Dornbirn (pta009/01.12.2020/07:30) - The development of revenues in the Zumtobel Group (ISIN AT0000837307) during the first half of the 2020/21 financial year (1 May 2020 to 31 October 2020) was significantly influenced by the economic effects of the Covid-19 pandemic: Group revenues fell by 14.6% year-on-year to EUR 515.4 million (H1 2019/20: EUR 603.8 million). After an adjustment for foreign exchange effects, revenues declined by 13.9%.
Despite this decline, the Zumtobel Group managed to navigate well through the crisis and successfully generated a profit for the first half year: Adjusted Group EBIT totalled EUR 25.3 million, and the return on sales equalled 4.9% (H1 2019/20: 7.3%). Net profit amounted to EUR 13.3 million for the first half of 2020/21.
"The generation of solid earnings during a global economic crisis is by no means an easy task," emphasised Alfred Felder, CEO of the Zumtobel Group . "However, it underscores our company's comparatively robust position."
Covid-19 pandemic's negative impact on business development in both segments
The second quarter of the current financial year (1 August to 31 October 2020) saw an increase in momentum due to the easing of restrictions on business life throughout Europe, but this positive trend has been subdued by the renewed increase in corona cases. The Lighting Segment recorded a 13.7% decrease in revenues for the first half year, while the decline in the Components Segment was 17.8%. Many customers, especially in the Components Segment, increased their inventories at the beginning of the lockdown in the fourth quarter of the 2019/20 financial year. This had an additional negative effect on revenues in the following months and resulted in lower order levels, especially during the first quarter of 2020/21.
Revenues in the DACH region, the strongest market for the Zumtobel Group, fell by nearly 9%. Revenues in Switzerland and Austria were only slightly lower despite the crisis, but the reduction in Germany was more substantial. Three core markets, Italy, Great Britain and France, were particularly hard hit by declines in revenue in the double-digits.
Effective cost management successfully offset a major part of the revenue decline. Cost savings of EUR 20.6 million were recorded during the first half of 2020/21, above all in the areas of sales and administration. These efforts were supported, among others, by the reduction in personnel expenses which resulted from the use of short-time work options. Not least due to the strong focus on expenses, free cash flow equalled at EUR 35.0 million and was even slightly higher than the first quarter of the previous year.
Solid balance sheet
The balance sheet structure has remained solid and nearly unchanged since 30 April 2020. The equity ratio equalled 28.4% as of 31 October 2020. Net debt declined by EUR 19.7 million from year-end 2019/20 to EUR 145.9 million.
Opening of the new Light Forum at the headquarters in Dornbirn
The digital opening of the new 4,000-square-metre Light Forum took place on 19 November. This space provides a unique setting to present wide-ranging light experiences for customers, partners and the general public. It shows the full range of the Group's brands, both directly on site and as a digital experience over the Internet. This revival of an old industrial building at the company's founding location also underscores the Zumtobel Group's commitment to its regional roots.
Extension of Management Board contract for Bernard Motzko (COO)
The Supervisory Board of Zumtobel Group AG extended the Management Board contract with Bernard Motzko at the end of November for a further three years to 30 April 2024. Mr. Motzko has served as Chief Operating Officer (COO) of the Zumtobel Group since May 2018. This contract extension will ensure continuity on the Management Board. Bernard Motzko will also be responsible for the advancement of the Zumtobel Group's digitalisation strategy in the future.
The Management Board is convinced that the Group's position is sufficiently robust to master the economic crisis. In addition, management is currently working to adjust the corporate strategy in response to changes in the economic framework so that new growth opportunities can be identified and taken advantage of.
In view of the current development of the Covid-19 pandemic, including the recent sharp rise in infections and the resulting lockdown measures, the Zumtobel Group stands by its decision not to issue any guidance for the 2020/21 financial year.(end)