lower business volume overall in a challenging environment – net sales growth in Transportation segment and strategic growth initiatives

Order intake and net sales 2023 (unaudited)

Following a strong first quarter, HUBER+SUHNER saw a marked slowdown in most target markets in the 2023 financial year. Over the course of the second half of the year, business volume stabilised at a lower level.

The decline in both order intake and net sales compared to the very strong previous year can be attributed to three main factors: the weak North American market due to declining 5G rollouts, the general trend of customers reducing high inventory levels, which was observed in many markets, and a significant strengthening of the Swiss franc. Despite the lower net sales in the reporting year and the challenging environment, some business areas, most notably the Transportation segment and the five strategic growth initiatives as a whole, did report positive development.

Order intake for 2023 amounted to CHF 821.4 million, which was 15.8 % below the prior-year value, while net sales for the year declined by 10.8 % to CHF 851.1 million. Adjusted for currency, copper price and portfolio effects, the decline in sales compared to the previous year was 6.3 %.

In the Industry segment, the continued depletion of inventories at customers over the entire reporting year delayed the awarding of new orders, while net organic sales were roughly on a par with the previous year. The aerospace and defense growth initiative reported double-digit percentage growth in both order intake and net sales, whereas the other subsegments fell short of their prior-year levels. The high-power charging subsegment, which had experienced impressive growth in recent years, was lacking both momentum in the important US market resulting from regulatory uncertainties and clarity regarding charging standards. Towards the end of the year, solutions began to emerge for both of these factors, allowing more planning certainty to return to this growth market.

A much weaker communications market resulted in significantly lower volumes around the world, which impacted the entire industry. For the communications business of HUBER+SUHNER, the combination of declining 5G rollouts in North America and high inventories throughout the supply chain resulted in a sharp decline in demand, especially in the second and third quarters. Towards the end of the reporting year, however, the Communication segment successfully secured new mobile communication rollouts in Asia as well as AI projects in the data center growth initiative. Overall, the book-to-bill rate by the end of the year was again slightly above 1 thanks to a significant increase in orders in the fourth quarter.

The Transportation segment closed the year with growth in net sales, and order intake at almost the same level as in the previous year. This growth was attributable to both the automotive and railway subsegments. In addition to strong demand for high-voltage cable systems for commercial vehicles, demand for solutions in the two growth initiatives of advanced driver assistance system (ADAS) and rail communications was also positive.

The detailed business results will be presented at the media and analysts’ conference on 5 March 2024.

This media release can also be found under https://www.hubersuhner.com/en/company/media/news

The definition of Alternative Performance Measures can be found under https://www.hubersuhner.com/en/company/investors/publications

This media release is also available in German. The German version is binding.