Ascom reports half-year result 2024

/EIN News/ -- Ad hoc announcement pursuant to Art. 53 LR
Baar, Switzerland, August 6, 2024

First half-year 2024 at a glance:

• Net revenue of CHF 142.1 million (H1/2023: CHF 150.2 million), reflecting a decrease of 2.7% at constant currencies (-5.4% at actual currencies). While the key markets (such as DACH region, Nordics and the Netherlands) performed in line with expectations, UK and France & Spain suffered from a shortfall. In addition, last year’s reporting period benefited from a high base effect due to a revenue catch-up after the component shortage.
• Incoming Orders 3.1% below previous year (-0.3% at constant currencies), but about 13% above H2/2023. USA & Canada, and Rest of World delivered a strong order intake with a growth rate of around 20%.
• EBITDA margin of 7.4% in line with previous year (H1/2023: 7.5%)
• Group profit of CHF 2.9 million (H1/2023: CHF 5.1 million), impacted by the increased costs of depreciation.
• Net cash position of CHF 16.5 million (H1/2023: CHF 21.2 million) with a solid equity ratio of 36.7% (H1/2023: 35.7%).

Guidance for fiscal year 2024
Given the slower start of the year and the current market and geopolitical environment, Ascom expects for fiscal year 2024:

• Net revenue in line with the previous year at constant currencies,
• EBITDA margin of 9-10%.

Key markets in line with expectations
Ascom generated in H1/2024 a net revenue of CHF 142.1 million, representing a decrease of 2.7% at constant currencies (-5.4% at actual currencies) compared to CHF 150.2 million in H1/2023, which was positively impacted by the catch-up in revenue due to the easing of the chip supply problems.
The best performance was achieved in the key markets DACH, Nordics and the Netherlands, as well as in Italy, while UK and France & Spain markets underperformed.
Revenue split by market segment showed the Healthcare sector accounting for 64% of total revenue, the Enterprise sector developed well and increased to 31%, while the OEM business contributed 5% of total revenue for the first half-year 2024.

Strong order intake in USA & Canada
In the first half-year of 2024, incoming orders were overall in line with the previous year. The total volume of new orders decreased by 0.3% at constant currencies and amounted to CHF 166.1 million, compared to CHF 171.5 million in H1/2023 (-3.1% at actual currencies).
However, incoming orders in the first six months of 2024 were about 13% higher than in the second half-year 2023 (H2/2023: CHF 147.1 million). Robust growth was achieved particularly in USA & Canada and Rest of World with an increase of about 20% compared to H1/2023 in each region.
The book-to-bill ratio remains at healthy 1.17. Order backlog further increased to CHF 311.5 million (31.12.2023: CHF 276.4 million), representing a healthy backlog for conversion in the second half-year 2024 and beyond.

EBITDA margin in line with previous year
Gross profit in the first half-year 2024 amounted to CHF 67.2 million and the gross margin reached 47.3%, the same level as in the previous year (H1/2023: 47.5%). EBITDA came to CHF 10.5 million with an EBITDA margin of 7.4% in line with the previous year (H1/2023: CHF 11.2 million with a margin of 7.5%).
EBIT was at CHF 4.0 million (H1/2023: CHF 6.1 million), mainly due to increased costs of depreciation. As a result, Ascom closed the first half-year of 2024 with a Group profit of CHF 2.9 million (H1/2023: CHF 5.1 million).

Solid balance sheet with equity ratio of 36.7%
On 30 June 2024, cash and cash equivalents amounted to CHF 21.5 million. Ascom generated free cash flow of CHF 2.1 million in the first six months (H1/2023: CHF 12.2 million). The cash flow generation was mainly impacted by the increased dividends of CHF 10.8 million paid-out in the first half-year 2024, and the investment in the refurbishing of Ascom’s facility in Gothenburg.
Ascom has outstanding borrowings of CHF 5.0 million, resulting in a net cash position (cash and cash equivalents less borrowings) of CHF 16.5 million (31.12.2023: CHF 24.7 million). As of 30 June 2024, the equity ratio stood at a solid level of 36.7% (H1/2023: 35.7%).

Strategy execution on track
Ascom is delivering upon its strategic plan to

• Become the key enabling platform for Healthcare and Enterprise;
• Step-up growth in the next couple of years;
• Strengthen Ascom’s position in solutions and software with the launch of its new standardized and integrated Healthcare and Enterprise Platforms in 2024 and 2025. The platform convergence will be completed by mid-2025;
• Enhance the gross margin and operational efficiency, enabling an EBITDA accretion over the next couple of years.

Next to its strategic transformation, Ascom is taking cost measures in 2024 to improve further its efficiency and cost base. This will result in additional run-rate savings in 2025 and beyond.

Guidance and targets for fiscal year 2024
Ascom is on track with its plan to execute its strategy and expects the second half-year 2024 to develop significantly better than the first half-year 2024 as well as the second half-year 2023.
However, taking into account the slower start of the year, as well as the current market and geopolitical environment, Ascom expects for fiscal year 2024 a revenue development in line with the previous year at constant currencies, and an EBITDA margin of 9-10%.

KEY FIGURES HALF-YEAR 2024        

In CHFm., except %
	H1 2024	H1 2023
Incoming orders	166.1	171.5
Order backlog (at the end of the period)	311.5	289.8
Net revenue	142.1	150.2
Gross profit	67.2	71.3
EBIT	4.0	6.1
EBIT margin in %	2.8%	4.1%
EBITDA1	10.5	11.2
EBITDA margin in %	7.4%	7.5%
Group profit	2.9	5.1
Number of employees (FTE) at 30.06.	1’433	1’368

¹EBITDA, earnings before interest, income tax, depreciation, and amortization, see also definition in the 2024 Half-year Report on page 5.

The Half-Year Report 2024 of the Ascom Group and the Half-Year Results Presentation 2024 are available in English on https://www.ascom.com/investors/reports-and-presentations/

The Half-Year Results Conference Webcast 2024 starts on Tuesday, 6 August 2024 at 10.00 a.m. CEST.

The conference can be joined via a live audio webcast with synchronized presentation slides, including Q&A or via conference call, where participants can ask questions after the presentation.

• Live Webcast: Link Live-Audio-Webcast
• Dial-In Conference Call: Link Conference Call

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• Ascom_MediaRelease_HYR2024_EN