Seizing strategic opportunities

At your side 24/7
SFS is a reliable companion throughout your day, from early in the morning to late at night, seven days a week. Not many people realize this, since our precision components and mechanical fastening systems are embedded in the successful products of our customers, where they perform often critical functions.

Your first contact with SFS products happens early in the morning when using your coffee machine or your smartphone. Driving to work, you are also surrounded by numerous SFS products: integrated in your car’s safety systems such as seat belts, airbags and braking systems, they help to protect your life in the event of an accident. At work, hard disk drives function with high-precision miniature SFS components. SFS products can be found in many electronic lifestyle products, such as adventure cameras, smart watches and smart home devices as well as a growing number of AR/VR solutions. In the field of healthcare, our precision components in bone screws, dental implant fixtures and surgical instruments help improve your quality of life.

Our value proposition:
creating sustainable added value for the customer
SFS components embedded into a customer’s product often account for less than 1% of the total product cost. But the costs at the customer end arising from procurement, logistics and handling operations can be several times the actual cost of these components. That is why we are not primarily focusing on reducing our direct product costs and differentiating ourselves on price – there would be limited potential. Instead, our main goal is to optimize our customers’ overall product-related costs. This approach generates significantly more cost-savings potential and allows us to create sustainable value for our customers. Our value engineering model focuses on product design, definition of manufacturing processes and on exploiting the power of digitalization. The result: custom-tailored products and intelligent solutions that increase the competitiveness of our customers. Hence, the SFS solutions lead to greater differentiation and stronger collaborative partnerships.

Sustainability is an integral component of our value proposition
Sustainability is important to us – it’s in our DNA! Embracing a sustainable mindset and practices drives innovation and gives us a chance to re-examine our products and processes on a daily basis and improve them continuously for the good of all stakeholders. As a value engineering specialist, working with our customers to develop sustainable products and solutions gives us a multitude of opportunities to utilize our expertise and offer our customers added value – in keeping with our corporate principle of “Inventing success together”. In close collaboration with customers and suppliers, we strive to improve cost transparency on an ongoing basis and also incorporate other aspects of sustainability into the calculations.

Detailed information on the topic of sustainability at SFS can be found at sustainability.sfs.com. As a signatory of the UN Global Compact, SFS is committed to the Sustainable Development Goals (SDG) and currently prioritizing following four 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 is reflected in the material topics identified in the materiality assessment conducted in 2019 (economic performance, occupational health and safety, training and education, emissions reduction and socioeconomic compliance), which are reviewed every two years. SFS has set itself ambitious goals on these material topics:

• Economic performance: Steady creation of value for all stakeholder groups
• Occupational health and safety: Reduce the number of work-related accidents to half the 2019 level by 2025
• Training and education: SFS’s long-term goal is to have 5–7% of its permanent employees around the world participate in a dual education program
• Emissions reduction:
  • Reduce CO₂ emissions (Scope 1 and 2) by ≥90% until 2030 (measured as tons of CO₂ per Swiss franc of value added) compared to 2020
  • Reduce CO₂ emissions (Scope 3) by ≥90% until 2040 (measured as tons of CO₂ per Swiss franc of value added)
  • Socioeconomic compliance: Fair, correct conduct is an expression of a healthy partnership. SFS should not be subject to any penalties in the area of socioeconomic compliance

The next sustainability report will be published at the end of May 2022 and, in addition to an updated materiality analysis, also provide information about progress made during 2021 and the Group’s priorities for 2022.

Further progress made with respect to digitalization
The digital revolution is one of the most important megatrends for SFS. As it already did before the COVID-19 pandemic, the company systematically takes advantage of the opportunities and applications opened up by ongoing product and process digitalization to make continuous improvements and increase efficiency in all aspects of the business. Some examples from the past financial year include:

• Further optimization of production processes with respect to quality assurance by means of networking, collecting and evaluating machine and process parameters
• Ongoing developments in the area of electronic procurement and logistics solutions that enable customers to automate their inventory management by integrating it into their ERP system, for example
• Modern e-commerce offers like the eShop of the Distribution & Logistics segment enable quick information gathering and simple order processes
• Major investments in the optimization and interconnectedness of SFS-internal business processes through the transition to S/4HANA, a new generation ERP system, in order to better and more efficiently meet market and customer requirements while also raising the level of process standardization
• Strong commitment to cybersecurity with a focus on technical solutions and preventive measures to mitigate risk
• Widespread use of virtual channels of communication such as a digital event platform, an in-house video studio for content production and the rollout of the mySFS employee app. More under the Success Story mySFS

Strategy tested by COVID-19 pandemic
The COVID-19 pandemic put the effectiveness of our 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 our “local for local” strategy, we are steadily building up our 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.
• The focus on a core set of tooling based technologies and relevant secondary operations allows technology leadership in the core processes. A standardized machine park reduces risk and maximizes flexibility.
• 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 investments even in such a crisis.
• For SFS relevant megatrends remain intact: Digital revolution, Economic globalization, Evolving consumption in “health & wellness”, Resource constraints and Demographic asymmetries.

Based on these findings, SFS is encouraged to pursue the path it has chosen consistently.