Revenue increases in growth areas in the first quarter of 2017 – Gigaset expands its strategic position in Europe

  • Consolidated revenue in the Consumer Products segment falls to €58.4 million for market-related reasons (Q1 2016: €61.9 million)
  • Cost-cutting measures are having an impact: EBITDA rises sharply to €3.1 million (Q1 2016: €1.2 million)
  • Outlook remains positive: New products will make a double-digit contribution to revenue as early as this year

Munich, May 19. 2017 - Gigaset AG (ISIN: DE0005156004), an internationally operating company in the area of communications technology, today published its business figures for the first quarter of 2017. Consolidated revenue fell to €58.4 million (previous year: €61,9 million) in a market that remains competitive and continues to decline, especially in the Consumer Products segment.

“Sharp increases in revenue at the Business Customers and Mobile Devices Business Units and a further improvement in earnings margins show that the restructuring and related operational realignment are bearing fruit and that we’re on the right track with the cost-cutting measures we’ve initiated and the new, innovative products we’re rolling out,” states Hans-Henning Doerr, CFO of Gigaset.

After the measures have been fully implemented, Gigaset will cut costs by an annual amount in the double-digit million euro range as of next year. The funds obtained as a result are to be used as of this year for investments in future growth areas, new products and subject areas that will be implemented successively from 2017 onward and help grow revenue. Over €10.0 million more than in 2016 will be invested in this. One particular focus is on further expansion and networking of cloud and Internet-based voice solutions.

The result from core business before depreciation and amortization (EBITDA) was increased significantly by 156% to €3.1 million (previous year: €1.2 million), while the consolidated net loss for the year fell to €1.5 million (previous year: net loss of €2.6 million).

Revenue by Business Unit
In the Consumer Products segment, Gigaset was able to strengthen its leadership in its key European markets, in particular thanks to growth in Germany and the Netherlands, as well as good trends in France and Italy (EU 4), but was not able to buck the general decline in the market. The company is countering that by rigorously rolling out new products and related investments. The Consumer Products segment thus generated revenue of €51.9 million in the first quarter (previous year: €45.8 million).

The Business Customers segment also performed positively, growing its revenue by 22% to €10.7 million (previous year: €8.8 million). The main reason for this was the increase in revenue from business with existing and new large OEM customers.

The Home Networks segment performed below expectations in a currently stagnating market environment, but still posted revenue of €0.6 million or around the level of the previous year (€0.6 million). In particular, Gigaset sees growing demand in the field of building security in the future and has responded to that by clearing positioning its Home Networks products with a focus on that.

Gigaset more than doubled its revenue from mobile devices year on year to €1.3 million (previous year: €0.6 million) and has complemented its product portfolio in a strategic and pinpointed way with its new entry-level model, the GS160. The product portfolio is to be expanded further in the course of 2017. “Smartphone business is running as expected. Market researchers see great potential in the mid-range and low price segment for brand products that boast features of expensive models and yet are attractive value for money. That is precisely where we’re pitching our portfolio and will present further products this year,” says Klaus Weßing, CEO of Gigaset.

Outlook remains positive
The company will press ahead rigorously with its realignment. That means: winning market share in Consumer Products business, growing revenue at Business Customers, improving its market position in the Home Networks segment, and building and expanding its own smartphone business with Mobile Devices. The company will still focus strongly in 2017 on establishing new products and business segments and will increase its expenditure, mainly on marketing and investments. The company therefore expects for the current fiscal year: 

  • An increase in revenue over 2016 by a low double-digit million amount thanks to the restructured smartphone business.
  • A result from core business before depreciation and amortization of between €15 million and €25 million. Operational performance will be impacted by a further decline in gross profit in the Consumer segment, an increase in gross profit in the Business Customer and Home Networks segments and an increase in expenditure on development and marketing.
  • Due to the considerable investments and expenses for the social plan and provisions for risks from past tax audits for previous years, the company expects a negative free cash flow in the medium single-digit million range.

Overview of the key figures

€ million

Jan. 1 - Mar. 31, 2017

Jan. 1 - Mar. 31, 2016[1]

Consolidated revenue

58,428

61,941

Result from core business before depreciation and amortization (EBITDA)

3,076

1,204

Earnings before interest and taxes (EBIT)

-413

-1,860

Consolidated net loss for the year

-1,515

-2,572

Free cash flow

-26.4

-15.2

Diluted earnings per share in €

-0.01

-0.02

€ million

Mar. 31, 2017

Dec. 31, 2016

Total assets

195.0

221.7

Consolidated equity

15.5

17.8

Equity ratio (in %)

12.6

12.4

Number of employees

984

1,223

 


 

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