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05.03.2024 06:46:00 - dpa-AFX: EQS-Adhoc: HUBER+SUHNER maintains solid EBIT margin despite the marked decline in the communications market (english)
HUBER+SUHNER maintains solid EBIT margin despite the marked decline in the
communications market
HUBER+SUHNER AG / Key word(s): Annual Results
HUBER+SUHNER maintains solid EBIT margin despite the marked decline in the
communications market
05-March-2024 / 06:45 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.
---------------------------------------------------------------------------
Ad hoc announcement pursuant to Art. 53 LR - 05.03.2024
Organic decline of 6.3 % in net sales after record high of previous year -
At 9.1 %, EBIT margin remains within the medium-term target range - Net
income of CHF 64.8 million - Cash flow from operating activities of CHF 116
million - Growth initiatives make positive contribution overall
Key figures
In an environment beset by various challenges and despite lower volumes,
HUBER+SUHNER closed the year 2023 as a whole with a solid result within the
medium-term EBIT target range of 9-12 %.
At CHF 821.4 million, order intake in 2023 was 15.8 % below the very high
prior-year level (CHF 975.4 million) and remained 3.5 % below net sales,
resulting in a book-to-bill rate of 0.97 (PY 1.02). After a very strong
start to the year, supported by the continuing momentum from the previous
year, the business volume situation then changed in many target markets.
This was attributable to high inventories at customers and throughout the
entire supply chain, as well as declining 5G rollouts in the North American
market. Over the course of the second half of the year, business volume
stabilised at a lower level. At the end of the year, the order backlog
amounted to CHF 271.9 million, remaining above the long-term average.
In the first half of 2023, net sales reached the same level as in the
previous year. From the third quarter, net sales developed in line with
order intake and, by the end of the year, amounted to CHF 851.1 million,
representing a decline of 10.8 % year on year (PY CHF 954.6 million). Net
sales were also negatively impacted by the significant strengthening of the
Swiss franc during the reporting period, which became even stronger towards
the end of the year. Adjusted for currency, copper price and portfolio
effects, the shortfall in net sales amounted to 6.3 %. While net sales in
Europe and Asia changed only marginally compared to the previous year, by -4
% and +2 % respectively, the aforementioned downturn in the American market
(-36 %) resulted in a marked shift in net sales share by region: 55 % (PY 51
%) in EMEA, 26 % (PY 23 %) in APAC, 19 % (PY 26 %) in the Americas.
The operating profit (EBIT) of CHF 77.6 million (PY CHF 103.2 million)
corresponds to an EBIT margin of 9.1 % (PY 10.8 %). Given the challenging
environment, the company considers the result within the medium-term EBIT
target range to be solid. The basis for this is the strategy of balanced
diversification. Thanks to another very low tax rate, net income as a
percentage of net sales reached 7.6 % (PY 8.9 %).
The gross margin recovered slightly over the course of the year and, at 35.3
% (PY 35.7 %), almost matched the previous year's level. With investments in
research and development reaching CHF 57.4 million, the company continued to
invest heavily in the future with a particular focus on strengthening the
five growth initiatives. Thanks to active cost management, selling expenses
were reduced almost in step with business volume development. The number of
employees worldwide in the reporting year fell to 4,109 (PY 4,469). In the
same period, the number of employees in Switzerland went down to 1,153 (PY
1,190).
High inventories and unfavourable exchange rate developments represent a
challenge
High inventory levels resulting from the long replenishment times following
the pandemic both delayed the placement of orders by customers throughout
the supply chain and resulted in value adjustments in the company's own
inventories. Appreciation of the Swiss franc against key local currencies
resulted in a shortfall in net sales of around CHF 40 million, while the
currency impact on costs showed only effect to a lesser extent.
Reduced momentum and lower profitability in Industry market segment
In the Industry market segment, the continued depletion of inventories at
customers over the entire reporting year had an impact on the awarding of
new orders. Order intake declined by 16.9 % to CHF 258.1 million (PY CHF
310.5 million). Organically, net sales remained around the previous year's
level. Effectively, there was a 4.3 % decline to CHF 285.3 million (PY CHF
298.0 million).
Compared to 2022, development in the subsegments was completely reversed
with aerospace and defense reporting double-digit percentage growth while
the three other subsegments, test and measurement, general industrial, and
high power charging, experienced a decline in the double-digit range. Demand
for high power charging experienced a distinct decline in the US market due
to uncertainties about the future charging standard. The decline in the EBIT
margin to 16.4 % (PY 21.3 %) can be explained by a change in the product mix
in most subsegments.
Declining volumes in Communication market segment - falling EBIT margin
stabilised by cost measures
The much weaker communications market resulted in significantly lower
volumes around the world, which impacted the entire industry. Compared to
the very strong net sales from the previous year, the Communication segment
suffered a significant slump, especially in the second and third quarters,
due to declining 5G rollouts in North America and the continued depletion of
high inventories throughout the supply chain. Order intake declined by 25.6
% to CHF 283.4 million (PY CHF 380.6 million), while net sales decreased by
27.4 % to CHF 280.3 million (PY CHF 385.9 million).
In this environment, which was characterised by significantly lower demand,
business picked up towards the end of the reporting period with the securing
of new mobile communication rollouts in Asia in particular and in the data
center growth initiative. Thanks to measures to reduce the cost base and
adjust capacities to the lower volumes, the EBIT margin was improved in the
second half of the reporting year compared to the first half and stabilised
at 4.9 % for the year as a whole (PY 8.9 %).
Net sales growth in Transportation market segment - four percentage point
increase in profitability
The Transportation market segment achieved the desired turnaround in the
reporting year. It ended the year with almost the same order intake as the
previous year, at CHF 279.9 million (PY CHF 284.4 million), and 5.5 % growth
in net sales to CHF 285.5 million (PY CHF 270.6 million).
After a three-year lean period, there was a marked upturn in demand in the
railway subsegment, which made a positive contribution to net sales in the
reporting period. The automotive subsegment also reported growth in net
sales thanks to a positive contribution from the electric vehicle and
advanced driver assistance system growth initiatives. The EBIT margin in the
Transportation market segment increased significantly in the reporting year
to 9.1 % (PY 5.1 %).
Sustainability reporting
HUBER+SUHNER connectivity solutions serve society's needs for personal
safety, seamless communication and environmentally friendly mobility, and
combine high customer value with sustainability criteria. The 2023
Non-financial Report describes the progress being made by the HUBER+SUHNER
Group in the implementation of its sustainability strategy.
Share buyback programme: proposal for capital reduction at the 2024 Annual
General Meeting
The shares acquired under the share buyback programme completed on 30 March
2023 correspond to 5 % of the share capital and will be proposed for
cancellation at the next Annual General Meeting on 27 March 2024 by means of
a capital reduction.
Dividend
The Board of Directors proposes to the Annual General Meeting a payout of
CHF 1.70 (PY CHF 2.10) per share, resulting in a payout ratio of 49 %.
Outlook
With an operating profit margin within the medium-term target range,
HUBER+SUHNER achieved a solid result in the 2023 financial year in view of
the difficult business environment. The organic growth of the five strategic
growth initiatives (aerospace and defense; data center, advanced driver
assistance system, electric vehicles, rail communications) as a whole shows
that the company is focusing on the right end markets and has the right
solutions with high customer benefits. The key to the company's future
success lies in its high level of innovation, which is deeply rooted in the
HUBER+SUHNER corporate culture and is supported by correspondingly high
levels of investment. This in turn will make the company even more resilient
to changes in the market environment or more difficult economic conditions
in the future.
Looking ahead and based on the lively bidding activity, the Industry segment
has probably bottomed out. The increasingly normalising inventory levels
point to a recovery in the second half of the current year. Incoming orders
in the communications market have already picked up in recent weeks and
concrete signs of a gradual recovery are increasing. This should enable the
Communication segment to return to growth compared to the second half of
2023. The growth initiatives should provide additional impetus for the
Transportation segment, particularly in the second half of 2024, which would
continue the positive trend.
In terms of net sales, HUBER+SUHNER has set itself the goal of returning
organically to a growth path in 2024. The medium-term target range of 9-12 %
for the operating profit margin remains unchanged. For the current financial
year, the company is aiming for an operating profit margin in the lower half
of the target range. A prerequisite for achieving the EBIT guidance is that
key influencing factors such as inflation, exchange rates and geopolitical
tensions do not have an excessively negative impact on sales volumes.
This media release can also be found under
www.hubersuhner.com/en/newsroom/company-news/news-ad-hoc-news
Annual Report 2023 online interactive reports.hubersuhner.com
Annual Report 2023 download center ( Link)
Management Report 2023 as PDF ( Link)
Presentation media and analysts' conference ( Link)
All publications as well as the definition of Alternative Performance
Measures can be found under
www.hubersuhner.com/en/company/investors/publications.
This media release is also available in German. The German version is
binding.
Media release as PDF Link
Further calendar dates
HUBER+SUHNER AG
Patrick G. Köppe
Head Corporate Communications
Tumbelenstrasse 20
8330 Pfäffikon ZH
Switzerland
+41 44 952 25 60
pressoffice@hubersuhner.com
hubersuhner.com
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End of Inside Information
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End of Announcement EQS News Service
---------------------------------------------------------------------------
1851159 05-March-2024 CET/CEST
communications market
HUBER+SUHNER AG / Key word(s): Annual Results
HUBER+SUHNER maintains solid EBIT margin despite the marked decline in the
communications market
05-March-2024 / 06:45 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.
---------------------------------------------------------------------------
Ad hoc announcement pursuant to Art. 53 LR - 05.03.2024
Organic decline of 6.3 % in net sales after record high of previous year -
At 9.1 %, EBIT margin remains within the medium-term target range - Net
income of CHF 64.8 million - Cash flow from operating activities of CHF 116
million - Growth initiatives make positive contribution overall
Key figures
in CHF million 2023 2022 Change
in %
Group
Order intake 821.4 975.4 (15.8)
Net sales 851.1 954.6 (10.8)
EBIT 77.6 103.2 (24.8)
in % of net sales 9.1 10.8
Net income 64.8 85.2 (23.9)
in % of net sales 7.6 8.9
Free operating cash flow 63.7 37.7 69.1
Industry segment
Order intake 258.1 310.5 (16.9)
Net sales 285.3 298.0 (4.3)
EBIT 46.8 63.4 (26.1)
in % of net sales 16.4 21.3
Communication segment
Order intake 283.4 380.6 (25.6)
Net sales 280.3 385.9 (27.4)
EBIT 13.7 34.2 (59.8)
in % of net sales 4.9 8.9
Transportation segment
Order intake 279.9 284.4 (1.6)
Net sales 285.5 270.6 5.5
EBIT 25.9 13.7 89.5
in % of net sales 9.1 5.1
In an environment beset by various challenges and despite lower volumes,
HUBER+SUHNER closed the year 2023 as a whole with a solid result within the
medium-term EBIT target range of 9-12 %.
At CHF 821.4 million, order intake in 2023 was 15.8 % below the very high
prior-year level (CHF 975.4 million) and remained 3.5 % below net sales,
resulting in a book-to-bill rate of 0.97 (PY 1.02). After a very strong
start to the year, supported by the continuing momentum from the previous
year, the business volume situation then changed in many target markets.
This was attributable to high inventories at customers and throughout the
entire supply chain, as well as declining 5G rollouts in the North American
market. Over the course of the second half of the year, business volume
stabilised at a lower level. At the end of the year, the order backlog
amounted to CHF 271.9 million, remaining above the long-term average.
In the first half of 2023, net sales reached the same level as in the
previous year. From the third quarter, net sales developed in line with
order intake and, by the end of the year, amounted to CHF 851.1 million,
representing a decline of 10.8 % year on year (PY CHF 954.6 million). Net
sales were also negatively impacted by the significant strengthening of the
Swiss franc during the reporting period, which became even stronger towards
the end of the year. Adjusted for currency, copper price and portfolio
effects, the shortfall in net sales amounted to 6.3 %. While net sales in
Europe and Asia changed only marginally compared to the previous year, by -4
% and +2 % respectively, the aforementioned downturn in the American market
(-36 %) resulted in a marked shift in net sales share by region: 55 % (PY 51
%) in EMEA, 26 % (PY 23 %) in APAC, 19 % (PY 26 %) in the Americas.
The operating profit (EBIT) of CHF 77.6 million (PY CHF 103.2 million)
corresponds to an EBIT margin of 9.1 % (PY 10.8 %). Given the challenging
environment, the company considers the result within the medium-term EBIT
target range to be solid. The basis for this is the strategy of balanced
diversification. Thanks to another very low tax rate, net income as a
percentage of net sales reached 7.6 % (PY 8.9 %).
The gross margin recovered slightly over the course of the year and, at 35.3
% (PY 35.7 %), almost matched the previous year's level. With investments in
research and development reaching CHF 57.4 million, the company continued to
invest heavily in the future with a particular focus on strengthening the
five growth initiatives. Thanks to active cost management, selling expenses
were reduced almost in step with business volume development. The number of
employees worldwide in the reporting year fell to 4,109 (PY 4,469). In the
same period, the number of employees in Switzerland went down to 1,153 (PY
1,190).
High inventories and unfavourable exchange rate developments represent a
challenge
High inventory levels resulting from the long replenishment times following
the pandemic both delayed the placement of orders by customers throughout
the supply chain and resulted in value adjustments in the company's own
inventories. Appreciation of the Swiss franc against key local currencies
resulted in a shortfall in net sales of around CHF 40 million, while the
currency impact on costs showed only effect to a lesser extent.
Reduced momentum and lower profitability in Industry market segment
In the Industry market segment, the continued depletion of inventories at
customers over the entire reporting year had an impact on the awarding of
new orders. Order intake declined by 16.9 % to CHF 258.1 million (PY CHF
310.5 million). Organically, net sales remained around the previous year's
level. Effectively, there was a 4.3 % decline to CHF 285.3 million (PY CHF
298.0 million).
Compared to 2022, development in the subsegments was completely reversed
with aerospace and defense reporting double-digit percentage growth while
the three other subsegments, test and measurement, general industrial, and
high power charging, experienced a decline in the double-digit range. Demand
for high power charging experienced a distinct decline in the US market due
to uncertainties about the future charging standard. The decline in the EBIT
margin to 16.4 % (PY 21.3 %) can be explained by a change in the product mix
in most subsegments.
Declining volumes in Communication market segment - falling EBIT margin
stabilised by cost measures
The much weaker communications market resulted in significantly lower
volumes around the world, which impacted the entire industry. Compared to
the very strong net sales from the previous year, the Communication segment
suffered a significant slump, especially in the second and third quarters,
due to declining 5G rollouts in North America and the continued depletion of
high inventories throughout the supply chain. Order intake declined by 25.6
% to CHF 283.4 million (PY CHF 380.6 million), while net sales decreased by
27.4 % to CHF 280.3 million (PY CHF 385.9 million).
In this environment, which was characterised by significantly lower demand,
business picked up towards the end of the reporting period with the securing
of new mobile communication rollouts in Asia in particular and in the data
center growth initiative. Thanks to measures to reduce the cost base and
adjust capacities to the lower volumes, the EBIT margin was improved in the
second half of the reporting year compared to the first half and stabilised
at 4.9 % for the year as a whole (PY 8.9 %).
Net sales growth in Transportation market segment - four percentage point
increase in profitability
The Transportation market segment achieved the desired turnaround in the
reporting year. It ended the year with almost the same order intake as the
previous year, at CHF 279.9 million (PY CHF 284.4 million), and 5.5 % growth
in net sales to CHF 285.5 million (PY CHF 270.6 million).
After a three-year lean period, there was a marked upturn in demand in the
railway subsegment, which made a positive contribution to net sales in the
reporting period. The automotive subsegment also reported growth in net
sales thanks to a positive contribution from the electric vehicle and
advanced driver assistance system growth initiatives. The EBIT margin in the
Transportation market segment increased significantly in the reporting year
to 9.1 % (PY 5.1 %).
Sustainability reporting
HUBER+SUHNER connectivity solutions serve society's needs for personal
safety, seamless communication and environmentally friendly mobility, and
combine high customer value with sustainability criteria. The 2023
Non-financial Report describes the progress being made by the HUBER+SUHNER
Group in the implementation of its sustainability strategy.
Share buyback programme: proposal for capital reduction at the 2024 Annual
General Meeting
The shares acquired under the share buyback programme completed on 30 March
2023 correspond to 5 % of the share capital and will be proposed for
cancellation at the next Annual General Meeting on 27 March 2024 by means of
a capital reduction.
Dividend
The Board of Directors proposes to the Annual General Meeting a payout of
CHF 1.70 (PY CHF 2.10) per share, resulting in a payout ratio of 49 %.
Outlook
With an operating profit margin within the medium-term target range,
HUBER+SUHNER achieved a solid result in the 2023 financial year in view of
the difficult business environment. The organic growth of the five strategic
growth initiatives (aerospace and defense; data center, advanced driver
assistance system, electric vehicles, rail communications) as a whole shows
that the company is focusing on the right end markets and has the right
solutions with high customer benefits. The key to the company's future
success lies in its high level of innovation, which is deeply rooted in the
HUBER+SUHNER corporate culture and is supported by correspondingly high
levels of investment. This in turn will make the company even more resilient
to changes in the market environment or more difficult economic conditions
in the future.
Looking ahead and based on the lively bidding activity, the Industry segment
has probably bottomed out. The increasingly normalising inventory levels
point to a recovery in the second half of the current year. Incoming orders
in the communications market have already picked up in recent weeks and
concrete signs of a gradual recovery are increasing. This should enable the
Communication segment to return to growth compared to the second half of
2023. The growth initiatives should provide additional impetus for the
Transportation segment, particularly in the second half of 2024, which would
continue the positive trend.
In terms of net sales, HUBER+SUHNER has set itself the goal of returning
organically to a growth path in 2024. The medium-term target range of 9-12 %
for the operating profit margin remains unchanged. For the current financial
year, the company is aiming for an operating profit margin in the lower half
of the target range. A prerequisite for achieving the EBIT guidance is that
key influencing factors such as inflation, exchange rates and geopolitical
tensions do not have an excessively negative impact on sales volumes.
This media release can also be found under
www.hubersuhner.com/en/newsroom/company-news/news-ad-hoc-news
Annual Report 2023 online interactive reports.hubersuhner.com
Annual Report 2023 download center ( Link)
Management Report 2023 as PDF ( Link)
Presentation media and analysts' conference ( Link)
All publications as well as the definition of Alternative Performance
Measures can be found under
www.hubersuhner.com/en/company/investors/publications.
This media release is also available in German. The German version is
binding.
Media release as PDF Link
Further calendar dates
27 March 202 20 Annual General Meeting (Rapperswil SG) Publication August 2024 22 Half-year Report 2024 / Media and analysts' webcast October 2024 23 Net sales and Order intake (9 months) 2024 Net Sales January 2025 11 and Order intake (12 months) 2024 Publication Annual March 2025 2 Report 2024 / Media and analysts' conference and April 2025 webcast Annual General Meeting
HUBER+SUHNER AG
Patrick G. Köppe
Head Corporate Communications
Tumbelenstrasse 20
8330 Pfäffikon ZH
Switzerland
+41 44 952 25 60
pressoffice@hubersuhner.com
hubersuhner.com
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End of Inside Information
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Language: English
Company: HUBER+SUHNER AG
Tumbelenstrasse 20
8330 Pfäffikon ZH
Switzerland
Internet: www.hubersuhner.com
ISIN: CH0030380734
Valor: 3038073
Listed: SIX Swiss Exchange
EQS News ID: 1851159
End of Announcement EQS News Service
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1851159 05-March-2024 CET/CEST
