Ascom's Preliminary 2024 Results: A Mixed Bag Amidst Market Challenges

Ascom, a Swiss-based provider of digital communication and mobile workflow solutions, has released its preliminary unaudited figures for the fiscal year 2024, painting a mixed picture of the company's performance amidst a challenging market environment. The company reported a revenue of CHF 286.7 million, representing a decline of 1.6% at constant currencies and 3.6% at actual currencies compared to the previous year.

Ascom's revenue development showed a mixed picture, with key markets such as Nordics, DACH, the Netherlands, and Italy performing well, while UK, OEM business, USA & Canada, and France & Spain underperformed. The underperformance in these regions can be attributed to lower market traction than expected and project delays in the last quarter of 2024. The especially disappointing results in USA & Canada and France & Spain have also triggered a management change, with both regions getting new Managing Directors as of January 2025.

Incoming orders came to CHF 307.4 million, representing a decline of 1.5% at constant currencies and 3.5% at actual currencies compared to the previous year. The order backlog stood at CHF 301.5 million as of year-end 2024, indicating a solid pipeline for the company.

Due to the lower revenue and higher investments in Research & Development (R&D) as well as in Marketing & Sales, Ascom achieved a lower EBITDA margin of around 7.5% in 2024, compared to the 10.1% margin reported in 2023. Considering the lower EBITDA and higher costs for depreciation and amortization due to investments in R&D and ERP (Enterprise Resource Planning), the 2024 Group profit is expected to be substantially lower than in the previous year, in the range of CHF 3 to 4 million, also impacted by a non-cash one-off adjustment of about CHF 2 million.

Ascom continues to have a solid balance sheet with a net cash position of CHF 18.6 million as of year-end 2024 and an equity ratio of around 39%. The full details of the financial statements and the 2024 Annual Report, including dividend proposal and 2025 guidance, will be published on 12 March 2025.

In conclusion, Ascom's preliminary 2024 results reflect a challenging market environment, with mixed performance across different regions and a decline in revenue and EBITDA margin. The company's solid balance sheet and strong order backlog provide a foundation for future growth, while the management changes in key regions and continued investments in R&D and Marketing & Sales position Ascom for long-term success. Investors should closely monitor the company's progress as it navigates the dynamic market landscape.