Ascom reports very good results and recorded a hike in profitability for the first half of 2013 - EBITDA guidance 15-16% for 2013 confirmed
ASCOM REPORTS VERY GOOD RESULTS AND RECORDED A HIKE IN PROFITABILITY FOR THE FIRST HALF OF 2013 - EBITDA GUIDANCE 15-16% FOR 2013 CONFIRMED
- Ascom Group:
- Incoming orders increased by 19.5%
- Revenue growth of 5.5%
- EBITDA margin increased to 12.4%
- Group profit almost tripled to CHF 14.5 million
- Free cash flow of CHF 30.5 million generated
- Balance sheet further solidified with equity ratio of 42.1%
- Wireless Solutions:
- Incoming orders increased by 12.7%
- Revenue growth of 5.8%
- EBITDA margin at high level of 14.0%
- Network Testing:
- Incoming orders increased by 44.4%
- Revenue growth of 7.2%
- EBITDA margin increased to 11.8%
- Guidance (on Group level):
- 2013: Revenue growth of 5%; EBITDA margin of 15-16%
- 2015: Revenue growth of 5-10%; EBITDA margin of 17-18%
Strong first half-year 2013 results
Ascom Network Testing successfully confirmed the turnaround achieved in 2012 and closed the first half-year 2013 with very good results. Ascom Wireless Solutions further strengthened its strong market position and showed a good first half-year as well. As a result the Group showed substantial growth in incoming orders and in revenue, as well as a significant improvement in its profitability for the first half-year 2013.
Ascom recorded a strong increase in incoming orders of 19.5% to CHF 259.7 million (H1/2012: CHF 217.4 million). Order backlog stood at CHF 159.5 million (31 December 2012: CHF 122.0 million) at the end of the reporting period, creating a very good basis for future revenue growth. For the first six months of 2013, Ascom generated revenue of CHF 225.1 million (H1/2012: CHF 213.4 million), corresponding to growth of 5.5%.
Ascom recorded a significant improvement in profitability. EBITDA for the first half-year amounted to CHF 27.9 million (H1/2012: CHF 15.0 million), resulting in an EBITDA margin of 12.4% (H1/2012: 7.0%). Both divisions achieved double-digit EBITDA margins with 14.0% for Wireless Solutions and 11.8% for Network Testing.
To maintain its innovation leadership, Ascom once again made substantial investments in R&D. For the first six months 2013, the expenses for R&D amounted to CHF 24.0 million which corresponds to 10.7% of revenue.
Profit hike for Ascom
Ascom almost tripled its net profit compared to the previous year, with Group profit amounting to CHF 14.5 million (H1/2012: CHF 5.2 million). It has to be considered that the first half-year result 2012 includes a positive amount of CHF 2.6 million due to a restatement according to IAS 19 standard in conjunction with defined benefit pension plans and a one-time profit contribution of CHF 6.1 million from divested activities on the one hand, and restructuring expenses of the Network Testing Division amounting to CHF 8.8 million on the other hand. Therefore, the one-time effects have been mostly neutralized.
As of 30 June 2013, the Group further solidified its balance sheet with a strong equity ratio of 42.1% (31 December 2012: 32.0%). Ascom repaid loans of CHF 27.9 million net and distributed CHF 12.2 million of dividends from the capital contribution reserves during the first half-year of 2013. Net debt decreased to CHF 21.8 million (31 December 2012: CHF 41.3 million). In the first half-year, Ascom generated a free cash flow of CHF 30.5 million.
Ascom Wireless Solutions - stable business on a high profitability level
Wireless Solutions enhanced its strategic focus on the healthcare segment and on improving its operational efficiencies. The division's business continues to remain stable and on a high profitability level. For the first six months, Wireless Solutions achieved revenue growth of 5.8% while incoming orders increased by 12.7%. Wireless Solutions managed to maintain its high margins and achieved an EBITDA margin of 14.0%. With the outsourcing of its last remaining production activities in Herrljunga (Sweden), Wireless Solutions is well prepared to further improve its net working capital. Wireless Solutions expects to continue its good performance during the second half-year as well.
Ascom Network Testing - turnaround confirmed
Network Testing successfully confirmed the turnaround achieved in 2012 and closed the first half-year 2013 with very good results. Revenue grew by 7.2% while incoming orders increased by a remarkable 44.4%. Due to substantial cost savings combined with the growth in revenue, Network Testing recorded a substantial improvement in profitability and reached a double-digit EBITDA margin. Network Testing expects to continue the good development and to further improve the profitability in the second half-year.
Ascom Head Office to be relocated to Baar (Canton of Zug)
The Ascom Head Office has been reduced and will be relocated to Baar (Canton of Zug) as of 1 November 2013. The Board of Directors will make a proposal to the shareholders at the next Annual General Meeting to transfer the legal domicile of Ascom Holding AG to Baar as well.
Outlook - guidance confirmed
In January 2011, Ascom announced EBITDA margin targets of 14-15% for the year 2013. Given the favorable results for the first half-year 2013, Ascom is very confident that it will achieve these goals and also the targeted growth of 5%.
In March 2013, Ascom further increased the EBITDA margin targets for 2013 to a new ambition level of 15-16%. Due to the traditionally stronger second half-year for Ascom and based on the assumption that Network Testing continues to improve its profitability, there is a fair chance to achieve even this ambition level. Furthermore, Ascom confirms its mid-term targets of reaching an average growth of 5-10% in 2014 and 2015; targeting an EBITDA margin of 17-18% in 2015.
Key figures Ascom Group
Key figures Wireless Solutions
Key figures Network Testing
The complete 2013 Half-Year Report of the Ascom Group is available in English only and can be viewed online at www.ascom.com/hyr2013-en.
The full presentation of the Media & Analyst Conference (in English) can be downloaded after the conference at: www.ascom.com/en/index/investor-relations/ir-reports-presentations/ir-media-presentations.htm
This document does not constitute an offer or solicitation to subscribe for, purchase or sell any securities. This document is not being issued in the United States of America or the United Kingdom and should not be distributed in any jurisdiction in a manner where such distribution would not comply with regulatory requirements. In particular, this document may not be distributed into the United States, to United States persons or to publications with a general circulation in the United States. In addition, the securities of Ascom have not been and will not be registered in any jurisdiction outside Switzerland. The securities of Ascom may not be offered, sold or delivered and no solicitation to purchase such securities may be made within the United States or to U.S. persons absent an applicable exemption from the registration requirements of the United States securities laws or within any other jurisdiction and in a manner where such offer, sale, delivery or solicitation might not be in compliance with regulatory requirements (including the United Kingdom).