Cicor Group Achieved Record Sales and Operating Results From Organic Growth and Acquisitions

Estimated reading time: 3 minutes

Cicor Group increased its sales by 35.7% to CHF 157.7 million in the first half-year of 2022 (1st half-year 2021: CHF 116.7 million). In addition to the contribution from the newly acquired companies, organic growth of 15.4% was achieved. Operating earnings before interest, taxes, depreciation and amortization (EBITDA) increased significantly by 29.5 % in the first half of 2022, reaching CHF 15 million (1st half-year 2021: CHF 11.6 million). The best results in the company’s history were thus achieved both in terms of sales and EBITDA.

The economic environment in the reporting period remained challenging: high customer demand faced a lack of production capacity at many chip manufacturers, the impact of the COVID-19 pandemic, with lockdowns especially in China, economic fears due to the geopolitical situation and galloping inflation. Cicor was able to largely meet customers’ needs through joint efforts with suppliers and customers as well as flexible production, which contributed to the double-digit organic growth. Cicor booked new orders of CHF 181.8 million in the reporting period (1st half-year 2021: CHF 139.8 million), corresponding to a growth of 30%. The ratio of new orders to sales (book-to-bill rate) of 1.15 (1st half-year 2021: 1.20) reflects on the one hand the long-term ordering behavior of many customers and on the other hand Cicor’s success in the market.

The operating result at EBITDA level reached new record levels at CHF 15 million with a solid 9.5% EBITDA margin. While the EBITDA margin of the EMS Division improved to highly satisfactory 10.2% (1st half-year 2021: 8.9%), the AS Division suffered from cost increases that can only be passed on to the market with a time lag, which led to a decline in the EBITDA margin to 13.2% (1st half-year 2021: 18.4%).

Core EBIT1) increased disproportionately by 45.4% to CHF 9.7 million (1st half-year 2021: CHF 6.6 million), corresponding to a margin of 6.1% (1st half-year 2021: 5.7%). In addition to the acquisition effect of Axis Electronics, this positive development is also attributable to the increased production capacity utilization of the EMS Division.

Core net profit1) decreased slightly year-on-year to CHF 4.9 million (1st half-year 2021: CHF 5.2 million). This was mainly due to the strong appreciation of the Swiss franc against the Euro since the beginning of the year and increased financing costs.

Cicor has reorganized the divisional structure as of January 1, 2022. Since the thick-film substrates business at RHe Microsystems (Radeberg, Germany) now only plays a minor role and sales are largely driven by EMS services in the microelectronics sector, this reassignment is in line with the current business model. The EMS Division (Electronic Manufacturing Services) contributed 85.6% of Group sales in the reporting period, while the AS Division (Advanced Substrates, consisting of the development and production of printed circuit boards and thin-film substrates) delivered 14.4% of Group sales. 

EMS division is growth driver

The acquisition of Axis Electronics (Bedford, UK, consolidated since December 2021) and SMT Elektronik (Dresden, Germany, consolidated since May 2022), together with significant organic growth, increased divisional sales by 42.2% to CHF 135.1 million (1st half-year 2021: CHF 95.0 million). The integration of the two companies is proceeding according to plan, and they contribute significant operating profits, resulting in a 63.9% increase in the operating result at EBITDA level to CHF 13.8 million (1st half-year 2021: CHF 8.4 million).

AS division with decline in earnings due to cost inflation 

The AS Division achieved sales of CHF 23.3 million in the first half of 2022 (1st half-year 2021: CHF 22.1 million), a slight increase of 5.5%, driven in particular by a pleasing increase in demand for printed circuit boards for medical technology. The operating result EBITDA of CHF 3.1 million was 24.1% below the previous year’s result of CHF 4.1 million. Significant increases in material and energy costs, which can only be passed on to customers with a time lag, led to the lower AS results for the first half-year 2022.

Outlook for the second half and full year of 2022

The Cicor units report a normalization in order intake while the continuing shortage of certain electronic components hinders faster growth. The high order backlog and the bulging new project pipeline should however compensate for these negative effects during the remainder of 2022 

Based on the current situation, Cicor expects to achieve sales of CHF 300–320 million in the full year 2022 with an EBITDA margin not significantly different from the first half of the year.