FREQUENTIS Reports a Clear Rise in Order Intake and Revenues

“Thanks to the extensive commitment of all our employees, we are on a good and sustainable growth track. The consistent working of our regional markets, the continuous expansion of our product portfolio through in-house research and development, as well as acquisitions enabled us to achieve a clear increase in order intake,” reports Frequentis CEO Norbert Haslacher. “The global security and mobility megatrends are supporting our growth.”

Orders for Frequentis from around the world

Both segments secured high-profile orders. NASA placed an order with the Air Traffic Management segment to upgrade the mission control voice conferencing system at the NASA Johnson Air Space Center.

Frequentis secured a further order in the USA from US telecommunications group Verizon. This covers nationwide implementation of the telecommunications network for the Federal Aviation Administration’s safety-critical voice and data communications at more than 5,000 locations.

In the Public Safety & Transport segment, orders were received from, among others, Germany, France, and Australia. Frequentis is supplying its 3020 LifeX multimedia communication solution to the police force in Lower Saxony, Germany. This project will establish a state-wide standard for the control centre communication system within an IP-based system environment in Lower Saxony.

In Bavaria, Germany, Frequentis has secured an order through the general contractor Sopra Steria to supply the ASGARD voice and data communication system for a total of 26 integrated control centres, three emergency control centres, the fire service dispatch centre in Munich, and a training and test environment at the fire fighter college in Geretsried.

Outside of Europe, Frequentis has been selected by Airservices Australia, the nation’s air navigation service provider, to deliver a solution for its Aviation Rescue Fire Fighting Service.

Frequentis’ Public Transport business domain is supporting digitalisation of the French railways. SNCF Réseau has selected Frequentis to develop and supply a customised communication system for the entire French rail network as part of its strategic development plan to transform its network by 2030. SNCF Réseau is responsible for the rail network in France and Monaco, including the TGV high-speed rail network. The aim is to drive performance through digital innovation.

Acquisitions

In April 2023, Frequentis acquired a 76.67% interest in FRAFOS GmbH, which is based in Berlin, Germany. FRAFOS will deliver key security components for Frequentis’ communication solutions for all safety-critical sectors.

In July 2023, Frequentis acquired 100% of the Norwegian software company GuardREC ATC AS to increase recording competence in all business areas.

Development of revenues and earnings

Revenues rose 11.7% to EUR 186.8 million in the first half of 2023. Looking at the regional split, Europe accounted for 67%, the Americas for 14%, Asia for 11%, and Australia/Pacific/Africa for 8%. Demand for Frequentis products remains high around the world. Order intake increased by 29.1% to EUR 208.0 million in the first half of 2023. Orders on hand amounted to EUR 546.7 million, a rise of 9.8%.

The war in Ukraine, which started in February 2022, indirectly impacted the Frequentis Group through higher inflation, which then filtered through stepwise to the cost of goods sourced from suppliers, salary rises, and other cost items. EBITDA was EUR 8.2 million. Depreciation and amortisation were almost unchanged. In all, EBIT was EUR -0.3 million. As a result of seasonal fluctuations, as usual, the second half of the year is more relevant for Frequentis’ profitability than the first half.

Asset and capital structure

Equity was EUR 142.8 million as at end-December 2023 and the equity ratio was 40.0%. The net cash position was EUR 75.1 million.

Outlook

Depending on the development of inflation, the supply chain problems, and the war in Ukraine, Frequentis considers that it is moving in the right direction to achieve the following targets for 2023 (compared with 2022):

• Increase revenues
• Increase order intake
• EBIT margin of around 6-8%.

The current latest financial publication can be found at: http://www.frequentis.com/publications.