Dornbirn, Austria – Despite a challenging market environment, the international lighting company Zumtobel Group recorded a slight improvement in revenues and a very satisfactory increase in earnings in the first three quarters of the 2019/20 financial year, compared to the prior-year period.
“In the first three quarters of the 2019/20 financial year, we were able to maintain moderate growth and significantly improve our earnings despite a difficult market environment,” comments Zumtobel Group CEO Alfred Felder on the current figures and confirms the outlook for the full year: “The lighting industry is a highly competitive market and the price pressure is enormous. In addition, there are macroeconomic uncertainties such as the impact of the coronavirus and a weak global economic growth, which also affect markets like Germany and Great Britain, which are particularly important for the Zumtobel Group. Due to these adverse market conditions, we expect a challenging last quarter and therefore still anticipate an adjusted EBIT margin between 3 and 5% as well as a slight increase in revenues.”
D/A/CH region secures slight revenue growth
The Zumtobel Group generated revenues of EUR 871.1 million in the first three quarters of the financial year, which corresponds to a slight increase of 0.8% compared with the previous year. This development was primarily driven by the D/A/CH region (Germany, Austria, Switzerland), with an increase of 3.1%.
Very satisfactory earnings development – return to profit
In the first nine months of the 2019/20 financial year, the Zumtobel Group recorded a very positive operating development: Group EBIT adjusted for special effects amounted to EUR 46.9 million, which equals an increase of 96.2% compared to the prior-year period. The company thus increased the adjusted return on sales from 2.8% to 5.4%. This positive development of the Group’s profitability is attributable to the slight increase in revenues and cost savings. As opposed to the prior-year period, when the Zumtobel Group recorded a loss of EUR minus 6.1 million due to one-off restructuring effects, net profit for the first three quarters of 2019/20 was clearly positive and amounted to EUR 22.2 million.
Optimisation of the global production network to better service customers
The Management Board of the Zumtobel Group considers the 2019/20 financial period a year of transformation, in which the focus of activities returns to the continuous improvement of the operating business and growth – in spite of the weakening market environment.
In the course of the ongoing optimisation of the operating business, the Management Board decided to regain the management control of the luminaire plant in Les Andelys, France, which had been sold to the French industrial group Active’Invest in 2017. The plant, which specialises in outdoor lighting, is now again part of the Zumtobel Group’s global production network. With the buyback we intend to stabilise supply processes and, consequently, ensure better service for customers in the outdoor lighting business. This step should subsequently have a positive impact on the development of revenues in this business area.
Guidance and medium-term goal confirmed
The weaker economic outlook for Europe and macroeconomic uncertainties (e.g. coronavirus) combined with the related, but currently incalculable negative effects on our operating business have curbed our optimism for the fourth quarter of 2019/20. However, we still expect an improvement in the adjusted EBIT margin to 3 to 5% and depending on the further development of the coronavirus slight growth in revenues. Our medium term goal for an EBIT margin of roughly 6% by 2020/21 also remains intact.
Zumtobel Group Press Team
+43 (0)5572 509 575
Senior Director Investor Relations
+43 (0)5572 509 1125