UUTISET

Ascom with solid results despite the recession

Ascom achieved solid results in the first half-year 2009 despite a very difficult economic climate. Group profit for the first half-year 2009 increased by CHF 4.8 million to CHF 11.9 million. At EBIT level, the Group achieved a profit of CHF 7.3 million, with both of its divisions generating positive operating results: Wireless Solutions and Security Solutions reported a profit at EBIT level of CHF 6.7 million and CHF 3.2 million respectively. With cash and cash equivalents in the amount of CHF 131.4 million and an equity ratio of 25.6%, Ascom is financially sound.

Ascom generated more than 70% of its total revenue in international business. Thus the half-year results were adversely affected not only by the economic environment but also by the weakness of the Euro against the Swiss Franc. The Ascom Group achieved revenue of CHF 235.2 million in the first half-year 2009, taking the pro rata consolidation of the acquisitions into account (previous year CHF 249.1 million). This corresponds to a decrease of 5.6%. Adjusted for currency effects, revenue increased by 0.9%. At CHF 233.8 million, incoming orders for the Group were below the prior-year figure of CHF 292.4 million, which had been exceptionally high due to a large military contract.

Both divisions are profitable In a tough economic environment, the Wireless Solutions Division posted revenue of CHF 126.1 million in the first half-year 2009 (previous year CHF 147.4 million), however, on constant exchange rates the decline was only 5.5%. Wireless Solutions responded rapidly to the significant change in the business environment and made necessary capacity adjustments, which resulted in extraordinary restructuring costs of CHF 1.6 million. At EBIT level, the division achieved a profit of CHF 6.7 million and an EBIT margin of 5.3% (previous year 8.3%); excluding the restructuring expenses, the margin is 6.6%.

The Security Solutions Division put in a respectable performance in the first half-year 2009. At EBIT level, profit amounted to CHF 3.2 million, with an EBIT margin of 3.2% (previous year 6.6%). The division generated revenue of CHF 101.2 million, largely on a par with the same period of last year (CHF 102.2 million). The Security Communication business unit succeeded in posting growth in revenue with international customers, while revenue in the Swiss market fell short of last year’s excellent results. In the Telecom Solutions business unit, revenue was below the prior-year level due to the prevailing economic conditions.

As TEMS has only been consolidated for one month within the Group, i.e. since June 2009, the results achieved are of limited significance. TEMS generated revenue of CHF 7.5 million in the month of June 2009 and posted incoming orders of CHF 9.7 million. Integration is progressing rapidly and according to plan.

Solid balance sheet structure
Following the successful closing and financing of the Comarco WTS and TEMS acquisitions in the first half-year 2009, Ascom retains a solid balance sheet structure as of 30 June 2009. With cash and cash equivalents in the amount of CHF 131.4 million and an equity ratio of 25.6%, Ascom is in a financially sound position.

Strategy implementation on course
With the closing of the acquisitions of Comarco WTS and TEMS in the first half-year, Ascom successfully completed the next steps in the implementation of its corporate strategy. From 2010 onwards, TEMS will merge with the existing Telecom Solutions business unit, which remains part of the Security Solutions Division up to the end of 2009, to form a third division called Network Testing. As of 1 January 2010, Rikard Lundqvist will become General Manager of Network Testing and Member of the Executive Board.

With its three clearly focused divisions, Wireless Solutions, Security Communication and Network Testing, aligned under the common umbrella of "Mission-Critical Communication", Ascom has created the prerequisites to reach its medium-term objectives for profitability and growth. In addition, its market presence will be strengthened and further investments will be made in the company’s innovation capabilities. Ascom aims to gain market shares and capitalize on any opportunities for further targeted, value-adding acquisitions. Strict cost management will remain a top priority.

Outlook
Ascom only expects an improvement in market conditions in the course of 2010. On the basis of current economic developments, the company assumes that Group revenue for the full year 2009 will be up to 10% below the prior-year level on a like-for-like basis, and on constant exchange rates. Taking the completed acquisitions into account, the company is planning to increase revenue year-on-year (at comparable exchange rates). Ascom is convinced to remain profitable for 2009.

Key financial figures            Income statement

The full 2009 half-year report of the Ascom Group is available online at www.ascom.com/hyr2009-en.

ABOUT ASCOM
Ascom is an international solution provider with comprehensive technological know-how in Mission-Critical Communication. The company focuses on the areas of Wireless Solutions (high-value, customer-specific on-site communications solutions) and Network Testing (a global market leader in optimization solutions for mobile networks). The company is headquartered in Switzerland, has subsidiaries in 20 countries and a workforce of some 2,300 employees worldwide. Ascom registered shares (symbol ASCN) are listed on the SIX Swiss Exchange in Zurich (Switzerland).

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