Bellevue Entrepreneur Switzerland (CH)

Swiss SMid Caps as measured by the SPIEX Index were flat in August. The meeting between Trump and Putin, followed by a Washington summit with Zelensky and European leaders, raised expectations for renewed dialogue on a Russian-Ukraine ceasefire. Powell’s remarks at the Jackson Hole symposium suggested a potential September rate cut amid early signs of a softening labor market. Eurozone’s Composite PMI print remained robust at 51.1 supported by a third consecutive expansion in services (50.7) and a rebound in manufacturing (50.7). In Switzerland, the procure.ch Manufacturing PMI rose slightly to 49.0 in August, suggesting that high tariffs on Swiss exports and other global developments have had little effect yet on overall business confidence. The Swiss CPI fell by 0.1% to 107.7 points and annual inflation was +0.2%, according to the Federal Statistical Office. From a sector perspective Communication Services (+8.4%), Consumer Discretionary (+2.7%) and Financials (+2.5%) performed best while Utilities (-7.2%), Information Technology (-3.7%) and Materials (-3.4%) lagged the most.

Against this backdrop, the Fund rose 0.6%, 63bps better than the SPIEX. YTD the Fund has returned 17.7%, 457bps above the benchmark.

Main detractors in the month were Montana Aerospace (-10.9%), Medmix (-10.2%) and Acceleron (-7.5%). Montana Aerospace suffered some profit taking despite solid Q2 figures. Revenues for aerostructures was a little shy of consensus but EBIT rose 24% yoy with margins up 140bps, reflecting disciplined efficiency management. The company reiterated guidance for 2025 and 2026. Medmix reported weaker-than-expected H1 2025 results, with a -10% revenue decline in Consumer & Industrial offsetting both +8% growth in Healthcare and the benefits of self-help measures. Management downgraded full-year guidance to MSD revenue decline, while maintaining an 18–19% Adj. EBITDA margin. Longer term, the company reiterated targets of ~4% revenue growth and EBITDA margins above 20%. Accelleron had pre-released H1 sales figures on July 15th and massively raised guidance for 2025. H125 EBITA finally came at tad above consensus with margins reaching 25.5%. The company lowered FY25 margin guidance by 1% to 24-25% because of the negative effect of tariffs, causing some profit taking after a YTD return of 53%.

Top 3 contributors were u-blox (+53.3%), Huber+Suhner (+30.5%) and Compagnie Financiere Tradition (+25.8%). U-blox was subject to a takeover offer by the US PE fund Advent at CHF 135, a premium of 32% to the 60 days average share price. We note that the acceptance threshold is 66.7%, while u-blox capital is highly fragmented and Advent so far only secured the SEO commitment to the offer. Ahead of the formal offer period, which will run until October 9, u-blox share price is trading slightly ahead of the offer price. Huber+ Suhner published H1 results marked by the resilience of its order intake. In the Communication division the very dynamic Data Center segment managed to mostly offset the end of a large Indian contract recorded in 2024. This encouraging numbers came a few days after Huber+Suhner announced a significant order for Polatis optical circuit switches from a global hyperscaler, a milestone for its strategic DC growth initiative. Tradition delivered a strong operating performance with H1 operating income increasing 30%, increasing margin to 16.4%. Revenues had been pre-released and rose 11% on a currency adjusted basis. We particularly appreciate Tradition’s business model in the actual environment, as the Interdealer Broker actually benefits from increased volatility and market uncertainty.

Fundamentally Swiss Small & Mid caps are truly exceptional and a great contribution to every portfolio. Often active in attractive niches where they command high market shares and a strong competitive position, they develop high-quality products and services. Always turned outwards and often truly global, they are indeed Entrepreneurs taking care of their own destiny and seeking solutions on their own whatever the economic or political environment. This is why in our Bellevue Entrepreneur Europe Small Fund, Swiss companies account for 15% of our stock picks and have been the second largest contributor to our YTD outperformance. From a cyclical point of view, in Europe the industrial short cycle is finally displaying signs of revival. The European PMI was up 0.9ppts to 50.7 in August, the first expansion reading since June 2022, driven by an improvement in domestic demand. A pick up in Europe will definitely also greatly benefit Switzerland and its industrial base, despite the US tariff uncertainty.