Ascom's 2024 Results: Dividends, Buybacks, and Future Growth

Ascom, a leading provider of communication and IT solutions, has released its 2024 full-year results, showcasing a mixed performance in a challenging market environment. The company reported net revenue of CHF 286.7 million, a decline of 1.6% at constant currencies and 3.6% at actual currencies compared to 2023. Despite the revenue drop, ascom maintained a strong order backlog of CHF 301.5 million, indicating a solid foundation for future growth. The company also announced a dividend proposal of CHF 0.10 per share and a share buyback program of up to 10% of its outstanding share capital, aiming to return value to shareholders and reduce its share count.



Ascom's EBITDA for 2024 stood at CHF 21.3 million, with an EBITDA margin of 7.4%, down from 10.1% in 2023. The decrease in profitability was attributed to lower revenue and higher investments in Research & Development (R&D) and Marketing & Sales. The company's group profit for the year was CHF 3.7 million, with earnings per share (EPS) of CHF 0.10. Ascom's net cash position as of 31 December 2024 was CHF 18.6 million, with an equity ratio of 39.2%.

The company's revenue split by market segments showed the Healthcare sector accounting for 67% of total revenue, while the Enterprise sector contributed 28%. The OEM business accounted for 5% of revenue, and the service business made up 36%. Notably, the software business increased its contribution to 13% of total revenue, up from 12% in 2023. Revenue from recurring business also increased to about 27%, highlighting Ascom's focus on sustainable and predictable income streams.

Ascom's strong order backlog and investments in R&D and Marketing & Sales position the company well for future growth. The company targets low single-digit revenue growth at constant currencies and aims to achieve an EBITDA margin of 9-10% for the fiscal year 2025. Ascom's commitment to delivering superior customer experience and generating sustainable and profitable growth is evident in its strategic initiatives and investments.

The proposed dividend of CHF 0.10 per share and the share buyback program of up to 10% of the outstanding share capital demonstrate Ascom's commitment to returning value to shareholders. The share buyback program, with a maximum buyback amount of CHF 15 million, is due to be launched in May 2025 and will run on a second trading line on the SIX Swiss Exchange over the next 18 months. This program aligns with Ascom's overall capital allocation strategy, focusing on capital reduction and enhancing shareholder value.

In conclusion, Ascom's 2024 full-year results reflect a challenging market environment, but the company's strong order backlog, strategic investments, and commitment to shareholder returns position it well for future growth. Ascom's targets for 2025 are ambitious but achievable, given the company's financial strength and strategic initiatives. Investors should closely monitor Ascom's progress in executing its growth strategy and delivering on its financial targets.