Annual Financial Report 2017/18 (May 2017 April 2018) Zumtobel Group's profitability impacted by revenue declines and intense price competition

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1 Press Release Dornbirn, 28 June Annual Financial Report 2017/18 (May 2017 April 2018) Zumtobel Group's profitability impacted by revenue declines and intense price competition Group revenues decline by 8.2% (FX-adjusted: minus 5.8%) LED share of Group revenues rises to 79.6% (EUR million) Adjusted Group EBIT falls to EUR 19.7 million Net profit negative at minus EUR 46.7 million Strengthening of technology position with EUR 73.4 million invested in R&D 2018/19 as a year of transition for stabilisation and strategic reorientation Dornbirn, Austria The 2017/18 financial year was not only characterised by key strategic steps to improve the competitive position of the Zumtobel Group, but also a reduction in the Group s profitability attributable to a substantial decline in revenues and intense price competition. The business development of the Zumtobel Group in the last financial year was disappointing. The loss of confidence on the part of key stakeholders including customers and the capital market and a difficult industry environment showed that strategic and organisational adjustments are required to successfully position the Zumtobel Group for the future. In recent months the newly installed Executive Board has introduced urgently required operating measures to stabilise the business and we are working intensively on the development of a future-oriented strategy for the Zumtobel Group. The strategic realignment of the Zumtobel Group will receive our full attention and commitment, says Zumtobel Group CEO Alfred Felder. Revenues impacted by negative currency effects The Zumtobel Group recorded a year-on-year decline of 8.2% in revenues to EUR 1,196.5 million for 2017/18 in a challenging industry environment (2016/17: EUR 1,303.9 million). Revenue development was influenced by substantial negative currency translation effects of EUR 31.5 million, above all from the appreciation of the euro versus the British pound and the Swiss franc. After an adjustment for currency translation effects, revenues declined by 5.8% in 2017/18. An analysis by region shows a particularly strong decline of more than 20% in Great Britain, the most important market for the Zumtobel Group. The LED share of Group revenues increased from 73.6% to 79.6% over the twelvemonth period. Significant decline in profitability The 2017/18 financial year was characterised by key strategic steps to improve the competitive position of the Zumtobel Group. Important milestones to support profitability over the medium-term included the start of construction on a new plant in Serbia in July 2017, closure for the sale of the Zumtobel Group plant in Les Andelys (France) in October 2017, and the decision to gradually transfer parts of the components production to Serbia in the coming years. However, these long-term steps and recently implemented cost-reduction measures were unable to prevent a reduction in Group EBIT adjusted for special effects to EUR 19.7 million (2016/17: EUR 72.4 million). The drop in the Group s profitability during the reporting year is attributable above all to a substantial decline in revenues as well as very aggressive price competition. Consequently, net profit fell from EUR 25.2 million in the previous year to minus EUR 46.7 million in 2017/18. As a result of the lower cash flow generated by the operating business and increased investment activity, free cash flow dropped to minus EUR 23.9 million (2016/17: plus EUR 69.4 million) in the

2 reporting year, while net debt rose by EUR 55.3 million to EUR million as of 30 April In view of the substantially weaker operating development, no distribution of dividends is planned for the 2017/18 financial year. 02 Investment in the future of light In 2017/18 the Zumtobel Group invested a total of EUR 73.4 million in research and development (R&D) aimed at further strengthening the Group s outstanding technology position. This is reflected not least in the Group s extensive patent portfolio. The number of active commercial property rights currently 8,128, including 4,728 patents speaks for the company s innovative strength. In addition to advancing LED technology, R&D also focuses on the increasing intelligence of the systems. Global workforce totals 6,224 full-time equivalents The adjustment of Zumtobel Group s personnel capacity to reflect the difficult market environment and the related necessary restructuring measures have led to a decline in the workforce during 2017/18 and in previous years. On 30 April 2018, the Zumtobel Group had 6,224 full-time employees worldwide (including contract workers). This represents a year-on-year workforce reduction of 338 employees, focused primarily in the production area. Compared to 30 April 2017, the size of the workforce in Austria fell by 3.7% to 2,339 full-time equivalents, with a 3.9% reduction at the Dornbirn location to 2,072 employees. On 30 April 2018, the Zumtobel Group had 106 apprentices worldwide. 2018/19 as a year of transition for stabilisation and strategic realignment The Zumtobel Group Management Board sees 2018/19 as a transitional year aimed at the continuing stabilisation of operations and the re-establishment of a strong foundation for future profitable growth. This will require fundamental organisational and strategic changes alongside targeted restructuring and cost-reduction measures in all functional areas. Specific details will be defined during the current strategy development process, which will include open discussions aimed at analysing all structures and corporate processes as well as business areas, markets and brand and product portfolios. The Executive Board will present the new strategy for the management of the Group as well as revised medium-term objectives at the latest by 4 September 2018 in conjunction with the announcement of first-quarter 2018/19 results. Due to the upcoming major changes in the Group, the intense price competition in the lighting industry and the noticeable deterioration in the operating environment in Great Britain, which is the Zumtobel Group s most important market, the forecast for revenues and earnings in the 2018/19 financial year is surrounded by substantial uncertainty. The Zumtobel Group expects a further decline in revenues, especially during the first half-year. For the full 2018/19 financial year, the Management Board has set the target of generating a slight year-on-year improvement in adjusted Group EBIT (FY 2017/18: EUR 19.7 million). Further non-recurring charges associated with the Group s strategic realignment are also highly probable in the coming quarters.

3 The 2017/18 financial year at a glance 03 in EUR millio n 2017/ /17 Change in % Revenues Zumtobel Group 1, , Lighting Segment Components Segment Adjusted EBIT as a % of revenues 1.6% 5.6% EBIT <-100 as a % of revenues -0.6% 3.5% Net Profit/Loss <-100 as a % of revenues -3.9% 1.9% in EUR millio n 30 April April 2017 Change in % Total assets , Equity Equity ratio in % 27.2% 32.8% Net debt Headcount incl. contract w orker (full-time equivalent) 6,224 6, /18 Revenues in EUR million Change in % D/A/CH Northern Europe Benelux & Eastern Europe Southern Europe Asia & Pacific Middle East & Africa Americas Total 1,

4 Pictures: 04 acdc: Osijek Bridge acdc's BLADE linear and FUSION spotlights provide a dynamic, full-colour lighting concept to emphasise the beauty of the bridge in Osijek, Croatia, and underline its iconic status. The Osijek pedestrian bridge spans the Drava River and is one of the city's landmarks. Thorn: Hong Kong International Airport Having already installed products from the Thorn portfolio in Terminal 1, Thorn also received the order for the Terminal 2 refurbishment project. Thanks to the HiPak LED high-bay from Thorn, energy consumption was reduced and the number of luminaires required was halved. The soft and even light coverage creates a pleasant environment for passengers and staff. Tridonic: Ulm Minster In May Tridonic customer Ingenieure Bamberger won two renowned awards for the joint Ulm Minster project: the Deutsche Lichtdesign-Preis 2018 and the international Lighting Design Award LED drivers from Tridonic are an important element of this sophisticated solution. They allow LED luminaires and drivers to be located at a significant distance from each other, enabling a particularly slim luminaire design. They also allow the LEDs to be operated efficiently and controlled in a variety of ways. Copyright: bildhübsche fotografie Andreas Körner

5 05 Zumtobel: New halls at Messe Dornbirn exhibition centre, Austria The innovative lighting concept from Zumtobel showcases the modern architecture of Messe Dornbirn. The key challenge for the lighting system was the spatial dimensions involved, including halls up to 75 metres long and 11 metres high. Zumtobel has installed innovative special solutions with TECTON Balanced White and PANOS infinity in tunablewhite. Zumtobel Group Services (ZGS): E. Leclerc Langon Zumtobel Group Services (ZGS) helped retailer E. Leclerc in Langon, France, to strengthen its bricks-and-mortar retailing through digitalisation and, in a pilot project, tested the added value of lighting concepts linked to the Internet of Things (IoT) for retailers. Multi-brand lighting solution: Oslo airport The Zumtobel Group has equipped the new terminal at Oslo's airport with a modern lighting solution. Within the scope of the project, more than 21,200 Zumtobel and Thorn brand LED luminaires with Tridonic technology inside were installed by now. Furthermore, the terminal was equipped with a smart lighting control and emergency lighting system from Zumtobel Group Services (ZGS). Copyright: Ivan Brodey Information This press release and the accompanying high-resolution images can be downloaded at: Media Contact Team Corporate Communications Phone +43 (0) press@zumtobelgroup.com Contact Investor Relations Harald Albrecht VP Investor Relations Phone +43 (0) harald.albrecht@zumtobelgroup.com

6 06 About the Zumtobel Group: The Zumtobel Group is an international lighting group and a leading supplier of innovative lighting solutions, lighting components and associated services. With its brands, Thorn, Tridonic and Zumtobel, as well as acdc, ThornEco, and Zumtobel Group Services (ZGS), the Group offers its customers around the world a comprehensive portfolio of products and services. The Group s know-how about the effects of light on people, acquired over decades, forms the basis for the development of innovations and for accessing new fields of business. In the lighting business, the Group with its Thorn, Zumtobel and acdc brands is the European market leader. The ThornEco brand serves the electrical wholesale sector with a tailored portfolio of products. Through its lighting components brand, Tridonic, the Zumtobel Group plays a leading role worldwide in the manufacture of hardware and software for lighting systems (LED light sources and LED drivers, sensors and lighting management). Zumtobel Group Services offers one of the most comprehensive service offerings in the entire lighting industry, including consultation on smart lighting controls and emergency lighting systems, light contracting, design services and project management of turnkey lighting solutions, as well as new, data-based services focused on delivering connectivity for buildings and municipalities via the lighting infrastructure. The Group is listed on the Vienna Stock Exchange (ATX Prime) and on the balance sheet date (April 30, 2018) employed a workforce of 6,224 employees. In the 2017/18 financial year, the Group posted revenues of EUR 1,196.5 million. The Zumtobel Group is based in Dornbirn in the Vorarlberg region of Austria. For further information, please visit