R&M announces sales are up, but profit is down for 2019
R&M has announced it has experienced increased sales in 2019, reaching CHF276.7 million, with sites now in the US East Coast and China.
R&M is a developer and provider of cabling systems for high-quality network infrastructures, based in Wetzikon, Switzerland.
The company has a focused growth strategy and has achieved key successes in 2019. R&M had an increase of 4.4 %, adjusted for currency effects, and growth of 6.8%.
However, the operating profit (EBIT) declined marginally. The company states this is due to high investment costs for the integration of newly acquired companies and for the expansion of the market organisations. Worldwide R&M now has 1,300 employees.
R&M CEO Michel Riva says, “For five years now, R&M has witnessed continuous, solid growth. In 2019, we were once again above the industry average. We do, however, currently find ourselves in a challenging market environment. Particularly the investments for the expansion of the global FTTH networks fell in 2019.”
In March 2019, R&M entered the East Coast of the US through its takeover of Optimum Fiberoptics in Maryland. Mega data centres, company headquarters and government agencies are all situated close together in this area.
The US branches of R&M in California and Maryland serve the North American continent with proprietary products, logistics and services, the company states.
In April, R&M acquired Durack Intelligent Electric Co, a manufacturer of network cabinets for data centres based in Shanghai. This acquisition has given R&M access to Chinese market sectors, such as finance, government, education and data centres, the company states.
At the same time, R&M is investing outside Shanghai in a new production site for the assembly of fiber optic and copper cable systems.
In the sales regions, development in the financial year was varied, according to the company. In South America and the Middle East, R&M achieved double-digit growth rates.
In Germany, Austria and Switzerland, sales initially declined, although the situation stabilised towards year end. The European markets offset this decline, R&M states.
The trade war between China and the US as well as a crisis on the Indian telecoms market impaired business in these regions, according to the company.
The sales company in India nevertheless posted a single-digit increase. In 2019, the R&M business area Public Networks benefited from various key projects in broadband cabling to the front door (Fiber to the Home).
Double-digit growth rates were recorded here despite the declining market environment.
With the new FO distribution frame PRIME-ODF, R&M gave telecoms the possibility to plan network expansion more freely than was previously the case.
These can now retrofit and densify their sites more easily and only have to invest as much in cabling as is currently required, R&M states.
The Data Center business area struggled with a slowdown of the market. With the range of its new subsidiary Durack in China, R&M can now act as an all-in-one provider for network equipment for data centers in Asia, according to the company.
Alongside a new fiber optic distributor, R&M introduced a software product developed in house for the first time. It helps data centre operators to manage their networks digitally.
The largest business area, the Local Area Networks segment, achieved solid single-digit growth. R&M states it is relying on new developments and premium products for fast data transmission to offices and smart buildings.
Riva says, “R&M expects the market environment to remain very challenging in 2020. The most recent investments and product innovations are intended to make a decisive contribution to continuing the growth strategy. Thanks to the innovative strength of the company, R&M now covers the entire connectivity range.”