DGAP-News: Gigaset AG: Gigaset systematically implements strategy and launches innovation drive with 'Gigaset elements'
(firmenpresse) - DGAP-News: Gigaset AG / Key word(s): Final Results
Gigaset AG: Gigaset systematically implements strategy and launches
innovation drive with 'Gigaset elements'
28.03.2013 / 07:25
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Gigaset systematically implements strategy and
launches innovation drive with 'Gigaset elements'
- Further expansion of market share in 2012 in a tough climate by two
percentage points in terms of units and revenue
- Consolidated revenue from continuing operations EUR419,6 million (2011:
EUR458.6 million)
- EBITDA from continuing operations EUR -5.8 million due to non-recurring
special effects for restructuring and investments in new business
segments (2011: EUR51.5 million)
- Given the anticipated positive impact of the cost-cutting program, a
positive EBITDA well up on the previous year is expected again for 2013
- Innovation drive announced for 2013
- CEO Charles Fränkl: 'In 2012 we initiated our transformation into a
digital company. The focus in 2013 is on implementing our 'Gigaset
2015' strategy. Thanks to the launch of 'Gigaset elements' and new
Android-based products, we will take a further large step to creating a
broader portfolio and improving our profitability.'
Munich, March 28, 2013. Gigaset AG performed in line with its forecasts,
continued to drive its 'Gigaset 2015' strategy and so created a crucial
foundation for profitable growth in fiscal year 2012. At the same time,
2012 was characterized by a sharp decline in the overall market in the
company's core business, digital cordless phones:
- Consolidated revenue from continuing operations in 2012: EUR419.6
million (2011: EUR458.6 million)
- EBITDA from continuing operations in 2012: EUR -5.8 million (2011:
EUR51.5 million). Excluding non-recurring special effects for
restructuring and investments in new business segments, the Group would
have been able to post a positive EBITDA.
- Consolidated earnings from continuing operations in 2012: EUR -28.2
million (2011: EUR20.5 million)
- Free cash flow from continuing operations in 2012: EUR -33.1 million
(2011: EUR23.7 million)
Further expansion of market share in a tough market
The overall market for cordless phones in Europe declined sharply in 2012,
namely by around 13 percent in terms of revenue. At the same time, Gigaset
was able to grow its market share in its core business of digital cordless
phones in its focal European markets by two percentage points (by units) to
28 percent and by two percent (by revenue) to 34 percent.
Growth was slightly above-proportionate in the focal markets of the UK and
Russia, which are of particular strategic importance for Gigaset and where
Gigaset recorded double-digit revenue growth.
In the fourth quarter of 2012, Gigaset AG again won market share in the
markets observed by it, even though the overall market declined sharply.
- Consolidated revenue from continuing operations was EUR123.5 million in
Q4/2012 (Q4/2011: EUR142.5 million)
- EBITDA from continuing operations was EUR -5.5 million in Q4/2012
(Q4/2011: EUR11.1 million)
- Consolidated earnings from continuing operations in Q4/2012: EUR -13.3
million (Q4/2011: EUR6.4 million)
- Free cash flow from continuing operations in Q4/2012: EUR 4.0 million
(Q4/2011: EUR16.5 million).
'Given the fact that we initiated restructuring of our company last year,
revenue and operating income are in line with our expectations,' said
Gigaset's CEO Charles Fränkl. 'Thanks to our continuing increase in market
share, we see ourselves as being a winner from the consolidation of our
core market. Our measures to increase efficiency are having a clear impact.
We are fully on schedule to achieve our ambitious goal of permanently
cutting costs by EUR30 million a year.' Gigaset AG has already secured more
than EUR12 million in permanent savings for 2013 from personnel measures
alone. The whole cost-cutting and efficiency program, which also comprises
reducing non-personnel and service costs, will unfold its full impact in
2014. In addition, Gigaset is currently reviewing its profitability in
markets outside Europe in order to further improve its results of
operations.
Innovation drive in 2013: 'Gigaset elements' to be launched in Q2. New
Android products.
Gigaset AG will launch its new connected home solution 'Gigaset elements'
in the second quarter of 2013. 'In 2012 we initiated our transformation
into a digital company. The focus in 2013 is on implementing our 'Gigaset
2015' strategy. Thanks to the launch of 'Gigaset elements' and new
Android-based products, we are embarking on an innovation drive and will
take a further large step to creating a broader portfolio and improving our
profitability. With 'Gigaset elements', we're extending our business model
as a hardware vendor to include the dimension of an Internet service
provider, which will also open up opportunities for new business models.
The launch of Android-based products will offer greater convenience for
users who are accustomed to smartphones, cut development costs and enable
faster product cycles,' stated Fränkl.
'Gigaset elements' is a sensor- and cloud-based solution for home networks.
Cutting-edge sensors are combined with each other and linked with an
Internet-capable DECT ULE base station and a secure Web server. That
permits a large number of applications in the home. The intelligent,
learning system will be able to be extended in a modular fashion. At a
price of less than EUR200 for a Starter Kit, the system is intended to be
suitable for the mass market.
According to a study by Strategy Analytics, the market for smart home
systems&services (SHSS) in Western Europe has a highly promising future.
According to it, the number of connected homes is expected to increase from
5.8 million in 2012 to 33 million by 2017. That gives technology and
service providers new opportunities for expansion in the SHSS arena.
Whereas just three percent of all Western European households could be
classified as 'smart homes' in 2012, that figure is anticipated to reach 18
percent by 2017. The market research institute expects the sales potential
to triple to around USD 10 billion in the next five years.
Quick and rigorous restructuring of the company
In order to help it shape increasing consolidation in its core market,
Gigaset AG restructured itself in 2012 by means of its cost-cutting and
efficiency program. As part of the new 'Gigaset 2015' strategy, it extended
its business model to include the growth areas of business customers and
solutions for home networks. Its core business was pooled and supplemented
in the 'Consumer Products' unit. All of the new units will operate with a
strong entrepreneurial mindset and thus have the freedom they require to be
successful in their respective markets. As a result, the company's
competitiveness should be strengthened and future growth enabled. A new
Product Center was established in Düsseldorf in January 2013 and
underscores Gigaset's new setup. It is intended to create significant
increases in efficiency thanks to an optimized geographical lineup for the
three Business Units of Consumer Products, Business Customers und Home
Networks.
Outlook
The measures required to ensure long-term growth were initiated in 2012. To
counter the continuing difficulties in the company's core market,
investments in establishing new, promising business segments and product
groups are required. Gigaset AG therefore expects from continuing
operations in the current fiscal year:
- A further decline in revenue in its core business in a high
single-digit to low double-digit percentage range.
- Given the anticipated positive impact of the efficiency program, a
positive EBITDA well up on the previous year is expected again.
- A negative free cash flow in the middle double-digit million range due
to the required investments.
For 2014, Gigaset AG expects initial and significantly positive effects on
revenue, earnings and cash flow from establishment of the new business
segments. The company therefore assumes that its revenue from continuing
operations will grow and its EBITDA will improve further in the course of
2014.
Overview of development of the Business Units
Consumer Products
As the innovation driver in the field of DECT-based cordless phones,
Gigaset AG won various awards in the past fiscal year for the new SL 910
touchscreen phone it launched in 2011. For example the SL 910 was voted
'Product of the Year 2012' by readers of the telecommunications magazine
'connect' in the cordless phone category. Overall, Gigaset products
occupied the first five and eight of the first ten positions in connect's
list of top cordless phones. According to the Society for Consumer
Research (GfK), in the fourth quarter the SL 910 ranked third in terms of
revenue in the European markets observed by Gigaset1.
The portfolio of Gigaset cordless phones was again expanded successfully in
2012 to include a large number of innovative models. For example, four
models of the A series (the A 120, A 200 A, A 220 and A 220 A), the
cheapest DECT phone family ever manufactured in Germany, were launched in
April. According to the GfK, the A 120 currently has a position among the
top 10 in the markets observed by Gigaset1. The first cordless hybrid
phone, the S 820 and S 820 A, that can be operated by touchscreen and keys
was launched at the end of August. The product came top of connect's rating
in the fixed-network phone category and was given the test verdict 'Very
good.' Gigaset won the prestigious 'if Design Award' for the design of its
C 620/C 620 A family phone. The product will come on the market in the
second quarter of 2013.
The high rate of innovation and constantly high quality ('Made in Germany')
of Gigaset's products mean the company is able to lessen the impact of the
general decline in prices. Gigaset still achieves an average selling price
of EUR9 more than the competition and so is successfully holding onto its
premium position. 1
In line with its strategic restructuring of core business, the company also
launched a new technology platform for delivering competitive Android and
IP products, yet reducing development costs. With its Android-based SL 930
full-touch phone, Gigaset is planning to set new standards when it comes to
blending innovative technology and outstanding design in the fixed-network
arena. The prototype was already presented at the Consumer Electronics Fair
(IFA) in Berlin in September 2012 and is expected to come onto the market
in the summer of 2013.
Business Customers
Following the launch of the Business Customers unit in 2011, Gigaset AG has
been able to establish it as a second important pillar. The 'pro' product
line grew its revenue by around 50 percent year on year in 2012. As part of
its business outside Germany, Gigaset has identified strategic target
markets such as the UK and Russia and successfully continued tapping them.
The result is a significant rise in revenue in the middle double-digit
percentage range in these markets and a perceptible increase in market
share. A further focus was on expanding cooperation with sales partners and
value added resellers. Apart from countries that the company has already
tapped - Germany, Austria, France and the Netherlands -, it was able to
expand its activities in Italy, Spain, Switzerland, Austria, Poland, the UK
and the countries of Scandinavia. As part of that, the number of
distributors and resellers has been doubled.
The Business Customers unit was also able to extend its range of products.
The multi-cell DECT solution launched in the spring of 2012 enables
cordless calls anywhere on the company campus. The abilities of the systems
were enhanced even further and operation of them simplified at the same
time thanks to the free software update.
At the Consumer Electronics Fair (IFA) in Berlin at the beginning of
September 2012, Gigaset AG presented 'Maxwell,' the prototype of a new
Android-based, tablet-like business phone that boasts an innovative
videoconference feature and a generous 10.1' multi-touch display. Its
market launch is scheduled for the fourth quarter of 2013.
Home Networks
Likewise at IFA, Gigaset AG presented the youngest pillar in its new
strategy, the Home Networks segment. In this connection, Gigaset premiered
concrete concepts for the new 'Gigaset elements' product line: Leading-edge
sensors that, linked with an Internet-capable DECT ULE base station and a
secure Web server, enable a large number of applications in the home.
Future application areas for 'Gigaset elements' are in the areas of
security, energy management and maintenance, for example. The first
products in this segment are scheduled to be launched in the second quarter
of 2013.
http://blog.gigaset.com.
Gigaset AG, Munich, is an internationally operating company in the area of
communications technology. The Company is Europe's market leader in DECT
telephones. The premium supplier ranks second worldwide with around 1,400
employees and a market presence in about 70 countries.
Gigaset AG is listed on the Prime Standard of Deutsche Börse and thus is
subject to the highest requirements for transparency. Its shares are traded
on the Frankfurt Stock Exchange under the symbol 'GGS' (ISIN:
DE0005156004).
Contact:
Gigaset AG
Stefan Zuber, Corporate Communications Kerstin Diebenbusch, Investor
Relations
Phone: +49 (0)89 444456-866 Phone: +49 (0)89 444456-937
E-mail: info.presse(at)gigaset.com E-mail: info(at)gigaset.com
End of Corporate News
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28.03.2013 Dissemination of a Corporate News, transmitted by DGAP - a
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Language: English
Company: Gigaset AG
Hofmannstraße 61
81379 München
Germany
Phone: +89444456937
Fax: +89444456930
E-mail: kerstin.diebenbusch(at)gigaset.com
Internet: www.gigaset.com
ISIN: DE0005156004
WKN: 515600
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart
End of News DGAP News-Service
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