Cicor continues to grow – sales and profits at record levels thanks to strategic expansion

Ad hoc announcement pursuant to Art. 53 LR

Bronschhofen, 6 March, 2025 – The Cicor Group (SIX Swiss Exchange: CICN) looks back on an exceptionally successful year 2024. Significant market share gains and steadily increasing profit margins at all levels demonstrate the consistent execution of Cicor’s strategy. Earnings per share rose to CHF 6.20 (2023 restated: CHF 2.66), and free cash flow remained very positive even after accounting for acquisitions completed during the reporting year. The new strategy, under the motto "Creating Together", paves the way towards the sales target of at least CHF 1 billion by 2028, positioning Cicor as the leading pan-European electronics developer and manufacturer in the fields of medical technology, aerospace and defence, and industrial applications.

Cicor maintained the growth momentum of the previous year, increasing sales by 23.3% to CHF 480.8 million in 2024 (2023: CHF 389.9 million). Organic growth was slightly negative at -1.6%, which, against the backdrop of a 14% downturn in the European Electronics Manufacturing Services (EMS) market, highlights Cicor’s strengthened market position. Acquisitions contributed with 26.1% to sales growth, while the appreciation of the Swiss franc had a negative impact of -1.1%.

The weak order intake in the first half of the year recovered significantly in the second half. Orders exceeded the prior year by 10.2% with CHF 440.4 million due to acquisitions (2023: CHF 399.8 million). The book-to-bill ratio of 0.92, influenced by shorter order horizons from some customers, reflects a stable order backlog of more than ten months at the end of 2024 – a level that was common before the supply chain crisis of recent years.

The focus on excellence in all business processes, coupled with the successful integration of acquired companies, led to further improvements in profit margins at all levels. The EBITDA margin increased by 0.5 percentage points to 12.1% (2023: 11.6%), marking the highest level achieved to date. EBITDA grew disproportionately by 29.3% to CHF 58.4 million (2023: CHF 45.1 million). As in the previous year, depreciation on tangible assets and amortisation of intangible assets amounted to 4.2% of sales, resulting in EBIT of CHF 38.1 million (2023 restated: CHF 29.0 million), corresponding to a margin of 7.9% (2023 restated: 7.4%).

Net profit increased disproportionately by 131.7% to CHF 27.3 million (2023 restated: CHF 11.8 million), primarily driven by favourable exchange rate effects and the normalisation of the tax rate to 23.2% (2023 restated: 43.1%).

In the reporting year, a strong focus on operational excellence in planning and procurement processes led to a significant reduction in net working capital relative to sales, lowering it to 24.8% (2023: 30.3%). As a result, free cash flow before acquisitions rose to an extremely strong CHF 61.1 million (2023: CHF 26.3 million), an increase of 132.7%. Even after accounting for the acquisitions completed in 2024, free cash flow further improved to CHF 6.3 million compared to the previous year (CHF 4.3 million).

The reported company results include acquisitions from the date of their completion and account for one-time costs. On a pro forma basis – taking into account all acquisitions as if they had been completed on 1 January 2024, and excluding one-time acquisition and restructuring costs – sales for the reporting year would amount to CHF 504.4 million, with an EBITDA of CHF 62.0 million (12.3% margin). We consider these figures as the true benchmark for assessing Cicor Group’s financial and operational performance.

Resilience Through Focus on Target Markets and New Customer Acquisition
Cicor remains committed to sustainably growing applications in medical technology, aerospace and defence, and industrial electronics. This strategic focus was a key factor in Cicor’s ability to remain largely unaffected by the 14% decline in the European EMS market compared to 2023.

Cicor’s strategic positioning – with clearly differentiated offerings for its target markets, a production network spanning Asia and Europe, complementary technologies, and a rapidly expanding capacity for product development – has enabled the Company to achieve an exceptionally high rate of new customer acquisition compared to its competitors, further driving market share gains.

Cicor has now developed a strong M&A capability. The acquisitions completed to date have created significant value and played a key role in strengthening Cicor’s strategic positioning. Through targeted acquisitions, Cicor has secured European market leadership in aerospace and defence and established itself as the fourth-largest provider in the medical technology sector.

Growth was recorded across all of Cicor’s strategic target markets: while medical technology grew by 1.6% and industrial electronics by 4.1%, the aerospace and defence business expanded significantly by 94.4%. As a result, the share of sales from industrial applications was 33.3% (2023: 39.4%), aerospace and defence accounted for 25.3% (2023: 16.1%), and medical technology contributed 23.7% (2023: 28.8%).

Due to acquisitions, sales generated in Europe (excluding Switzerland) increased by 38.8%, contributing 67.6% of total group sales (2023: 60.1%). Switzerland was the only market to experience a sales decline, shrinking by 5.2% and contributing 17.6% (2023: 23.0%). In Asia, most sales was generated from European and American customers, with an 8.5% increase bringing its share to 9.9% (2023: 11.2%). Meanwhile, sales directly invoiced to North America grew by 11.4%, accounting for 3.9% of Cicor’s total sales (2023: 4.3%).

Electronics Manufacturing Services (EMS) Division Achieves Breakthrough in the European Market
The development of the EMS Division in the reporting year was characterised by exceptionally high resilience against adverse market influences and four strategically and financially significant acquisitions.

The combination of a focus on growth markets – particularly aerospace and defence and medical technology – and Cicor’s unique selling propositions played a crucial role in gaining market share across Europe. Key customers and products in the ramp-up phase significantly contributed to sales, including sensor applications, semiconductor equipment, neurostimulation implants, and medical wearables.

An increasing number of these products were developed by Cicor on behalf of its customers. Strengthening co-development activities remains a key strategic direction for Cicor. The acquisition of Evolution Medtec (Bucharest, Romania, completed in February 2024) and Nordic Engineering Partner (Stockholm, Sweden, completed in November 2024) has quadrupled Cicor Group’s development capacities for the medical technology and industrial markets and expanded its technological expertise. At the end of 2024, more than 100 (2023: around 25) highly qualified Cicor development engineers were working on future new customer products.

In the EMS market for aerospace and defence, Cicor has established itself as the European market leader. The acquisitions of STS Defence (Gosport, UK, completed in January 2024) and the TT IoT Division (three sites in Newport and Hartlepool, UK, as well as Dongguan, China, completed in March 2024) enable Cicor to provide its A&D customers with development and manufacturing capabilities in Switzerland, Germany, and the UK. Combined with Cicor’s technological expertise – including hybrid circuits for high-frequency applications and direct chip assembly – the Company has built a strong foundation for organic growth in this sector.

The implementation of these strategic measures significantly contributed to the expansion of the EMS Division’s sales by 25.9% to CHF 438.0 million (2023: CHF 347.9 million). As a result, Cicor is now among the top 10 European EMS providers and has established a strong foundation for further growth.

Notably, the EBITDA margin expanded to 13.0% (2023: 12.5%). EBITDA increased by 31.5% year-on-year to CHF 57.0 million (2023: CHF 43.4 million). This margin improvement was driven by progress in the execution of the operational excellence program and the successful integration of newly acquired companies. In particular, the EBITDA margin of the TT IoT Division, consolidated for nine months in the reporting year, has significantly increased.

Advanced Substrates (AS) Division Continues Positive Development
Both the printed circuit board business at the Boudry site (Switzerland) and the hybrid circuit production at the Wangs (Switzerland) and Ulm (Germany) sites performed well. The division increased its sales, primarily through organic growth, by 5.3% to CHF 45.3 million (2023: CHF 43.0 million), while EBITDA rose by 12.6% to CHF 6.8 million (2023: CHF 6.1 million). Despite costs associated with the structural optimisation of the thin-film business, the operating margin improved by 1.0 percentage points to 15.1%.

The Boudry site continued building on the previous years' successes in operational excellence and achieved key milestones in new customer acquisition. Neurostimulation applications and other medical technology fields developed in collaboration with the EMS Division are expected to drive further growth in the coming years.

As the European market leader in hybrid circuits, Cicor has taken important steps to enhance efficiency. The production facility acquired from AFT Microwave in March 2023 was relocated to other sites during the reporting year, leading to the closure of the Backnang (Germany) site at the end of 2024. Additionally, as part of a strategic restructuring, production activities will be consolidated at the Wangs site, and the Ulm production facility will be closed. The project is proceeding according to plan and is expected to be completed by mid-2025.

Strategy 2028 – Creating Together
Since the implementation of its corporate strategy in 2017, Cicor has increased sales by 150%, tripled EBITDA, and quadrupled net profit. The Company has risen from around 30th place among European EMS providers to the top 10, establishing market leadership in Switzerland and the UK, as well as a pan-European leadership position in aerospace and defence applications.

The Creating Together strategy, presented in November 2024, defines the roadmap for the future. By 2028, Cicor aims to become a leading pan-European partner for electronic design and manufacturing in healthcare technology, aerospace and defence, and industrial applications, as well as a recognised employer committed to sustainability.

In addition to focusing on attractive market segments and operational excellence, Cicor will significantly expand its co-development activities for electronic systems in collaboration with customers. The Company will also continue its strategy of achieving market leadership in key European regions through acquisitions. The financial strategy is designed to further enhance value creation for shareholders. Furthermore, Cicor is committed to increasing its attractiveness as an employer while strengthening its focus on sustainable corporate governance.

Strengthening the Balance Sheet Through Debt Reduction
Cicor significantly strengthened its balance sheet during the reporting year. Due to strong free cash flow, net debt remained nearly stable at CHF 44.1 million (2023: CHF 43.5 million) despite the completed acquisitions. As a result, the leverage ratio (net debt to EBITDA) was significantly reduced to 0.74 (2023: 0.96), positioning Cicor on a solid foundation for continued growth.

The key changes in equity during the reporting year were driven by net profit of CHF 27.3 million and the offsetting of goodwill from acquisitions against equity, amounting to CHF -23.8 million.

Dividend Policy
The Board of Directors of Cicor Technologies Ltd. proposes to the 2025 Annual General Meeting that no dividend be distributed, in order to allocate capital towards strategic acquisitions that support the Company’s growth trajectory. These investments are aimed at generating long-term value for Cicor’s stakeholders. As soon as Cicor has achieved a sustainable growth platform generating recurring positive net cash flow, a resumption of dividend payments will be considered.

Sustainability
Sustainable corporate development is a key success factor for Cicor’s long-term competitiveness. Environmental, Social, and Governance (ESG) considerations are firmly embedded in the Company’s strategy. The focus is not only on meeting regulatory requirements but also on comprehensively integrating sustainability aspects into all business areas.

In the 2024 reporting year, Cicor made significant progress toward achieving its sustainability goals. Energy consumption relative to sales was reduced by 16%, and the share of renewable energy increased to 28% (2023: 19%). The sustainability strategy aims to reduce the share of non-renewable energy to 50% by 2030.

Employees are the key to success. Cicor adheres to the highest standards as an employer, ensuring a safe, attractive, and future-oriented working environment. In 2024, the number of workplace accidents was significantly reduced below industry standards. Given the substantial increase in the workforce, Cicor continues to strengthen its decentralised and inclusive corporate culture, enabling every team member to actively contribute to shaping and improving the Company. Sustainability responsibility extends beyond Cicor’s own facilities. With the introduction of a unified supply chain management system, Cicor has laid the foundation for a sustainable and transparent supply chain.

The 2024 Sustainability Report was prepared in accordance with the GRI (Global Reporting Initiative) Sustainability Reporting Standards and the requirements of the Task Force on Climate-related Financial Disclosures (TCFD). It also meets the legal obligations for non-financial reporting under Swiss law. The report will be submitted to shareholders for approval at the 2025 Annual General Meeting.

Events After the End of the Financial Year
On 3 January 2025, Cicor completed the acquisition of Profectus Solutions GmbH in Suhl, Germany, further strengthening its market position in Germany. The Company, with approximately 90 employees, reported sales of around EUR 25 million for the financial year ending 30 September 2024, with an operating margin comparable to that of Cicor.

Major shareholder OEP 80 B.V. (OEP) converted its mandatory convertible bonds at the end of November 2024. As a result, OEP exceeded the threshold of one-third of voting rights, triggering an obligation to submit a public takeover offer to the other Cicor shareholders. The offer price of CHF 55.17 per share corresponded to the minimum price as of 9 December 2024. This price was 7.12% below the last closing price on the SIX Swiss Exchange and significantly lower than the fair value range of CHF 92.02 to CHF 121.45 per share, as calculated by IFBC on behalf of the Cicor Board of Directors. The Board of Directors therefore decided not to recommend acceptance of the offer. By the end of the acceptance period on 20 February 2025, a total of 13,216 shares had been tendered to OEP. As a result, OEP held 41.21% of all Cicor shares at that time. The mandatory public offer was successfully completed on 28 February 2025, contributing to the simplification of Cicor’s capital structure.

Return to Organic Growth Expected in 2025
Following a slight decline in organic sales, Cicor expects a normalisation in 2025, though the anticipated further appreciation of the Swiss franc remains a challenge.

Additionally, the full-year contributions from the companies acquired in 2024, as well as the recently acquired Profectus Solutions GmbH in early 2025, are expected to drive sales to between CHF 520 million and CHF 560 million, with an EBITDA margin that should remain largely in line with that achieved in 2024. As a result, EBITDA is projected to be in the range of CHF 60 million to CHF 70 million. These expectations are based on the assumption that geopolitical, economic, and financial conditions do not deteriorate significantly.

As part of its strategy presentation in November 2024, Cicor announced new financial mid-term targets for 2028:

• Annual organic sales growth of 7-10%
• Sales of >CHF 1 billion by 2028
• Profitability of 7-10% (EBIT) and 10-13% (EBITDA)
• Return on invested capital (ROIC) of >15%
• Leverage ratio (Net Debt / EBITDA) of <2.75
• Capital expenditure (CAPEX) of less than 3% of sales

Cicor is very well positioned: The Company benefits from its focus on the medical technology, aerospace and defence and industrial markets. Despite a challenging economic environment, Cicor has demonstrated resilience in recent years. Based on its proactive risk management strategy and continuous adaptation to changing market conditions, the Company is committed to sustainable growth and the effective pursuit of its corporate objectives. Acquisitions will continue to play an important role in Cicor’s strategy, as the Company sees attractive opportunities in a highly fragmented market. The mid-term targets assume a moderate level of acquisitions. The actual level of inorganic growth may lead to a revision of the financial mid-term targets.

The Cicor Group is a globally active provider of full-cycle electronic solutions from research and development to manufacturing and supply chain management. Cicor’s approximately 3,450 employees at 21 locations are serving leaders from the medical, industrial and aerospace & defence industries. Cicor creates value to its customers through the combination of customer-specific development solutions, high-tech components, as well as electronic device manufacturing. The shares of Cicor Technologies Ltd. are traded at the SIX Swiss Exchange (CICN). For further information, please visit the website www.cicor.com.