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• Axel Rienitz Leiter Corporate Communication HUBER+SUHNER AG +41 44 952 2560 axel.rienitz@hubersuhner.com

Net sales after 9 months significantly higher – fewer new orders in 3rd quarter – start to 4th quarter indicates trend reversal in terms of order intake

29/10/2013 06:45:00

After the strong surge in growth during the first term, net sales remained at a pleasing level in the third quarter as well at CHF 175 million. However, as predicted, the volume of business was not able to follow on seamlessly from the boom experienced during the first term. Order intake in particular (CHF 153 million) suffered during the summer months from the intensified drop in the solar market and the phase-out of large-scale projects in the North American communication market. Besides rather slack demand in the broad-based industrial core business due to the economic climate, state budget cuts led to lower volumes in the space and defence sub-market. The order situation in the rail market developed robustly overall and benefited from a revival of demand in China. In cumulative terms, net sales have seen double-digit growth compared with the previous year (+13%), whereas order intake reflects the slackening of demand (-13%).

Order intake and net sales after nine months

Radio Frequency division: moderate increase in net sales Net sales in Radio Frequency, which has returned to greater profitability, exceeded that recorded in the previous year by 6% during the first nine months, whereas order intake remained 6% lower than in the equivalent period. For some time, Radio Frequency's mobile communication business has recorded a downward trend due to constant price erosion. The important space and defence sub-market suffered from cuts in public spending, especially in the USA. In the current year, various innovative products have, however, been launched in the product groups of antennas, coaxial cables and high-quality plug connectors, opening up new opportunities for the division in all target markets.

Fiber Optics division: strong development and good prospects The still impressive increase in net sales after three quarters in Fiber Optics (+38%) was largely due to the Long Term Evolution (LTE) projects in North America. In fact, a large proportion of corresponding orders was booked in 2012, now resulting in a minus of 23% in order intake compared with the previous year. However, demand is already increasing again. In addition to new projects in North America, deliveries for roll-outs of 4th generation mobile communications in various European countries and Asia-Pacific have started. The completed range of system solutions for data centers is receiving a very positive response from customers in the field of financial services, broadcasting as well as from outsourcing partners.

Low Frequency division: robust demand in the transportation market helps to overcome slump in the solar market During the first nine months, Low Frequency succeeded in stabilising net sales to the previous year's level (+2%). This is attributable to significant growth in the rail and automotive market. Thanks to this positive development, it was possible to fully compensate for the drop in the solar market of over CHF 20 million. Order intake remained 10% lower than in the previous year. This is attributable entirely to the situation in the solar market.

Outlook In view of the low order intake in the third quarter and the negative currency development, HUBER+SUHNER anticipates moderate growth in net sales in the business year 2013. The 5% mark is unlikely to be achieved. In terms of the EBIT margin, the company still anticipates a significant improvement compared with the previous year and a figure within the target range of 6-9%. Order intake is expected to have reached its low in the third quarter.