Market environment, interest rates, uncertainties and market restraint are weighing on earnings. 

Growth in the home market of Switzerland.

R&M Annual Report 2023

R&M, the globally active developer and provider of high-end infrastructure solutions for data and communications networks, based in Wetzikon, Switzerland, recorded a significant decline in business in 2023. Consolidated sales fell by 13.4% to CHF 257.8 million. In organic terms and adjusted for exchange rate effects, the decline was 10%. Operating profit (EBIT) before extraordinary restructuring costs fell to CHF 6.2 million. The situation stabilized in the fourth quarter, mainly due to the acquisition of new large orders.

CEO Michel Riva attributes this development primarily to the difficult market environment. High inflation, rising interest rates, and geopolitical uncertainties impacted the economy in the reporting year. The global infrastructure market for communications and data networks suffered a decline of 15% to 20% in 2023. The manufacturing industry and the market for commercial buildings were reluctant to award contracts. Increased material, installation, and construction costs had a significant impact. For R&M, the cabling of local data networks (LAN) in buildings is an important but increasingly price-sensitive business area. In 2023, however, R&M once again made innovative network systems ready for series production in the future market of smart buildings.

Backlog in broadband networks

In Germany, and North and South America, the expansion of broadband networks (fiber to the home, FTTH) was slowed down more than expected. In many countries, including highly developed industrial regions, there is a latent backlog in terms of broadband supply.

Switzerland and some countries in Asia and the Middle East were able to escape the negative trend. In Switzerland, R&M achieved an increase in sales of almost 5%. All business areas contributed to the success there. In India, R&M closed with stable sales growth and is now one of the top suppliers of fiber optic products for the telecommunications industry. Here, too, the company successfully entered the 5G market in the reporting year. R&M has introduced a portfolio for the fiber optic cabling of antenna sites and has won orders from leading mobile communications equipment suppliers. In the fourth quarter, business with large orders in the Middle East also picked up noticeably.

The Data Center market remained constant worldwide in the 2023 financial year. In recent years, R&M has developed an offering that includes all-in-one infrastructure solutions for data center operators. The rack and housing manufacturer Tecnosteel, which was acquired in Italy in 2022, was fully integrated into the Group and the product range and capacities for the Group adjusted accordingly.

Structural measures

A decline in demand and rising operating expenses prompted R&M to make structural adjustments in the reporting year. Production areas were already relocated to India at the end of the first quarter. The plant in Bangalore is being expanded into the largest production plant for fiber optic cabling products. New premises will be moved into in spring 2024. At the same time, R&M invested in the expansion of the plants in Italy, the Czech Republic, and Poland in order to be ready for the coming market upswing.

Focus on the future

«Despite the current crisis, the global infrastructure market for communications and data networks remains attractive,» says R&M CEO Michel Riva. 

The intensive use of digital services and the trend towards AI require higher transmission capacities and therefore the expansion and densification of network infrastructures in buildings, data centers, and telecom networks. This is why R&M expects the markets to boom again in the medium term.

R&M is turning 60 in the spring of 2024. 

«We are delighted to be able to look back on an impressive 60 years of company history,» comments CEO Michel Riva. 

Among other things, R&M will report on this in a blog series.

Download the annual report and further information on the business year: https://www.rdm.com/company/about-rm/annual-report/