ODDO : Hidden winners - get connected to value-adding supply chain specialists
We initiate two Swiss Industrials midcaps, SFS Group (Outperform, target price CHF 140) and Bossard (Neutral, CHF 200). Both globally active supply chain managers operate in a still overlooked and underestimated c-parts market which is characterised by a solid value add of its supportive local-for-local solution offering. The two companies show comparable growth and quality profiles (3Ye sales CAGR of 2.9%/2.7%, EBIT CAGR of 6%/11%, ongoing healthy FCF ratios of 8.4%/7.1%). However, we currently prefer SFS on the back of a slightly higher M&A likelihood (better financial position), (thematically) bigger exposure to a potential recovery of German industry and a more attractive valuation (discount of 16% vs Bossard for EV/EBIT 2026e).Bossard Holding AG is a Switzerland-based holding company of the Bossard Group specialized in the procurement and sale of fastening elements. Through its operating entities, the Company focuses on the procurements of fasteners, including sales, technical and engineering support and inventory management. The Company's business model covers three strategic areas: Product Solutions, providing product line, which covers standard parts, components developed in-house, branded products, as well as special parts; Application Engineering, which includes technical advice, and Customer Logistics, which offers logistic solutions. The Company has approximately 50 locations worldwide. The Company's products include Bossard ecosyn, screws and fastening elements, standard fasteners, custom-made screws, nut and bolts for special uses and brand-name fasteners. The Company operates through its subsidiaries in Europe, America and Aisia.
SFS Group AG is a global provider of mechanical fastening systems and precision formed components. Co. operates in the three segments Engineered Components, Fastening Systems and Distribution & Logistics, which represent Co.'s differing business models. Engineered Components develops, manufactures and sells precision components and special screws in four divisions. Fastening Systems combines the principles of threaded fastening and riveting technologies and consists of two divisions. Distribution & Logistics is a national supply partner for fasteners, tools and architectural hardware in Switzerland and neighboring countries.
Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.
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