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Annual results 2014: HUBER+SUHNER reports further growth and increased earnings

Double-digit growth in order intake – organic growth in net sales in the target area – sharp rise in net income – still rock-solid balance sheet – successful acquisition of Cube Optics

Annual results 2014: HUBER+SUHNER reports further growth and increased earnings

In 2014, HUBER+SUHNER achieved a 4 % increase in net sales and a significant increase of over 12 % in order intake. Organic growth, i.e., adjusted for exchange rates, copper prices and the acquisition of Cube Optics AG, was actually higher at 4.9 %. The operating profit grew by more than 30 % to CHF 69 million. The EBIT margin of 9.2 % thus exceeded the target range of 6-9 %. The rise in net income (CHF 59.2 million) was even more striking, soaring to an increase of over 80 % on the previous year. With the acquisition of Cube Optics in Mainz, HUBER+SUHNER also further expanded its successful position in Fiber Optics.

in CHF million 2014 2013 Change %
Order intake 768.1 683.4 +12.4
Net sales 748.5 719.7 +4.0
Operating profit 69.0 51.6 +33.7
EBIT margin 9.2% 7.2%  
Net income 59.2 32.5 +82.2
Radio Frequency      
Order intake 238.7 211.4 +12.9
Net sales 235.0 217.9 +7.8
Operating profit 33.0 27.6 +19.4
EBIT margin 14.0% 12.7%  
Fiber Optics      
Order intake 271.0 188.6 +43.7
Net sales 249.9 226.2 +10.5
Operating profit 26.6 28.0 -4.9
EBIT margin 10.6% 12.4%  
Low Frequency      
Order intake 258.4 283.4 -8.8
Net sales 263.6 275.6 -4.3
Operating profit 12.2 0.5 n/a
EBIT margin 4.6% 0.2%  

Strong growth in Communication, slight increase in Transportation, significant decline
in Industrial

In 2014, the communications market registered another year of growth with a plus in net sales of
11.7 %. Substantial investments in the mobile communications infrastructure are made globally. Extensive Long-Term Evolution (LTE) roll-outs in Australia, India and China in 2014 brought about
the largest growth. After the boom in the US in the previous year, this meant that mobile communications business was successfully diversified and more broadly supported. After the sharp increase in 2013, the transportation market again showed a slight increase in net sales in 2014 (+3.8 %). The global investment in trackside and train modernisations remained at a high level. In particular, the development of high-speed lines in China significantly gathered speed. The booming automotive market of 2013 almost remained at the previous year’s level in the reporting year. Net sales in the industrial market fell by 8.2 %. Reductions in defence budgets, especially in the United States, were a significant factor. Additionally, the base effect on the solar market, which has become insignificant for HUBER+SUHNER today, once again impacted net sales by a good CHF 10 million. However, the test and measurement subsegment showed a rise in net sales figures.

Progress in all three divisions
In 2014, the Radio Frequency division achieved good growth in net sales of 7.8 %. The most important factors here were both success in mobile communications and marked growth in the railway market. Industrial high-tech niches also held their ground well. The only exception was the space and defence market segment which was affected by budget cuts in the US. Operating profit increased significantly, and the EBIT margin reached an attractive 14.0 %. Radio Frequency thus advanced to become the most profitable division.

Borne by geographical diversification of the highly successful Fiber to the Antenna (FTTA) application, net sales in Fiber Optics increased by a double-digit figure (+10.5 %) thus reaching a new record high. The book-to-bill rate (1.08) of well over 1 indicates continued positive momentum in this division. The data center market segment, in which significantly more orders were recorded than in 2013, made an important contribution to this as well. A major milestone was achieved with the acquisition of Cube Optics at the end of October 2014, ideally complementing the existing product portfolio. Integration is proceeding according to plan and HUBER+SUHNER Cube Optics made a positive contribution to profits from the outset. All told, Fiber Optics achieved a double-digit EBIT margin of 10.6 %.

The main goal in the Low Frequency division was to improve the profit situation. Substantial progress was made here, and the EBIT margin increased from 0.2 % to 4.6 % in 2014. In by far the most important market, Transportation, both sub-segments railway and automotive remained at the same high levels as last year. The Industrial market declined due to the continuing base effect in the solar market. This was also the reason for a decrease in net sales by 4.3 %.

Changes to the Board of Directors and to the Executive Group Management
It was with great sadness and sorrow that we had to learn that our long-time board member and Chairman, Mr. Erich Walser, had passed away on 30 December 2014. We will always honour
his memory.
Dr. Beat Kälin was appointed as Chairman of the Board of Directors until the General Annual Meeting 2015. The Board of Directors is to propose him as candidate for Chairman of the Board to the Annual General Meeting. Furthermore, there will be several changes to the Executive Group Management in 2015 to set the course for the future. On 1 May 2015, Drew Nixon will take over the leadership of Global Sales from Paul Harris, while Patricia Stolz will succeed Urs Alder as the new head of Human Resources on 1 July 2015. The IT department will be integrated into Corporate Operations under the leadership of Dr Ulrich Schaumann as of 1 April 2015. All three new members of the Executive Group Management have already been serving HUBER+SUHNER for several years.

The Board of Directors will propose a 75 % higher dividend of 1.40 CHF per share to the Annual General Meeting; this represents a dividend payout ratio of 46 %.

After a very good fiscal year in 2014, HUBER+SUHNER has got 2015 off optimistically. The order intake has cooled down in the fourth quarter remarkably though, which is why the new financial year took a restrained start. Nevertheless, the target markets are in a good shape. The global Communication and Transportation markets, in particular, remain at a high level. The situation in the high-tech niches in Industrial may vary depending on the application, but future prospects are also in this market intact.
However, the decision by the Swiss National Bank (SNB) on 15 January 2015 has changed the starting position for the current period. In recent years, the cost base in Swiss francs has been gradually reduced from 50 % to 35 %, and the international production network has been expanded. This improved the situation compared to the first currency crisis in 2011, but the impact on our profitability is significant this time, too.
Based on the chosen scenario (€/CHF=1.05 and $/CHF=0.93) there will be a translation effect of approx. 8 % in net sales compared to 2014, and a negative impact on the EBIT margin of 2.5 to 3 percentage points. In addition, the financial results will be affected CHF -17 million due to one-time effects. Immediate measures to maintain the competitiveness of the locations in Switzerland were initiated already. Over the next few months, structural measures will be evaluated with all due care. Their effect on the income statement cannot yet be estimated.
From the company Cube Optics that was acquired in October 2014, HUBER+SUHNER expects a sales increase of more than CHF 20 million, compared to 2014.

Overall, HUBER+SUHNER expects the organic sales (before currency, copper and portfolio effects) to remain at the previous year’s level. From today’s perspective, the company anticipates an EBIT margin of 6-7.5 % before possible one-off costs, which would still meet the declared medium term EBIT margin target range of 6-9 %.


  • Karin Freyenmuth
    Leiterin Corporate Communication
    +41 44 952 2560

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