Dornbirn, Austria – As announced in an ad hoc information already, the third quarter of the current financial year at the Zumtobel Group was again marked by a clear decline in revenues, in particular in Great Britain, as well as by negative currency translation effects, aggressive price competition and operational challenges. Despite a 4.6 percent decline in revenues after adjustment for currency translation effects, in the traditionally weak third quarter the cost cutting measures already introduced enabled the Group to post balanced operating earnings of EUR 0.2 million. The new Zumtobel Group Services business division showed very positive development.
The newly formed Executive Board is sparing no effort to define a strategy for the future and deal with operational challenges. Alfred Felder, Acting President of the Executive Board, explains: “For the new Executive Board, the developments we see in the third quarter spur us on more than ever to overcome the challenges we face. For the coming months we have defined a clear agenda, aimed at stabilizing operational developments and consistently pursuing the cost savings measures already introduced.”
“At the same time, together with a leaner management team we are working on a strategic roadmap for the future of the Zumtobel Group. In this respect we will be defining clear measures and targets and at the same time reviewing all our structures and procedures, as well as our markets and product portfolios without any fixed expectations regarding the results,” says Alfred Felder and announces results for June 2018 already, when the annual financial statements are published..
Negative currency translation effects and downturn in Great Britain
In the first nine months of the current 2017/18 financial year, Group revenues fell by 6.7% year on year to EUR 908.1 million (previous year: EUR 973.4 million). This revenue development was influenced by strong negative currency translation effects of EUR 20.7 million, which resulted primarily from the increase in the value of the euro versus the British pound and the Swiss franc. After adjustment for these effects, revenue declined by 4.6% for the reporting period. In regional terms, the decline in revenues was particularly marked in Great Britain, the most important single market for the Zumtobel Group, where revenues were down by more than 20%. Growth with LED products remains unbroken. Revenues from the sale of LED products rose by 1.3% year on year to EUR 719.0 million, which means that the LED share of Group revenues increased from 72.9% to 79.2% within 12 months.
Services business division posts double-digit growth – Trade fair Light + Building
Sound development was recorded by the new Zumtobel Group Services (ZGS) business division, which was successfully positioned in the marketplace in the spring of 2017. Within the ZGS brand, the lighting group bundles all project- and software-oriented services under a single roof. In this sector, revenues showed a 12.1% increase compared to the first nine months of the previous year to reach EUR 137.4 million, which corresponds to 15.2% of Group revenues. The service offering will also be a focal point of the Zumtobel Group’s presence at this year’s Light + Building, the world’s largest lighting trade fair which takes place in Frankfurt in March. With a stand covering 1,280 square metres, the Zumtobel Group will be one of the main exhibitors.
Profitability in the first three quarters well down on previous year
Group EBIT adjusted for special effects fell to EUR 20.5 million in the first nine months of 2017/18 (previous year: EUR 62.0 million). This was also reflected in the return on sales, which dropped from 6.4% to 2.3%. Profitability in both the Lighting and Components segments was negatively influenced by substantial revenue declines and aggressive price competition. Net profit for the first three quarters was down at minus EUR 1.7 million (previous year: EUR 29.8 million).
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