30/03-09   -   Press releases

R&M Posted Stronger Results in Fiscal Year 2008 Than in the Previous Year

The Swiss cabling specialist Reichle & De-Massari AG (R&M) continued its strong growth trend from 2007 in the first half of 2008, but sales increasingly felt the effects of the financial crisis in the second half of the year. R&M closed the fiscal year with sales of CHF 247 million, a figure 2.2 percent higher than in 2007.

Reichle & De-Massari AG (R&M) is one of the world’s leading cable specialists. It is represented on all five continents with 30 marketing organizations. After a strong growth phase lasting from 2002 to mid-2008, business at R&M began to feel the first effects of the financial crisis around the middle of the year. Despite the recession, sales increased over the previous year by 2.2 percent to CHF 247 million, yet were still short of expectations. EBIT amounted to 8 percent at the end of 2008 but fell to 7 percent after the company made a voluntary contribution to the retirement fund to put it on a more solid footing. EBIT has aver-aged 10 percent over the past five years and confirms the solid growth the company has achieved.

Success in international markets

R&M has consistently pushed its internationalization strategy over the last ten years and fur-ther strengthened its position on international markets in 2008. The company has emerged as one of the top three players in Europe and the Middle East. It generates 78 percent of its sales abroad.

From a regional perspective, sales figures rose in Germany (plus 14.2 percent), the Middle East (plus 63.4 percent) and Latin America (plus 75.4 percent) as well as in Central and Eastern Europe. R&M continues to view the Asian market as quite promising.

Two thirds of total sales were made with structured building cabling (Private Networks). This segment has declined slightly since 2008. Higher sales (plus 18 percent) in telecom (Public Networks) helped R&M to prevent a sales decline in the group as a whole. Growth in this segment is largely attributable to fiber optic projects.

Switzerland, the company’s home market, came increasingly under pressure in 2008. R&M felt the direct effects of smaller volume orders from large-scale projects and restrained in-vestment in the banking and financial sectors and increasingly in other sectors as well. Major customers deferred investments. R&M partially offset this decline in orders with transactions in Private Networks, but still posted a decrease of 10.5 percent.

Anti-cyclical investment policy
It is important to focus and invest in the right projects to keep the company firmly positioned in the market even in difficult times. R&M is concurrently taking the necessary steps to cut costs. With its solid equity base, R&M can continue the initiated growth strategy even in weaker years and emerge all the stronger from the crisis.

Fiber optic technology is a focal point of investment. R&M assumes this segment will be more resistant to the crisis than other segments and plans to increase its investment in the development of new FO product solutions by 10 percent in 2009. As such, R&M is meeting the requirements of the international market and living up to its claim as innovation leader. Twenty percent of total sales are achieved with products less than three years old.

R&M is also investing in decentralization. The first management and logistics hub that was recently opened in Singapore will be followed over the next two years by four hubs in other regions. These hubs will allow the R&M sales regions to provide their customers with even better logistics services and to develop or produce on-site solutions tailored to the customers’ needs. Hub expansion underscores the internationalization strategy that R&M is pursuing.

R&M is also counting on Switzerland as a business location. In May 2008, the cornerstone was laid for a new company building in Wetzikon. Supply chain processes will be optimized in the new building with facilities such as a high-bay warehouse, for example. Two of the five floors in the building will also be home to an innovation center. A new ERP solution set to go live at mid-year will further boost efficiency.

For further information about the company, please visit www.rdm.com

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Facts & Figures
Reichle & De-Massari AG (R&M) develops and produces cabling solutions for communication networks. R&M has earned a reputation as a quality leader with its excellent copper and fiber optical products. The company has its own marketing organizations in 30 countries. It generates 78 percent of its sales abroad. Sales in 2008 totaled CHF 247 million; EBIT was 7 percent. The company invests more than CHF 10 million in research and development every year. R&M is one of the 500 largest companies in Switzerland and currently has more than 670 employees. The company is wholly owned by the Reichle family and is now being run by the second generation as an independent family-owned company.