Cicor: Solid growth and improved operating results

In 2013 it experienced a healthy growth in revenue and was ab le to further increase its competitiveness. All Divisions performed well in the medical field, an area Cicor has particularly focused on for some time now. The medical segment has become the Cicor Group’s biggest market segment with 28 %. Revenue growth rates varied among the Divisions. While the ES and Asia Divisions increased sales in 2013, the Printed Circuit Board (PCB) and Microelectronics (ME) Divisions suffered a drop in their net revenues. Net working capital as at t he end of 2013 grew to CHF 49.4 million, driven by good business development in 2013 as a whole and especially by a strong fourth quarter with increased activity towards the end of the year. Owing to the increase in net working capital and the investments made in 2013, net debt went up from CHF 16.3 million as at 31 December 2012 to CHF 28.2 million as at 31 December 2013. Further development of the organization The number of Divisions was reduced from four to two as of 1 Ja nuary 2014. Cicor is now divided into the Advanced Microelectronics & Substrates (AMS) Division and the Electronic Solutions (ES) Division. The organizational structure of the Group was adjusted in order to better respond to future customer requirements. The further development of the organization also reflects the change in the printed circuit boards and microelectronics businesses and enables Cicor to improve on its operational and technological excellence.The new streamlined structure is a logical step toward creating an efficient and forward-looking corporation. Investment in employees and modernization As a result of good business development, by the end of the yea r the number of employees worldwide had also increased by 400 to over 1,900. A significant increase was seen once again in the growth regions Asia and Eastern Europe. Particular attention in 2013 was also given to the expansion of capacities and the renewing and modernizing of production tools and facilities. The aim of these strategic investments is to support growth and especially market expansion, for which know-how and technological abilities are vital, throughout the coming years. About the Divisions The Asia Division was again the Group‘s growth engine over the past year. The decisive factors in achieving this good business performance were the expanded manufacturing capacities in PCB assembly, plastic injection molding and complete box building. The Division recorded very solid growth, a big part of it came from the area of medical devices. The Asia Division posted record revenues of CHF 38.2 million, which represents a solid organic growth of 45.3% (2012: CHF 26.3 million). Based on the strong increase in net revenues and the very good capaci ty utilization, the Division posted a very high operating result. Operating profit (EBIT) in 2013 was CHF 3.3 million (2012: CHF 1.9 million), which is equivalent to a margin of 8.6% (2012: 7.4%). The ES Division returned to growth in 2013. The growing trend toward more development work being provided by Electronic Manufacturing Services (EMS) providers continued in 2013. This enabled the ES Division to generate net revenues of CHF 94.8 million in the 2013 financial year, an increase of 8.0% compared with the previous year (2012: CHF 87.8 million). Overcapacities in the market environment continue and the price pressure remains intense. These effects could only be partially offset at profitability level. However, the Division posted good operating results (EBIT) of CHF 5.2 million (2012: CHF 5.6 million). Compared with the above average profitable year 2012, the EBIT margin decreased to 5.5% (2012: 6.3%), which is still very satisfactory for an E MS business. The PCB Division gave positive impulses in 2013. In 2013, the strategic medical technology business segment was expanded and again exhibited the greatest level of growth. The Division also made progress in the strategic development of other markets. The book-to-bill trend indicator surpassed 100% for the year 2013 as a whole, underlining the Division’s good performance. Due to the noticeable reserve of some major customers in 2013 as well as the lost reven ue due to the closing of Photochemie AG (closed in 2012), the Division’s net revenues fell short of the previous year and dropped by 7 .7 % to a total of CHF 30.5 million (2012: CHF 33.0 million). The Division generated operating profits (EBIT) of CHF 2.4 million in 2013 (2012: CHF 2.9 million or CHF 1.7 mi llion adjusted for one-off effects from Photochemie AG). This corresponds to profitability of 8.0% (2012: 8.9% / 5.2% without one-off effects). The net revenues of the ME Division as a whole amounted to CHF 28.7 million (2012: CHF 30.3 million), a decline of 5.4% compared with 2012. Even the expansion of business with customers from the medical industry could not prevent the year as a whole endi ng with a decline in sales. The lower revenue reflected the reluctance among European governments to award new contracts in the areas of defense and energy (nuclear power plants) sectors. The lower revenue resulted in an EBIT loss of CHF 0.2 million for the Division. On the whole, the performance of the ME Division in 2013 was disappointing. Outlook: Good prospects for 2014 The focus in 2013 within the Cicor Group was upon stability so as to lay the foundations for sustainable, profitable growth. This was clearly achieved over the past year. In the future, the streamlined organizational structure, coupled with the direct use of available know-how within the entire Group, will now support future organic growth. Based on the positive business results in 2013 and the adjustments made within the company, the Management Team is expecting Cicor to experience further profitable growth in revenue and expansion of the markets in all Divisions for the 2014 financial year.