- Stable consolidated sales revenues from continuing operations in the amount of EUR 205.7 million in the first half of 2012 (H1/2011: EUR 210.4 million)
- EBITDA from continuing operations at EUR 10.7 million (H1/2011: EUR 25.6 million) due to investments in new growth businesses and innovations as well as a strong US dollar
- Efficiency and cost-savings program over at least EUR 30 million annually started to ensure long-term sustainable profitability
- The cordless telephone market remaines under pressure due to the euro crisis in core markets
- CEO Charles Fränkl: "We are expanding our business through the 'Gigaset 2015' strategy to include internet-based communications solutions, where we are making targeted investments in sustainable profitability and growth."
Gigaset AG, one of the worldwide leading suppliers of communications technology and Europe's market leader in DECT telephones, generated EUR 205.7 million in sales in continuing operations in the first half of 2012, and is thus approximately at the same level as in the previous year (H1/2011: EUR 210.4 million). The company increased its market share in Europe by 1-2 percent in a declining market. In the meantime, the company holds a market share of 27 percent in unit volume and 33 percent in sales in the particularly important European business.Gigaset announced an efficiency and cost-savings program to ensure the long-term sustainable profitability of its business. In addition, the company substantiated its "Gigaset 2015" strategy. Thus, the company is striving to expand its business to include Internet-based communications solutions by growing its sales to EUR 500-560 million in 2015.
Gigaset AG's figures in the second quarter of 2012, continuing operations:
- consolidated sales revenue: EUR 93.4 million (Q2/2011: EUR 95.4 million)
- EBITDA: EUR 0.01 million (Q2/2011: EUR 11.2 million)
- EBITDA margin: 0.01 percent (Q2/2011: 9.7 percent)
- consolidated profit: EUR -3.8 million (Q2/2011: EUR 3.6 million)
With respect to the first half of 2012, continuing operations:
- Consolidated sales revenue: EUR 205.7 million (H1/2011: EUR 210.4 million)
- EBITDA: EUR 10.7 million (H1/2011: EUR 25.6 million)
- Consolidated profit: EUR 0.13 million (H1/2011: EUR 6.6 million)
- Equity ratio as of June 30, 2012: 27.6 percent (December 31, 2011: 24.5 percent)
- Consolidated equity as of June 30, 2012: EUR 76.3 million (December 31, 2011: EUR 76.2 million)
Efficiency program should lead to annual savings of at least EUR 30 million
The decrease of net operating income (EBITDA) in the second quarter, which is traditionally weaker due to seasonal effects, can be mainly attributed to investments. In total, Gigaset invested EUR 9.1 million within the framework of the “Gigaset 2015” strategy in the development of new products, their branding, the development of an online shop, and in process optimizations. This should pay off in higher profitability in the medium term. In addition, the strong US dollar and relatively weak euro resulted in significant currency effects. Gigaset's procurement markets lie in particular in the US dollar zone.
As a reaction to the decrease in net operating income (EBITDA), the company started a Group-wide cost-savings and efficiency program, which should lead to permanent savings of at least EUR 30 million annually and take full effect no later than 2014. The first significant effects are expected already in 2013. A reduction in the workforce is not being ruled out and discussions with employee representatives have already been taken up in some countries.
"Gigaset 2015" strategy: EBITDA margin of 10-13 percent by 2015
In addition, the company substantiated its "Gigaset 2015" strategy, whose key points were presented during the annual shareholders' meeting held on June 12, 2012. Gigaset had announced its intention to consistently take advantage of its opportunities for growth in three segments in the future: The communications company profited in its core business Consumer Products (formerly: Cordless Voice) from the consolidation of the market and its premium strategy, which guarantees considerably higher margins for each product.
In its corporate customer segment Business Customers, Gigaset is concentrating on IP-based offers for small and medium-sized enterprises – in particular in the area of Gigaset pro. This market is growing annually by 20 percent. Over the third segment Home Networks, Gigaset is striving to make the Gigaset stations installed in 75 million households into a control center for home networks. Gigaset plans to enter the mass market in this area. The associated overall market is growing by 40 percent annually and will reach a volume of EUR 850-900 million in 2015 according to studies, whereby the communications specialist for the home sees advantages that will be crucial for success in its well-known brands, excellent distributions, and experienced team of developers.
Charles Fränkl, Chairman of the Executive Board of Gigaset AG, said: "Our 'Gigaset 2015' strategy calls for expanding our business over a modular, expandable, open platform to include Internet-based communications solutions, where we are making targeted investments in sustainable profitability and growth. While we expect a slight decrease in sales for 2012 in our core business Consumer Products due to the euro crisis, we expect significant market successes in the Business Customers segment starting in 2013 and in the Home Networks segment in 2014. In 2015, we are striving for total sales revenues of EUR 500-560 million with an EBITDA margin of 10-13 percent for Gigaset AG."
Prototypes and innovations for IFA 2012 in Berlin
Gigaset is expecting a market volume of EUR 1.2-1.4 billion in the corporate customer segment Business Customers in 2015. Sales should lie between EUR 70-90 million. In the Home Networks segment, Gigaset expects an addressable market volume of EUR 850-900 million by 2015. The company is aiming for sales between EUR 30-50 million in this segment.
Prototypes and corresponding product innovations and further developments will be presented for the first time at the trade show IFA in Berlin at the end of August/beginning of September 2012. They show the company's strategic and evolutionary expansion to include new growth fields as part of the Gigaset 2015 strategy.
Due to the persistent crisis in the euro zone, the resulting increase in consumer restraint, and the euro which is expected to remain weak, the company confirms its outlook for the full year 2012 communicated on July 27, 2012. For 2012, Gigaset expects:
- a single-digit percentage decrease in sales
- earnings before interest, taxes, depreciation and amortization (EBITDA) significantly below that of the previous year in the single-digit million range
- a negative free cash flow in the low double-digit million range
Gigaset AG, Munich, is a globally operating company in the area of communications technology. The Company is Europe's market leader in DECT telephones. The premium supplier ranks second with more than 1,700 employees and a market presence in more than 70 countries. Shares of Gigaset AG are traded in the TecDAX (Prime Standard) of the Frankfurt Stock Exchange under the symbol 'GGS' (ISIN: DE0005156004).
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