Ascom (ASCN) H1 2024 earnings summary

Executive summary

• H1 2024 performance was mixed, with EBITDA margin stable at 7.4% despite revenue decline, mainly due to shortfalls in UK, France, Spain, and OEM, while DACH, Nordics, and Netherlands performed as expected.

• Order intake was flattish year-over-year in constant currency but showed a 13-14% sequential increase from H2 2023, with strong growth in USA, Canada, and Rest of World, especially in healthcare.

• Group profit was CHF 2.9 million, down from CHF 5.1 million in H1 2023, impacted by higher depreciation.

• The company is executing a four-pillar strategy: platform enablement, profitable growth, platform convergence/new products, and cost efficiency, with strategic progress toward becoming a key healthcare platform.

• Order backlog grew 7% year-over-year in CHF (8% at constant currencies), reaching CHF 311.5 million, with about 35% expected to convert in 2024.

Financial highlights

• H1 2024 net revenue was CHF 142.1 million, down 2.7% at constant currency and 5.4% in CHF compared to H1 2023.

• EBITDA was CHF 10.5 million (7.4% margin), EBIT CHF 4.0 million (2.8% margin), and net profit CHF 2.9 million, down 43.1% year-over-year.

• Gross profit margin remained stable at 47.3% (vs. 47.5% in H1 2023).

• Net cash position was CHF 16.5 million, with an equity ratio of 36.7%.

• Free cash flow was CHF 2.1 million, impacted by higher dividends and facility investment; CapEx increased to CHF 9.2 million, mainly for R&D, ERP migration, and building refurbishment.

Outlook and guidance

• Full-year 2024 net revenue is expected to be in line with the previous year at constant currency, with an EBITDA margin between 9%-10%.

• Management has adopted a more prudent outlook due to slower H1 revenue and ongoing market and geopolitical uncertainty.

• About 35% of the order backlog is deliverable in H2 2024, supporting expectations for a stronger second half.

• Platform convergence, SaaS/cloud offerings, and operational efficiency are expected to drive future growth.

• Midterm margin improvement targets remain, with additional operating leverage expected from cost and productivity measures.