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Cicor was able to get back on track again in the second half of the year after a difficult first six months. Turnover in the last financial year was CHF 189.5 million, 4.9% above the previous year (2015: CHF 180.6 million). After adjusting for foreign exchange effects, growth was 3.3%. Following a significant loss in 2015, a small net profit of CHF 0.3 million was made in 2016 (2015: CHF -4.1 million). While in the first half of the year, an operating margin of 5.7% before depreciation and restructuring was achieved with only a slight increase in turnover of 0.9% to CHF 92.9 million (H1 2015: 8.6%), in the second half of the year turnover increased by 9.1% to CHF 96.5 million (H2 2015: CHF 88.5 million) and the operating margin before depreciation and restructuring increased to 7.6% (H2 2015: 4.7%). The loss of CHF 0.6 million from the first half of the year was compensated by the resulting profit of CHF 0.9 million (after restructuring costs). At the Annual Shareholders ́ Meeting, the board of directors will propose to forego a distribution of earnings.
Record order intake
The Group acquired important new customers in the 2016 financial year, which further strengthened the strategic segments of medical and industrial. In addition to gaining new customers in all areas, the order intake from existing customers also increased significantly and additional development and processing orders were obtained. The significant growth in order intake of 26.7% to a record CHF 223.5 million (2015: CHF 176.3 million) is highly pleasing. Cicor has therefore now returned to the desired growth path.
Electronic Solutions Division on the road to success again
After the ES Division had suffered from the strong appreciation of the Swiss franc in 2015, it has achieved the highest net sales ever in 2016 with CHF 146.7 million (2015: CHF 131.6 million), a rise of 11.5% compared with the previous year. The EBITDA operating profit (before restructuring) has now increased by 23.3% to CHF 11.6 million, despite the costs for the relocation of the production in Switzerland. The EBITDA margin (before restructuring) of the Division is 7.9%, up by 0.8 percentage points on the previous year.
Progress in turning around the AMS Division
With a decline in turnover of 13.5% compared with the previous year to CHF 42.8 million (2015: CHF 49.5 million), the AMS Division ended the financial year below expectations. This was due to a further decline in demand for printed circuit boards for the watch making industry and inventory corrections by a customer from the aerospace industry, whereas demand for microelectronic solutions for the medical and industrial technology gained momentum in the second half of the year. By focusing on cost reductions, in the second half of the year the operating profit margin at EBITDA level (before restructuring) at practically unchanged sales, was significantly increased by 8 percentage points compared with the first half of the year. However, for the year as a whole, there was a decline from 9.9% to 6.0% in the EBITDA margin compared with the previous year. The cost reduction measures implemented in 2016 will take effect in 2017. Therefore the Division is expected to show a positive result again in the new financial year.
Site optimization executed
Consolidation of printed circuit board manufacturing in Boudry (Switzerland) was completed on schedule in 2016, a prerequisite for the turnaround of the AMS Division. In autumn of 2016, Cicor integrated the two production and administration sites in Bronschhofen SG into a new building with significantly optimized process flows. Cicor Management AG has also moved from Zurich-Oerlikon to eastern Switzerland. Cicor’s electronics production is now ideally set up: The flagship operation in Switzerland, with strong engineering capabilities and the production of advanced PCBAs and devices in small- and pilot batches, is ideally complemented by the sites in Romania and Vietnam, where larger-scale batches and labor-intensive production is located. In order to ensure continued growth, land has been acquired in Arad (Romania), on which a new manufacturing plant will be erected by mid-2018.
New management structure
In the 2016 financial year, Cicor simplified its management structure. With the new, more direct organizational and management structure, Cicor expects more clearly defined responsibilities, more efficient processes, more direct communication, and in particular stronger customer focus and proximity. As of September 1, 2016, Alexander Hagemann was appointed as the new CEO of the Cicor Group. Removing one level of management and the more direct integration of operational responsibilities will make a positive contribution to the success of the Cicor Group.
Positive outlook for the 2017 financial year
Thanks to the record order intake in 2016, Cicor had a good start into the new financial year. The restructuring and efficiency improvement measures implemented in 2016 will take effect in the new year. The focus in 2017 will lie in an acceleration of Cicor’s growth, improved operational excellence in the factories and the turnaround of the AMS Division. Cicor expects that 2017 will be a year of good sales growth and clear improvement of results for the group, and can thus be linked to the results of 2013 and 2014.