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| Lighting group heading for profitable growth with new strategy For Austrian lighting group Zumtobel the 2013/14 financial year was marked by the fundamental redirection of the international lighting group. In a phase of dynamic change, particularly with regard to the technology shift to LEDs, the Group's new CEO Ulrich Schumacher, who took office on 1 October 2013, has chosen to focus on a consistent multi-brand strategy, intensive collaboration within the Group and flat, efficient organisational structures. The new structures that were implemented on 1 December 2013 support the stronger entrepreneurial management of the Zumtobel Group, the optimal utilisation of production and sales synergies and the strengthening of the Group's innovative power. Revenues: steady improvement in the course of the year; LED products account for over 30% At the Zumtobel Group the development of business in 2013/14 was influenced by the increasing stabilisation of the economic environment. While the first two quarters brought revenue declines, the third and fourth quarters saw a return to growth, with revenue growth of 8.1% in the final quarter giving particular cause for optimism. Total revenues recorded by the Zumtobel Group for the reporting year rose by 0.3% against the prior year to EUR 1, 246.8 million (2012/13: EUR 1, 243.6 million). Revenues from the sale of LED products were particularly positive, rising 52.6% year-on-year to EUR 419.0 million (2012/13: EUR 274.5 million), which equates to 33.6% of total Group revenues. This means that LED technology has taken a firm hold across a broad market segment, bringing customers and end-users optimum energy efficiency and new opportunities for the creative use of light. Adjusted EBIT shows a 33.3% increase Despite the flat development of revenues and higher research and development expenditures (+3.9%) Group EBIT adjusted for special effects rose significantly year-on-year to EUR 47.6 million in 2013/14 (2012/13: EUR 35.7 million). This represents an improvement in the return on sales (adjusted EBIT margin) to 3.8% (2012/13: 2.9%). Contributory factors in this improvement in earnings power included reduced material costs and optimised product design, as well as the enhanced profitability of the LED products, particularly in the Components Segment. Necessary restructuring results in substantial negative special effects in reporting year In a phase of strategic redirection for the Zumtobel Group, during the reporting year management rapidly initiated the necessary restructuring projects and in some cases already completed them. In the Components Segment (Tridonic) the measures relate to the technology shift to LEDs and the related exit from the magnetic ballast business. In line with the new organisational structures, in the Lighting Segment (Zumtobel / Thorn) the previously separate sales and operations organisations for each brand were merged to form global cross-brand organisations. In this context, steps were taken in the final quarter to improve cost structures and capacity utilisation at the plants. Negative special effects totalled EUR 35.5 million in the reporting year (2012/13: EUR 14.0 million). These significant special effects impacted on net income for the 2013/14 financial year, with the outcome that after special effects, interest and taxes, the Zumtobel Group recorded a net loss of EUR 4.8 million (2012/13: net profit of EUR 6.1 million). Outlook: further revenue and earnings growth anticipated Based on the positive economic signals from the second half of 2013/14 and the planned significant cost savings, the Management Board of the Zumtobel Group looks toward the coming months with reserved optimism in spite of the still limited visibility. The development of revenues will be supported by slight tailwinds from the recovering market environment in Europe, but revenues from the sale of magnetic ballasts have now ended with Tridonic’s exit from this technology. Overall, despite the absence of magnetic ballast revenues, the Management Board expect the 2014/15 financial year to bring an increase of approximately 3% in revenues as well as an improvement in the adjusted EBIT margin from its current level of 3.8% to between 5% and 6%. write your comments about the article :: © 2014 Construction News :: home page |