, tools and innovative logistics solutions. Customers benefit not only from the segment's extensive nationwide network of physical sales and distribution points, which include 28 HandwerkStadt retail shops, but also from its online channel, where an item, the segment offers, is only a click away.

Perfect sales platform

The new SFS store is now online at www.sfs.ch (German and French). It combines a straightforward, intuitive user interface with an appealing and responsive design that is just as user-friendly when accessed with a smartphone or tablet. Customers can quickly search and select whatever they need using the optimized search and purchase functions. One click on a product in the search results is all it takes to order any of the more than 150,000 top-quality products in the store. SFS’s online store also displays news, serves as a source of information about the vast range of products and services offered by Distribution & Logistics and includes a click-and-collect option, i.e. customers can place an express order and then collect the ordered merchandise in-store at one of the HandwerkStadt locations a mere two hours later.

High customer value

This optimized omni-channel concept is very convenient for professionals from the manufacturing and skilled trades sectors as it takes a variety of individual needs into consideration: the modern online store offers an efficient ordering process and 24-hour availability, while professional, personal support and advice is available at the local stores.

SFS Group generated dynamic sales growth in business year 2017

News – 09. March 2018

2017 was a successful year. SFS Group generated dynamic sales growth and improved its position in the medical device industry and in the Americas, thanks to the integration of Tegra Medical. Operating profit showed double-digit growth.

Driven by strong organic growth of 7.4% and the first-time consolidation of Tegra Medical, SFS Group increased its sales in the 2017 financial year by 13.7% to CHF 1,632.7 million. All segments contributed to this pleasing development. Changes in the scope of consolidation had a positive impact of 5.8% and currency movements added 0.5% to reported sales.

Financial statements 2017 according to Swiss GAAP FER

For the first time, Swiss GAAP FER accounting standards were used to prepare the financial statements for 2017 instead of IFRS. These standards are more practical for SFS Group than IFRS.

After the switch to Swiss GAAP FER and the associated shortening of the balance sheet, the equity ratio as at 31.12.2017 reaches a high 71.6% (31.12.2017 under IFRS: 80.1%). In view of this strong balance sheet, the company’s financial stability and entrepreneurial freedom remain fully intact.

20180309 Tabelle Erfolgsrechnung EN

Operating profit increased
Adjusted operating profit (EBITA) rose by 10.7% and amounted to CHF 235.8 million. The adjusted EBITA margin achieved an attractive level of 14.4% (previous year 14.8%) of the total net sales, despite extraordinarily high advance outlays and expenditures in the realization of demanding new projects. Furthermore, SFS is completing important transformational projects initiated in the Fastening Systems segment. The related cost-savings will become effective in the coming years. The fast appreciation of the euro increased procurement costs, while necessary adjustments to selling prices could only be made after a certain time lag. The high dynamics as well as project activity are also reflected in the high investments made in property, plant, equipment and software of CHF 132.8 million (previous year CHF 84.6 million). Net income including proceeds from property disposals amounted to CHF 159.1 million (previous year CHF 124.8 million), which corresponds to a year-on-year increase of 27.5%.

Balanced market exposure
In the 2017 financial year, sales showed positive growth in every region. Sales generated in the Americas increased by 39.9% thanks to the successful integration of Tegra Medical and amounted to CHF 281.4 million. Due to this acquisition, the geographical sales contribution from the Americas region increased to 17.2% (previous year 14.0%). Sales generated with medical device manufacturers jumped from 1.9% (2016) to 6.4% (2017) of the total sales. Thus, a significantly broader market exposure in terms of regional and end market sales has been achieved.

20180309 Tabelle EC EN
| 1: at constant exchange rates and on the same scope of consolidation | 2: return (EBITA) in % of net operating assets (adjusted for Tegra Medical 2016) | 3: return (EBITA) in % of average capital employed without intangible assets | SGF = Swiss GAAP FER

The Engineered Components segment reported sales of CHF 925.8 million (+20.5% y-o-y), thanks to the first-time consolidation of Tegra Medical and to the strong growth momentum at the Automotive and Electronics divisions. The EBITA margin is once again at a very attractive level of 19.8% (previous year 21.2%) despite advance outlays in connection with the realization of new projects and customer-induced project delays, which had a negative effect on operating profitability.

20180309 Tabelle FS EN
| 1: at constant exchange rates and on the same scope of consolidation | 2: return (EBITA) in % of net operating assets (adjusted for Tegra Medical 2016) | 3: return (EBITA) in % of average capital employed without intangible assets | SGF = Swiss GAAP FER

The Fastening Systems segment sustained its good growth momentum from the first half into the second half of the year. It reported full-year sales of CHF 384.0 million, which corresponds to a growth rate of 8.0%. The EBITA margin for 2017 lowered to 7.7% (previous year: 9.0%) due to increased costs in connection with ongoing transformational projects.

20180309 Tabelle DL EN
| 1: at constant exchange rates and on the same scope of consolidation | 2: return (EBITA) in % of net operating assets (adjusted for Tegra Medical 2016) | 3: return (EBITA) in % of average capital employed without intangible assets | SGF = Swiss GAAP FER

The Distribution & Logistics segment strengthened its market position thanks in particular to the acquisition of new customers and realized sales growth of 3.2% to CHF 322.9 million. The segment EBITA margin came in at 9.1%. Excluding non-recurring effects, profitability for the current year as measured by the EBITA margin of 6.9% was only slightly below the level achieved in previous year (7.2%). Rapidly rising procurement costs have temporarily impacted profitability.

Shareholder payout
In view of the robust earnings and the positive outlook for future business activity, the Board of Directors will propose an increase in the payout to CHF 1.90 per share (previous year CHF 1.75), to be paid from capital contribution reserves. This payout is not subject to withholding or income tax for natural persons whose tax domicile is in Switzerland.

Outlook for the 2018 financial year
Our focus in the 2018 financial year will be on strengthening our position with existing customers and on the selective expansion of our customer base. We also intend to exploit new application areas, launch significant new projects and extract greater synergies from the transformational projects currently under way at SFS Group. All projects aimed at sharpening our production profile in the Fastening Systems segment should also be completed by the end of this year.

Assuming unchanged economic conditions, we expect sales to grow by 5–7% in 2018 and the EBIT margin to increase compared with the 2017 financial year.

Documents to the 2017 financial year
Please find the full report, summary report and the presentation on the FY2017 at www.sfs.biz/investorrelations.

The online annual report is available at annualreport.sfs.biz/en

If you wish to participate in the webcast at 11 a.m., please follow this link

and dial the following numbers 10-15 minutes prior to scheduled start:

Switzerland / Europe +41 (0) 58 310 50 00

Germany +49 (0) 69 505 0 0082

France +33 (0)1 7091 8706

United Kingdom +44 (0) 207 107 0613

United States +1 (1) 631 570 56 13

SFS shareholders approve all proposals at AGM

News – 26. April 2018

729 shareholders attended the 25th Annual General Meeting of SFS Group AG, which took place yesterday. They represented 81.9% of the votes. All proposals by the Board of Directors were approved by a large majority.

On 25 April 2018, the Chairman of the Board, Heinrich Spoerry, welcomed 729 shareholders to the 25th Annual General Meeting (AGM) of SFS Group AG at the Aegeten sports centre in Widnau (Switzerland). They represented 30.711.980 shares, which corresponds to 81.9% of the share capital.

Dynamic business year

In his short speech, Heinrich Spoerry commented on the successful 2017 financial year. SFS Group generated dynamic sales growth and improved its position in the medical device industry and in the Americas thanks to the integration of Tegra Medical. Jens Breu, CEO of the SFS Group, informed about important projects, which will lay the basis for SFS' further growth. Rolf Frei, CFO of the SFS Group, gave his comments on selected financial aspects of the 2017 financial year.

All proposals approved

During the statutory part of the meeting, shareholders approved the management report, the financial statements and the consolidated financial statements. All members of the Board of Directors were re-elected and the compensation to members of the Board of Directors and the Group Executive Board was also approved. The shareholders released both boards, the Board of Directors and the Group Executive Board, from liability for their activities.

Likewise, the law firm bürki bolt németh in Heerbrugg was re-elected as independent proxy and PricewaterhouseCoopers AG in St. Gallen was re-elected as auditor.

Payout to shareholders

The shareholders also approved the payout of CHF 1.90 per share from capital contributions reserves. This represents an increase in payout of 8.6% compared to the previous year (CHF 1.75).

SFS raises its stake in HECO to 51%

News – 17. May 2018

SFS is deepening its strategic partnership with HECO, a leading manufacturer of fastening solutions for structural timberwork, and raising its interest in the German company to 51%.

In August 2015, HECO (Ludwig Hettich GmbH & Co. KG) and SFS signed an agreement establishing a strategic partnership. SFS concurrently acquired a minority interest of 30% in HECO. Both companies are active in the structural timber market and have built strong reputations for quality and innovation. Thanks to the two companies’ largely complementary product portfolios, customers have since benefited from a more comprehensive range of products and services. Close collaboration between the two partners has created operational synergies in their manufacturing operations and sharpened their competitiveness.

Strengthening the strategic partnership

This two-year old partnership has yielded very positive results for both HECO and SFS. The advantages are becoming increasingly visible, both on the sales and the manufacturing front.

In a move to further strengthen this strategic partnership, SFS will increase its stake in HECO to 51% effective 1 July 2018. This will allow both companies to better capture growth and synergy potential and take better advantage of their respective competencies. Acquiring a majority interest in HECO will facilitate the targeted improvement in HECO’s performance within the SFS Group and have a positive effect on the headcount and business activity at the different HECO locations. HECO generated EUR 41 million in sales in 2017 and employed 322 employees (end of 2017). The company will be consolidated by SFS Group as of 1 July 2018.

SFS decides on successor in Distribution & Logistics segment

News – 28. June 2018

Iso Raunjak, currently Head of Central Logistics, takes over from Josef Zünd as Head of the Distribution & Logistics segment on 1 January 2020. After 49 successful years at SFS, Josef Zünd goes into retirement in March 2020.

In the interests of early planning, the Board of Directors has chosen Iso Raunjak to succeed Josef Zünd to head the Distribution & Logistics (D&L) segment. With Iso Raunjak, the SFS Group falls back on a highly experienced and long-term SFS manager who started his career at SFS in 1992. In his function as head of the D&L segment, Iso Rauniak will also become member of the Group Executive Board of the SFS Group AG on 1 January 2020.

Over the past 20 years, Josef Zünd considerably improved the positioning and growth of the D&L segment. Up to his retirement, Josef Zünd will remain Head of D&L and will continue to manage segment strategy and organisation in close collaboration with his successor.

On this occasion, the Board of Directors and the Group Executive Board would like to thank Josef Zünd for his prominent and untiring efforts in building up the D&L business activities.

SFS sustained good growth momentum

News – 20. July 2018

SFS sustained its good sales growth and expanded its market positions during the first half of 2018. Compared to the adjusted previous year the operating profit rose by 4.6%. High advance outlays, structural adaptions and increased raw material costs still pressured the operating profit.

SFS managed to sustain its growth momentum from the previous financial year throughout the first half of 2018. Sales amounted to CHF 855.9 million, which corresponds to an increase of 9.9% from the previous-year period. Organic sales growth came in at 7.1% and was broadly based in terms of end markets and regions, with positive contributions from all three segments. Currency translation and changes in scope of consolidation had with 2.8% a positive effect on reported sales growth.

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Earnings power impacted by extraordinary operating effects
Although significant progress has been made, extraordinary operating effects continued to weigh on profitability during the first half of 2018, as had been forecast in the presentation of the annual results 2017. These temporary operating effects related to the sharp increase in the cost of materials, which was passed through to customers with a time lag, substantial advance outlays for pending growth projects, and additional costs associated with the sharpening of production profiles. Against this backdrop, EBIT amounted to CHF 116.0 million, which corresponds to an EBIT margin of 13.6% (prior-year period: 10.4%; adjusted 14.2%). Whereas the second half of the financial year 2017 was distinguished by weak results – due to the above-mentioned extraordinary effects – SFS expects the opposite pattern in the current financial year.Profitability is forecast to improve significantly during the second half of the year thanks to the measures taken, the positive seasonal effects in the second half, as well as the passing on of price increases to customers.

Net income for the period amounted to CHF 88.9 million or 10.4% of the net sales.

Major investments in future growth
Capital expenditure on property, plant and equipment amounted to CHF 69.5 million, which corresponds to an increase of 44.0% from the previous-year period. Most of these investments (75.9%) were made in the Engineered Components segment, which also displays the highest return on capital employed.

The high level of capital expenditure, triggered by key customer projects, will continue during the second half of the year. SFS expects capital expenditure for the year as a whole to equal over 8.5% of net sales.

Entrepreneurial freedom thanks to solid balance sheet
SFS’ balance sheet remains familiarly solid. The equity ratio stood at 71.1% (31 Dec. 2017: 71.6%). Net debt amounted up to CHF -0.4 million.

Engineered Components Segment: Growth maintained
The healthy growth momentum witnessed during the preceding fiscal year continued into the first half of 2018. Organic growth amounted to 7.6%. Supported by positive currency effects, reported sales of CHF 473.2 million were up 10.5% over the figure from the prior-year period. As in 2017, the two key contributors to this growth were the Automotive and the Electronics divisions.

The earnings power of Engineered Components continued to be pressured in the first half of 2018 by high levels of advance outlays in preparation for future growth projects and by increased raw material costs. EBIT amounted to CHF 83.9 million, or 17.6% of net sales (prior-year period: 12.7%, adjusted 19.6%). SFS expects margins to recover during the second half of 2018, thanks to the pass-through of the higher costs to customers, which has taken longer than expected to achieve, and new product launches.

Fastening Systems Segment: Growth driven by innovation
The sales momentum from the previous fiscal year was maintained during the period under review. Sales amounted to CHF 213.0 million, 12.0% more than in the first half of 2017. Organic growth amounted to 6.9%. Fastening Systems continued to strengthen its market position amid a robust market environment, thanks to its offering of compelling products and services. Both divisions contributed broadly to overall sales growth.

Due to good progress on the operating front, reported EBIT of CHF 20.7 million for the first half of 2018 topped the previous-year figure by 12.2%. The EBIT margin stood at 9.4% (prior-year period: 9.3%). SFS expects segment sales and earnings to show positive trends in the second half of 2018.

Thanks to the increase in SFS’s stake in HECO to 51%, growth and synergy potential and the core competencies of each partner are now being exploited even more effectively. HECO has been fully consolidated by SFS Group since 1 July 2018.

Distribution & Logistics Segment: Accelerated growth
The Distribution & Logistics (D&L) segment reported faster sales growth than in 2017. Sales amounted to CHF 169.7 million, which corresponds to an increase of 5.9% compared with the previous-year period.

D&L’s distinctive offering in several market segments was profiled more effectively during the period under review. Examples here are the launch of the new online shop, a more focused offering for specialty retailers and the sale of the security systems business that belonged to the unit of architectural hardware operations.

Sharply higher procurement costs continued to impact D&L's profits in 2018. These increased costs on the supply side were passed through to customers after a longer-than-expected time lag. Nevertheless, segment operating profit rose by 9.2% y-o-y to CHF 12.4 million. The EBIT margin came in at 7.2% (prior-year 7.0%). SFS expects a positive trend in the second half of 2018.

In order to ensure an orderly succession process, the Board of Directors announced that Iso Raunjak will succeed Josef Zünd as Head of the D&L segment. In this role Iso Raunjak will also become a member of the Group Executive Board of SFS Group AG on 1 January 2020.

Positive developments expected
On the assumption that the general economic environment remains basically unchanged, SFS expects sales to continue to grow in the second half of 2018 and full-year sales growth to amount to 7–9% over the previous financial year. Due to the subsiding impact of the above-mentioned extraordinary operating effects and the positive seasonal trends in the second half, profitability should improve and SFS reiterates its projection of an EBIT margin in excess of 14.3% for the financial year 2018.

The half-year report for 2018 can be downloaded at: www.sfs.biz/investorrelations