Bossard: Positive Result despite substantial Decline in Sales

Lower demand but also because customers reduced their inventories – a typical reaction in economically difficult times. Thus Group sales dropped further. Moreover, price reductions in line with the lower cost of raw materials also impacted on sales revenues. Taken together these factors led to Group-wide sales falling to CHF 205.9 million for the first six months of 2009 – a decline of CHF 94 million or 31.3 % year on year. In local currencies sales decreased by 30.8 %.

Bossard reacted in good time to the changed market situation by launching a cost reduction program some twelve months ago. In the past six months these measures were even more broadly applied and tuned to the ongoing market conditions. To some extent this counteracted the exceptional shrinkage of demand with the result that the Group reached a pleasing consolidated net income of CHF 5.6 million. Weak Demand worldwide – some strong Sectors of Industry The worldwide recession led to an exceptional sales collapse in all markets and regions. However, not every sector was affected equally strongly: Continuing weak investment activity impacted seriously on the electronics, textile and mechanical engineering sectors; conversely, the energy and railway sectors reported higher capacity utilization. All Bossard's Key Markets hit

Europe

Sales in Europe fell by 36.9 % to CHF 115.3 million. In local currencies they were down 34 %. Sales decline was similar in Western and Eastern Europe.

America

In America sales dropped from USD 74.5 million to USD 56.5 million. This decrease of 24.2 % was noticeably lower than in Europe and Asia. Demand declined less than in the prior year because the economic downturn in the United States had already commenced in spring 2008. Moreover, some of Bossard's U.S. customers are less seriously affected by the economic crisis. In Swiss francs sales fell by 18.4 %. This lower decrease in Swiss francs is attributable to the fact that the U.S. dollar declined in value against the Swiss franc.

Asia

With a decrease of 31.1 %, the Group's sales fell noticeably in Asia. Only India reported growth. Sales overall were down from CHF 38.9 million to CHF 26.8 million. In local currencies sales fell by 30.9 %. The reason for this strong decline was: Bossard's customers in this region are primarily export-oriented industrial companies, which are severely affected by the global decline in demand and have adjusted their production volume accordingly.

It is reassuring to note that – despite the difficult economic situation – the Group managed to increase its market share. This demonstrates that we can hold our own among our competitors and that we can successfully deploy our various strengths.

Gross Profit Margin maintained

Given the marked drop in sales, gross profit fell from CHF 108 million to CHF 74.2 million. This is a decrease of 31.3 %. Despite the difficult market conditions prevailing, the gross profit margin of 36.1 % remained at the prior year's level. With a continuing adverse market environment and the fact that the cost of raw materials is rising again, the gross profit margin will remain under pressure.

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