Ascom (ASCN) H2 2023 earnings summary

Executive summary

• FY 2023 revenue grew 5.5% at constant currencies but was flat at actual rates; H2 slowed across all regions amid macroeconomic headwinds.

• EBITDA margin rose to 10.1% from 8.0%, net profit increased to CHF 17.4m from CHF 11.0m, and free cash flow improved to CHF 16.3m from negative CHF 3.8m.

• Incoming orders were flat at constant currencies, with a CHF 276.4m year-end backlog and a 1.1 book-to-bill ratio.

Financial highlights

• Revenue was CHF 297.3m versus CHF 297.4m; constant-currency revenue was CHF 313.7m, with a CHF 16.4m adverse currency effect.

• Gross profit increased to CHF 141.4m from CHF 136.1m; gross margin rose to 47.6% from 45.8%.

• EBITDA was CHF 30.1m versus CHF 23.9m; EBIT was CHF 20.2m versus CHF 14.0m, and net profit was CHF 17.4m versus CHF 11.0m.

• EPS increased to CHF 0.48 from CHF 0.31; H2 EBITDA margin reached 12.8% despite slower revenue growth.

• Operating cash flow was CHF 32.5m, up CHF 22.3m YoY, supported by higher net profit and lower receivables.

Outlook and guidance

• FY 2024 targets mid-single-digit revenue growth at constant currencies and an EBITDA margin of ~11%, based on current market conditions and visibility.

• By 2027, targets high-single-digit revenue growth at constant currencies and annual EBITDA margin improvement of ~100 bps.

• Mid-term priorities include a gross margin target above 50%, recurring SaaS and software growth, product-mix optimization, and continued productivity gains.