DGAP-News: Gigaset AG / Key word(s): Half Year Results/Quarter Results
Gigaset posts consolidated profit and positive free cash flow in Q2 -
Significant improvement in the funding base
07.08.2014 / 07:25
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Gigaset posts consolidated profit and positive free cash flow in Q2 -
Significant improvement in the funding base
- Consolidated revenue from continuing operations in the second quarter:
EUR82.0 million (Q2/2013: EUR96.8 million)
- EBITDA from continuing operations in the second quarter: EUR10.3
million (Q2/2013: EUR6.4 million)
- Consolidated profit from continuing operations in the second quarter:
EUR1.3 million (Q2/2013: EUR -9.4 million)
- Positive free cash flow from continuing operations of EUR1.1 million in
the second quarter
- Market share in core business expanded further in terms of volume and
revenue
- Business Customers Business Unit grows revenue by 8%
- CEO Charles Fränkl: "Despite a sharply declining market in our core
business we were profitable again in the second quarter, not least
thanks to the efficiency programs. The significant improvement in our
funding base means we have new freedom when it comes to financing our
company's growth in future by means of the new products we've already
launched and those still under development."
Munich, August 7, 2014 - Thanks to successful implementation of the
efficiency programs and the elimination of negative one-off tax effects
from the previous year, Gigaset AG was able to again post positive
consolidated net income of EUR1.3 million from continuing operations in the
second quarter of 2014. The company made a net loss of EUR9.4 million in
the same period of the previous year.
The free cash flow in the past quarter was positive at EUR1.1 million. The
free cash flow in the first six months totaled minus EUR26.9 million and
was reduced in particular by a one-off capital contribution of EUR18
million to Gigaset Mobile Pte. Ltd. Gigaset Mobile is a joint venture that
is run together with Goldin Fund Pte. Ltd. and at which mobile
communications business is to be built. Adjusted for this one-off effect,
the free cash flow in the first half of the year was thus minus EUR8.9
million, a sharp improvement over the same quarter of the previous year.
Gigaset Mobile Pte. Ltd., Singapore, which had been fully consolidated due
to the 100% stake in it, was no longer fully consolidated as of January
2014 due to the fact that Goldin Digital Pte. Ltd., Singapore, took a stake
in Gigaset, but was instead included in the consolidated financial
statements using the equity method on the basis of the voting rights now
applying.
In July Gigaset obtained net proceeds of EUR33.9 million from the capital
measures announced in June from the issue of new shares and bonds. The
company used the proceeds of EUR25.0 million to repay all its financial
liabilities. They included the syndicated loan, as well as a loan granted
by the associated company Gigaset Mobile Pte. Ltd., Singapore. The company
intends to use the remainder to fund and expand its business, in particular
the promising Home Networks segment.
"By repaying its liabilities to banks, the Gigaset Group now has no
financial debt whatsoever. The company's funding has been put on a totally
new footing in the space of just twelve months. In addition, we'll save
around EUR1.5 million a year in interest payments," says CFO Dr. Alexander
Blum. Gigaset obtained net liquid funds totaling EUR82.4 million from the
capital measures in 2013 and 2014.
CEO Charles Fränkl commented on the quarterly figures: "Despite a sharply
declining market in our core business we were profitable again in the
second quarter, not least thanks to the efficiency programs. The
significant improvement in our funding base means we have new freedom when
it comes to financing our company's growth in future by means of the new
products we've already launched and those still under development."
Leading market position expanded
In a weak market, Gigaset was able to increase its share in its core
business of digital cordless phones year on year by 1 percentage point in
terms of units sold and by 0.3 percentage points in terms of revenue and so
was again a winner from the continuing phase of market consolidation.
Gigaset's share of market revenue in Europe was 34% in the second quarter
of the year. As a result, Gigaset was able to expand its market position in
Europe further. As a premium brand, Gigaset was also able to achieve prices
that were 29% above the market average. However, the market as a whole
remains under strong pressure. It declined year on year by around 12% in
terms of units sold and by 13% in terms of revenue.[1]
Gigaset AG's figures in the second quarter of 2014 (continuing operations):
- Consolidated revenue: EUR82.0 million (Q2/2013: EUR96.8 million)
- EBITDA: EUR10.3 million (Q2/2013: EUR6.4 million)
- EBITDA margin: 12.6 percent (Q2/2013: 6.6 percent)
- Consolidated net income: EUR1.3 million (Q2/2013: minus EUR9.4 million)
- Free cash flow: EUR1.1 million (Q2/2013: minus EUR10.9 million)
Relative to the first half of 2014 (continuing operations):
- Consolidated revenue: EUR147.0 million (H1/2013: EUR183.6 million)
- EBITDA: EUR2.6 million (H1/2013: EUR11.0 million)
- EBITDA margin: 1.8 percent (H1/2013: 6.0 percent)
- Consolidated net income: minus EUR11.0 million (H1/2013: Consolidated
net loss: EUR12.7 million)
- Free cash flow: minus EUR26.9 million (H1/2013: minus EUR34.9 million)
Outlook confirmed
Gigaset AG sticks to the outlook it gave when the 2013 Annual Report was
published on March 26, 2014.
The measures required to ensure long-term growth were initiated in 2012. To
counter the continuing difficult trend in the company's core market,
investments in establishing new, promising business segments and product
groups are also still required. In 2014, the new business segments will
make additional contributions to revenue, but these will not yet be able to
compensate fully for the market-related decline in cordless phones. Gigaset
therefore expects in the current fiscal year in the Business Units Consumer
Products, Business Customers and Home Networks (excluding tablets and
mobile):
- A decline in revenue from continuing operations in a high single-digit
to low double-digit percentage range.
- EDITBA to improve sharply year on year and to be positive again and an
EBITDA margin in the upper single-digit percentage range thanks to the
positive impact expected from the efficiency programs.
- A negative free cash flow in the low double-digit million range, among
other things due to the investments required in further establishment
of the new business segments and restructuring of the company.
In addition, Gigaset expects additional revenues from tablet and smartphone
business; however, they are difficult to predict due to the early stage of
the joint activities with Goldin Fund Pte. Ltd., Singapore.
Overview of development of the Business Units
Consumer Products
Gigaset's sales strategy is geared toward maintaining the Gigaset brand's
price premium in the market and further growing its market share in Europe.
In what is overall a difficult environment for retailers and operators,
Gigaset was again able to maintain its position over the competition in its
core markets. That was assisted in particular by the company's
participation in large invitations to tender by retailers and
telecommunications providers. Trends varied by region and country. Overall,
Gigaset was able to hold its leading market position in Europe and Germany
in terms of units sold.[1]
This success is mainly due to the unmistakable design of Gigaset's
products. Numerous awards over the past years are testimony to Gigaset's
constant design leadership. More than 20 products have captured the iF
Awards, Red Dots, Good Design Awards and other prestigious prizes for
design since 2010. Gigaset has won nine awards so far in 2014.
The new products Gigaset C530 and Gigaset C430 and the Gigaset Dune picked
up Plus X Awards, while the innovative Dune was also named "Best Product of
2014" in the fixed-network telephony segment. Gigaset was also elected the
"most innovative brand" overall.
The new ContactsPush represents a first step toward a single Gigaset
ecosystem that is intended to network the entire hardware portfolio of
Gigaset over the cloud in future and enable automatic and smooth transfer
of data between different Gigaset devices. It enables simple transfer of
smartphone contacts to fixed-network handsets operated on IP base stations.
The app is compatible with Android (4.x and above) and iOS devices (6.x and
above) and can be obtained free of charge from the Google Play Store(TM) or
Apple App Store(TM). It was launched in May.
Business Customers
Revenue at the Business Customers Business Unit grew by 8% year on year in
the second quarter of 2014. This was attributable in particular to business
under the brand name Gigaset pro, which increased by 19%. On the product
side, the N720 DECT IP Pro multi-cell system contributed sharp growth.
Business with customer-specific products remained constant. Seen
regionally, the Business Unit mainly grew in the Netherlands, Italy and the
UK.
The flagship product Maxwell, which is based on the Android operating
system and is to be launched in the middle of the year, has been certified
for access to the Google Play Store. As a result, applications from
third-party vendors, such as video applications or tools to enable better
collaboration, can be installed especially simply and securely. In
addition, Maxwell was named the best product in the category
"Telecommunications and Accessories" by Spain's "Melco Business Club."
After being rolled out in France, the telephone system "Hybird 120 Gigaset
Edition," which was provided together with the partner bintec elmeg, was
also launched in the Netherlands, Austria, Switzerland, Spain, Portugal and
the UK and is helping grow revenue further.
Home Networks
In September 2013, Gigaset began marketing the Gigaset elements starter
kits through the network of specialty retailers and online in Germany and
then in France shortly afterwards. Gigaset has a particularly dense sales
network in France. The system has also been available in Switzerland,
Austria, the Netherlands and Sweden since April.
In order to increase sales of Gigaset elements in Germany, the product was
offered for the first time exclusively in the Tchibo online shop as part of
Tchibo's "Mobile Technology 2014" campaign. The offering comprised a bundle
made up of the starter kit and the separately available alarm siren
"siren." The special promotion made Gigaset elements accessible to a broad
group of customers, since Tchibo's online sales channel is one of the most
far-reaching in Germany.
In May 2014 Gigaset elements was voted "Product of the Year" in the "Smart
Home" category by readers of Europe's largest telecommunications magazine
connect at the 2014 Community Awards.
The starter kit is the foundation for the versatile uses of Gigaset
elements. It consists of two intelligent DECT ULE-based sensors - the door
sensor "door" and the motion sensor "motion" - as well as the base station
"base" and an app for smartphones. An intelligent, learning and secure
cloud is behind Gigaset elements, acting as an interface between the home
and smartphone. The system can be expanded in a modular manner. A siren and
separate door and window sensors are also available. A camera will be
launched soon as a further element of the system.
In addition, an intelligent socket will be added to the sensor portfolio in
2014. The central software platform in the cloud is also to be provided
successively with new functionalities. So as to be able to address new
segments, Gigaset is setting store in the cloud by machine learning and
open interfaces (APIs) to make it easier to integrate partners. The aim of
this is to further enhance the attractiveness of Gigaset elements by
devices and services from partners.
Mobile Products
In December 2013, Gigaset entered the growing market for tablets with two
Android-based models in an 8" and 10.1" format. That marked the completion
of the next step in expansion of the Gigaset 2015 strategy. The main focus
of their launch was Germany. Marketing of the tablets was then expanded
successively to other European countries. At the moment Gigaset is
developing a smartphone portfolio in cooperation with Goldin.
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 is likewise the leader worldwide with
around 1,400 employees and sales activities in around 70 countries. Under
the name Gigaset pro, the company continues to develop and market
innovative business telephony solutions for small and medium-sized
enterprises. The company also operates in the smart home arena.
Cutting-edge, cloud-based products and solutions for the smart home are
developed and marketed under the name Gigaset elements.
Gigaset AG is listed on the Prime Standard of Deutsche Börse and is
therefore subject to the very highest requirements for transparency. Its
shares are traded on the Frankfurt Stock Exchange under the symbol 'GGS'
(ISIN: DE0005156004).
More information on Gigaset can be found at: http://www.gigaset.com/de or
at http://blog.gigaset.com
Contact:
Gigaset AG
Stefan Zuber
Corporate Communications &
Investor Relations
Phone: +49 (0)89 444456-866
E-mail: info.presse@gigaset.com
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07.08.2014 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
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Language: English
Company: Gigaset AG
HofmannstraÃe 61
81379 München
Germany
Phone: +89444456937
Fax: +89444456930
E-mail: info@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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281220 07.08.2014
DGAP-News: Gigaset posts consolidated profit and positive free cash flow in Q2 - Significant improvement in the funding base
| Source: EQS Group AG