The Group's business volume grew by about 12% compared with the first, weaker half of 2012 and around 3% compared with the good second half of 2012. While this growth is evidence of the growing demand for outsourcing services and technologies for the manufacture of highly complex, innovative solutions, it is also the result of the investments the Cicor Group made in order to improve its competitiveness in 2012.
The profitability of the Cicor Group remained at the same level as in the previous year, as an improvement in the margins was not yet achieved. This was a result of competitive pricing in connection with the excess capacities on the Electronic Manufacturing Services (EMS) market and of the costs arising from the ramping up of new projects and further upgrading of production facilities in rapidly growing markets.
The Group balance sheet remains solid with an equity ratio of 53.8%. Despite an increase in working capital and continued higher-than-average investments, Cicor's level of debt, measured as net debt/EBITDA, improved slightly to 1.8 (first half of 2012: 1.9). On 30 June 2013, net debt was at TCHF 28,419 (first half of 2012: TCHF 19,995).
Innovation power and growth
At TCHF 16,003, the net revenue of the Printed Circuit Boards Division fell 4% short of the previous year's figure (first half of 2012: TCHF 16,648). This decline is attributable to the closure of Photochemie AG, without which the Printed Circuit Board Division would have posted a net increase in revenue of 1.7%. At TCHF 1,002, the operating result (EBIT) was TCHF 871 lower than in the previous year (first half of 2012: TCHF 1,873), which included TCHF 853 related to the closure of Photochemie AG. The operating result before depreciation and amortization (EBITDA) rose to TCHF 2,388 (+6.6%, without taking into account Photochemie AG). Sales in the 3D-MID area remained at a modest level in the first half of 2013 despite steady demand and innovative pilot projects.
The increase in order intakes in the medical field is expected to lead to additional revenue growth in the second half of the year.
The Microelectronics Division generated net revenue of TCHF 15,388 (first half of 2012: TCHF 13,829), which represents a sound boost of 11.3% compared with the previous year based on the implementation of new projects, especially in the highly demanding medical and aerospace fields. The public sector remained reluctant to award new contracts in the defense sector. The Microelectronics Division started to intensify its activities in the medical field in 2012. As a result, additional costs arising from the industrialization of a new product for the medical sector are included in the results for the first half of 2013. Positive results from the measures implemented by the Division in 2012 aimed at increasing efficiency were observed in the first half of 2013. The Division, however, only just exceeded the break-even point at EBIT level at TCHF 43 (previous year: TCHF–1,252), as a result of which the Division's expectations and objectives were not met. During the second half of the year, the focus will also remain on improving efficiency, output and on-time-delivery.
With net revenue of TCHF 46,418 during the first half of 2013, Electronic Solutions, the largest Division within the Group, generated an increase of 7.1% compared to the previous year (first half of 2012: TCHF 43,350). This revenue growth reflects the solid market position the Division has attained due to the compelling quality of its services. The somewhat sluggish demand in the Swiss market was more than offset by the positive revenue trend in international business. While growing excess capacities fuelled continued price wars in the first half of 2013, the Division was able to partly compensate the effects of this negative influence with enhanced efficiency and innovative products and services.
The Asia Division again achieved impressive growth, benefiting from the continued strong demand for production capacity in the Asian market environment. In the first half of the year, the Division posted net revenue of TCHF 17,410, which corresponds to an increase of 56.4% compared to the previous year (first half of 2012: TCHF 11,132). The operating result (EBIT) amounted to TCHF 1,043 (6%), which was an improvement over the previous year (first half of 2012: TCHF 475, 4.3%). The Division's high degree of competence in technology, its attractive cost structures and its strategic positioning as a solution provider are proving to be potent growth drivers, especially in the award of new orders in the medical and automotive fields as well as industry.
Outlook: Continued growth
In view of the positive performance in the first half of 2013, the revenue and operating results (EBIT) projections for the current business year remain unchanged. The Cicor Group expects to remain on its growth track for the year 2013 as a whole, with profitability remaining stable at the level of the previous year.
The complete Interim Report 2013 of the Cicor Group can be accessed at http://annualreport.cicor.com.
Chairman of the Board of Directors
Phone +41 43 811 44 05
Phone +41 43 811 44 05