Excellent second half-year for Ascom - Increased Group profit of approximately CHF 39 million expected for 2014
Due to a very strong second half-year, Ascom expects for fiscal year 2014 at Group level an EBITDA margin of approximately 15.4% while the revenue development was in line with the previous year at constant rates. Both divisions, Wireless Solutions and Network Testing, achieved in the second half-year a net revenue growth of about 26% compared to the first half-year. Ascom is expecting an increased Group profit for 2014 in the region of CHF 39 million (2013: CHF 36.9 million).
Supported by the on-going strong momentum in market, growth and profit development, Ascom has decided to accelerate implementation of its strategy with an additional investment program on top of normal investments for 2015 of around CHF 10 million mainly for Wireless Solutions, which includes the addition of up to 100 employees.
Ascom sets a target to reach organic revenue growth in its core business of 3-7% in 2015 while achieving an EBITDA margin in the range of 13-16% due to the additional investments. For the period 2016/2017, Ascom sets a goal of reaching average organic revenue growth of 5-10% while achieving an EBITDA margin in the range of 14-18%.
EBITDA margin of approximately 15.4% on Group level
Based on preliminary unaudited results, Ascom generated revenues of CHF 448.8 million in fiscal year 2014 (2013: CHF 459.7 million) and thus achieved a stable revenue development at constant currencies. On Group level, Ascom realized EBITDA of approximately CHF 69 million (2013: CHF 67.6 million) resulting in an EBITDA margin of approximately 15.4% (2013: 14.7%).
In its core business (including Wireless Solutions, Network Testing and Corporate, but excluding the activities related to the non-core real estate) Ascom generated revenues of CHF 437.5 million (2013: CHF 439.2 million), representing a growth of about 2% at constant currencies. Ascom posted in its core business EBITDA of about CHF 67 million with an EBITDA margin of about 15.2%.
Both divisions achieved in the second half-year a net revenue growth of about 26% compared to the first half-year
Wireless Solutions recorded revenue growth of 6.4% year-on-year at constant currencies and generated revenues of CHF 318.9 million for the full-year 2014 (2013: CHF 306.1 million). Network Testing generated revenues of CHF 119.0 million (2013: CHF 133.3 million) showing a decline of approximately 8.8% at constant currencies. Both Divisions achieved in the second half-year a net revenue growth of approximately 26% compared to the first half-year.
Increased Group profit in 2014
Ascom is expecting a higher Group profit for 2014 in the magnitude of CHF 39 million (2013: CHF 36.9 million). The Ascom Group shows a net cash position of CHF 27.1 million as of 31 December 2014 (2013: net debt of CHF 2.9 million) and an equity ratio of around 50%.
Ascom will publish further information and full details of its financial statements and the 2014 Annual Report as usual at the Annual Media Conference to take place on 11 March 2015.
"Ascom 2020" - accelerating strategy implementation
Today Ascom sets out an accelerated plan to invest in sustainable growth for the Group, driven by additional investments into solutions, software and professional services. Ascom intends to invest around CHF 10 million in 2015 mainly in Wireless Solutions. Up to 100 employees are planned to be added as part of this program, expanding Sales, Marketing, Technology capabilities, while also creating a new Global Solutions Center. Based on the plan "Ascom 2020", the Group has set a target to double its revenues in ICT healthcare.
Ascom intends to reach organic revenue growth in its core business of 3-7% in 2015 while achieving an EBITDA margin in the range of 13-16% due to the additional investments. For the period 2016/2017, Ascom has set a goal of reaching average organic growth of 5-10% while achieving an EBITDA margin in the range of 14-18%.
Fritz Mumenthaler, CEO of Ascom, emphasizes: "In recent years we have increased our investments in the ICT healthcare markets step by step and in a targeted way. These investments have yielded strong returns, as the growth and record EBITDA margin in our 2014 figures today clearly show. Therefore, we will now focus on accelerating this momentum with an additional investment program of around CHF 10 million mainly for Wireless Solutions. We are convinced that healthcare offers the best opportunity for Ascom to accelerate its growth in a sustainable way. We have a unique opportunity to transform the way high-pressure healthcare environments work. Better patient care and better ways of working can all be enabled by our solutions and it is a market where we have already proven our ability."
"We have an ambition to be present in every Tier 1 hospital in the world. This will be made possible by existing innovations such as our smart device Ascom Myco - a revolutionary workflow management tool for nurses, which will start to drive revenue growth for us this year. Targeted investments in new people, new solutions and synergistic acquisitions will help to build out and to enhance our strong customer value proposition. This is an exciting moment for Ascom and I look forward to the next months and years with confidence", he adds.
Preliminary assessment of the impact of the Swiss Franc appreciation in January 2015
The expansion of Ascom's international presence and the various acquisitions and divestments made in past years have significantly reduced the exposure of Ascom's business operations to fluctuations of the Swiss Franc vis-à-vis other major currencies. With less than 100 employees currently employed in Switzerland (approximately 6% of Ascom`s employee base), Ascom's Swiss cost base is largely matched by earnings generated in Switzerland. However, the Swiss Franc's substantial appreciation in January 2015 will have translational repercussions in the range of 10-15% on the future net revenue, operating results, cash flows and balance sheet of Ascom Group when reported in Swiss Francs. Importantly, Ascom does not expect material impact from the translation of local currencies into Swiss Francs on revenue growth rates or profitability margins.
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