What makes SFS’s corporate culture stand out?

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.
• With its increased focus on the medical device industry – a market that is growing worldwide – SFS is attractively positioned for the future.
• Thanks to its good profitability and solid balance sheet, the company has the means and the ability to pursue its long-term strategy and to make the associated investments – even in a crisis.

Based on these findings, SFS is encouraged to systematically continue to pursue its chosen path.

SFS products are pivotal to the success of a wide range of different automotive applications including seat belts, airbags and brake systems. Innovation and growth in this industry are being driven by trends towards greater comfort, safety, efficiency, and, in an overall context, by the autonomous vehicle trend. SFS benefits from the associated electrification of vehicles, since this lets us tap other promising growth areas, with actuators for electric brake systems being just one example. These trends are independent of the powertrain. Sales generated with products for internal combustion engines currently represent a low, single-digit percentage of overall SFS Group sales, so the phase-out of internal combustion engines in the long term will not have a significant impact on our business. Given the robust innovation and growth trends as well as the Group’s enormous competitive edge, SFS expects a continuation of strong organic growth that is likely to outperform the market as a whole by 4–6%. Additional production capacities are being created to implement these growth projects, with some examples including the expansion of the production platform in Nantong (China) and the construction of an additional production hall in Heerbrugg (Switzerland).

SFS manufactures products for various automotive applications, ranging from seat belts and airbags to brake systems. Innovation and growth in these application fields is driven by trends towards greater comfort, safety and efficiency, and in an overall context by the autonomous vehicle trend. SFS profits from the resulting vehicle electrification through the additional growth opportunities; for example, actuators for electronic brake systems. Sales generated with products for internal combustion engines currently represent a low, single-digit percentage of overall SFS Group sales, so the phase-out of internal combustion engines in the long term will not have a significant impact on our business.

Looking at the entire range of cold-formed products made by SFS, we estimate the material savings are equivalent to about 67% of material consumed using conventional manufacturing processes. Based on our annual consumption of raw materials and taking into consideration the emissions generated both to produce the steel and by conventional machining processes, we calculate that we save about 300,000 tons of CO2 emissions a year through cold forming manufacturing processes. This roughly corresponds to the annual CO2 emissions of approx. 50,000 single-family homes using a conventional oil or gas heater.

Sustainability is important to us! If we embrace a sustainable mindset and practices, that 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 sustainable added value – in keeping with our corporate principle of “Inventing success together”.

You can find detailed information on the topic of sustainability at SFS at sustainability.sfs.com. The report for the 2021 reporting period will be published at the end of May 2022. SFS’s long-term goal is to incorporate sustainable business mindsets and practices into its corporate strategy and business model. As a signatory of the UN Global Compact, SFS is committed to the Sustainable Development Goals (SDG) and is currently prioritizing the 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 reports annually on the goals, measures and progress of the individual topics within the framework of the Communication on Progress report (UN Global Compact) and the GRI Report (Core option).

The D&L segment represents SFS Group’s historical roots. Founded as the Stadler hardware store in Altstätten, Switzerland, in 1928, the store’s trading business evolved over time and grew to include new product and application areas. Until the end of the past reporting period, the segment has kept its geographic focus on Switzerland and thus steadily expanded and strengthened its market position.

The addition of Hoffmann SE now lends the segment an internationally strong position in the attractive area of quality tools. The companies have been working together successfully for many years and have a great deal of common ground with respect to their value proposition and values. This pooling of forces marks a milestone and their complementary positioning opens up attractive development opportunities. Together they will be able to exploit advantages in the areas of digitalization, logistics, software and purchasing. The extensive cross-selling potential created through Hoffmann’s incorporation into the D&L segment opens up additional growth prospects. In the medium term, Hoffmann’s existing customers will gain access to SFS’s expertise in the areas of mechanical fastening systems and electronic procurement solutions.

The digital revolution is one of the most important megatrends for SFS. As it 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 plant and production processes with respect to quality assurance by means of networking, collecting and evaluating plant and process parameters
• Ongoing developments in the area of electronic procurement and logistics systems that enable customers to automate their warehouse management by integrating it into their ERP system, for example
• Modern e-commerce offers like the eShop of the Distribution & Logistics segment that enable quick information procurement and simple order processes
• Other major investments in the optimization and interconnectedness of SFS-internal business processes through the transition to S/4HANA, a new generation of ERP systems, 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 that mitigate risk
• More 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.

In all these areas and many more, SFS has its own in-house specialists who collaborate with external service providers to promote the ongoing development of applications and thereby steadily expand SFS’s digital expertise.

The organizational structure with three segments, all of which have different business models, benefits SFS in several ways. The Engineered Components and Fastening Systems segments help and augment each other in matters related to manufacturing technology and capabilities. The Fastening Systems and Distribution & Logistics segments reap benefits from their pooled knowledge and competence in the areas of sales and distribution, services and logistics solutions. Our value proposition – Inventing success together – runs through all segments of our business activities and requires the continuous goal of continuous improvement in order to create added value for our customers. With the aim of inventing success together.

Switzerland is where it all began: SFS Group traces its roots back to a hardware store opened in Altstätten, Switzerland, in 1928 under the name Stadler. The establishment of a metal press shop in Heerbrugg in 1960 laid the foundation of the company’s manufacturing activities and subsequent international expansion. Our desire to be close to the customer was the driving force behind the internationalization and global presence of our company.

Switzerland is still very important to SFS Group today. In addition to the Distribution & Logistics Switzerland segment, where activities are focused on Switzerland, and the corporate functions, the Automotive and Industrial divisions serve their European customers primarily from their sites in Switzerland. Our Swiss sites have remained competitive on the international stage, even with the sustained strength of the Swiss franc, through a focus on the development and production of expertise-intensive, technologically advanced products and on highly automated, capital-intensive manufacturing processes. The relatively good availability of skilled workers is an important locational advantage and another reason why Switzerland is our innovation and technology hub.

The global political stage has become more complex over the past year. Nationalism is gaining ground in many countries. The confrontational approach to international trade relations is becoming a risk factor. The potential consequences for the world economy are not predictable.

Despite these challenges, SFS is guardedly optimistic about the future. As a value engineering specialist that creates added value for the customer with precision components in selective niche applications that are often mission-critical, we have always maintained close ties with our customers. That has motivated us to innovate and internationalize our business and it explains our global production platform. Standardized production facilities make us very flexible and this flexibility can, in a worst-case scenario, quickly become a critical competitive advantage.

For example, we are rigorously analyzing scenarios in which supply chains for the electronics industry are transferred to locations outside China, and we have been discussing these possible contingencies with our customers. SFS’s established production sites in Malaysia and India could serve as potential alternative production platforms. Our strong footing in various niche applications puts us in a good position to cushion the impact of negative developments in any one market.

SFS's internal R&D departments examine technological developments in all relevant business areas. New developments and processes that fall within SFS’ strategic focus are added to the value chain or product portfolio.

SFS is pursuing the development of additive manufacturing processes and has already successfully applied it in the production of prototypes. Our focus, however, is on markets and applications that involve very large production quantities: SFS produces more than 30 billion precision components a year. With these high production volumes, cold forming – one of our core technologies – offers significant advantages owing to its very high productivity. Today's additive manufacturing processes are not a feasible alternative in the production of high volumes. However, as additive manufacturing technology matures, it could become a viable add-on to SFS’s manufacturing technology portfolio.

In terms of fastening solutions, SFS is focusing on specific mechanical applications that offer our customers added value. This added value can be in the form of a more efficient fastening process, greater reliability or improved ergonomics. In these applications, alternative fastening solutions, such as adhesive bonding, are not viable, or do not offer the same level of value added.

The new production platform in Nantong will bring about major strategic benefits for the Electronics division and for other SFS divisions in different business areas. The wide range of production technologies offered by the new site in Nantong has attracted considerable interest from existing and potential customers:

• The production site is equipped with modern infrastructure and has all the relevant surface treatment certifications for components.
• The Nantong plant is the most important production site for the Electronics division. Thanks to the new platform in Nantong, the Electronics division has been able to realize efficiency gains since the site’s commissioning in 2019 by successfully consolidating multiple sites in China at this one location.
• In the automotive business, the plant offers a platform for satisfying customers’ need for greater localization in component manufacturing, which SFS addresses with its “local-for-local” strategy, New projects have already been acquired from local customers.
• In addition, the Nantong platform will enable the D&L segment and the Medical and Riveting divisions to serve customers in China as a local supplier, giving them a key locational advantage.