Swiss-based The Kudelski Group, a world leader in digital security, will establish its North American headquarters in Phoenix, Arizona.

André Kudelski, Chairman/CEO of the Group, said,“The Group continues to grow mainly outside of Europe. The timing is therefore appropriate to adapt our organization to the new market paradigm in order to ensure sustainability in a changing geographic and commercial environment.”

Establishing a second headquarters in the United States will also help expedite the commercial deployment of the Group’s innovation activities, such as its cybersecurity and intellectual property initiatives. The Group’s worldwide headquarters will remain in Cheseaux, Switzerland, with several high-level Group management and support functions relocated to Phoenix. Cheseaux will develop further as an excellence center in the field of security technologies.

“By taking these measures, the Kudelski Board of Directors wishes to establish a strong foothold in the US, providing the Group with better access to the world’s largest market while showcasing the high-quality innovation and engineering of its Swiss teams. A stronger presence in the US will also enable the Group to recruit the appropriate profiles for the development of new business activities,” a company spokesperson said.

As a consequence of the transformation, a number of employees will be invited to move to Phoenix. Internal transfers between the two sites will be favored, in order to preserve the company’s unique DNA. Several Group support functions will be transferred to Phoenix as of this summer, in particular management positions within the Group finance and legal teams, the company explained.

“By taking this step, the Group will become closer to the North American market and be able to better leverage growth opportunities that are developing there. At the same time, the Group will be able to mitigate the effects of the strong Swiss franc by progressively shifting its center of gravity and by reporting its financial results in US dollars beginning as of its 2017 fiscal year,” officials added.

Historically, the Group was able to generate a substantial proportion of its business from Switzerland and Europe due to its margin structure and the strong dynamics of the European markets. Since 2011, the situation has changed dramatically, and a number of challenges have emerged, company officials said.

“Today, the Group’s key growth opportunities are primarily outside of Europe, particularly in the US. The outlook in Switzerland and Europe in respect of the Group’s core business and for new technology is less promising, as demonstrated for instance by the weaker dynamics of the European cybersecurity market compared to the United States.

Moreover, the strength of the Swiss franc continues to affect the profitability of the Kudelski Group and more specifically its capacity to invest over the long term, as the Group has less visibility of its future results due to the fact that the majority of the Group’s revenues is generated in currencies other than the Swiss franc,” a spokesperson said.