The positive development of group profitability in the first nine months is due to a slight improvement in sales and cost savings, according to a company press release.
Sales grew by 0.8 percent to EUR 871.1 million in the first three quarters of 2019/20. The operating result (EBIT) rose from EUR 7.2 million to EUR 38.3 million. Group EBIT adjusted for special effects increased by 96.2 percent to EUR 46.9 million.
“Price pressure is immense”
“The lighting industry is a highly competitive market and the pressure on prices is immense,” said Zumtobel boss Alfred Felder. In addition, there would be “uncertainties such as the effects of the corona virus and sluggish global economic growth”, which would also affect markets such as Germany or the United Kingdom, which are particularly important for Zumtobel.
“Due to these market violations, we anticipate a challenging last quarter and therefore still expect an adjusted EBIT margin of between 3 and 5 percent for the year as a whole, with a slight increase in sales.” Also the medium-term goal of an EBIT margin of around 6 percent remain up until fiscal year 2020/21, it says in today’s announcement.
Management control over plant in France
In the course of optimizing the operational business, the management board also made the decision to regain management control of the lighting plant in Les Andelys, France, which was sold in 2017, from the French industrial group Active’Invest, the statement said.
The factory, which specializes in outdoor lighting, is thus part of the global Zumtobel Group production network again. With the return, a stabilization of the delivery processes and a better service for the customers in the outdoor lighting business are to be ensured.
Strong third quarter
In the third quarter alone, Zumtobel reduced the loss to EUR 2.5 million after a loss for the period of EUR 14.8 million. EBIT was up by 1.7 million euros, after minus 12 million euros, according to the quarterly report. Sales fell slightly by 0.5 percent to EUR 267.3 million.
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