Thank you.
I
will
also
say
something.
Welcome
to
our
Annual
Financial
Analyst
and
Media
Conference
2022.
I'm
very
happy
that
we
are
back
to
a
physical
meeting.
We
are
streaming
this
event
and
it
will
be
available
on
our
website
later
today.
Stephan
Zehnder,
our
CFO
and
I
would
like
to
guide
you
through
the
following
agenda.
I
will
start
with
some
highlights
2021.
Stephan
Zehnder
will
then
navigate
through
the
financials
before
I
will
close
with
a
strategic
focus
and
outlook
2022.
So
let me
start
with
the
highlights.
The
Bossard
Group
closed
with
a
record
sales
of
CHF
995
million
and
an
EBIT
of
CHF 123
million.
The
economic
tailwind
throughout
the
year
helped
us
to
achieve
these
numbers
whereas
the
ongoing
pandemic,
global
supply
disruptions
and
cost
inflation
posed
unprecedented
challenges
to
the
organization.
Our
proven
supply
chain
resilience
through
double-sourcing
of
key
products
from
different
sources
and
regions
and
safety
stock
up
to
eight
months
helped
us
to
respond
to
increasing
customer
demand
without
significant
shortages.
Our
proven
productivity
services,
namely
Smart
Factory
Logistics
and
Smart
Factory
Assembly,
were
in
high
demand
to
reduce
total
cost
for
our
customers.
They
opened
opportunities
for
new
business
and
for
creating
customer
loyalty.
Throughout
the
year,
we
continued
to
implement
our
Strategy
200,
particularly
our
digitalization
and
cultural
transformation
plans
to
improve
our
internal
efficiency.
In
October,
we
announced
the
acquisition
of
Jeveka,
a
high-quality
distributor
in
the
Netherlands,
which
posed
us
in
a
strong
market
position
in
a
former
market
[ph]
white
spot (00:02:01),
the
Benelux.
And
last
but
not
least,
we
conducted
our
first
Capital
Markets
Day
where
we
had
the
opportunity
to
communicate
our
strategy
and
business
model
in
more
detail
to
interested
investors
and
analysts.
All
this
was
only
possible
with
a
motivated
organization.
What
you
see
here
is
a
picture
from
our
last
three
corona
leadership
conference
in
Portugal.
Stephan
Zehnder,
our
CFO
will
now
guide
you
through
the
financial
review
2021.
Stephan,
please.
S
Stephan Johannes J. Zehnder
Good
morning,
ladies and
gentlemen.
Bossard
looks
back
on
another
extraordinary
business
year.
The
COVID-19
pandemic
continued
to
create
major
challenges
for
the
group
from
a
variety
of
angles
in
2021.
However,
one
could
almost
say
with
completely
different
signs
than
in
the
prior
year,
but
those
not
less
demanding.
When
in
2020,
the
group
was
challenged
by
the
maximum
extent
to
prove
its
operational
efficiency
and
thus
to
guarantee
the
delivery
capability
to
its
customers
as
a
result
of
the
lockdowns
and
global
interrupted
supply
chains,
in
2021,
the
global
economic
upturn
and
the
resulting
high
demand
led
to
supply
bottlenecks,
capacity
restrictions
and
longer
delivery
times,
which
were
coupled
with
significant
price
increases
for
raw
materials
and
freight
costs.
The
fact
that
Bossard
was
able
to
hold
its
own
and
to
take
advantage
of
the
market
opportunities
even
in
this
challenging
environment
is
impressively
demonstrated
by
the
2021
annual
results.
We
are,
therefore,
pleased
to
present
to
you
today
results
that
are
exceptionally
in
the
Bossard
history.
We
were
able
to
simultaneously
increase
sales,
EBIT
and
net
income
to
new
record
levels
in
2021
and
hence
not
only
to
significantly
surpassing
the
results
from
the
prior
year,
but
also
those
prior
pandemic.
The
Bossard
Group
achieved
sales
of
CHF
995.1
million
in
2021,
an
increase
of
22.4%
compared
to
prior
year,
whereby
the
currency
effect
of
0.2%
was for
once
neglectable.
Organically,
sales
growth
was
disproportionately
high
compared
to
the
prior
year,
with
an
increase
of
21.1%.
The
newly
acquired
Dutch
company
Jeveka,
consolidated
since
October
2021,
contributed
1.1%
to
the
group's
sales
increase.
Thanks
to
its
consistently
high
delivery
capability,
Bossard
benefited
from
the
strong
global
economic
upturn.
As
a
result,
Bossard
was
able
to
report
double
digit
growth
rates
not
only
in
all
three
market
regions,
but
actually
in
all
the
countries.
There
is
no
doubt
that
the
investment
backlog
caused
by
the
pandemic
in
2020
and
the
high
resulting
dynamic
demand
in
2021
helped
us
to
significantly
increase
sales
and
profits.
However,
the
growth
is
also
an
expression
of
our
internationality
and
the
group's
broad
customer
base
in
a
wide
range
of
industrial
segments.
The
focus
on
growth
industries
such
as
robotics,
electromobility,
railway
and
medical
technology
paid
off
and
those
segments
developed
particularly
well.
The
EBIT
amounted
to
CHF 123.3
million,
representing
an
increase
of
42.8%.
At
the
same
time,
EBIT
margin
improved
from
10.6%
in
the
prior
year
to
12.4%,
which
means
that
the
group's
earnings
power
has
again
improved
markedly.
Despite
the
volatile
market
conditions
paired
with
significant
cost
increases
both
in
raw
material
prices
as
well
as
operating
expenses,
we
managed
to
keep
the
EBIT
margin
in
the
upper
part
of
the
targeted
range
of
10%
to
13%.
This
shows
how
solid
our
group
performed
in
this
very
challenging
environment.
The
positive
underlying
condition
also
had
an
impact
on
profit.
Compared
to
prior
year,
net
income
increased
from
CHF 67.8
million
to
CHF 98
million.
The
return
on
sales
amounted
to
9.8%
compared
to
8.3%
in
2020. With
that,
the
Bossard
Group
can
report
the
best
annual
results
in
its
history;
hence
we
are
proud
of
that.
Three
key
factors
were
decisive
for
the
success
over
the
last
two
years.
Firstly
and
foremost,
the
flexibility
of
our
2,700
employees
around
the
globe
who
did
a
tremendous
job
and
whose
performance
was
exceptional
under
difficult
conditions.
Secondly,
the
purchasing
strategy
we
have
practiced
for
years,
which
is
based
on
several
procurement
sources.
And
finally,
our
generous
stock keeping.
Although
this
represents
the
largest
balance
sheet
item
with
a
high
capital
commitment
of
over
CHF
338
million,
it
was
of
central
importance
in
order
to
ensure
the
best
possible
delivery
capability
to
our
customer
in
this
exceptional
demand
situation.
In
addition,
the
strong
performance
is
also
preceded
by
various
upfront,
far-sighted
investments and expenditures
made over
the last
years.
Worth mentioning
are here,
the
investments
in
people and
the
organization,
the
expansion
of
office
and
warehouse
capacities
in
various
markets,
as
well
as
our
targeted
acquisitions.
Also,
our
focus
on
special
parts,
engineering
services
and
smart
factory
solutions,
as
well
as
our
investments
in
digitalization
of
our
processes
and
services
supported
the
strong
sales
and
profit
growth
in
2021. Examples
are
our
new
e-commerce
platform
or
our
real-time
manufacturing
service,
which
enables
our
customers
to
obtain
milled
and
turn
prototype
parts
quickly
and
reliably
at
a
reasonable
price.
Another
example
is
our
new
service,
Smart
Factory
Assembly,
which
is
supporting
our
customers'
digitalization
of
their
assembly
processes.
Now,
let's
have a
look
at
the
sales
developments
in
the
individual
market
regions.
In
America,
sales
increased
by
12.4%
to
CHF
226.2
million
or
15.3%
in
local
currency.
This
gratifying
development
continued
due
to
the
ongoing
diversification
of
our
customer
base,
among
other
things,
in
the
field
of
electromobility.
The
digitalization
accelerated
by
the
pandemic
had
a
supporting
effect,
which
also
led
to
sustained
high
demand
in
the
electronics
segment
in
2021.
In
Europe,
sales
increased
by
23.1%
to
CHF
574 million
compared
to
last
year,
while
in
local
currency,
the
increase
was
22.1%.
Especially
in
Europe,
we
benefited
from
the
broad
customer
base
in
industries
such
as
medical
technology
and
railway.
The
acquisition
of
Etanco
contributed
for
the
gratifying
sales
performance.
Adjusted
for
acquisition,
annual
sales
totaled
CHF
564.4
million.
In
Asia,
we
remained
on
a
growth
path.
The
continued
strong
demand
throughout
the
year
resulted
in
a
sales
increase
of
34%
to
CHF 194.9
million.
In
local
currency,
growth
amounted
to
31.8%,
but
this
growth
was
broad
based
is
reflected
in
the
increase
in
sales
of all
business
units,
some
of which
were
well
into
the
double-digit
range.
Malaysia,
India
and
Taiwan
are
particularly
worth
mentioning
at
this
point.
As
for
the
industrial
segments,
it
was
primarily
robotics,
automation
and
electronics
that
recorded
strong
growth
rates.
Now we
review
on
the
balance
sheet
the
above-average
growth
rate
also
and
also
the
investment
activities
of
the
group
led
to
significant
increase
in
total
assets.
Compared
to
the
prior
year,
total
assets
increased
by
20.5%
to
CHF
773
million.
Despite
the
high
profitability,
the
equity
ratio
fell
from
50.3%
in
the
prior
year
to
45.2%.
This
decline
can
be
explained
by
the
fact
Bossard
offsets
the
goodwill
from
acquisition
in
2021,
CHF 38
million,
directly
against
equity.
The
market
increase
in
total
assets,
it's
driven
by
higher
customer
receivables
as
a
result
of
the
substantial
increase
in
sales
on
the
one
hand
and
on
the
other
hand
by
the
higher
inventory
levels.
While
the
increase
in
receivables
was
in
line
with the
sales
growth,
the
increase
in
inventories
was
above
average.
Besides
the
higher
sales
volumes,
the
increase
was
due
to
higher
raw
material
prices
and
freight
costs.
Furthermore,
inventories
were
deliberately
increased
to
ensure
the
best
possible
delivery
capabilities
of
our
customers,
in
view
of
the
continuing
market
uncertainties
and
long
delivery
times.
Last
but not
least,
the
acquisition
of
Jeveka
also
contributed
to
the
increase
in
total
assets.
In
relation
to
net
sales,
the
operating
net
working
capital
increased
slightly
from
42.7%
in
the
prior
year
to
43.8%.
As
a
result
of
the
high
level
of
investment
activity
and
accelerated
growth,
net
debt
increased
from
CHF
156
million
in
2020
to
CHF 270
million
in
2021.
The
gearing
net
debt
measured
against
equity
recorded
a
slight
increase
from
0.6
versus
0.5
in
the
prior
year.
The
debt
factor,
the
net
debt
in
relation
to
EBITDA
nevertheless
remained
at
the
prior
year's
levels,
1.5
times,
thereby
Bossard
continues
to
have
solid
balance
sheet
ratios,
which
allow
room
for
further
growth
and
investments.
[indiscernible]
(00:13:11)
in
2021, we
invested
in
various
areas
in
order
to
keep
pace
operationally,
but
also
technologically
with
the
current
planned
growth
ahead.
In
total,
we
invested
CHF 35.3
million.
Thereof,
around CHF
6
million
relates
to
two
ongoing
infrastructure
projects.
In
France,
we
are
currently
expanding
existing
capacities
and
in
Taiwan,
we
are
investing
in
a
completely
new
office
and
warehouse
building.
Hereby,
we
more
than
doubled
our
logistics
capacities
in
both
cases.
We
invested
CHF 11
million
in
digitalization.
The
biggest
share
of
this
investment
was
dedicated
to
our
new
group-wide
ERP
system.
The
first
rollouts
are
planned
in
Denmark
and
Sweden
in
the
second
quarter
of
this
year.
In
total,
we'll
invest
about
CHF 70
million
into
the
new
ERP
system
and
the
global
roll-out
of
it
over
the
next
six
years.
About
CHF 14
million was
spend
for
replacement
investments
in
ongoing
operations.
Particularly,
I
would
like
to
mention
the
investments
of
CHF
4.5
million
into
smart
pin,
which
we
invested
– which
we
installed
at
our
customer
premises
and
are
the
core
of
our
smart
factory
logistics
solutions.
This
means
that
we
sold
quite
a
few
smart
logistics
solutions
in
2021
or
in
other
words,
every
Swiss
franc
spent
increases
business
volume
and
process
efficiency,
and
at
the
same
time
boosts
the
competitiveness
of
our
customers
and
therefore
is
the
basis
for
long-term
partnerships.
Now,
the
business
growth
and
the
investment
may
have had
an
impact
on
the
cash
flow
too.
Cash
flow
from
operating
activities
before
change in
the
net
working
capital
increased
by
striking
39.7%
to
CHF
126
million.
By
contrast,
cash
flow
from
operating
activities
of
the
changes
in
net
working
capital
fell
from CHF
91.6
million
in
the
prior
year
to
CHF 65.9
million.
As
already
mentioned,
this
is
mainly
due
to
the
higher
inventory
levels.
Cash
flow
from
investing
activities
increased
quite
a
bit
from CHF
41.2
million
in
2020
to
CHF
92.3
million
in
2021.
On
the
one
hand,
this
is
due
to
the
acquisition
of
Jeveka
last
October
– in October
2021
and on
the
other
hand,
due
to
higher
investments
in
property,
plant
and
equipment
and
intangible
assets,
as
already
mentioned.
While
the
group
reported
a
positive
free
cash
flow
of
CHF
50.4
million
in
the
prior
year,
a
negative
free
cash
flow
of CHF
26.4
million
resulted
in
2021
due
to
the
significant
growth
and
the
investments
made.
Finally,
a
word
on
the
dividend.
As
you
know,
our
dividend
policy
provides
for
a 40%
payout
of
net
income
to
shareholders.
After
two
extraordinary
years
influenced
by
the
pandemic,
we
will
return
to
our
normal
payout
ratio.
Accordingly,
the
Board
of
Directors
will
propose
a
gross
dividend
of
CHF
5.10
for
registered
A
share
at
the
2022
Annual
General
Meeting
of
Shareholders
compared
with
CHF
4.40
in
the
prior
year.
This
corresponds
to
an
increase
of
almost
16%.
Ladies
and
gentlemen,
with
this
preview,
I
conclude
my
remarks.
I
thank
you
very
much
for
your
attention
and
with
pleasure,
I
hand over
the word back
to Daniel.
Thank
you.
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
Thank
you,
Stephan.
An
amazing
year
behind
us.
I
would
now
like
to
elaborate
on
our
strategic
focus
and
what
we
expect
for
2022.
As
we
have
communicated
earlier,
we
have
developed
the
Strategy
200,
which
is
a
strategic
journey
we
follow
until
2031,
when
Bossard
turns
200
years
old.
We
aim
for
accelerated,
profitable
and
sustainable
growth
based
on
our
proven
business
model
organically
and
through
acquisitions
to
achieve
relevant
market
shares
in
our
key
markets
through
seven
strategic
initiatives.
We
have
elaborated
on
them
at
our
Capital
Markets
Day
in
October
last
year.
What
is
now
the
focus
for
2022?
One
of
the focus
areas
is
the
sunrise
industries.
Those
are
industries
which
we
expect
to
grow
above
average
in
the
next
years,
particularly
we
talk
about
railway,
electric
and
electronics,
healthcare
and
electric
vehicles.
To
make
it
more
tangible,
I'd
like
to
give
you
some
examples
for
each
industry.
We
have
been
working
with
railway
companies
for
decades.
This
is
particularly
interesting
because
we
see
a
lot
of
global
government
spending
on
railway
infrastructure,
namely
in
USA
and
Asia,
China
and
India
and
on
top,
railway
is
considered
a
sustainable
mobility
technology.
A
prominent
customer
example
is
Alstom
Bombardier,
which
we
are
serving
globally
as
an
engineering
and
smart
factory
partner.
Similarly,
we
are
engaged
with
Stadler
Rail
around
the
globe,
Hyundai
roped
them
in
Korea
or
CRRC
China
North
Railway
in
China
and
in
the
United
States.
To
our
acquisition
in
the
Netherlands,
we
became
the
key
fastener
supplier
for
ASML,
the
global
leader
in
the
development
and
production
of
semiconductor
equipment,
with
a
global
market
share
of
around
85%,
growing
exponentially.
Besides
ASML,
we
are
a
strategic
supplier
for
Dell
in
the
US
and
Ireland
with
the
rapid
acceleration
of
global
digitalization.
We
are
happy
to
be
positioned
well
in
a
number
of
electronics
companies
around
the
world.
With
the
globally
growing
demand
for
healthcare
services
and
sales
diagnostics
devices,
our
focus
on
the
healthcare
industry
continues.
A
good
example
of
a
long-term
partnership
is
Roche
Diagnostics,
where
Bossard
is
supplying
the
majority
of fasteners,
but
is
also
engaged
as
an
engineering
and
smart
factory
partner.
Similarly,
we
work
with
other
global
customers
in
the
segment
such
as
GE
Healthcare,
[ph]
EBrown (00:19:54),
Siemens
or
Metrohm,
a
Swiss-based
global
producer
of
chemical
analytics
devices.
Electric
vehicle
manufacturers,
from
startup
companies
to
mass
production
companies
have
been
and
will
be
in
our
growth
focus.
Lucid
Motors
is
a
prominent
example
of a
customer
where
Bosshard
was
engaged
in
engineering
from
the
very
beginning
some
four
years
ago.
Last
year,
Lucid
chose
Bossard
as
the
key
supplier
for
fasteners
for
the
ramp
up
in
steel
production
in
Casa
Grande,
Arizona.
Lucid
is
producing
a
luxury
sedan,
targeting
the
global
markets.
Another
example
of
a
new
project
in
the
ecosystem
of
electric
vehicles
is
our
engineering
collaboration
with
Northolt
in
Sweden.
Northvolt
is
a
six-year
old
Swedish
startup
company
who
joined
with
Volvo,
Volkswagen
and
Porsche
to
develop
their
own
battery
systems,
with
the
ambition
to
serve
the
global
market
with
batteries
for
electric
mobility.
Last
year,
Bosshard
was
chosen
as
the
engineering
partner
and
key
supplier
for
fasteners.
Looking
at
electric
vehicles,
our
product
solutions
are
used
in
the
body,
in
the
interior,
in
the
exterior,
in
the
chassis,
in
the
battery,
as
well
as
in
the
powertrain
and
inverters.
We
have
created
an
industry-specific
product
solution
assortment,
which
allows
us
to
run
focused
marketing
campaigns
globally.
Dedicated
industry
assortments
have
not
only
been
developed
for
electric
vehicles,
but
for
all
other
previously
mentioned
sunrise
industries
for
electronics,
healthcare
and
railway
as
well.
Another
strategic
focus
in
2022
is
our
proven
productivity
promise
to
our
customers.
Our
product solutions,
assembly technology
experts and
smart
factory services
are
key enablers
to
make
our
customers
more
productive.
When,
if
not
now,
when
wages
and
overall
costs
are
skyrocketing,
should
we
promote
our
solutions
that
enable
customers
to
reduce
their
total
costs
in
C-part
management
and
assembly
significantly.
What
do you
see here
is
a
exemplary,
but
typical
smart
factory
layout,
in
this
case,
of a
white
goods
or
washing
machine
producer
working
with
Bossard
on
multiple
levels.
Through
our
smart
factory
assembly
technology
services,
we
advise
customers
in
selecting
the
right
products.
What
you
see
here
is
a
tear-down
project
where
we
take
a
customer
product
apart,
here,
a
washing
machine
drum
and
proposed
optimization
potential
in
the
design
by
reducing
fastener
varieties
or
by
applying
more
innovative
product
solutions.
The
benefits
for
customers
are
higher
safety,
higher
efficiency
and
assembly
and
finally
increased
productivity.
Our
smart
factory
logistics
solutions
enable
customers
to
manage
their
C-parts
automatically,
ensure
an
optimized
and
real-time
inventory
management
and
a
smooth
flow
of
parts
through
the
factory
from
the
central
storage
location
to
the
points
of
assembly.
The
main
benefits
are
higher
availability
at
lower
total
cost,
and
again,
increased
productivity.
With
our
smart
factory
assembly
services,
we
secured
customers'
assembly
processes
by
providing
smart
tools
and
digital
work
instructions.
These
enable
assembly
workers
to
avoid
mistakes,
speed
up
the
assembly
process
and
onboard
new
unskilled
staff
very
efficiently.
Consequently,
smart
factory
assembly
services
are
another
lever
to
make
our
customers
more
productive.
The
Bossard
Group
sales
volume
is
driven
by
product
sales
whereas
the
services
are
creating
customer
value,
trust
and
loyalty.
While
we
sell
product
solutions
to
purchasing,
which
look
for
the
lowest
price,
we
promote
smart
factory
services
to
production
and
logistics
specialists
which
want
a
lean
production
and
logistics
flow.
Likewise,
we
sell
assembly
technology
expert
services
to
designers
and
developers
who
need
innovative
and
safe
solutions
instead
of
just
low-cost
products.
And
finally,
we
aspire
to
sell
our
complete
service
package
to
[ph]
P&L (00:24:30)
owners,
usually
the
C-level,
to
demonstrate
the
full
potential
of
total
cost
savings
and
to
underline
that
by
applying
the
complete
portfolio
of
services,
customers
typically
save
three
times
more
in
process
costs
than
they
actually
spend
on
products.
Some
of
you
may
remember
the
iceberg
model.
So
services
can
be
regarded
as
a
shoehorn
to
sell
products.
In
our
view,
an
absolutely
indispensable
shoehorn
because
we
would
not
be
where
we
are
today
had
we
not
focused
on
services
in
the
past.
In
summary,
our
strategic
focus
for
2022
is
to
run
the
business
and
ensure
we
achieve
profitable
growth
by
focusing
on
sunrise
industries.
Retain
and
penetrate
existing
customers,
but
also
win
new
business
through
our
strategic
services,
especially
now.
We
will
sharpen
our
view
on
sustainability,
both
socially
and
environmentally
and
for
the
latter,
collect
data
and
set
realistic,
short,
mid-
and
long-term
targets.
Besides
running
the
business,
we
are
fostering
change
by
implementing
our
strategic
initiatives,
one
of
them
being
our
operations
engine,
where
we
will
be
introducing
the
first
release
of
our
new
ERP
system
this
year.
The
sales
engine
will
help
to
provide
us
with
a
joint
structure,
processes
and
systems
to
acquire
new
business,
while
the
Together
We
Create
initiative
is
the
foundation
of
our
cultural
transformation
journey
for
better
and
more
efficient
internal
collaboration
through
the
application
of
our
new
guiding
principles,
leadership
development
and
talent
management.
This
leads
me
to
the
outlook
for
2022.
Looking
at
the
purchasing
manager
indices,
they
still
indicate
a
very
strong
global
demand.
The
current
global
supply
chain
situation
looks
a
bit
more
challenging.
The
war
in
the
Ukraine
does
not
help
to
stabilize
the
current
supply
chain
challenges.
Yet
we
have
no
dependency
neither
on
Ukraine
nor
on
Russia.
The
EU
has
imposed
anti-dumping
taxes
for
steel
fasteners
from
China
as
of
February
17.
This
means
we'll
need
to
forward
20%
to
80%
higher
product
cost
depending
on
specific
suppliers
to
our
customers
in
the European
Union.
In
general,
fastener
prices
are
on
the
rise
again.
Lead
times
went
up
to
30 weeks
to 50
weeks
with
12
weeks
in
normal
times.
So
you're
waiting
one
year
for
fasteners.
Freight
costs
are
still
peaking
at
around
$30,000
per
container
from
Asia
to
Europe.
Prices
tenfolded
in
the
last
12
months.
We
are
currently
facing
scarce
ports
and
container
capacities
all
around
the
globe.
And
then
we
see ongoing
inflationary
trends
on
wages
and
raw
materials.
In
a
nutshell,
this
means
we
are
still
in
a
strong
seller's
market
and
will
act
accordingly.
Our
stock
levels
are
sufficient,
so
we
are
not
expecting
significant
shortage
in
the
short
or
mid-term
and
we
will
continue
with
price
increases
and
ask
customers
for
longer
commitments
to
secure
their
supply.
In
summary,
the
strong
global
demand
and
the
great
market
potential
in
sunrise
industries
sent
very
optimistic
signals.
The
volatile
environment
with
the
ongoing
pandemic
waves,
the
war,
the
supply
chain
disruptions
may
pose
unexpected
challenges
to
our
business
development
this
year.
Since
we
think
long
term,
we
will
continue
to
invest
in
our
future,
namely
in
our
operations
engine,
our
new
ERP
system
and
in
our
Strategy
200
initiatives.
With
this,
we're
still
optimistic
for
2022
and
focus
on
what
we
can
influence.
And
part
of
what
we
can
influence
is
our
attitude
and
spirit.
Together
We
Create
is
the
motto
of
our
cultural
journey.
Through
better
collaboration
across
regions,
functions
and
hierarchies
and
also
with
suppliers
and
customers,
we
strongly
believe
we
can
be
more
efficient
as
an
organization,
not
reinventing
wheels,
collaborating
on
global
projects
and
sharing
best
practices
much
more
than
in
the
past.
We
want
to
unleash
the
potential
of
all
our
employees
by
applying
our
new
guiding
principles,
which
are
summarized
and
described
in
the
first
Bossard
comic
that
each
one
of
you
can
find
on
your
table.
The
comic
serves
as
our
global
employee
handbook,
we
have translated
it
into
eight
languages.
Please
feel
free
to
take
one
with
you.
With
this,
I
would like
to
thank
you
for
your
attention
and
Stephan
Zehnder
and
I
will
now
gladly
try
to
answer your
questions. Thank
you.
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
Okay.
So
now
I
was
advised
that
we
first
take
the
questions
from
the
room
and
then
in
the
second
stage,
we
will
address
the
questions
from
the
online
platform.
All
right.
U
Yes.
Good
morning.
And
I
have
a
question
first
on
the
Russian
invasion.
You
said
you
have
no
exposure,
but
you
have
really no
exposure
to
the
Ukraine,
neither
to
Russia,
nor
to
Belarus.
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
It's
when
you
talk
about
the
supply
chain,
we
have
no
exposure
in
the
sense
that
we're
not
buying
from
Ukraine
or
Russia.
When
it
comes
to
sales,
Stephan,
maybe
you
want
to say
too
who,
he
in
that...
[indiscernible]
S
Stephan Johannes J. Zehnder
(00:30:24).
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
So
we
have
some
sales
about,
CHF
300,000
in
Russia
and
it's
about CHF
0.5
million in
Ukraine.
But
we
have
no
physical
assets,
we
have
no
employees.
It's
just
export
sales
into
these
countries.
U
And
Belarus?
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
Belarus,
it's
about
CHF
100,000.
U
Thank
you.
May
I
ask
a
second
one?
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
Yeah.
Sure.
U
Okay.
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
Please
go
ahead.
U
You
have
inventory
increase
by CHF
80
million
in
2021,
and you're saying
inflation
is
increasing.
How
do
we
have
to
think
about
inventory
in
2022?
So
do
you
expect
that
this
is
going
to
increase
further?
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
We
will
expect
further
increase.
I
mean,
if
we
would
say
just
the
business
remains
that
it
is,
it
will
still
increase
because
there
is
different
reason
for
that.
It's
still
we
receive
goods,
which
are
to
a
higher
price
because
the
way
we
bought
and
also when
we
placed
orders
last
year,
it
was
already
to
a
higher
price,
so
these
goods
coming
in
only
now.
The
other
one
is
still
we work
on
the
service
level,
which I was
also
mentioning.
So
we
also
have
the
plan
to
bring
it
up again.
It's
not
an
issue
today
we
can
serve,
but
it's
not
where
we
want
it
to
be.
And
the
other
part
is
also
that
we still,
based
on
the
supply
chain,
you
also
place
a
big
order
technically
from
that
perspective
and
hopefully,
yes,
we
will
increase
the
business,
so
by
higher
volume
also,
the
inventory
will
increase.
So
the
expectation
we
need
to
expect,
it's
increasing.
I
would
say
mid-term
when
the
supply
chain
normalizes,
then
also
the,
let's
say,
the
capital
commitment,
as
I
also
mentioned
in the
percentage
of
sales,
should
normalize
and
should
rather
come
again
in
the
range
of
40%.
S
Stephan Johannes J. Zehnder
Maybe
if
we
can
add
to
that,
the
worst
thing
that
can
happen
to
us
is
that
we
cannot
deliver.
That's
truly
the
worst
thing.
So
– and
now
the
prices
have
been
increasing
and
it's
kind
of
a
natural
cycle
that
we're
getting
in
higher
cost
products,
but
increases
our
availability.
So
that's
why
it's
kind
of
a
normal
cycle.
Of
course,
prices
have
been
going
up
maybe
more
than
in
the
past,
but
still
availability is
high
and
we're
managing –
trying
to manage
this
balance
of
how
much
do
we
order
now?
When
is
it
going
to go
down?
Okay.
Tell
us.
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
I
mean,
if
we
see
the
clouds
or
the
slides
or
the
points,
I
mean, we
have
to
plan
cautiously
ahead.
Any
other
question?
B
Bernd Pomrehn
Analyst, Bank Vontobel AG (Research Firm)
Bernd Pomrehn
from
Vontobel.
You
talked
about investments
in
Taiwan
and
France.
Could
you
talk
a
little bit about
your
investment
and
growth
initiatives
in
2022?
Where
you
do –
where
do
you
plan
investments,
both
in tangible
and
intangibles?
And
could
you
maybe
provide
for
modeling
CapEx
guidance?
Thank
you.
S
Stephan Johannes J. Zehnder
Yeah
I
answered
on
the
CapEx
one.
So
the
plans
is
about
CHF
50
million
to
CHF
52
million.
If
you
break
it
down,
then
it's
about
CHF 12
million
dedicated
to
the
ERP
system.
We have
about CHF
14
million
dedicated
to
the
two
infrastructure
projects,
and
the
remaining,
about
CHF 26
million
is
for
ongoing
replacement
investments.
Again,
as
I
always
said,
it's
[indiscernible]
(00:33:57).
We
will
be
cautiously
always
look
– and
we
always
work
on
the
principle
kind
of
pay
as
you
go,
but
that's
the
kind
of
the
framework
which
we
have
for 2022
in
our
plans.
M
Marta Bruska
Good
morning. Marta
Bruska
from
Berenberg
and
thank
you
for
taking
the
question.
Fantastic
results.
Congratulations.
I
was
wondering
whether
you
could
give
us
a
little
bit
of
a
feeling
in
terms
of
the
inflationary
environment
in
2022.
With
price
increases,
whether
you
have
any
expectation
to
know
how
much
of
the
growth
in
2022
for Bossard
would
come
from
price
increases
and
then
I
have
two
follow-ups?
S
Stephan Johannes J. Zehnder
Well,
maybe
on
the
price
increases,
one
element
that
we
haven't
talked
too
much
in
the
past
is
wage
increases.
And
we
see
in
Eastern
Europe,
wage
increases
double-digit,
10%,
12%
Czech
and
Poland.
We
see,
in
US
also
wage
increases
going
more
towards
10%.
So
those
wage
increases
somehow
also
obviously
turn
into
higher
costs
and
we
want
to
provide
– to
convey
that
to
customers.
So
part
of
our
price
increase
discussions
is
because
of
wage
increase.
Give
you an
example, John
Deere,
some
six
months
ago,
they
striked.
So
their
employees
got
like
12%
more
salary. Now,
the
whole
region of
Iowa, they
were
kind of
under
pressure, so
people asked
for
higher
salaries also
at Bossard.
Now
we
have to
pay
higher
salaries. We
went now back
to
John
Deere
and
said,
hey,
now
we
need
to
increase price.
So
they shoot
themselves in
the foot.
I
mean,
wage
increases
are part
of
the
overall increase
and
it's significant
now. So
and
raw
material
prices
will
still
increase
and
it's
the
seller's
market.
And
what
we
try
to
do
is,
of
course,
ask
customers
for
longer
term
commitments.
But
I
guess
for
this
year,
there
will
be
another
round
of
at
least
10%-20%
in
two
steps,
maybe
throughout
the
year.
I
would
expect.
So,
prices
are
still
steadily
going
up.
Besides
the
fact
that
we
have
EU
anti-dumping
taxes
up
to
80%
for steel fasteners
and
with
the
European
Union,
which
we will
pass
on
straight
away.
So
there
will
be
no
[indiscernible]
(00:36:11)
just
added
40%,
50%,
60%
only
for
the
European
Union.
So
we
will
continue
in
the
range,
10%
to
20%,
I
guess
we
will
have
to
do.
Do
they
all
come
through
the
whole
year?
No,
it's
a
process.
But
it's
a
seller's
market
and
the
question
is
for
the customer,
can
they
get
the
goods?
M
Marta Bruska
So,
10%,
at
least
of
growth
in
2022
just
from
price
increases.
Thank
you.
And
I
have
one
follow-up,
if
you
could
please
contextualize
a
little
bit
your
growth
in
the
smart
factory
assembly
and
how
the
project
pipeline
is
developing
there,
that
would
be really
appreciated.
Thank
you.
S
Stephan Johannes J. Zehnder
Yes,
we're
currently
scaling
our
smart
factory
assembly
services.
We
have
started
some
three
years
ago
with
ramping
up
the
system.
We
currently
have
12
pilot
customers
around
Europe,
which
we're
serving,
which
is
RUAG,
Metrohm, Komax,
Hilti
and
we're
now
scaling
into
China,
Denmark,
Germany,
and
so
the
pipeline
is
and
we're
now
scaling
into
China, Denmark,
Germany.
And
so,
the pipeline
looks
very promising.
Now we
have
more
of the challenge
that
we
can actually
manage
the projects.
We
have much
more demand
than
we
can
actually
manage the
projects.
So,
we're
very,
very
optimistic
and
the
challenge
is
now
not to
stumble
over
our
own
feet
to
make
this
system
truly
stable
and
scalable
and
then
continue
our
rollout.
I
don't
know
if
that
answered your
question.
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
More
questions?
U
You're
still
operating
in
a
very
fragmented
market.
Your
balance
sheet
is
pretty
strong.
Could
you
talk
just
a
little
bit
about
your
– your
M&A
pipeline,
what
opportunities
do
you
see,
how
do
you
see
current
multiples
for
acquisition
targets,
just
qualitatively,
obviously?
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
No.
No,
we
cannot
talk
about
any
names
or
potentials,
but
in
general,
we
see,
of
course,
as
we
said,
our
acquisition
plans
are
to
grow
another
one-third
over
the
next
10 years
through
acquisitions.
There
is
a
few
targets
in sight,
which
always
–
always
the
goal
is
to
make
us
better
and
not
just
bigger.
So,
in
the
Netherlands,
it
was
that
it
was
a
white
spot
for
us
and
we
saw a
great
industrial
environment.
So,
we
said,
okay,
that's
good
or
we
invest
into
technology
companies,
which
provide
new,
innovative
technologies.
So,
we're
looking
into
these
and
it
will
be
going. As
you
know,
we
have
also
now
a
function,
Head of
M&A,
Mr.
Rolf
Ritter.
So,
be
sure
he
is
not
going
to be
bored.
Okay.
Should
we –
yeah.
[indiscernible]
U
(00:39:29)
I
have
two
questions,
first,
the
EU
anti-dumping,
will
that
change
your
sourcing
strategy
going
forward?
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
Well,
first
of
all
the
short
answer
is
no,
not
dramatically.
We
have
always
had
anti-dumping
taxes
in
the
past
and
we
already
have
sources
outside
China.
Now,
of
course,
we're
shifting
more
procurement
to
non-Chinese
countries;
that's
true.
But
we
have
also
done
that
in
the
past,
and
our
sourcing
strategy
has
always
been
to
source
from
multiple
sources,
not
only
single
source.
So
for
us,
it's
relatively
easy
to
switch
to
others.
The
problem
now
is,
of
course,
everybody
else
does
the
same.
So
yes,
we're
switching
some
of
the
suppliers,
but
no,
we're
not
changing
strategy.
U
Okay.
And
my
second
question
will
be
the
effect
of
inflation,
so
there
are
various
effect,
high
raw
material
prices,
wages
and
so
on,
what
have
been
the effect on
the
margin
in
2022?
S
Stephan Johannes J. Zehnder
Well, that's
a
difficult
question
to
answer
[ph]
besides
to
calculate (00:40:40). And
I
think
we
have
to
put
this
into
perspective.
I
mean,
we
serve
more
than
30,000
customers
with
more
than
1 million
items
and
some
of
which
we
sell
to
different
customers
and
we
have
11
ERP systems.
So
that's
not
a
number
which
we
can
provide,
I'll
give
you
a
split
in
that
one.
It's
for
sure
that
with
the
price
increases
we
have
done
in
2021
that
the
share
of
the
growth
was
for
sure
bigger
than
in
the
past.
But
I
cannot give
you
any number.
U
Okay.
Thanks.
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
Okay
let's
switch – sorry.
U
I
would
like
to
ask,
in
the
past,
there
were
certain
differences
in
profitability
per
region.
I
know
you
don't
disclose
the
details,
but
just
in
general
terms,
have
you
seen
any
catch-up
maybe
in
the
Americas,
how
is
it
developing
with
the
new
General
Manager
there?
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
Yes,
we
have
refocused
the
strategy
in
the United
States,
so
we
have
refocused
on
growing
industries,
East
and
West
Coast.
We
have
changed
the
organization
fundamentally
from
a
sales
structure,
namely,
and
we
have
a
new
management
in
place
with
some
more
ambitious
targets,
I
would
say.
So
we're
following
that
path.
I
cannot
give
you
any
numbers,
but
we're
so
far
happy
with
the
development.
Okay,
let's
switch
to
the
online.
Operator
Yeah,
ladies
and
gentlemen,
we
will
now
begin
the
question-and-answer
session
on
the
phone.
[Operator Instructions]
The
first
question
is
from
Sebastian
Vogel,
UBS.
Your
line
is
now
open
for
you.
U
Good
morning,
can
you
hear
me?
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
Yes,
yes,
Sebastian.
S
Sebastian Vogel
Analyst, UBS AG
Perfect.
I
got
three
questions.
The
first
one
is
on
electric
vehicle
side
of
things.
You
have
shown
this
slide
with
the
different
pieces
and
fasteners
going
into
an
electric
vehicle.
And
just
can
you
quickly
remind
maybe
– of
course
my
past
understanding
was
that
you
have
been
mainly
active
in
the
interior
side
of
automotive
and
that's
like
sort
of
conveys
the
impression
that
you
would
be
all
over
the
vehicle
in
that
regard.
Is
that
a
change
or
was
it
just
a
wrong
perception
on
my
side
in
the
past?
That
would
be
the
first
question.
And
the
second
– sorry,
[indiscernible]
(00:43:33) go
further?
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
Yeah,
maybe
I
can answer
to
that.
It's
not
a
change.
Maybe
we
haven't
made
it
that
transparent
in
the
past,
but
it's
not
a
change.
We're
expanding
also
into
the
ecosystem,
which
is
batteries,
charging
stations,
and
so
on,
which
is
then
more
the
ecosystem
of
electric
vehicle. So it's
not
new
in
that
sense,
but
maybe
we
haven't
made
it
transparent
in
the
past.
S
Sebastian Vogel
Analyst, UBS AG
Understood.
And
with
regard
to
the
smart
solutions,
can
you
sort
of
give
us
a
rough
ballpark
figure,
what
is
the
sort
of
revenue
contribution
you
have
seen
so
far
in
2021
and
what
are
your
ambitions
for
2022
given
the
decent
ramp
up
plans,
what
you
have
outlined
as
well
there?
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
So,
that
one
that we
have
talked
about
earlier
many
times,
the
contribution
of
services
is
minor.
So,
it's
a
few
percent
of
total
sales,
but
that's
not
the
point.
And
so,
the
goal
is
not
to
make
that
whatever
50%
share
of
our
sales.
The
goal
is
to
use
this
as
a
shoehorn
to
create
customer
value.
And
again,
had
we
not
sold
those
services
in
the
past
or
serve
customers
to
services,
we
would
not
have
created
the
loyalty
and
stickiness
with
our
customers.
So,
in
that
sense,
it's
marginal
and
the
targets
are
to
continue
using
them
as
a
tool
to
create
product
solution
sales.
S
Sebastian Vogel
Analyst, UBS AG
Understood.
Then, my
last
question
there with
regard
to
the
customer
mix.
In
the
past,
you
mentioned
that
you
have
two
major
customers
and
then
all
the
others
that
are
on
average,
at
least
the
business,
what
they
do
with
you
is
rather
small
and
does
that
also
apply
to
the
other
large
names
that
you
have
mentioned
throughout
the
presentation,
[indiscernible]
(00:45:09) et
cetera?
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
Well,
those
are
key
accounts.
But
still
we're
very
broadly
diversified.
We
intentionally
now
didn't
bring
up
the
variety
of
customers
we
have.
What
we
showed
today
is
more
of
a
focus
that
we
said
those
are
growth
industries
that
we
can
join
and
join
forces.
So,
they
are
key
accounts,
but
we're
not
dependent
on
them.
S
Sebastian Vogel
Analyst, UBS AG
And
they
are
not
mostly
depend
on
you
because
they
are
outsourcing
also.
That's
why
– is
that the
right
reading?
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
For
some,
we
are
almost
single
source,
which
is
a
nice
problem
for
us.
S
Sebastian Vogel
Analyst, UBS AG
Thank
you very
much.
Many
thanks.
That
were
my
questions.
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
Thank
you.
Operator
The
next
question
is
by Andreas
Müller.
The
line
is
now
open
for
you.
A
Andreas Müller
Analyst, Zürcher Kantonalbank
Yes,
thank
you
very
much, Andreas Müller from ZKB.
Thanks
for
taking
my
questions.
I've
got
two
or
three –
two
questions.
One
is
on
the
margin
progression
this
year,
I
mean,
you
mentioned
you
can
pass
on
price
increases
and
also
the
tax
increases,
the
latter
immediately,
the
rest
probably
with
some
delays.
And
with
that,
also
with
the
investments
in
ERP
and
so
forth,
would
you
be
able
to
increase
margin
this
year
or
should
we
rather
look
for
margin
decline
with,
say,
high
revenue
progression?
S
Stephan Johannes J. Zehnder
Here,
I
would
refer
to
the
second
half
of
2021.
I
mean,
we
have
seen
growth,
but
we
also
have
seen
cost
increases.
And
as
we
already
talked
about
and
elaborated,
I mean we
see
further
cost
increase,
input
costs
on
the
product
side
and
freight
costs,
but
we
will
also
see
further
increase
also
on
the
operational
costs.
Also
here
to
mention
is
that
we have –
we
had
120
employees
more
and
we
have
added
60 in
the
second
half.
So
the
annualized
– just
the
annualized
cost
will
have
an
impact
too.
So
I
would
say
that
for
the
whole
year,
if
you
look
at
the
second
half
of
2021,
that
surrounds
what
we
see
also
continuing
this
year.
But
again,
there's
a
lot
of
uncertainties
right
now
around
this
topic.
A
Andreas Müller
Analyst, Zürcher Kantonalbank
Okay.
I
understand.
And
did
I
hear
that
right,
so
you're
thinking
that
at
least
– that
the
price
increases
are
going
to
grow
top
line
at
least
10%,
just
this
factor,
is
that
right?
S
Stephan Johannes J. Zehnder
I
wouldn't
bet
on
that.
The
question
was
are
we
going
to
go
out
with
price
increases
again
this
year?
And
this
is
probably
going
to
be
like
10%
again
and
then
we
will
see
what
happens.
Maybe
another
10%
during
the
year.
Now
will
the
impact
come
directly
through
to
the
sales?
A,
there
will
be
a
time
lag,
so
we
don't
do
that
from
1st
of
January.
B,
you
can
imagine
with
large
customers,
it's
kind
of
a
negotiation
to
do
that
and
it
could
take
even
many
months
before
that
comes
to
effect.
The
effect
for
the
whole
year,
I
would
rather
expect
around
a
few
percent than
the
full
10%.
But
again,
this
is
very
difficult
to
say
how
it
continues
for
the
rest
of
the
year.
And
in
that
sense,
it's
hard
to
give
you
a
number
here,
but
those
are
indications
that
we
see
right
now.
We
need
to
at
least
go
out
with
another
price
increase
around
of
10%
and
maybe
another
10%
later.
That's
what
we
see
today.
Will
the
impact
be
10%
or
20%
on
the
top
line?
No,
because
of
time
lags,
because
of
negotiation
rounds?
Because
maybe
we
can
only
convey it
partially,
but
there
will
be
a
part
of
that
impacting
our
sales.
So
I don't
know,
that
was
probably
too
vague
for
you,
but
that's
how
it
is.
A
Andreas Müller
Analyst, Zürcher Kantonalbank
It's
okay.
That
was
giving
some
indication,
I
think.
And
my
last
question
is
on
America's
growth
dynamic
in
Q4.
I
mean,
they
came
down
a
bit
relative
also
to
the
still
strong
other
regions.
What
was
the
reason
there?
S
Stephan Johannes J. Zehnder
The
main
reason
is
that
we
had
quite
a
good
performance
in
the
last
quarter
of
2020,
so
we
had
a
basis
impact.
Besides
that,
if
you
look
again,
the
cost
of
the
base
we
have,
also
we
have
– the
way
we
have
started
into
the
year,
so
we
are
happy
with
that
development
so
far.
A
Andreas Müller
Analyst, Zürcher Kantonalbank
Thank
you
very
much.
[Operator Instructions]
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
Finished.
Okay.
D
Daniel Bossard
Chief Executive Officer, Bossard Holding AG
Good.
If
there
is
any
more
questions,
no
more
question
here.
It
doesn't
look
like,
then
we
would
like
to
thank
you
very
much
for
your attention
and
wish
you
a
great
day
ahead.
Thank
you.
Thank you. I will also say something. Welcome to our Annual Financial Analyst and Media Conference 2022. I'm very happy that we are back to a physical meeting. We are streaming this event and it will be available on our website later today. Stephan Zehnder, our CFO and I would like to guide you through the following agenda. I will start with some highlights 2021. Stephan Zehnder will then navigate through the financials before I will close with a strategic focus and outlook 2022. So let me start with the highlights.
The Bossard Group closed with a record sales of CHF 995 million and an EBIT of CHF 123 million. The economic tailwind throughout the year helped us to achieve these numbers whereas the ongoing pandemic, global supply disruptions and cost inflation posed unprecedented challenges to the organization. Our proven supply chain resilience through double-sourcing of key products from different sources and regions and safety stock up to eight months helped us to respond to increasing customer demand without significant shortages. Our proven productivity services, namely Smart Factory Logistics and Smart Factory Assembly, were in high demand to reduce total cost for our customers. They opened opportunities for new business and for creating customer loyalty.
Throughout the year, we continued to implement our Strategy 200, particularly our digitalization and cultural transformation plans to improve our internal efficiency. In October, we announced the acquisition of Jeveka, a high-quality distributor in the Netherlands, which posed us in a strong market position in a former market [ph] white spot (00:02:01), the Benelux. And last but not least, we conducted our first Capital Markets Day where we had the opportunity to communicate our strategy and business model in more detail to interested investors and analysts. All this was only possible with a motivated organization. What you see here is a picture from our last three corona leadership conference in Portugal.
Stephan Zehnder, our CFO will now guide you through the financial review 2021. Stephan, please.
Good morning, ladies and gentlemen. Bossard looks back on another extraordinary business year. The COVID-19 pandemic continued to create major challenges for the group from a variety of angles in 2021. However, one could almost say with completely different signs than in the prior year, but those not less demanding. When in 2020, the group was challenged by the maximum extent to prove its operational efficiency and thus to guarantee the delivery capability to its customers as a result of the lockdowns and global interrupted supply chains, in 2021, the global economic upturn and the resulting high demand led to supply bottlenecks, capacity restrictions and longer delivery times, which were coupled with significant price increases for raw materials and freight costs.
The fact that Bossard was able to hold its own and to take advantage of the market opportunities even in this challenging environment is impressively demonstrated by the 2021 annual results. We are, therefore, pleased to present to you today results that are exceptionally in the Bossard history. We were able to simultaneously increase sales, EBIT and net income to new record levels in 2021 and hence not only to significantly surpassing the results from the prior year, but also those prior pandemic. The Bossard Group achieved sales of CHF 995.1 million in 2021, an increase of 22.4% compared to prior year, whereby the currency effect of 0.2% was for once neglectable. Organically, sales growth was disproportionately high compared to the prior year, with an increase of 21.1%. The newly acquired Dutch company Jeveka, consolidated since October 2021, contributed 1.1% to the group's sales increase. Thanks to its consistently high delivery capability, Bossard benefited from the strong global economic upturn.
As a result, Bossard was able to report double digit growth rates not only in all three market regions, but actually in all the countries. There is no doubt that the investment backlog caused by the pandemic in 2020 and the high resulting dynamic demand in 2021 helped us to significantly increase sales and profits. However, the growth is also an expression of our internationality and the group's broad customer base in a wide range of industrial segments. The focus on growth industries such as robotics, electromobility, railway and medical technology paid off and those segments developed particularly well.
The EBIT amounted to CHF 123.3 million, representing an increase of 42.8%. At the same time, EBIT margin improved from 10.6% in the prior year to 12.4%, which means that the group's earnings power has again improved markedly. Despite the volatile market conditions paired with significant cost increases both in raw material prices as well as operating expenses, we managed to keep the EBIT margin in the upper part of the targeted range of 10% to 13%. This shows how solid our group performed in this very challenging environment. The positive underlying condition also had an impact on profit. Compared to prior year, net income increased from CHF 67.8 million to CHF 98 million. The return on sales amounted to 9.8% compared to 8.3% in 2020. With that, the Bossard Group can report the best annual results in its history; hence we are proud of that.
Three key factors were decisive for the success over the last two years. Firstly and foremost, the flexibility of our 2,700 employees around the globe who did a tremendous job and whose performance was exceptional under difficult conditions. Secondly, the purchasing strategy we have practiced for years, which is based on several procurement sources. And finally, our generous stock keeping. Although this represents the largest balance sheet item with a high capital commitment of over CHF 338 million, it was of central importance in order to ensure the best possible delivery capability to our customer in this exceptional demand situation. In addition, the strong performance is also preceded by various upfront, far-sighted investments and expenditures made over the last years.
Worth mentioning are here, the investments in people and the organization, the expansion of office and warehouse capacities in various markets, as well as our targeted acquisitions. Also, our focus on special parts, engineering services and smart factory solutions, as well as our investments in digitalization of our processes and services supported the strong sales and profit growth in 2021. Examples are our new e-commerce platform or our real-time manufacturing service, which enables our customers to obtain milled and turn prototype parts quickly and reliably at a reasonable price. Another example is our new service, Smart Factory Assembly, which is supporting our customers' digitalization of their assembly processes.
Now, let's have a look at the sales developments in the individual market regions. In America, sales increased by 12.4% to CHF 226.2 million or 15.3% in local currency. This gratifying development continued due to the ongoing diversification of our customer base, among other things, in the field of electromobility. The digitalization accelerated by the pandemic had a supporting effect, which also led to sustained high demand in the electronics segment in 2021. In Europe, sales increased by 23.1% to CHF 574 million compared to last year, while in local currency, the increase was 22.1%. Especially in Europe, we benefited from the broad customer base in industries such as medical technology and railway. The acquisition of Etanco contributed for the gratifying sales performance. Adjusted for acquisition, annual sales totaled CHF 564.4 million. In Asia, we remained on a growth path. The continued strong demand throughout the year resulted in a sales increase of 34% to CHF 194.9 million. In local currency, growth amounted to 31.8%, but this growth was broad based is reflected in the increase in sales of all business units, some of which were well into the double-digit range. Malaysia, India and Taiwan are particularly worth mentioning at this point. As for the industrial segments, it was primarily robotics, automation and electronics that recorded strong growth rates.
Now we review on the balance sheet the above-average growth rate also and also the investment activities of the group led to significant increase in total assets. Compared to the prior year, total assets increased by 20.5% to CHF 773 million. Despite the high profitability, the equity ratio fell from 50.3% in the prior year to 45.2%. This decline can be explained by the fact Bossard offsets the goodwill from acquisition in 2021, CHF 38 million, directly against equity. The market increase in total assets, it's driven by higher customer receivables as a result of the substantial increase in sales on the one hand and on the other hand by the higher inventory levels. While the increase in receivables was in line with the sales growth, the increase in inventories was above average. Besides the higher sales volumes, the increase was due to higher raw material prices and freight costs.
Furthermore, inventories were deliberately increased to ensure the best possible delivery capabilities of our customers, in view of the continuing market uncertainties and long delivery times. Last but not least, the acquisition of Jeveka also contributed to the increase in total assets. In relation to net sales, the operating net working capital increased slightly from 42.7% in the prior year to 43.8%. As a result of the high level of investment activity and accelerated growth, net debt increased from CHF 156 million in 2020 to CHF 270 million in 2021. The gearing net debt measured against equity recorded a slight increase from 0.6 versus 0.5 in the prior year.
The debt factor, the net debt in relation to EBITDA nevertheless remained at the prior year's levels, 1.5 times, thereby Bossard continues to have solid balance sheet ratios, which allow room for further growth and investments. [indiscernible]
(00:13:11) in 2021, we invested in various areas in order to keep pace operationally, but also technologically with the current planned growth ahead. In total, we invested CHF 35.3 million. Thereof, around CHF 6 million relates to two ongoing infrastructure projects. In France, we are currently expanding existing capacities and in Taiwan, we are investing in a completely new office and warehouse building. Hereby, we more than doubled our logistics capacities in both cases. We invested CHF 11 million in digitalization. The biggest share of this investment was dedicated to our new group-wide ERP system. The first rollouts are planned in Denmark and Sweden in the second quarter of this year.
In total, we'll invest about CHF 70 million into the new ERP system and the global roll-out of it over the next six years. About CHF 14 million was spend for replacement investments in ongoing operations. Particularly, I would like to mention the investments of CHF 4.5 million into smart pin, which we invested – which we installed at our customer premises and are the core of our smart factory logistics solutions.
This means that we sold quite a few smart logistics solutions in 2021 or in other words, every Swiss franc spent increases business volume and process efficiency, and at the same time boosts the competitiveness of our customers and therefore is the basis for long-term partnerships.
Now, the business growth and the investment may have had an impact on the cash flow too. Cash flow from operating activities before change in the net working capital increased by striking 39.7% to CHF 126 million. By contrast, cash flow from operating activities of the changes in net working capital fell from CHF 91.6 million in the prior year to CHF 65.9 million.
As already mentioned, this is mainly due to the higher inventory levels. Cash flow from investing activities increased quite a bit from CHF 41.2 million in 2020 to CHF 92.3 million in 2021. On the one hand, this is due to the acquisition of Jeveka last October – in October 2021 and on the other hand, due to higher investments in property, plant and equipment and intangible assets, as already mentioned. While the group reported a positive free cash flow of CHF 50.4 million in the prior year, a negative free cash flow of CHF 26.4 million resulted in 2021 due to the significant growth and the investments made.
Finally, a word on the dividend. As you know, our dividend policy provides for a 40% payout of net income to shareholders. After two extraordinary years influenced by the pandemic, we will return to our normal payout ratio. Accordingly, the Board of Directors will propose a gross dividend of CHF 5.10 for registered A share at the 2022 Annual General Meeting of Shareholders compared with CHF 4.40 in the prior year. This corresponds to an increase of almost 16%.
Ladies and gentlemen, with this preview, I conclude my remarks. I thank you very much for your attention and with pleasure, I hand over the word back to Daniel. Thank you.
Thank you, Stephan. An amazing year behind us. I would now like to elaborate on our strategic focus and what we expect for 2022. As we have communicated earlier, we have developed the Strategy 200, which is a strategic journey we follow until 2031, when Bossard turns 200 years old. We aim for accelerated, profitable and sustainable growth based on our proven business model organically and through acquisitions to achieve relevant market shares in our key markets through seven strategic initiatives. We have elaborated on them at our Capital Markets Day in October last year. What is now the focus for 2022? One of the focus areas is the sunrise industries. Those are industries which we expect to grow above average in the next years, particularly we talk about railway, electric and electronics, healthcare and electric vehicles.
To make it more tangible, I'd like to give you some examples for each industry. We have been working with railway companies for decades. This is particularly interesting because we see a lot of global government spending on railway infrastructure, namely in USA and Asia, China and India and on top, railway is considered a sustainable mobility technology. A prominent customer example is Alstom Bombardier, which we are serving globally as an engineering and smart factory partner. Similarly, we are engaged with Stadler Rail around the globe, Hyundai roped them in Korea or CRRC China North Railway in China and in the United States. To our acquisition in the Netherlands, we became the key fastener supplier for ASML, the global leader in the development and production of semiconductor equipment, with a global market share of around 85%, growing exponentially.
Besides ASML, we are a strategic supplier for Dell in the US and Ireland with the rapid acceleration of global digitalization. We are happy to be positioned well in a number of electronics companies around the world. With the globally growing demand for healthcare services and sales diagnostics devices, our focus on the healthcare industry continues. A good example of a long-term partnership is Roche Diagnostics, where Bossard is supplying the majority of fasteners, but is also engaged as an engineering and smart factory partner.
Similarly, we work with other global customers in the segment such as GE Healthcare, [ph] EBrown (00:19:54), Siemens or Metrohm, a Swiss-based global producer of chemical analytics devices. Electric vehicle manufacturers, from startup companies to mass production companies have been and will be in our growth focus. Lucid Motors is a prominent example of a customer where Bosshard was engaged in engineering from the very beginning some four years ago. Last year, Lucid chose Bossard as the key supplier for fasteners for the ramp up in steel production in Casa Grande, Arizona.
Lucid is producing a luxury sedan, targeting the global markets. Another example of a new project in the ecosystem of electric vehicles is our engineering collaboration with Northolt in Sweden. Northvolt is a six-year old Swedish startup company who joined with Volvo, Volkswagen and Porsche to develop their own battery systems, with the ambition to serve the global market with batteries for electric mobility. Last year, Bosshard was chosen as the engineering partner and key supplier for fasteners.
Looking at electric vehicles, our product solutions are used in the body, in the interior, in the exterior, in the chassis, in the battery, as well as in the powertrain and inverters. We have created an industry-specific product solution assortment, which allows us to run focused marketing campaigns globally. Dedicated industry assortments have not only been developed for electric vehicles, but for all other previously mentioned sunrise industries for electronics, healthcare and railway as well. Another strategic focus in 2022 is our proven productivity promise to our customers.
Our product solutions, assembly technology experts and smart factory services are key enablers to make our customers more productive. When, if not now, when wages and overall costs are skyrocketing, should we promote our solutions that enable customers to reduce their total costs in C-part management and assembly significantly.
What do you see here is a exemplary, but typical smart factory layout, in this case, of a white goods or washing machine producer working with Bossard on multiple levels. Through our smart factory assembly technology services, we advise customers in selecting the right products. What you see here is a tear-down project where we take a customer product apart, here, a washing machine drum and proposed optimization potential in the design by reducing fastener varieties or by applying more innovative product solutions. The benefits for customers are higher safety, higher efficiency and assembly and finally increased productivity.
Our smart factory logistics solutions enable customers to manage their C-parts automatically, ensure an optimized and real-time inventory management and a smooth flow of parts through the factory from the central storage location to the points of assembly. The main benefits are higher availability at lower total cost, and again, increased productivity. With our smart factory assembly services, we secured customers' assembly processes by providing smart tools and digital work instructions. These enable assembly workers to avoid mistakes, speed up the assembly process and onboard new unskilled staff very efficiently. Consequently, smart factory assembly services are another lever to make our customers more productive. The Bossard Group sales volume is driven by product sales whereas the services are creating customer value, trust and loyalty.
While we sell product solutions to purchasing, which look for the lowest price, we promote smart factory services to production and logistics specialists which want a lean production and logistics flow. Likewise, we sell assembly technology expert services to designers and developers who need innovative and safe solutions instead of just low-cost products.
And finally, we aspire to sell our complete service package to [ph] P&L (00:24:30) owners, usually the C-level, to demonstrate the full potential of total cost savings and to underline that by applying the complete portfolio of services, customers typically save three times more in process costs than they actually spend on products. Some of you may remember the iceberg model. So services can be regarded as a shoehorn to sell products. In our view, an absolutely indispensable shoehorn because we would not be where we are today had we not focused on services in the past.
In summary, our strategic focus for 2022 is to run the business and ensure we achieve profitable growth by focusing on sunrise industries. Retain and penetrate existing customers, but also win new business through our strategic services, especially now. We will sharpen our view on sustainability, both socially and environmentally and for the latter, collect data and set realistic, short, mid- and long-term targets. Besides running the business, we are fostering change by implementing our strategic initiatives, one of them being our operations engine, where we will be introducing the first release of our new ERP system this year. The sales engine will help to provide us with a joint structure, processes and systems to acquire new business, while the Together We Create initiative is the foundation of our cultural transformation journey for better and more efficient internal collaboration through the application of our new guiding principles, leadership development and talent management.
This leads me to the outlook for 2022. Looking at the purchasing manager indices, they still indicate a very strong global demand. The current global supply chain situation looks a bit more challenging. The war in the Ukraine does not help to stabilize the current supply chain challenges. Yet we have no dependency neither on Ukraine nor on Russia. The EU has imposed anti-dumping taxes for steel fasteners from China as of February 17. This means we'll need to forward 20% to 80% higher product cost depending on specific suppliers to our customers in the European Union. In general, fastener prices are on the rise again. Lead times went up to 30 weeks to 50 weeks with 12 weeks in normal times.
So you're waiting one year for fasteners. Freight costs are still peaking at around $30,000 per container from Asia to Europe. Prices tenfolded in the last 12 months. We are currently facing scarce ports and container capacities all around the globe. And then we see ongoing inflationary trends on wages and raw materials. In a nutshell, this means we are still in a strong seller's market and will act accordingly. Our stock levels are sufficient, so we are not expecting significant shortage in the short or mid-term and we will continue with price increases and ask customers for longer commitments to secure their supply.
In summary, the strong global demand and the great market potential in sunrise industries sent very optimistic signals. The volatile environment with the ongoing pandemic waves, the war, the supply chain disruptions may pose unexpected challenges to our business development this year. Since we think long term, we will continue to invest in our future, namely in our operations engine, our new ERP system and in our Strategy 200 initiatives.
With this, we're still optimistic for 2022 and focus on what we can influence. And part of what we can influence is our attitude and spirit. Together We Create is the motto of our cultural journey. Through better collaboration across regions, functions and hierarchies and also with suppliers and customers, we strongly believe we can be more efficient as an organization, not reinventing wheels, collaborating on global projects and sharing best practices much more than in the past. We want to unleash the potential of all our employees by applying our new guiding principles, which are summarized and described in the first Bossard comic that each one of you can find on your table. The comic serves as our global employee handbook, we have translated it into eight languages. Please feel free to take one with you.
With this, I would like to thank you for your attention and Stephan Zehnder and I will now gladly try to answer your questions. Thank you.
Okay. So now I was advised that we first take the questions from the room and then in the second stage, we will address the questions from the online platform. All right.
Yes. Good morning. And I have a question first on the Russian invasion. You said you have no exposure, but you have really no exposure to the Ukraine, neither to Russia, nor to Belarus.
It's when you talk about the supply chain, we have no exposure in the sense that we're not buying from Ukraine or Russia. When it comes to sales, Stephan, maybe you want to say too who, he in that... [indiscernible]
(00:30:24).
So we have some sales about, CHF 300,000 in Russia and it's about CHF 0.5 million in Ukraine. But we have no physical assets, we have no employees. It's just export sales into these countries.
And Belarus?
Belarus, it's about CHF 100,000.
Thank you. May I ask a second one?
Yeah. Sure.
Okay.
Please go ahead.
You have inventory increase by CHF 80 million in 2021, and you're saying inflation is increasing. How do we have to think about inventory in 2022? So do you expect that this is going to increase further?
We will expect further increase. I mean, if we would say just the business remains that it is, it will still increase because there is different reason for that. It's still we receive goods, which are to a higher price because the way we bought and also when we placed orders last year, it was already to a higher price, so these goods coming in only now. The other one is still we work on the service level, which I was also mentioning. So we also have the plan to bring it up again. It's not an issue today we can serve, but it's not where we want it to be. And the other part is also that we still, based on the supply chain, you also place a big order technically from that perspective and hopefully, yes, we will increase the business, so by higher volume also, the inventory will increase. So the expectation we need to expect, it's increasing. I would say mid-term when the supply chain normalizes, then also the, let's say, the capital commitment, as I also mentioned in the percentage of sales, should normalize and should rather come again in the range of 40%.
Maybe if we can add to that, the worst thing that can happen to us is that we cannot deliver. That's truly the worst thing. So – and now the prices have been increasing and it's kind of a natural cycle that we're getting in higher cost products, but increases our availability. So that's why it's kind of a normal cycle. Of course, prices have been going up maybe more than in the past, but still availability is high and we're managing – trying to manage this balance of how much do we order now? When is it going to go down? Okay. Tell us.
I mean, if we see the clouds or the slides or the points, I mean, we have to plan cautiously ahead. Any other question?
Bernd Pomrehn from Vontobel. You talked about investments in Taiwan and France. Could you talk a little bit about your investment and growth initiatives in 2022? Where you do – where do you plan investments, both in tangible and intangibles? And could you maybe provide for modeling CapEx guidance? Thank you.
Yeah I answered on the CapEx one. So the plans is about CHF 50 million to CHF 52 million. If you break it down, then it's about CHF 12 million dedicated to the ERP system. We have about CHF 14 million dedicated to the two infrastructure projects, and the remaining, about CHF 26 million is for ongoing replacement investments. Again, as I always said, it's [indiscernible] (00:33:57). We will be cautiously always look – and we always work on the principle kind of pay as you go, but that's the kind of the framework which we have for 2022 in our plans.
Good morning. Marta Bruska from Berenberg and thank you for taking the question. Fantastic results. Congratulations. I was wondering whether you could give us a little bit of a feeling in terms of the inflationary environment in 2022. With price increases, whether you have any expectation to know how much of the growth in 2022 for Bossard would come from price increases and then I have two follow-ups?
Well, maybe on the price increases, one element that we haven't talked too much in the past is wage increases. And we see in Eastern Europe, wage increases double-digit, 10%, 12% Czech and Poland. We see, in US also wage increases going more towards 10%. So those wage increases somehow also obviously turn into higher costs and we want to provide – to convey that to customers. So part of our price increase discussions is because of wage increase. Give you an example, John Deere, some six months ago, they striked. So their employees got like 12% more salary. Now, the whole region of Iowa, they were kind of under pressure, so people asked for higher salaries also at Bossard. Now we have to pay higher salaries. We went now back to John Deere and said, hey, now we need to increase price. So they shoot themselves in the foot.
I mean, wage increases are part of the overall increase and it's significant now. So and raw material prices will still increase and it's the seller's market. And what we try to do is, of course, ask customers for longer term commitments. But I guess for this year, there will be another round of at least 10%-20% in two steps, maybe throughout the year. I would expect. So, prices are still steadily going up. Besides the fact that we have EU anti-dumping taxes up to 80% for steel fasteners and with the European Union, which we will pass on straight away. So there will be no [indiscernible] (00:36:11) just added 40%, 50%, 60% only for the European Union. So we will continue in the range, 10% to 20%, I guess we will have to do. Do they all come through the whole year? No, it's a process. But it's a seller's market and the question is for the customer, can they get the goods?
So, 10%, at least of growth in 2022 just from price increases. Thank you. And I have one follow-up, if you could please contextualize a little bit your growth in the smart factory assembly and how the project pipeline is developing there, that would be really appreciated. Thank you.
Yes, we're currently scaling our smart factory assembly services. We have started some three years ago with ramping up the system. We currently have 12 pilot customers around Europe, which we're serving, which is RUAG, Metrohm, Komax, Hilti and we're now scaling into China, Denmark, Germany, and so the pipeline is and we're now scaling into China, Denmark, Germany. And so, the pipeline looks very promising. Now we have more of the challenge that we can actually manage the projects. We have much more demand than we can actually manage the projects. So, we're very, very optimistic and the challenge is now not to stumble over our own feet to make this system truly stable and scalable and then continue our rollout. I don't know if that answered your question.
More questions?
You're still operating in a very fragmented market. Your balance sheet is pretty strong. Could you talk just a little bit about your – your M&A pipeline, what opportunities do you see, how do you see current multiples for acquisition targets, just qualitatively, obviously?
No. No, we cannot talk about any names or potentials, but in general, we see, of course, as we said, our acquisition plans are to grow another one-third over the next 10 years through acquisitions. There is a few targets in sight, which always – always the goal is to make us better and not just bigger. So, in the Netherlands, it was that it was a white spot for us and we saw a great industrial environment. So, we said, okay, that's good or we invest into technology companies, which provide new, innovative technologies. So, we're looking into these and it will be going. As you know, we have also now a function, Head of M&A, Mr. Rolf Ritter. So, be sure he is not going to be bored. Okay. Should we – yeah. [indiscernible]
(00:39:29) I have two questions, first, the EU anti-dumping, will that change your sourcing strategy going forward?
Well, first of all the short answer is no, not dramatically. We have always had anti-dumping taxes in the past and we already have sources outside China. Now, of course, we're shifting more procurement to non-Chinese countries; that's true. But we have also done that in the past, and our sourcing strategy has always been to source from multiple sources, not only single source. So for us, it's relatively easy to switch to others. The problem now is, of course, everybody else does the same. So yes, we're switching some of the suppliers, but no, we're not changing strategy.
Okay. And my second question will be the effect of inflation, so there are various effect, high raw material prices, wages and so on, what have been the effect on the margin in 2022?
Well, that's a difficult question to answer [ph] besides to calculate (00:40:40). And I think we have to put this into perspective. I mean, we serve more than 30,000 customers with more than 1 million items and some of which we sell to different customers and we have 11 ERP systems. So that's not a number which we can provide, I'll give you a split in that one. It's for sure that with the price increases we have done in 2021 that the share of the growth was for sure bigger than in the past. But I cannot give you any number.
Okay. Thanks.
Okay let's switch – sorry.
I would like to ask, in the past, there were certain differences in profitability per region. I know you don't disclose the details, but just in general terms, have you seen any catch-up maybe in the Americas, how is it developing with the new General Manager there?
Yes, we have refocused the strategy in the United States, so we have refocused on growing industries, East and West Coast. We have changed the organization fundamentally from a sales structure, namely, and we have a new management in place with some more ambitious targets, I would say. So we're following that path. I cannot give you any numbers, but we're so far happy with the development. Okay, let's switch to the online.
Yeah, ladies and gentlemen, we will now begin the question-and-answer session on the phone. [Operator Instructions] The first question is from Sebastian Vogel, UBS. Your line is now open for you.
Good morning, can you hear me?
Yes, yes, Sebastian.
Perfect. I got three questions. The first one is on electric vehicle side of things. You have shown this slide with the different pieces and fasteners going into an electric vehicle. And just can you quickly remind maybe – of course my past understanding was that you have been mainly active in the interior side of automotive and that's like sort of conveys the impression that you would be all over the vehicle in that regard. Is that a change or was it just a wrong perception on my side in the past? That would be the first question. And the second – sorry, [indiscernible] (00:43:33) go further?
Yeah, maybe I can answer to that. It's not a change. Maybe we haven't made it that transparent in the past, but it's not a change. We're expanding also into the ecosystem, which is batteries, charging stations, and so on, which is then more the ecosystem of electric vehicle. So it's not new in that sense, but maybe we haven't made it transparent in the past.
Understood. And with regard to the smart solutions, can you sort of give us a rough ballpark figure, what is the sort of revenue contribution you have seen so far in 2021 and what are your ambitions for 2022 given the decent ramp up plans, what you have outlined as well there?
So, that one that we have talked about earlier many times, the contribution of services is minor. So, it's a few percent of total sales, but that's not the point. And so, the goal is not to make that whatever 50% share of our sales. The goal is to use this as a shoehorn to create customer value. And again, had we not sold those services in the past or serve customers to services, we would not have created the loyalty and stickiness with our customers. So, in that sense, it's marginal and the targets are to continue using them as a tool to create product solution sales.
Understood. Then, my last question there with regard to the customer mix. In the past, you mentioned that you have two major customers and then all the others that are on average, at least the business, what they do with you is rather small and does that also apply to the other large names that you have mentioned throughout the presentation, [indiscernible] (00:45:09) et cetera?
Well, those are key accounts. But still we're very broadly diversified. We intentionally now didn't bring up the variety of customers we have. What we showed today is more of a focus that we said those are growth industries that we can join and join forces. So, they are key accounts, but we're not dependent on them.
And they are not mostly depend on you because they are outsourcing also. That's why – is that the right reading?
For some, we are almost single source, which is a nice problem for us.
Thank you very much. Many thanks. That were my questions.
Thank you.
The next question is by Andreas Müller. The line is now open for you.
Yes, thank you very much, Andreas Müller from ZKB. Thanks for taking my questions. I've got two or three – two questions. One is on the margin progression this year, I mean, you mentioned you can pass on price increases and also the tax increases, the latter immediately, the rest probably with some delays. And with that, also with the investments in ERP and so forth, would you be able to increase margin this year or should we rather look for margin decline with, say, high revenue progression?
Here, I would refer to the second half of 2021. I mean, we have seen growth, but we also have seen cost increases. And as we already talked about and elaborated, I mean we see further cost increase, input costs on the product side and freight costs, but we will also see further increase also on the operational costs. Also here to mention is that we have – we had 120 employees more and we have added 60 in the second half. So the annualized – just the annualized cost will have an impact too. So I would say that for the whole year, if you look at the second half of 2021, that surrounds what we see also continuing this year. But again, there's a lot of uncertainties right now around this topic.
Okay. I understand. And did I hear that right, so you're thinking that at least – that the price increases are going to grow top line at least 10%, just this factor, is that right?
I wouldn't bet on that. The question was are we going to go out with price increases again this year? And this is probably going to be like 10% again and then we will see what happens. Maybe another 10% during the year. Now will the impact come directly through to the sales? A, there will be a time lag, so we don't do that from 1st of January. B, you can imagine with large customers, it's kind of a negotiation to do that and it could take even many months before that comes to effect.
The effect for the whole year, I would rather expect around a few percent than the full 10%. But again, this is very difficult to say how it continues for the rest of the year. And in that sense, it's hard to give you a number here, but those are indications that we see right now. We need to at least go out with another price increase around of 10% and maybe another 10% later. That's what we see today. Will the impact be 10% or 20% on the top line? No, because of time lags, because of negotiation rounds? Because maybe we can only convey it partially, but there will be a part of that impacting our sales. So I don't know, that was probably too vague for you, but that's how it is.
It's okay. That was giving some indication, I think. And my last question is on America's growth dynamic in Q4. I mean, they came down a bit relative also to the still strong other regions. What was the reason there?
The main reason is that we had quite a good performance in the last quarter of 2020, so we had a basis impact. Besides that, if you look again, the cost of the base we have, also we have – the way we have started into the year, so we are happy with that development so far.
Thank you very much. [Operator Instructions]
Finished. Okay.
Good. If there is any more questions, no more question here. It doesn't look like, then we would like to thank you very much for your attention and wish you a great day ahead. Thank you.
Thank you.