Dear Employees
At the end of last year, our management and Board of Administration were intensively planning the future of Variosystems.
As we are unable to hold a personal staff briefing due to the current situation, we will inform you in this letter about all decisions of the Board and the resulting measures.
Budget 2021
After having Variosystems’ strongest year in terms of sales in 2020 with 225 million USD in total sales, we expect 240 million USD in 2021.
Nevertheless, we are aware of the upcoming negative influences on the 2021 budget (loss of Watchguard in the US and BRP in China, decline of Hamilton in the US, Hamilton Medical in Switzerland, Sensirion and ATM).
There are also very positive examples of growing customers, including NewTek in the US, Hamilton Bonaduz (Robotic), Miromico and V-Zug in Switzerland.
With the unexpected figures from last year and the targeted budget this year, we have planned investments (CAPEX) totaling CHF 11 million USD for the entire VS Group in 2021. This corresponds to 4.7% of turnover. Almost 30% of the investments (3.1 million USD) will flow into the IT infrastructure.
Strategy 2025
We are aiming for natural growth to 380 million USD by 2025. Two-thirds of this target is to be covered by growth in existing customers. The rest of the growth is to be achieved with the addition of new customers.
Of course, this will demand additional manpower. In 2021 and 2022, an additional sales team will expand each the sales hubs in Switzerland and the USA. These will consist of business development or representatives, as well as account and purchasing.
An additional sales team (business development, account and purchasing) will also expand the Sales Hub China in 2021. With these personnel measures, we plan to grow by 34 million USD.
New Facility in Mexico
In order to meet our growth requirements in the USA, we have been looking for new production capacities and decided to build a new facility for the production of electronic components in Juarez, Mexico.
Juarez is located near El Paso (border city to the USA) and is about 1,000 km away from Southlake.
The short distance to the US market, as well as the free trade agreement (NAFTA) without customs duties within North America (USA, Canada, Mexico), are a great advantage for our US customers.
The production area of approx. 6’100 m² will be equipped with identical equipment as in the other locations: SMD lines, THT production and test. Production start is planned for Q3/2021.
The new plant also serves to level capacity for Sri Lanka: Orders for the USA are shifted step by step from LK to Mexico and creates new capacity for orders from Switzerland.
Summary
With these decisions of the Board of Administration and the defined strategy, we want to achieve an annual sales growth of approx. 12% with constant earnings.
In comparison, the EMS market growth is about 5-7%. We are therefore gaining small market shares of the total EMS volume, which is approx. 500 billion USD.
We are aware that the targets are ambitious, but possible with the planned measures. We are convinced that with the growth investments until 2025: additional manpower, new machines, IT infrastructure, harmonization of processes and technology, as well as global and local personnel functions, we will be well positioned.
We know and appreciate that we have a strong VS team that is fully committed to the long-term success of Variosystems and we are proud to have such reliable and motivated employees at all locations.
We thank you for your trust!
The Management Board
Adresse Schweiz
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Switzerland
Variosystems AG
Ampèrestrasse 5
9323 Steinach
Phone +41 71 447 87 00
Fax +41 71 447 87 12
sales@variosystems.ch