Zumtobel Achieved Turnaround
The Austrian lighting company announced strong results. Revenues increased by 10.2%. Net profit for the year is firmly back in the black at € 51.3m.
In the 2010/11 financial year (01 May 2010 to 30 April 2011) the Zumtobel Group benefited from the improved economic conditions and posted a 10.2% increase in Group revenues, which totaled € 1,228.2m (prior year: € 1,114.6m). Along with the positive business environment, two other factors that drove the internationally active lighting group’s growth were the trend towards energy-efficient lighting systems and the technology shift from conventional light sources to LEDs. As a result, the Zumtobel Group was able to buck the general trend in the commercial construction sector, which showed a marked downturn in calendar year 2010.
The positive impact of revenue growth was also reflected in the Group’s earnings position. Adjusted for special effects, operating profit (adjusted EBIT) rose by € 27.0m or 52.4% to € 78.4m (PY: € 51.4m). This equates to an improvement in adjusted EBIT margin to 6.4% (PY: 4.6%). Net profit for the year reached a sound € 51.3m, following a substantial loss of € 69.8m in the previous year, mainly as a result of an impairment charge to goodwill. For Zumtobel AG shareholders, this means that earnings per share reached € 1.19 in 2010/11 (PY: € -1.64).
The Components Segment (Tridonic / Ledon) posted a dynamic 19.3% surge in revenues, which moved ahead from € 366.6m in the prior year to € 437.3m in 2010/11. The late-cyclical Lighting Segment (Zumtobel / Thorn) also showed increasingly positive development over the course of the year, as revenues for the segment increased 6.4% in 2010/11 to € 869.0m (PY: € 816.7m). Growth was largely driven by the renovation sector, which began to pick up speed again, with the trend towards greater energy efficiency proving a key factor. The development of revenues with LED products proved pleasing, easing across the targeted € 100m threshold to reach € 100.3m (PY: € 65.9m). That corresponds to a growth rate of 52.2%.
The rising volume of business was also coupled with additional working capital requirements. The resulting cash outflows and a high level of capital expenditure had a negative effect on free cash flow which, however, was still slightly positive at € 4.8m for the reporting year (PY: € 36.8m). The balance sheet structure of the Zumtobel Group remains solid. The equity ratio improved from 35.0% to 37.1% in 2010/11. The positive development of operating earnings reduced the debt coverage ratio (net debt divided by EBITDA) from 1.63 to 1.11.
Based on the company’s sound operational development, the Management Board recommended to the Supervisory Board and thus to the Annual General Meeting to increase the dividend from € 0.15 to € 0.50 for the 2010/11 financial year.