R&M Annual Report 2017

reichle

Annual Report 2017 Reichle & De-Massari AG

Annual Report

2017


041.0327

Our Mission –

“We provide connectivity that matters.”


Contents

Foreword by the Chairman of the Board

of Directors and the CEO

Strong Previous Year Results Confirmed 4

Public Networks market segment

Reliable Sector with Products in Demand 7

Data Center market segment

Hyperscale Drives Growth 11

LAN Cabling market segment

Still More Power in the LAN 15

Internationalization

Growing Synergies in the Global Supply Chain 20

Innovation management

The Smart Path to Customer Benefit 22

Management

Members of the Board of Directors 26

Members of the Executive Board 27

Owners

The Power of Esteem 28

Facts & Figures

Key Figures 30

Publication Details

Cover picture

The modernized government building at Rijnstraat 8

was officially opened in The Hague at the end of

2017 after extensive renovation; a building with

4,500 workplaces and the largest LAN in the country.

The Royal BAM Group N. V., the SPIE SA Group

and R&M together developed a network for the

government building of the future.

Layout: inch, Natalie Schnetzler, Wetzikon

Text: damm.com, www.damm.com.de

Printed by

Druckerei Sieber AG, www.druckerei-sieber.ch

Publisher

Reichle & De-Massari AG

Binzstrasse 32, CHE-8620 Wetzikon, Switzerland

www.rdm.com, erica.monti@rdm.com

R&M Annual Report 2017 | 3


Foreword by the Chairman of the Board

of Directors and the CEO

Strong Previous Year

Results Confirmed

Expiring large customer projects successfully replaced.

Strong growth with fiber optic solutions. Position in Brazil strategically strengthened.

New products launched with leading customers.

The demands for the 2017 financial year

were ambitious. The previous year had been

one of the R&M Group’s most successful

in its history. But at the end of 2016 various

large customer projects worth millions

were coming to their close. Therefore, it was

the aim to confirm the good results of the

previous year in the reporting year and to

safeguard future growth with further investments

in new products and markets.

During the reporting year, the Group generated

sales of CHF 232 million and was

thus 1.2 % above the previous year. It was

possible to entirely compensate the large

projects that were expiring. Particularly in

the second half of 2017, sales developed

dynamically in almost all regions. Especially

newly launched products as well as the great

need for progressive cabling solutions made

a contribution to this.

The EBIT margin of 6.1 % was slightly below

the previous year margin ( 6.6 % ), but within

expectations. The decline was due to specific

investments for developing new markets as

well as to a slightly reduced margin resulting

from increased price pressure in large telecommunication

projects.

Nearly all regions contributed to the growth

in the reporting year. In Europe, Germany – as

in 2016 – recorded by far the greatest growth.

The double-digit growth rate was particularly

supported by increased investments in

FTTH projects. R&M has established itself

as a leading partner both with large telecommunication

companies and with utility

companies. In other markets in Europe, sales

were very variable. In some countries, there

were no major projects or state investments.

In 2017, the Swiss market organization was

once again the largest sales contributor for

the R&M Group. Sales revenues were again

able to be increased in comparison to the

previous year in spite of tougher competition.

Major projects were acquired particularly

in the segments Data Center and Public

Networks. Over the last few years, R&M has

become a leading fiber optic solution provider

in Switzerland.

Committed on all continents

Despite generally difficult conditions the

developments in the Middle East and in

Turkey were very pleasing. R&M is heavily

involved in the major project Istanbul New

Airport and in building FTTH fiber optic

networks. In Saudi Arabia, R&M is now one

of the market leaders in the industry. As in

the last few years, there was double-digit

growth in the Asia Pacific region. In India,

R&M is establishing itself as a preferred

supplier of fiber optic systems and benefits

from high investments in the telecommunications

market. Due to the high demand, a

new production site will be in operation in

Bangalore from the beginning of 2018. This

will lead to capacity being tripled.

The entry into the US market is proceeding

on schedule. Production has been extended

with copper termination and the sales

organization extended both on the West

and East Coast. Thanks to newly launched

products, the market position with hyperscale

data center customers in particular has

been further expanded.

The fiber optic business of the Brazilian

company Peltier Comércio e Indústria acquired

in April 2017 has been successfully

integrated into the R&M Group. This means

R&M now also has a strong position with its

own production in Latin America.

Smart solutions

The Data Center market segment focused

more on the growing hyperscale market and

is following the positive development of

previous years. The pioneering data center

solutions such as the ultra high density platform

Netscale and the infrastructure management

system R&MinteliPhy are meeting

the needs of the industry.

The Public Networks market segment also

continuously contributed to growth in the

reporting year. The demand for fiber optic

systems for broadband networks increases

by around 10 % every year. R&M was able

to achieve good success particularly with

new products such as the innovative SYNO

gel dome closure and the multifunctional

Polaris- box. Numerous new developments

were also successfully launched on the market

in the LAN Cabling market segment.

Today, R&M can offer sophisticated solutions

for intelligent buildings, digital ceiling

and comparable growth applications.

As an innovative solution provider, R&M

was also able to set itself apart from the

competition in the reporting year. Together

with the customers, customized, specific

solutions are being developed for their data

networks. Thanks to innovative core components,

an internationally established production

network and local engineering,

these solutions are made quickly and delivered

cost effectively on time. R&M will extend

and strengthen these competencies in

the coming years.

4 | R&M Annual Report 2017


060.2001

Michel Riva, Hans Hess

Worldwide quality provider

Since 2017, R&M’s lean and professionally

managed international supply chain has been

working on five continents with seven plants.

This makes R&M one of the few companies

which can offer top-quality solutions

in the connectivity market worldwide. The

ISO certification of the quality management

system was extended to the plants in India

and Dubai.

R&M is currently digitalizing numerous processes

so that the different areas at Headquarters

and in the subsidiaries can work

together perfectly and transparently. This

was supported by the continued rollout of

the SAP system in various subsidiaries and

by the implementation of a new SharePoint

platform as the basis for a digital workplace

philosophy. The website was revised to

further support customers in the purchase

process and the launch of a webshop is currently

being prepared.

Well trained, motivated employees and successful

intercultural collaboration are important

keys for success for R&M. Various

workshops were held on this subject with

the aim of promoting networking, the exchange

of experiences and identification

with the company.

R&M is also supporting the introduction

of the dual vocational education system

in Bulgaria based on the Swiss model and

has been educating young people there to

become electromechanics since September

2017.

Well prepared for 2018

Due to the dynamic development of the last

few months, the R&M management is optimistic

about the business year 2018. It is

our aim to grow faster than the overall market

and further extend our global position.

To be able to achieve this long term, further

investments will be made in sales, development,

new products, production capacities

and digitalization.

The Members of the Board of Directors and

the Executive Board would like to thank the

R&M employees for their commitment and

professionalism in 2017 as well as for their

flexibility in challenging times.

We would also like to thank our customers

and business partners for the professional

and trusting collaboration. We look forward

to inspiring you with our solutions in the

coming business year.

Hans Hess

Chairman of the Board of Directors

Michel Riva

CEO

R&M Annual Report 2017 | 5


060.2002


Public Networks market segment

Reliable Sector with

Products in Demand

The fiber optic boom is reaching a new dimension. All over the world network

operators are investing more than ever before in the FTTX rollout and are looking

for future-proof and cost efficient cabling solutions. R&M was able to gain

important market share in this sector and convinced customers with new products

such as the SYNO dome closure.

The Public Networks market segment is

a reliable sector for R&M and constantly

contributes to growth. In the financial year

2017, the segment once again generated

around one third of the overall result. R&M

was able to continue its growth consequently

and the market segment is establishing

itself as a strong pillar R&M can rely on.

In selected countries, R&M focused on leading

telecom companies. This policy resulted

in R&M gaining important market share in

2017 in, for example, Germany, India, the

Middle East and of course the domestic

market, Switzerland. Investments in market

development and the launch of innovative

products are paying off. In the coming years,

this position will be able to be extended

accordingly.

090.7528

FTTX worldwide

Based on recent market developments,

R&M is predicting that telecom companies

all over the world will also be investing

heavily in the FTTX rollout in the future.

Since 2012, the number of homes with

FTTH connections has increased by 20 %.

Some countries in Europe, the Middle East

and Asia are now actually reporting an FTTH

coverage of more than 80 %. In other economically

strong regions, the race to catch

up is on. In Latin America, where R&M is on

site with its new acquisition and can thus

target market development, fiber optics are

now gradually beginning to be extended.

Industry experts are observing a race between

established telecommunication companies,

regional carriers and CATV network

operators. They are increasingly looking for

new, compact, flexible, pre-terminated and

in particular more cost efficient cabling solutions.

These enable them to quickly realize

the vision of full-coverage fiber optic networks

in financially manageable steps. The

current R&M range for Public Networks

perfectly meets this customer requirement.

Needs are increasing

States and municipalities are increasing the

financial promotion of FTTX projects. Economy,

society and politics are becoming more

and more aware of how efficient communication

infrastructures will have to be in the

future. The digital transformation in society,

the development of smart cities and the

Martin Kellenberger

Head of Consultancy

“Digitalization is the industrial

revolution of our time. With

top-quality, tailor-made fiber

optic infrastructure solutions

demonstrating long-term

stability, R&M is protecting

customer investments.”

060.2003

R&M Annual Report 2017 | 7


Public Networks market segment

090.7816

emergence of the Internet of Things (IoT)

are driving the fiber optic boom. End customers

want TV functions such as replay,

streaming and Video on Demand, ideally

with a resolution of 4K or even 8K. Precisely

these entertainment offers require more data

throughput and a higher transmission speed.

All parties involved have great expectations

of the new transmission technology, 5G. It is

due to be introduced widely in the medium

term and provide a large part of the transmission

capacities required in the future.

However, the antenna sites to be equipped

with 5G must be able to rely on solid,

dense fiber optic networks with considerable

throughput.

Hybrid still legitimate

In the transition phase from the copper to the

fiber optic era, hybrid infrastructures prove

their worth. This is particularly the case for

market-leading, global telecom companies.

With a justifiable level of investment, they

can provide the bandwidths demanded to

date virtually everywhere. Telecom companies

opt in particular for vectoring and G.fast

to max out the potential of local copper

networks over the last 200 to 500 meters.

CATV suppliers use the DOCSIS 3.1 standard

to link local coax networks with supralocal

fiber optic infrastructures.

Alongside the dynamic FTTX development

in the area of access networks, R&M is

still expecting considerable investments in

wide area and metro networks. Operators

of railways as well as highways and freeways

are also building more fiber optic networks

because traffic, logistics and public

transpor tation systems require faster data

transmission along the routes. The driving

force in this case is the need for navigation,

tracking, infotainment, traffic surveillance

and control.

Tailor-made

R&M offers network operators customized

cabling solutions and considerably benefits

from that. The resolutely customer-oriented

approach has proved to be a success factor.

R&M also satisfies the markets with its

customer proximity, expertise and uncomplicated

project solutions on the basis of the

modular system. R&M uses quality, local

engineering, fast customizing, local production

and flexible logistics as unbeatable

strengths. The ambitious customer care service

is often seen as a very positive feature.

New stars: SYNO and Polaris

The SYNO dome closure with gel cold sealing,

launched in 2016, is fulfilling all expectations.

Big names in the telecommunication

industry certified the innovative outdoor distribution

platform and ordered first batches.

And R&M already has several international

references to prove it. The Polaris -box 6 with

its innovative cable seal system, launched in

2017, also exactly meets FTTH suppliers’ requirements

and demand is already extensive.

The tried-and-tested FO main distribution

system ODF SCM has been supporting the

19" technology comprehensively since 2017.

060.2004

8 | R&M Annual Report 2017


Public Networks market segment

090.7796

060.2006

The range was extended for this purpose

with the 19" CombiMODULE. Another new

feature is an ODF module with five height

units at just half the housing size. This solution

specifically supports a step-by-step

FTTX rollout. It is even simpler for telecom

companies to plan or upgrade on a “pay as

you grow” basis.

Wolfsburg: smart pioneer

The home of Volkswagen is becoming something of a pioneer in

digitalization. By the end of 2021 the city of Wolfsburg in northern

Germany will have a full-coverage FO network. The Stadtwerke

Wolfsburg AG utility and its subsidiary, the telecommunication

service provider WOBCOM GmbH, are investing EUR 88 million

in the network. R&M is supplying fiber optic distribution hardware

components. After careful deliberation, the utility opted for R&M.

The quality of the products was compelling as was the expert local

service R&M provides.

The fiber optic network is the cornerstone of the future smart

city. Around 80,000 business premises and residential homes are

acquiring access to Gigabit bandwidths and innovative ser vices.

The city council and the Volkswagen Group together want to turn

Wolfsburg into a model city for digitalization.

The fiber optic network provides the basis for test fields in the

area of 5G radio networks and Car2X communication. This means

that, for example, mobility concepts can be investigated as in a

large lab.

060.2005

The Head Mayor of Wolfsburg Klaus Mohrs said at the start of the

Smart City initiative: “There are a lot of areas where networked

technology can simplify our lives and help financially. Wolfsburg

and Volkswagen will drive these innovations on together. And to

do that we are relying on an outstanding infrastructure for large

and fast data transmission.”

070.0277

R&M Annual Report 2017 | 9


060.2007


Data Center market segment

Hyperscale

Drives Growth

The Data Center market is racing from one record to the next. In 2017 the industry

invested more than ever before on a worldwide scale in the setting up of highly

efficient sites. R&M is taking advantage of the dynamic expansion and is positioning

itself as a supplier of innovative solutions. These are also particularly sought-after

in the hyperscale segment.

For five years now, the Data Center segment

has constantly been on the growth path. This

was also the case in the reporting year 2017,

with R&M reporting pleasing progress and

double-digit growth.

The focus in the reporting period was very

much on Data Center projects in the US and

Europe. Here R&M is observing investment

activities with double-digit growth – in established

financial centers as well as up-andcoming

regions. R&M’s main European sales

markets in 2017 were Switzerland, Germany

and France.

But there is also considerable vitality in other

regions too. Growth factors are, in particular,

cloud, storage, colocation and IT services

as well as the Internet of Things, cellular

phone networks, video and social media. The

Chinese cloud market will, based on various

forecasts, approximately triple by 2021 and

the Indian Data Center sector will double.

Worldwide, the investments in the first half

of 2017 exceeded the volume of all investments

in the whole of 2016. Current analyses

of market researchers 451 Research and the

Investment Group CBRE confirm this.

A mass of optical fibers

Hyperscale data centers in particular are

witnessing incredible growth at a rate of

20 % per year. R&M is serving this specific

big player market with suitable solutions for

high-count fiber infrastructures.

With hyperscale data centers, providers are

treading an attractive path in financial terms

to create gigantic, fail-safe, distributed cloud

capacities. The concept is based on a solid

and freely scalable computing architecture

which can be managed like a single unit.

Large quantities of switches, servers and

storage can be set up, scaled and provisioned

independently from one another at the click

of a mouse.

Hyperscale solutions allow operators to start

out modestly with lower investments and

then react accordingly to growing demand.

Hyperscale capability is based in particular

on there being an available mass of optical

fibers. High-count fiber cables with more

than 4,000 fibers are typically needed to

cover the connectivity requirement. Hyperscale

providers are already working with a

performance of 100 Gbit/s and are striving

for 200 or 400 Gbit/s.

With the Building Entrance Facility BEF 60,

launched in 2017, R&M is offering a further

innovation for this area. R&M USA constructed

the splice cabinet on the basis of

best practice studies and using its extensive

experience with large-volume fiber optic

060.2008

Dr. Thomas Wellinger

Market Manager Data Center

“Cloud applications and the

Internet of Things are growing

into corporations. More and

more enterprises are integrating

complete production systems,

buildings, offices, applications,

storage etc. into a private

or external cloud. This trend

is presenting a major challenge

to the networks.”

R&M Annual Report 2017 | 11


Data Center market segment

060.2009

distributors. Capacity-wise the cabinet offers

23,040 splices over 60 drawers. The

BEF 60 is an ideal entry point for hyperscale

data centers for scalable spine and leaf

topologies.

The hyperscale business also influences

fiber optic sales at R&M. Hyperscale data

centers require more singlemode cables.

Their share rose to 36 % in 2017. In 2011

pre-terminated singlemode cables still represented

only 14 % of sales.

Flagship Netscale

A further innovative product contributed

to the success in the reporting period: the

ultra high density platform Netscale. It has

become R&M’s new flagship. The high packing

density is impressive. R&M placed Netscale

solutions in significant major projects

such as the Istanbul New Airport and in

other major reference projects in Europe

and Asia.

and the Netscale Blade Cabling Manager

(BCM), presented at Data Centre World in

Singapore in the fall of 2017. It targets the

growing market of modular high density

switches for cloud networks.

R&M’s integration of the R&MinteliPhy sensors

in the Netscale patch panels was something

of a sensation. It is the only ultra

high density platform on the market which

unites top port density with comprehensive

management and automation functions.

Thousands of fiber optic connections in one

rack can be monitored simultaneously, fully

automatically and in real time – an indispensable

solution for hyperscale data centers.

In this way, R&M is supporting the business

model of dynamic, fail-safe, seamless and

cost efficient cloud services.

Focus on customer requirements

Quality, handling, design, performance and

efficiency of products as well as expertise,

advice and service from R&M satisfy the

needs of the hyperscale, cloud and IT service

providers. Involving customers in product

development ensures that the construction

is fit for purpose and user-friendly. With the

products named, R&M is emphasizing its role

as the leading developer of highly dense,

modular fiber optic systems and smart, innovative

data center solutions.

The increasing demand for further specific

R&M products rounds out the success.

Alongside Netscale, the most important

components of the Data Center range are

the automated infrastructure management

system R&MinteliPhy, the LC-QuickRelease

connector which can be operated at the boot

041.0303

090.7903

12 | R&M Annual Report 2017


Data Center market segment

090.7810

090.7693

In the background, ambitious market development

plays just as much a part in the

success. In important regions R&M is seen

as a reliable equipment supplier and trusted

advisor which represents the state of the art

and always has an eye to the future.

The brave investments in product development

made over the past years are paying off.

The innovations have very clearly contributed

to the two-digit growth in the market

segment in the reporting period. Therefore

R&M will continue to extend the portfolio

in the fiber optic solutions and smart infrastructure

management areas.

The largest airport in the world

The largest air traffic hub is currently being

constructed to the north of Istanbul. Istanbul

New Airport is being planned to handle 200

million passengers a year. The first section will

be put into operation in the fall of 2018. It is

the first fully digitalized airport. All operating

functions run over data networks and fireproof

cabling from R&M. On completion of

the first phase, R&M will have supplied around

4,500 kilometers of copper and 1,600 kilometers

of fiber optic cables as well as more than

90,000 RJ45 interfaces. Each area requires

customization, such as specific color coding.

Istanbul Grand Airport Construction (IGA),

the company commissioned to build the airport,

is also equipping important data center

areas with solutions from R&M. This includes

the ultra high density distribution platform

Netscale and the infrastructure management

system R&MinteliPhy. This solution enables

seamless extensions which will follow in the

years to come.

Ersin Inankul, CIO of IGA, says: “The R&M

team understands our needs and customizes

060.2010

solutions accordingly. This is the biggest

advantage for us as it separates R&M from

other vendors. Availability, security, modularity,

flexibility, capacity and cost effectiveness

were important reasons why R&M

solutions were chosen.”

R&M Annual Report 2017 | 13


050.6458


LAN Cabling market segment

Still More Power

in the LAN

Generational change in structured cabling systems. In almost all regions,

the market is increasingly opting for solutions which support 10 Gigabit Ethernet.

The LAN is taking on an increasing number of services in buildings.

It even makes sure there is intelligent light. R&M has everything users need

for LAN cabling.

The data transmission of tomorrow demands

immense resources from a LAN. A transmission

rate of 10 Gigabit Ethernet (10 GbE) is

now often a prerequisite as this is the way

to manage the growing data traffic between

clients and the cloud without any delays.

Copper cabling with Cat. 6 A / Class E A or

Passive Optical LAN (POLAN) are bringing

the transmission performance required in the

future into offices.

Furthermore, data networks are increasingly

being tasked with more and more functions

for smart buildings. LED lighting and end

devices used in building automation, security

monitoring and many other areas can be

powered and networked with Power over

Ethernet.

With foresight R&M has comprehensively

tailored the LAN range to face this evolution.

The demand for innovative, high-performance

systems is on the increase. In the

business year 2017, the share of Cat. 6 A

products surpassed the 50 % mark of all sales

of copper products for the first time.

090.7605

With the correspondingly high-end and midrange

complete solutions, R&M generated

solid sales revenues, particularly in the core

markets in Europe. The slightly increased

sales volume offset the ever-present strong

price pressure. The classic growth markets

in the Middle and Far East, however, experienced

varied development in the reporting

period. The important Indian market was

troubled this year by the after-effects of

demonetization and the introduction of the

goods and services tax. Other markets, such

as China and Southeast Asia, continued to

experience positive development. In total,

the LAN Cabling market segment accounts

for more than 50 % of the Group’s total sales.

R&M is expecting the structured cabling

systems market to grow 2 to 3 % annually in

the coming years.

Ready for POLAN and PoE

As is the case for 10 Gigabit Ethernet,

R&M has answers to other future trends

and customer requirements. For example,

the POLAN range was completed in the

reporting period. R&M is thus once again

showing its strength in developing new

offers in line with market needs thanks to

the company’s extensive know-how in all

kinds of technologies and thanks to symbiosis.

Experience gathered in the FTTH and

LAN application ranges was incorporated

directly into the POLAN solutions. Findings

from numerous POLAN installations

shape further market development. POLAN

is outstanding, for example, when used in

extensive buildings with low port density,

060.2011

Matthias Gerber

Market Manager LAN Cabling

“The further we get with

digitalization, the more powerful

the LAN will become and

the more diverse its uses.”

R&M Annual Report 2017 | 15


LAN Cabling market segment

090.7874

such as hotels, shopping malls and campus

environments. And POLAN brings fiber optic

infrastructures into large installations at a

favorable price while saving space.

More intelligent with PoE

The implementation of Power over Ethernet

(PoE) is also increasing. Powering end devices

over the LAN opens up the way to smart

applications. The four-pair PoE (4PPoE) can,

for example, power the LED lighting of an

entire office or building. Every light endpoint

is assigned an IP address in the LAN and

can be extended with sensors for building

automation and the Internet of Things (IoT).

Digital building is the name of the application

which is expected to result in immense

market growth.

R&M has the appropriate cabling solutions

in its range and also defined a pioneering

digital building solution in 2017. The more

challenging the requirements made of structured

cabling, the clearer R&M can position

itself as a provider of ready-to-install complete

solutions. Furthermore, R&M supports

planners and installers with know-how,

service and planning aids so that they can

implement PoE successfully from the outset.

Cat. 8.1 is physically feasible

The industry is intensively discussing the

next performance level of copper cabling

with the RJ45 connection format. Cat. 8.1 is

due to enable transmission rates of 25 and

40 Gigabit Ethernet for the first time with

frequencies of up to 2,000 MHz. Tests carried

out by R&M show that Cat. 8.1 is physically

feasible, but mastering the high frequencies

is a complex technical issue. Here too R&M

has developed a market-leading solution.

It will be launched as soon as value added

is deemed to be genuinely percep tible for

customers.

The financial year 2017 was also dominated

by the orientation of the extended LAN

range to higher cabling categories and the

introduction of the European Construction

Product Regulation, CPR. And R&M has

adapted the LAN range to suit local requirements

in the regions USA and LATAM to be

able to gain an extensive foothold in these

markets.

R&M launched a new 1U 48-port panel for

data centers and high-density LAN distributors.

It can accommodate Cat. 6 A copper and

fiber optic connections. Newly developed

cable guides with reusable lugs and the

quick mounting solution for connection

modules simplify handling in installation and

maintenance.

Further market launches in 2017: R&MthinLine

cables and the slim-line DRM45

top hat rail adapter. The slim-line, flexible

050.6525

050.6531

041.0339

16 | R&M Annual Report 2017


LAN Cabling market segment

041.0340 Photo: Office for Metropolitan Architecture (OMA)

060.2000

R&MthinLine patch cords are easy to lay in

tighter bending radii and are simple to store

in cable guides. The cable volume in racks

is reduced by up to 50 % in comparison to

conventional Cat. 6 or Cat. 6 A patch cords.

The new DRM45 for DIN Rail installations

is a third narrower than the first generation.

In 2017, the LAN sector also started to

digitize technical data of the R&M products

in a standardized and complete manner.

This means the data can be incorporated

in Building Information Modeling (BIM) for

CAD construction and 3D visualization of

construction projects. This alleviates the

planning and management of intelligent

buildings.

Government office of the future

Digital transformation is changing the work of ministries and

authorities. They require future-proof networks and smart environments

to ensure they can fulfill their tasks perfectly tomorrow.

A reference project was created in the Netherlands: the modernized

government building Rijnstraat 8 in The Hague. A building

with 4,500 workstations and the largest LAN in the country. R&M

implemented far-sighted planning in close collaboration with the

Royal BAM Group N. V. and the SPIE SA Group.

Structured cabling systems integrate not only the modern working

world but also lots of building functions, communication and security

systems in a digital framework. Even the lockers are connected

to the network. R&M recommended creating the fiber optic backbone

with singlemode cables. These also fulfill future bandwidth

requirements. The LAN enables expansion to implement even

more intelligent systems in the future. The automated infrastructure

management system R&MinteliPhy is also to support smart

facility management.

R&M and SPIE planned the installation on the basis of Building

Information Modeling (BIM). This meant virtually no material was

lost. The cabling could be prefabricated entirely outside the project

site. “SPIE and R&M provided smart and reliable integrated

communication infrastructure solutions which meet the requirements

of both BAM and the end customer,” says Ron Meester,

BAM Project Manager.

R&M had to take regulations applicable in the Netherlands into

consideration in terms of availability, scalability and long-term

operational security. Furthermore, approvals had to be obtained

in accordance with the strict regulations of the Foreign Ministry

and the state’s security services. All requirements were fulfilled

and a 25-year system warranty granted.

041.0286

R&M Annual Report 2017 | 17


060.2013


Committed on every continent

R&M Headquarters

R&M Manufacturing

R&M Sales Offices


Internationalization

Growing Synergies

in the Global Supply Chain

Manufacturing worldwide in Swiss quality. It is possible. R&M is proving

just that at seven sites on four continents. The lean and professionally managed

supply chain, the organization of which was further optimized in 2017,

makes R&M a top supplier on the cabling market. Productivity could be increased

noticeably with good utilization of the workforce, which in turn necessitates

an increase in capacity.

With great commitment R&M substantiates

its position as a top global player on the

connectivity market with its own supply

chain. After the acquisition of the fiber optic

business of Peltier Comércio e Indústria in

the spring of 2017, R&M is now producing

at seven plants which work together closely

as an operations network and learn from

each other.

This makes it possible to guarantee the

exceptional Swiss and R&M quality standards

in all plants whilst embracing high

cultural diversity. The individual sites and

the network are continuously optimizing

their organi zation in accordance with lean

management principles ( pearl program ) by

exchanging information on experiences.

Operations Management sets up international

teams which provide mutual support

for each other. A new Communication &

Collaboration environment supports them

in this, resulting in synergies and marked

increases in productivity.

There was a double-digit increase in the

number of production hours in 2017 in

comparison to the previous year. More than

650 employees achieved this in seven plants

and two fast-track operations. A further

double-digit increase in production hours

is seen as being likely for 2018. The new

production plant in Minas Gerais is now also

gradually being integrated into the Group.

The plant in Sofia had to create more space

due to the order situation and capacities

were increased accordingly. For the very

first time, R&M is training five apprentices

here who, over a period of four years, will

complete their apprenticeship as electromechanics

in a scheme similar to the Swiss dual

vocational training system. The fiber optic

fast-track projects in Sofia and Wetzikon

also progressed. The response speed which

can be achieved with fast-track is noticeably

strengthening the competitive position.

The fiber optic production facility in Bangalore

became the second largest production

plant in the R&M Group in 2017 with production

output doubling. With the reloca-

Five apprentice electromechanics

at the production facility in Sofia

060.2014

Employees of the new R&M production facility

in Minas Gerais, Brazil

060.2015

20 | R&M Annual Report 2017


Internationalization

060.2017

New fiber optic assembly facility in Dubai

Highly automated production site at the Headquarters in Wetzikon

060.2016

060.2018

Production site in Silicon Valley, USA

tion to a new building at the start of 2018,

activities in India can be consolidated in one

place, production capacities substantially increased

and processes further optimized.

The fiber optic assembly facility in Dubai got

off to a successful start and is processing

connectors in bulk. The ISO Group certificate

now also applies to this site. Core products

are pigtails as well as simplex and duplex

patch cords with singlemode and multimode

fibers.

The Polish plant in Warsaw achieved outstanding

success. The team implemented

lean line design concepts in copper production.

The plant thus reduced product costs

by a double-digit percentage.

Their share is growing rapidly and will soon

surpass the amount of copper products.

Over the next two years, R&M will have

seamlessly integrated all seven plants into

the global supply chain. This means R&M

can massively extend its position as a flexible,

market- and customer-oriented supplier

of connectivity solutions. The production

network for FO and copper systems unites

the advantages of industrial production with

the flexibility of local assembly shops. Industrial

production covers high-volume requirements

and major projects. Individual assembly

fulfills daily customer requirements in

the regions. This strategy optimizes production

costs and at the same time fulfills our

customers’ high requirements.

“Quality standards introduced

in all production facilities

worldwide are further increasing

our flexibility, reducing delivery

times to the customers and

ensuring that at least one backup

production site is defined for

every product family.”

The plant acquired in 2016 in Milpitas, California,

was completely integrated into the

production network during the reporting

period. It works universally on the 5S lean

management principles and is continuously

increasing productivity. For one of the most

important customers in the US, the team

in California realized a new HD distribution

rack in a very short time.

Central procurement in Wetzikon is being

supported by the experienced R&M procurement

team in Shanghai. It is responsible

for the professional procurement of

top- quality FO components on the Asian

market. FO products are responsible for

around 45 % of production or sales at R&M.

R&M wants to be able to assemble at any

site. Individual market organizations will be

able to assemble copper cables locally. Additional

fast-track activities in the FO sector

will be created in Germany and other regions.

And end-to-end delivery times, from the

customer placing the order to taking delivery,

will be further reduced for all ranges. This will

enable R&M to guarantee that “on demand”

customer wishes will be fulfilled even more

quickly and flexibly – a key factor for future

competitiveness.

Markus Stieger-Bircher, COO

060.2019

R&M Annual Report 2017 | 21


Innovation management

The Smart Path

to Customer Benefit

The new, smart innovation process is a key element of R&M’s growth strategy.

Success has been achieved in all market segments with ambitious

new developments. Customers and the worldwide innovation network

are involved from the very beginning.

For R&M, innovation means far more than

launching new products and inventions.

The innovation process established in 2016

is all about the systematic investigation of

growth areas and customer requirements.

060.2020

In 2017 R&M went one step further and

became a smart innovator. Smart means

identifying potential early on, skillfully implementing

development projects and making

them usable for a specific purpose. R&M

does not leave anything to chance and in

2017 once again invested 5 % of its sales

revenue in research and development.

The innovation process follows the lean

management approach. It includes scouting

and screening, ideation, evaluation and

feasibility analyses, conceptual design and

prototyping as well as realization and implementation

on the market. New ideas and

projects speedily run through three decision

phases. When selecting projects, the company

strives to achieve a balanced relation

between radically new, significant and incremental

innovations.

Networked globally

The globally networked innovation management

process sets its focus on the three

strategic market segments as well as the

R&M innovation fields “Smart Networks” and

“Next Generation Optical Connectivity”. The

current innovation activities are all linked

to familiar trends such as digital transformation,

Internet of Things (IoT), Industry 4.0,

cloud computing etc. These are making ever

higher demands of connectivity and transmission

paths.

With its market and technology radar, R&M

constantly monitors customer feedback,

research studies, multi-source agreements

(MSA), standardization activities, ICT trends

and lots more. Tips from internal sources,

innovation agents and partners are all incorporated

in the search. At the same time,

22 | R&M Annual Report 2017


Innovation management

060.2021

R&M works in different standardization committees

and consortia to spur on innovative

product solutions and new technologies.

This is why, for example, R&M joined the

Consortium for On-Board Optics (COBO)

in 2017. The aim is to move electro-optical

conversion closer to the processors in servers

and switches, enabling a further increase in

the packing density of the connections.

Alongside interdisciplinary specialist teams

from within the company, the innovation

network includes key accounts, universities

and research institutes. Suppliers and industry

experts are also involved. The network

forms R&M’s international innovation community.

Customers as innovation partners

In the conception phase, R&M deploys a

system of fast iterations with selected customers.

This enables potential risks to be

detected at an early stage. The product idea

must illustrate its potential to increase value

added clearly from the outset. It must fit in

with the market position and R&M’s market

segment and growth strategy, and guarantee

customers convincing value added.

In the innovation phase, the development

team constructs the prototypes in accordance

with the Minimum Viable Product

(MVP) principle. Together with key accounts,

it tests the prototypes in their working environment.

In this way, customers collaborate

with the company at an early stage as

co-creators and test users. This is a unique

principle throughout the industry. When all

criteria of this smart innovation process are

fulfilled, the Executive Board decides on the

industrialization and launch in the strategic

market segments.

The two new strategic innovation fields

“Next Generation Optical Connectivity” and

“Smart Networks” are described in detail in

the customer magazines CONNECTIONS

51 and 53. First innovative products and

solutions made it to the implementation

phase in the reporting period and will be

industrialized in 2018.

060.2022

Dr. Peter Cristea, Head of Corporate

Technology and Innovation

“The key to our innovation success

is the early involvement of

customers and good networking

within the industry.”

R&M Innovation Process: Overview Key Elements per Phase

Scouting and Screening

Ideation

Conception and

Prototyping

Implementation

R&M Annual Report 2017 | 23


Intercultural cooperation –

an important part

of the R&M value system

060.2023


Management

Members of the Board of Directors

R&M is an independent Swiss family company. Second-generation owners Martin and Peter Reichle guarantee

sustainability and solid values. They plan, approve and monitor corporate strategy on the Board of Directors

together with four experts from the industry. These specialists bring expertise onto the Board which has been

gained internationally. Their specialist areas are engineering and industrial production, business administration,

marketing, management as well as finances and controlling.

f. l. t. r.: Martin Reichle, Peter Reichle, Hans Hess, Adrian Bult, Andreas Spreiter, Dr.-Ing. Michael Reinhard

030.5685

Hans Hess, Chairman

Swiss nationality (1955), owner of Hanesco

AG; holds Board of Director seats in various

companies (Burckhardt Compression

Holding AG, Comet Holding AG, dormakaba

Holding AG). Previously worked at Sulzer,

Huber + Suhner, and Leica in leading positions,

was the CEO of Leica Geosystems for

10 years. Diploma in Materials Engineering

from the Swiss Federal Institute of Technology

(ETH) Zurich; MBA from the University

of Southern California, USA. Chairman

of Swissmem; Vice-President of economiesuisse.

Martin Reichle, Vice Chairman

Swiss nationality (1967), Co-owner Reichle

Holding, Member of the R&M Executive

Board 1996 – 2012, CEO R&M 1999 – 2011.

Diploma in Electrical Engineering from the

Technical University in Rapperswil. Roles in

Swiss employee associations.

Peter Reichle

Swiss nationality (1964), Co-owner Reichle

Holding, Chairman Reichle Immobilien AG,

Member of the R&M Executive Board

1996 – 2012, COO R&M 1999 – 2011; previously

held management posi tions in production,

logistics and supply chain at R&M

and other companies. Swiss federal diploma

in Business Administration. Roles in Swiss

business organizations and further Board

memberships within industrial companies.

Adrian Bult

Swiss nationality (1959), Chairman of the

Board of Directors at Swissgrid AG, holds

positions on the Board of Directors in various

Swiss companies; previously held positions,

including CEO and CIO, for the Swisscom

group as well as other leading roles within

international marketing and management at

IBM. Studied Business Administration and

Marketing at the University of St. Gallen

(HSG).

Dr.-Ing. Michael Reinhard

German nationality (1956), Member of the

Group Executive Board of Geberit International

AG, responsible for Operations &

Supply Chain; previously held management,

marketing and sales positions at Schott AG

as well as McKinsey & Company. Studied

Mechanical Engineering at the Technical University

in Darmstadt, completed a doctorate

at the German Plastics Institute (DKI).

Andreas Spreiter

Dual Swiss and British nationality (1968),

Member of the Board of Directors and Head

of the Audit Committee at Landis + Gyr Holding

AG since July 2017. Former Group CFO

of Forbo, Group CFO of Landis + Gyr and

held various finance management and controlling

positions at Landis + Gyr / Siemens

Metering. Studied Plant and Production

Engineering at the Swiss Federal Institute of

Technology (ETH) Zurich.

26 | R&M Annual Report 2017


Management

Members of the Executive Board

R&M stands for continuity in management. For the past five years a well-established team has been at the helm

of the growing corporate group. The members of the Executive Board are all distinguished by international

experience, expertise, commitment to lean management and a passion for R&M. The number of R&M employees

has risen under their leadership by 66 % to more than 1,000. Revenues increased by 25 % and the number

of production locations doubled.

030.5679 030.5681

030.5682

Michel Riva, CEO

Swiss nationality (1964), CEO of R&M since

August 2012. Previously held international

management roles, e. g. at F. Hoffmann-

La Roche, Strapex, DuPont de Nemours, and

the Forbo Group. Studied Business Administration

at the School of Economics and

Business Administration (HWV/FH) in Basel;

MBA at IMD Business School in Lausanne;

Advanced Executive Program at Kellogg

Graduate School of Management in Chicago.

Stefan Grätzer, CTO

Swiss nationality (1973), at R&M since 2010,

CTO since 2014, previously Head of Corporate

Development. Previously held positions

at the Institute for Product Design at the

Technical University in Rapperswil (HSR),

Sultex AG, and STEINEL Solutions AG. Studied

Mechanical Engineering at the Technical

University in Rapperswil (HSR), EMBA FH,

Kalaidos Zurich.

Andreas Rüsseler, CMO

German nationality (1967), CMO of R&M

since 2012. Previously worked as an engineer

and marketing manager at Quante AG,

3M, held management positions at Huber +

Suhner AG. Studied Communications Engineering

at the University of Emden (GER);

Master of Advanced Studies in Business

Administration and Engineering at the University

of St. Gallen (HSG).

030.5683 030.5684

Patrick Steiner, CFO

Swiss nationality (1979), at R&M since 2011,

CFO since April 2015, previously Head of

Group Controlling & Accounting Switzerland.

Previously held positions at Jafra Cosmetics

Cham as CFO, Cham, as well as Controller

at Vorwerk Gruppe, Wollerau. Swiss federal

diploma as an Expert in Accounting and

Controlling.

Markus Stieger-Bircher, COO

Dual Swiss and British nationality (1960), at

R&M since 2006, COO since 2011, previous ly

Head of Supply Chain Management. Former

roles include engineer at ABB and Head of

Logistics at Bühler Uzwil. Diploma in Mechanical

Engineering from the University of

Applied Sciences Northwestern Switzerland

(FHNW) in Windisch, and Diploma in Industrial

Engineering (Swiss Technical Association,

STV); MBA from City University, Seattle.

R&M Annual Report 2017 | 27


Owners

The Power of

Esteem

The R&M family is growing. Our Group was once again

able to welcome new customers, partners and employees

to our midst in the financial year 2017.

Together they face the daily challenges of the market.

And they are successful because the collaboration

is based on esteem and respect.

As owners, we represent the R&M corporate

culture on site. We encourage open discussion

to ensure we understand our customers’

needs and learn from them. We ask about

what they feel could be optimized and

want to immerse ourselves in the markets.

Whether in Europe, Asia, the Middle East,

the US – or now in Latin America.

Our visits to customers, suppliers and partners,

as well as meetings at trade shows and

network days, all show that our contacts

appreciate the personal touch. The entire

company, including the owners, wants to be

a partner with clear values: We are approachable,

transparent, honest, expert, trustworthy,

respectful, innovative, committed long term,

reliable, cooperative and inspiring. These are

key factors for both our current and future

success.

We are resolutely continuing the growth

strategy. Where we reach capacity limits – as

is the case in India, Bulgaria and Poland – we

make fast decisions. New acquisitions will

continue to be integrated into the Group

quickly in the future; solid family companies

with similar values. Together with our customers,

we realize top-quality connectivity

solutions – whether for data centers, offices,

FTTH networks, airports, ships or hospitals.

We will do everything in our power to successfully

master future challenges in the

familiar way. With esteem and customer

focus.

Martin and Peter Reichle

Owners and Members

of the Board of Directors

The results of the 2017 financial year confirm

that, with this attitude, R&M is on the right

track. With intense market development

measures and the necessary cost discipline,

the Group once again achieved good results.

These results are the work of more than

1,000 employees in seven plants and more

than 35 branches. We are most grateful to

them all and hold them in great esteem.

28 | R&M Annual Report 2017


060.2024

Peter Reichle, Martin Reichle

More than 1,000 employees in seven plants and

more than 35 branches contributed to the

good results. We are most grateful to them all

and hold them in great esteem.

R&M Annual Report 2017 | 29


Facts & Figures

Key Figures

225

200

175

150

125

100

75

50

25

0

6

5

4

3

2

1

0

2013 2014 2015 2016 2017

Sales

in millions of CHF, consolidated 197.3 211.7 205.1 229.4 232.1

Growth

compared with the previous year 7.4 % 7.3 % –3.1%* 11.8 % 1.2 %

* ( exchange-rate-adjusted: + 2.2 %)

EBIT

as a % of sales 2.5 % 4.3 % 4.9 % 6.6 % 6.1 %

International Sales Revenue

Revenue generated outside of Switzerland was 78 % of total sales.

Development Expenses

Average development expenditure over the last 5 years: 4 % of revenue.

Innovative Capacity

23 % of the revenue was generated with products less than three years old.

Number of Employees

as of December 31, 2017: Total 1,044

6 % 42 % 25 % 14 % 13 %

Research and

Development

Production

Sales and

Marketing

Purchasing

and Logistics /

Distribution

Management and

Administration

30 | R&M Annual Report 2017


060.2025

Across the seas with R&M –

cabling solutions suitable for the use

on the high seas are considered

increasingly.


Reichle & De-Massari AG

Binzstrasse 32

CHE-8620 Wetzikon

Phone +41 (0)44 933 81 11

Fax +41 (0)44 930 49 41

www.rdm.com

R330346/e/03.2018/SIE Printed in Switzerland – © Reichle & De-Massari AG – All rights reserved

Photo: Office for Metropolitan Architecture (OMA)

060.2000

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