Quarterly Report • Nov 30, 2018
Quarterly Report
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| EU R m illio ns |
1/1 /30 /20 - 9 18 |
1/1 /30 /20 - 9 17 |
|---|---|---|
| li dat d r Co nso e eve nu es |
16 8.7 |
18 8.0 |
| fro bu be for Ear nin sin tiv itie gs m co re ess ac s e de d a n ( EBI TD A) cia tio rtiz atio pre n a n mo |
4.5 | 12 .0 |
| Ear be for d i ( EBI T) nin e in ter est ta gs an nco me xes |
-5. 7 |
0.9 |
| Co li dat d los for he t nso e s y ear |
-5. 2 |
-1. 5 |
| h f lo Fre e c as w |
-34 .8 |
-30 .0 |
| har di lut d i Ear nin ( n E UR ) gs pe r s e e |
-0. 04 |
-0. 01 |
| 9/3 0/2 01 8 |
/31 /20 12 17 |
|
| l as To ta set s |
19 9.1 |
22 6.9 |
| li dat d e Co ity nso e qu |
9.4 | 24 .1 |
| Eq ( ) uity io in % rat |
4.7 | 10. 6 |
| be f e loy Nu m r o mp ees |
88 0 |
930 |
| Th Sh e G iga set are |
Q 3 / 20 18 |
Q 3 / 20 17 |
|---|---|---|
| f t C los ing ice in EU R (a he d o he rio d ) t t pr en pe |
0.5 8 |
0.7 4 |
| Pea k p EU R ( he d ) rice in in t rio pe |
0.6 9 |
0.8 6 |
| R ( he d ) Low ice in EU in t rio est pr pe |
0.5 1 |
0.6 5 |
| be f s har lati he d o f t he d Nu in c ircu (a rio ) t t m r o es on en pe |
13 2, 45 5, 896 |
13 2, 45 5, 896 |
| ket liza l lion he d o f t he d Ma ita tio n in EU R m i (a rio ) t t r ca p en pe |
76 .8 |
98 .0 |
No audit opinion has been rendered on this quarterly report. This report is not an interim financial report in accordance with IAS 34 or financial statements pursuant to IAS 1. It was prepared based on the financial reporting rules applied in the last consolidated financial statements. Comparative information in terms of financial year 2017 was not adjusted for new financial reporting standards, see Section 5 "Changes in accounting treatment as a result of the first-time application of IFRS 15 and IFRS 9".
The quarterly report includes statements and information regarding Gigaset AG relating to future periods. The statements regarding the future represent estimates that were made based on all information available when the report was prepared. If the assumptions underlying the forecasts should prove inaccurate, the actual developments and results can deviate from current expectations. The Company does not accept any responsibility to update the statements included in this report outside of the provisions governing publication stipulated under the law.
Amounts included in tables and percentages in this report (monetary units, percentages) can differentiate from the mathematically correct values due to rounding differences.
In the core business, the Phones segment, which yields the highest revenues, Gigaset continued to operate in a contracting and increasingly competitive market environment in the first nine months of 2018. In the following assessment of the general economic environment, the two most important sales markets, Germany and France, – and in a wider assessment the four most important European countries (EU41) – are used to describe the market situation.
In the first nine months of 2018, the market for phones in Germany contracted by 9.2% with respect to unit volume compared with the prior-year quarter. The negative overall development has thus continued. Based on revenues, the market decrease amounts to 7.7%. Nevertheless, Gigaset achieved a very strong position on this market of over 47.1% in terms of units and 45.4% in terms of revenues2.
The French market for phones likewise declined significantly in the first nine months of 2018. Compared with the prior-year quarter, the market dropped by 15.3% in terms of units and by 16.8% based on revenues. Despite the challenging circumstances, Gigaset continued to hold a market share of more than 32.5% in terms of units and 39.3% in terms of revenues, which constituted a rise in market share of 3.3 percentage points in respect of units and 3.9 percentage points in respect of revenues2.
Widening the assessment to the market development in the markets observed by Gigaset in Europe, the Company suffered an 11.4% decline in terms of units and a 10.5% drop in terms of revenues compared with the prior-year period. Overall, however, Gigaset achieved a market share of 43.6% in terms of revenues. This means that Gigaset is still the market leader in Europe2.
1 EU4 refers to Germany, France, Italy and the Netherlands
2 GfK 2018 – Report on the EU4 market
With a market share of 43.6% in terms of value, Gigaset has reinforced its market leadership in the EU4 area in the first nine months of 2018. Nevertheless the Phones segment is a victim of the general market decline of 10.5%. Gigaset is responding to this situation by developing new products. The focus here is chiefly on products in the area of IP telephony and offerings for older people3.
The Business Customers segment noted an increase in revenues of 8.8% in the first nine months of 2018 compared with the prior-year period. It was mainly Germany, followed by Italy and Spain, that drove this development. In terms of the product segments, revenues with
N-series DECT base stations jumped by 43.3%. The IP desk telephones from the Maxwell series also made a notable contribution to growth, with an increase of 37.3% in terms of revenues4. In addition, the Company successfully completed the largest research and development project in recent years and, with the new multi-cell Gigaset N780 PRO, introduced for the first time an enterprise solution that can be scaled up to 20,000 participants. By gaining entry to the enterprise market, Gigaset expects to record further revenues in the Professional segment going forward.
On the whole, the segment moved sideways in the third quarter of 2018, in line with the overall market for Smart Home products. While there is more and more interest on the part of customers, it would be premature to speak about a widescale boom5. Gigaset has nonetheless succeeded in growing revenues by 27.7% or EUR 0.4 million in the first nine months of 2018 compared with the prior-year period4. Because the market for Smart Home systems & services in western Europe is still considered to be promising, Gigaset recently extended its offering to include the area of Smart Care. In view of the demographic development, the Company sees a growing need in this environment for nursing care and assistance services and corresponding major potential for sales in future. The new products were developed based on the many years of experience in the Smart Home area, and have already been awarded the seal of inspection by the Deutscher Seniorlotse initiative for the elderly. Gigaset will be one of the first tech firms to start advertising its products on the Smart Care market in as early as Q4 2018 in order to generate further revenues in the area of Smart Home.
The Company currently sells the smartphone models GS100, GS180 and GS185 – the first smartphone to be manufactured in Germany. With these models, the Company offers attractive mobile phones in the low and mid-price segment. Updates to Android 8 are now available for models GS270 and GS370, which were launched in 2017. The Company has thus demonstrated that it is pursuing a long-term customer strategy in the Smartphones segment. Compared with the first nine months of 2017, revenues slipped slightly by 2.9%4. It continues to be the Company's objective to extend its position as an established participant on the smartphones market and in particular to further increase revenues in the fourth quarter of 2018, which traditionally yields the strongest revenues.
1 General economic environment
3 GfK 2018 – Report on the EU4 market
4 Gigaset 2018 – Board
5 Deloitte 2018 – Smart Home Consumer Survey 2018
In an industry environment that remains challenging, the Gigaset Group generated revenues of EUR 168.7 million in the first nine months of financial year 2018 (prior year: EUR 188.0 million); this constitutes a decrease in revenues of 10.2%. Revenues from core business activities are subject to the usual seasonal fluctuations in the consumer business.
The decrease in revenues in the first three quarters of 2018 can be attributed in the main to a decrease of EUR 140.8 million or 16.0% to EUR 118.2 million in the Phones segment. By contrast, revenues were up 8.8% to EUR 39.5 million in the Professional segment. At EUR 9.2 million, revenues in the Smartphones segment dropped marginally by 2.9% compared with the previous year (prior year: EUR 9.5 million). The Smart Home segment was up sharply year on year by 27.7% to EUR 1.8 million (prior year: EUR 1.4 million).
| Rev es i n € mi llio enu ns |
1/1 -9/3 0/2 018 |
1/1 -9/3 0/2 017 |
Ch ang e |
|---|---|---|---|
| P ho nes |
11 8.2 |
14 0.8 |
-16 .0% |
| fes l Pro sio na |
39 .5 |
36 .3 |
8.8 % |
| ho Sm art p nes |
9.2 | 9.5 | -2. 9% |
| Sm Ho art me |
1.8 | 1.4 | 27 .7% |
| Gig t T l ota ase |
16 8.7 |
18 8.0 |
-10 .2% |
In general, the decrease in revenues in the Phones segment followed the overall market trend in all European countries. Gigaset nevertheless increased its market share by 3.5 percentage points in terms of units and by 1.7 percentage points based on revenues in the market for phones in the EU4 area. With market share of 41.0% in terms of units and 43.1% in terms of revenues, Gigaset underscored its premium position in the EU4 area once again in the first nine months of 2018. This positive development in market share in terms of units was driven primarily by France, with growth of 5.6%, while the Netherlands also saw above-average market share growth of 6.2%.
At 2.9%, Smartphones revenues were down marginally on the prior year. Gigaset intends to further expand its position in the smartphone market in financial year 2018.
The Smart Home area developed positively compared to the prior year. The market for Smart Home systems and services in western Europe is still considered to be promising.
The trend was likewise positive in the Professional segment, where in particular the increase in revenues in Germany, Spain and Italy had a significant influence with a total increase of EUR 3.7 million. The focus currently lies on further expanding the market position by expanding the product portfolio.
Revenues by sales region developed as follows:
| Rev es i mi llio n € enu ns |
1/1 -9/3 0/2 018 |
1/1 -9/3 0/2 017 |
Ch ang e |
|---|---|---|---|
| (ex lu din Ge ) Eu rop e c g rm any |
75 .5 |
82 .2 |
-8. 1% |
| Ge rm any |
73 .1 |
80 .3 |
-9. 0% |
| f W l d Res t o or |
20 .1 |
25 .5 |
-21 .1% |
| Gig t T l ota ase |
16 8.7 |
18 8.0 |
-10 .2% |
The decrease in revenues in Germany and in Europe (excluding Germany) can be attributed largely to the negative market growth in the Phones segment. However, the solid performance in the Professional segment somewhat mitigated the effects. The other segments are being further expanded in order to offset the decline in this segment going forward.
Revenues by geographical region developed as follows:
| Rev es i mi llio n € enu ns |
1/1 -9/3 0/2 018 |
1/1 -9/3 0/2 6 017 |
Cha nge |
|---|---|---|---|
| (ex lu din Ge ) Eu rop e c g rm any |
83 .6 |
95 .0 |
-12 .0% |
| Ge rm any |
74 .7 |
80 .3 |
-7. 0% |
| f W l d Res t o or |
10 .4 |
12 .7 |
-18 .1% |
| Gig t T l ota ase |
8.7 16 |
18 8.0 |
-10 .2% |
The cost of materials for raw materials, merchandise, finished goods and purchased services was EUR 96.3 million in the first nine months of 2018 – a decrease of 4.0% compared with the prior-year comparative value of EUR 100.3 million. The purchased goods and services ratio decreased slightly from 50.3% in the prior year to 48.4%, including changes in inventories.
Gross profit, comprising revenues less the cost of materials and including the change in inventories of finished goods and work in progress decreased by EUR 6.4 million from EUR 93.4 million to EUR 87.0 million on account of the drop in revenues. The gross profit margin edged up in the first nine months of 2018 to 51.6% compared with 49.7% in the prior-year period.
At EUR 7.5 million, other own work capitalized remained on a par with the previous year's level and mainly includes costs related to the development of new products.
Other operating income amounted to EUR 8.2 million (prior year: EUR 9.9 million).
At EUR 44.7 million after three quarters in 2018, personnel expenses for wages, salaries, social security contributions and old-age pensions were down 10.1% below the prior-year figure (EUR 49.7 million). The decrease is still attributable to the restructuring completed at the end of 2017. The personnel cost rate continued to stand at 26.5% (prior year: 26.5%).
Other operating expenses increased to EUR 53.4 million in the first nine months of 2018 after amounting to EUR 49.2 million in 2017. This is due to cost increases. The increase results mainly from higher marketing and hospitality expenses in the amount of EUR 3.6 million, increased expenses from the loaning of employees in the amount of EUR 1.2 million and higher tax expenses of EUR 0.5 million, which were counterbalanced by EUR 0.9 million less in license fees and lower consulting fees in the amount of EUR 0.3 million.
At EUR 4.5 million, earnings before interest, taxes, depreciation, amortization and impairment losses (EBITDA) were lower in the first nine months of 2018 than in 2017 (EUR 12.0 million). Taking into account depreciation and amortization in the amount of EUR 10.2 million (prior year: EUR 11.1 million), earnings before interest and taxes (EBIT) amounted to EUR -5.7 million (prior year: EUR 0.9 million).
6 The prior-year figures deviate from the quarterly report for September 30, 2017 because the segment allocation was changed. Revenues from Europe (outside of the EU) were allocated to the Rest of World segment instead of Europe (excluding Germany).
After deducting the financial result of EUR -0.7 million (prior year: EUR -0.8 million), the result from ordinary activities is EUR -6.4 million (prior year: 0.1 million).
The consolidated loss for the year amounts to EUR -5.2 million as of September 30, 2018 (prior year: EUR -1.5 million).
This results in earnings per share of EUR -0.04 (basic/diluted) (prior year: EUR -0.01 (basic/diluted)).
The cash flows developed as follows:
| Cas hflo w i mi llio n € ns |
1/1 -9/3 0/2 018 |
1/1 -9/3 0/2 017 |
|---|---|---|
| Ca h f lo fro tin ctiv itie s ws m op era g a s |
-25 .4 |
-21 .2 |
| Ca h f lo fro inv ing tiv itie est s ws m ac s |
-9. 4 |
-8. 9 |
| h f lo Fre e c as w |
-34 .8 |
-30 .0 |
| h f lo fro f in Ca cin ctiv itie s ws m an g a s |
5.0 | 0.1 |
In the past three quarters, the Gigaset Group recorded a cash outflow from continuing operations in the amount of EUR -25.4 million (prior year: EUR -21.2 million). This stemmed especially from the payment of liabilities and the utilization of provisions amounting together to EUR -15.5 million and the accumulation of inventories of EUR 27.2 million, which were counterbalanced by cash inflows from the decrease in receivables and assets of EUR 16.8 million.
Cash outflows from investing activities amounted to EUR -9.4 million and thus exceeds the previous year's level of EUR -8.9 million marginally. The majority of the investments in the current and past financial year constitute capital expenditures in noncurrent assets.
Thus, free cash flow amounted to EUR -34.8 million compared to EUR -30.0 million in the prior-year period.
Cash inflows from financing activities amounted to EUR 5.0 million as of September 30, 2018 (prior year: EUR 0.1 million). Cash inflows included the first payment of a credit facility made at the end of June 2018. Gigaset had agreed a new credit facility in the amount of up to EUR 20.0 million in April 2018.
Please refer to the cash flow statement presented for a detailed presentation of changes in cash and cash equivalents. The cash flow includes changes in exchange rates in the amount of EUR -0.1 million (prior year: EUR -0.3 million). Cash and cash equivalents amounted to EUR 19.2 million as of September 30, 2018 (prior year: EUR 17.2 million).
The Gigaset Group's total assets amounted to EUR 199.1 million as of September 30, 2018, and therefore decreased by approximately 12.2% compared with December 31, 2017 (EUR 226.9 million).
Noncurrent assets increased by EUR 9.4 million from EUR 84.9 million to EUR 75.5 million compared with December 31, 2017. Financial assets dropped by EUR 9.8 million from EUR 18.4 million to EUR 8.6 million. Measurement of the fair value of the investment in Gigaset Mobile Pte. Ltd. led to recognition of an impairment loss. The investment in Gigaset Mobile Pte. Ltd. is an investment in equity instruments under the rules of IFRS 9, so changes in fair value are recognized in other comprehensive income (FVOCI without reclassification (measurement category)). Depreciation and amortization and disposals exceeded capital expenditures in property, plant and equipment; as a result, property, plant and equipment decreased by EUR 1.4 million to EUR 21.9 million. Intangible assets increased by EUR 0.7 million to EUR 30.7 million as a consequence of increased investment. Deferred tax assets increased by EUR 1.2 million to EUR 14.3 million.
7
Current assets represented 59.2% of total assets. Compared with December 31, 2017, they decreased by EUR 18.3 million and amounted to EUR 123.7 million. Inventories increased by EUR 27.2 million to EUR 53.9 million. This effect is linked to the development of revenues and the upcoming seasonal business. Trade receivables declined by EUR 12.9 million to EUR 27.0 million. Additionally, cash and cash equivalents dropped from EUR 49.1 million as of December 31, 2017 to EUR 19.2 million. Please refer to the statement of cash flows in the quarterly report for a detailed breakdown of changes in cash and cash equivalents.
Total liabilities amounted to EUR 189.8 million (prior year: EUR 202.8 million), 51.3% of which are current.
The Gigaset Group's equity amounted to around EUR 9.4 million as of September 30, 2018, and was EUR 14.7 million lower than at the beginning of the year. This corresponds to an equity ratio of 4.7% compared with 10.6% as of December 31, 2017. The impairment loss based on the fair value measurement of the investment in Gigaset Mobile Pte. Ltd. of EUR 9.8 million was recognized directly in equity. Due to the increase in the discount rate from 1.85% to a current figure of 1.91% for the pension obligations accounted for, net actuarial gains of EUR 0.6 million were recognized directly in equity. Furthermore, changes in exchange rates in the amount of EUR -1.1 million were recognized directly in equity. Cash flow hedging resulted in gains of EUR 1.4 million that were recognized directly in equity. In addition, equity is impacted by the consolidated net loss of EUR -5.2 million for reasons relating to the reporting date.
Noncurrent liabilities mainly included pension obligations, financial liabilities, and deferred tax liabilities as well as long-term provisions for personnel expenses and provisions for guarantees. Noncurrent liabilities amounted to EUR 92.4 million as of September 30, 2018, after a figure of EUR 88.7 million as of December 31, 2017.
Current liabilities dropped by 14.7% to EUR 97.3 million (December 31, 2017: EUR 114.1 million). The decline in current liabilities stemmed first and foremost from the EUR 3.4 million decrease in provisions as well as from the fall of EUR 8.9 million in trade payables to EUR 47.2 million due to seasonal effects (December 31, 2017: EUR 56.1 million).
The classification of the income statement was changed compared with the previous year. The previously presented breakdown of the operating result in earnings from core business activities before and after depreciation and amortization and an additional ordinary result was omitted. With the subtotals EBIT-DA (earnings before interest, taxes, depreciation, amortization and impairment losses) and EBIT (earnings before interest and taxes) now shown, the classification is adjusted by the omission of the breakdown described above to a more conventional hierarchical structure, thereby increasing the comparability with other financial statements.
| tho nds in € usa |
1/1 - 9 /30 /20 17 Str in the uct ure blis hed 20 17 pu rly rte ort qua rep |
|
|---|---|---|
| 1 | Re ve nu es |
18 7, 978 |
| 2 | han f f in he d g ds d w k C in i ries is nto ge nve o oo an or in p rog res s |
5, 750 |
| 3 | Co f m ls ria st o ate |
-10 0, 284 |
| f it Gr oss pr o |
93 44 4 , |
|
| 4 | he k c lize d Ot ita r o wn wo r ap |
49 7, 7 |
| 5 | fro Ot he bu r in sin tiv itie co me m co re ess ac s |
2, 707 |
| 6 | Pe l ex be for ing est tur rso nn e pe nse s e r ruc |
-49 736 , |
| 7 | he fro bu Ot sin tiv itie r ex pe nse s m co re ess ac s |
-44 393 , |
| Ea rni fro bu sin tiv itie be for ng s m co re ess ac s e de cia tio d a rtiz ati / EB ITD A pre n a n mo on |
9, 9 51 |
|
| 8 | De d a cia tio rtiz atio pre n a n mo n |
-11 059 , |
| fro bu fte Ea rni sin tiv itie ng s m co re ess ac s a r de d a cia tio rtiz ati pre n a n mo on |
-1, 54 0 |
|
| 9 | d dit l or din A ion in a ary co me |
3, 54 1 |
| 10 | A d dit l or din ion a ary ex pe nse s |
253 -1, |
| 11 | Pe l ex fro rin tru ctu rso nn e pe nse s m res g |
0 |
| 12 | han Exc ain rat ge e g s |
3, 694 |
| tho nds in € usa |
1/1 - 9 /30 /20 17 New str uct ure in t he 201 8 rly rte ort qua rep |
|
|---|---|---|
| 1 | Re ve nu es |
18 7, 978 |
| 2 | han f f in he d g ds d C in i ries is nto ge nve o oo an k in wo r pr og res s |
5, 750 |
| 3 | Co f m ls ria st o ate |
-10 0, 284 |
| f it Gr oss pr o |
93 44 4 , |
|
| 4 | he k c lize d Ot ita r o wn wo r ap |
49 7, 7 |
| 5, 9, 12 |
Ot he ing in rat r o pe co me |
9, 942 |
| 6, 11 |
Pe l ex rso nn e pe nse s |
-49 736 , |
| 7, 10, 13 |
he Ot ing rat r o pe ex pe nse s |
-49 181 , |
| EB ITD A |
11 96 6 , |
|
|---|---|---|
| 8 | De cia tio d a rtiz atio pre n a n mo n |
059 -11 , |
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|---|---|---|
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9
| tho nds in € usa |
1/1 - 9 /30 /20 17 Str in the uct ure blis hed 20 17 pu rly rte ort qua rep |
|---|---|
| han los 13 Exc rat ge e ses |
-3, 535 |
| d dit l o din lt A ion a r ary re su |
2, 44 7 |
| Op tin lt era g res u |
90 7 |
| Ot he d s lar 14 r in im i inc ter est an om e |
41 |
| d s lar 15 Int im i st a ere n exp en ses |
-81 3 |
| l re lt Fin cia an su |
-77 2 |
| fro Re lt din tiv itie su m or ary ac s |
13 5 |
| Inc 16 e t om axe s |
-1, 61 1 |
| Co li da d los for he te t nso s y ea r |
-1, 47 6 |
| ha Ea rni ng s p er co mm on s re |
|
| bas ic i n E UR - |
-0. 01 |
| di lut d i n E UR e - |
-0. 01 |
| tho nds in € usa |
1/1 - 9 /30 /20 17 New str uct ure he in t 201 8 rly rte ort qua rep |
|
|---|---|---|
| EB IT |
90 7 |
|
| 14 | Ot he d s lar r in im i inc ter est an om e |
41 |
| 15 | d s lar Int im i st a ere n exp en ses |
-81 3 |
| l re lt Fin cia an su |
-77 2 |
|
| fro Re lt din tiv itie su m or ary ac s |
13 5 |
|
| 16 | Inc e t om axe s |
-1, 61 1 |
| Co li da d los for he te t nso s y ea r |
-1, 47 6 |
|
| ha Ea rni ng s p er co mm on s re |
||
| bas ic i n E UR - |
-0. 01 |
|
| di lut d i n E UR e - |
-0. 01 |
The current line item Other operating income (EUR 9,942 thousand) includes the previously presented line items Other income from core business activities (EUR 2,707 thousand), Additional ordinary income (EUR 3,541 thousand) and Exchange rate gains (EUR 3,694 thousand). The line item Personnel expenses (EUR -49,736 thousand) now includes the previous Personnel expenses before restructuring (EUR -49,736 thousand) as well as Personnel expenses from restructuring (EUR 0 thousand). The line item Other operating expenses (EUR -49,181 thousand) consolidates the previous line items Other expenses from core business activities (EUR -44,393 thousand), Additional ordinary expenses (EUR -1,253 thousand) and Exchange rate losses (EUR -3,535 thousand).
The new financial reporting standard IFRS 15, Revenue from Contracts with Customers, has been applied since January 1, 2018. IFRS 15 replaces the standards IAS 11 and IAS 18 as well as the interpretations IFRIC 13, 15, 18 and SIC-31. Gigaset makes use of the option to apply IFRS 15 based on the modified retrospective approach, in which it is not necessary to adjust prior-year values. Such amounts continue to be presented in adherence to the standards IAS 11 and IAS 18 (for further details see the Notes to the consolidated financial statements part A "General information and presentation of the consolidated financial statements" of the 2017 Annual Report). The cumulative effect of the first-time application of IFRS 15 was recorded in equity in the amount of EUR 0.6 million as of January 1, 2018.
In the case of discount agreements, the new provisions of IFRS 15 result in variable consideration at the time in which the price concession expected to be taken advantage of is considered. Marketing activities that represent consideration as defined in IFRS 15 to be paid by the customer are shown as an expense. Gigaset is obliged to remit copyright levies to the Central Organization for Private Recording Rights (Zentralstelle für Private Überspielungsrechte) (ZPÜ). Since the amounts in question were collected in the interest of third parties, they are not to be included in the transaction price. Therefore, the copyright levy amounts are no longer shown in revenues. Based on the business model, the majority of payment obligations relate to a specific point in time.
The new financial reporting standard IFRS 9, Financial Instruments, has been applied since January 1, 2018, and replaces the previous regulations regarding financial instruments. The Group makes use of the exception whereby comparative information for prior periods with respect to changes in classification and measurement (including impairment) does not have to be adjusted (for further details see the Notes to the consolidated financial statements part A "General information and presentation of the consolidated financial statements" of the 2017 Annual Report).
The first-time application of this standard has an effect on group companies that make use of factoring. Trade receivables that are not sold are assigned to the category Fair Value Through Profit or Loss (FVTPL), since the majority of the receivables in these subportfolios are sold; consequently, there can be no presumption of an intention to hold nor of the utilization of a business model involving a mix of holding and selling. There are no effects from the fair value measurement, since the receivables are short term and it can therefore be assumed that the fair value and the nominal value are generally equal. Significant changes in value due to defaults would naturally reduce the fair value, but any
such impacts have already been recognized through profit or loss as impairment losses. The effect of the first-time application of IFRS 9 results from the reclassification of trade receivables from the IAS 39 category Loans and Accounts Receivable (LaR) to the IFRS 9 category Fair Value through Profit and Loss (FVPL). This resulted in an effect of EUR 60 thousand as of January 1, 2018 from the reversal of the impairment loss recognized pursuant to IAS 39. The trade receivables not subject to factoring are measured at amortized cost. The impairments are determined using an impairment model based on the simplified approach, in which it is not necessary to assign levels. However, in contrast to the previous accounting treatment, expected credit losses are also anticipated under IFRS 9 and risk provisions are recognized accordingly. The effects on hedge accounting are immaterial, since the prospective effectiveness of the hedging relationships for currency risk is given. The investment in Gigaset Mobile Pte. Ltd. is measured at fair value through other comprehensive income (FVOCI without reclassification) under the rules of IFRS 9.
Gigaset is focusing on the realignment of the Company once again in 2018.
This means gaining market share in the Phones business, increasing revenues in the Professional segment, further expanding the Company's own smartphone and Smart Home business as well as establishing other new segments such as Smart Care and Smart Communications. The Group therefore expects the following for the current financial year:
t The Company expects an EBITDA of between EUR 20 million and EUR 28 million characterized by further declining gross profits in the Phones segment, rising gross profits in the Professional and Smart Home segments, and an increase of expenses for development and marketing.
1 General economic environment
| € th and ous s |
1/1 /30 /20 - 9 18 |
1/1 /30 /20 - 9 17 |
|---|---|---|
| Rev en ues |
168 728 , |
18 7, 978 |
| han f f in he d g ds d w k in C in i ries is nto ge nve o oo an or pr og res s |
14 603 , |
5, 750 |
| f m ls Co ria st o ate |
-96 289 , |
-10 0, 284 |
| f it Gr oss pr o |
87 04 2 , |
93 44 4 , |
| Ot he k c lize d ita r o wn wo r ap |
7, 46 9 |
7, 49 7 |
| Ot he ing in rat r o pe co me |
8, 163 |
9, 942 |
| l ex Per son ne pe nse s |
-44 734 , |
-49 736 , |
| he Ot ing rat r o pe ex pe nse s |
-53 40 0 , |
-49 181 , |
| EB ITD A |
4, 54 0 |
11 96 6 , |
| De d a cia tio rtiz atio pre n a n mo n |
-10 236 , |
-11 059 , |
| EB IT |
-5, 69 6 |
90 7 |
| he d s lar Ot r in im i inc ter est an om e |
163 | 41 |
| Int d s im i lar st a ere n exp en ses |
-88 5 |
-81 3 |
| Fin cia l re lt an su |
-72 2 |
-77 2 |
| lt fro din tiv itie Re su m or ary ac s |
-6, 41 8 |
13 5 |
| Inc e t om axe s |
1, 170 |
-1, 61 1 |
| li da d los for he Co te t nso s y ea r |
24 8 -5, |
6 -1, 47 |
| Ea rni ha ng s p er co mm on s re |
||
| bas n E UR ic i - |
-0.0 4 |
-0. 01 |
| di lut d i n E UR e - |
-0.0 4 |
-0. 01 |
| € th and ous s |
7/1 - 9 /30 /20 18 |
7/1 - 9 /30 /20 17 |
|---|---|---|
| Rev en ues |
47 69 7 , |
59 715 , |
| han f f in he d g ds d w k in C in i ries is nto ge nve o oo an or pr og res s |
12 020 , |
5, 655 |
| f m Co ls ria st o ate |
-35 160 , |
-36 288 , |
| Gr f it oss pr o |
24 55 7 , |
29 08 2 , |
| Ot he k c lize d ita r o wn wo r ap |
2, 304 |
2, 793 |
| he Ot ing in rat r o pe co me |
1, 816 |
1, 993 |
| l ex Per son ne pe nse s |
-13 796 , |
09 -15 7 , |
| Ot he ing rat r o pe ex pe nse s |
-18 000 , |
-14 683 , |
| EB ITD A |
-3, 11 9 |
4, 08 8 |
| d a De cia tio rtiz atio pre n a n mo n |
-3, 44 2 |
-3, 722 |
| EB IT |
-6, 56 1 |
36 6 |
| Ot he r in d s im i lar inc ter est an om e |
6 | 10 |
| Int d s lar im i st a ere n exp en ses |
-33 0 |
-25 9 |
| Fin cia l re lt an su |
-32 4 |
-24 9 |
| lt fro din Re tiv itie su m or ary ac s |
-6, 88 5 |
11 7 |
| Inc e t om axe s |
1, 782 |
-34 0 |
| for Co li da d los he te t nso s ea r y |
10 3 -5, |
-22 3 |
| Ea rni ha ng s p er co mm on s re |
||
| bas ic i n E UR - |
-0.0 4 |
-0. 00 |
| di lut d i n E UR e - |
-0.0 4 |
-0. 00 |
| € th and ous s |
1/1 - 9 /30 /20 18 |
1/1 - 9 /30 /20 17 |
|---|---|---|
| for Co li da d los he te t nso s ea r y |
24 8 -5, |
6 -1, 47 |
| Ite hat bse ly be las f ie d t f it los si t t ms m ay su qu en rec o p ro or s |
||
| Cu han rre ncy c ge s |
-1, 054 |
-36 0 |
| h f lo he dg Ca s w es |
1, 972 |
-3, 902 |
| d o hes Inc niz e it e t n t om axe s re cog e em s |
-62 1 |
210 1, |
| Ite hat l l no bse ly be las f ie d t f it los i si t t su t ms w qu en rec o p ro or s |
||
| lua f fe lia bi lity de de f in d be f it lan Rev tio ct, net a n e un r e ne p s |
81 7 |
3, 895 |
| lue Fai nt r va m eas ure me |
-9, 800 |
0 |
| d o his Inc niz ite e t n t om axe s re cog e m |
-26 0 |
239 1, - |
| To l c ha niz d i he he nsi in ta t ng es rec og e n o r co mp re ve co me |
-8, 94 6 |
-39 6 |
| l re niz d i d e To ta co g e nc om e a n xp en se |
-14 19 4 , |
-1, 87 2 |
| € th and ous s |
7/1 - 9 /30 /20 18 |
7/1 - 9 /30 /20 17 |
|---|---|---|
| Co li da d n f it for he f in cia l y te et t nso pro an ea r |
-5, 10 3 |
-22 3 |
| hat bse ly be las f ie d t f it los Ite si t t ms m ay su qu en rec o p ro or s |
||
| lati di f fe Cu tra rre ncy ns on ren ces |
-58 7 |
-16 5 |
| h f lo he dg Ca s es w |
-25 | 95 |
| Inc d o hes niz e it e t n t om axe s re cog e em s |
8 | -29 |
| hat l l no bse ly be las f ie d t f it los Ite i si t t su t ms w qu en rec o p ro or s |
||
| lua f fe lia bi lity de de f in d be f it lan Rev tio ct, net a n e un r e ne p s |
1, 826 |
-71 4 |
| lue Fai nt r va m eas ure me |
-9, 800 |
0 |
| Inc d o his niz ite e t n t om axe s re cog e m |
-58 1 |
22 7 |
| l c ha niz d i he he nsi in To ta t ng es rec og e n o r co mp re ve co me |
-9, 15 9 |
-58 6 |
| l re niz d i d e To ta co g e nc om e a n xp en se |
-14 26 2 , |
-80 9 |
| € th and ous s |
9/3 0/2 018 |
12/ 31/ 201 7 |
|---|---|---|
| AS SE TS |
||
| No t a ts nc urr en sse |
||
| b le a Int i ts an g sse |
30, 734 |
30 083 , |
| lan d e Pro ipm rty t a t pe , p n qu en |
21, 865 |
23 313 , |
| Fin l as cia set an s |
8, 586 |
18 386 , |
| De fer d t ets re ax ass |
14, 292 |
13 137 , |
| l n To ta nt ets on cu rre ass |
75 47 7 , |
84 91 9 , |
| Cu nt ets rre ass |
||
| Inv ies tor en |
53, 885 |
26 733 , |
| de b les Tra eiv rec a |
27, 029 |
39 92 1 , |
| he Ot set r as s |
23, 184 |
25 678 , |
| fun d c laim Tax re s |
398 | 3 51 |
| Ca h a d c h e len iva ts s n as qu |
19, 163 |
49 09 7 , |
| l cu To ta nt ets rre ass |
12 3, 65 9 |
14 1, 94 2 |
| l as To ta set s |
19 9, 13 6 |
22 6, 86 1 |
| € th and ous s |
9/3 0/2 018 |
12/ 31/ 201 7 |
|---|---|---|
| EQ UIT Y & LIA BIL ITI ES |
||
| uit Eq y |
||
| bsc be d c l Su ri ita ap |
132 45 6 , |
13 2, 45 6 |
| har S ium e p rem |
86, 076 |
86 076 , |
| Ret d e ain ing e arn s |
68, 979 |
68 979 , |
| late d o he he Ac nsi inc t cu mu r co mp re ve om e |
-27 8, 138 |
-26 3, 42 3 |
| l eq To uit ta y |
9, 37 3 |
24 08 8 , |
| No lia bi liti t nc urr en es |
||
| Pen b liga sio tio n o ns |
81, 246 |
81 43 2 , |
| Pro vis ion s |
4, 09 1 |
5, 609 |
| l lia bi litie Fin cia an s |
5, 000 |
0 |
| Ot he lia bi litie r s |
0 | 9 |
| De fer d t lia bi litie re ax s |
2, 095 |
1, 663 |
| l n lia bi liti To ta nt on cu rre es |
92 43 2 , |
88 71 3 , |
| Cu lia bi liti nt rre es |
||
| Pro vis ion s |
18, 853 |
22 29 1 , |
| de b les Tra pay a |
47 210 , |
56 114 , |
| lia bi litie Tax s |
14, 023 |
17 166 , |
| Ot he lia bi litie r s |
245 17, |
18 48 9 , |
| To l cu lia bi liti ta nt rre es |
97 33 1 , |
11 4, 06 0 |
| l eq uit & lia bi liti To ta y es |
19 9, 13 6 |
22 6, 86 1 |
| € th and ous s |
Sub ibe d scr ital cap |
Sha re miu pre m |
Rev enu e res erv es |
Acc ula ted oth um er hen sive com pre inc om e |
sol ida ted Con ity equ |
|
|---|---|---|---|---|---|---|
| be De r 3 1, 20 16 cem |
13 2, 45 6 |
86 076 , |
68 979 , |
-26 9, 669 |
17 842 , |
|
| 1 | Co li dat d los s 2 01 7 nso e |
0 | 0 | 0 | 6 -1, 47 |
6 -1, 47 |
| 2 | Cu han rre ncy c ge s |
0 | 0 | 0 | -36 0 |
-36 0 |
| 3 | h f lo he dg Ca s w es |
0 | 0 | 0 | -2, 692 |
-2, 692 |
| 4 | Rev lua f fe lia bi lity tio cts t a n e , ne de de f in d be f it lan un r e ne p s |
0 | 0 | 0 | 2, 656 |
2, 656 |
| 5 | l c han d i he To niz ta t ge s re cog e n o r he nsi inc co mp re ve om e |
0 | 0 | 0 | -39 6 |
-39 6 |
| 6 | l n ( ) To inc 1+ 5 ta et om e |
0 | 0 | 0 | -1, 87 2 |
-1, 87 2 |
| be Se r 3 0, 20 17 tem p |
13 2, 45 6 |
86 07 6 , |
68 97 9 , |
-27 1, 54 1 |
15 97 0 , |
|
| De be r 3 1, 20 17 ce m |
13 2, 45 6 |
86 07 6 , |
68 97 9 , |
-26 3, 42 3 |
24 08 8 , |
|
| dju FRS 9 / IFR S 1 A ts I 5 stm en |
-52 1 |
-52 1 |
||||
| Jan 1, 20 18 ua ry |
13 2, 45 6 |
86 07 6 , |
68 97 9 , |
-26 3, 94 4 |
23 56 7 , |
|
| 1 | li dat d los Co s 2 018 nso e |
0 | 0 | 0 | -5, 248 |
-5, 248 |
| 2 | Cu han rre ncy c ge s |
0 | 0 | 0 | 054 -1, |
054 -1, |
| 3 | Ca h f lo he dg s w es |
0 | 0 | 0 | 1, 35 1 |
1, 35 1 |
| 4 | lue Fa ir v nt a m eas ure me |
0 | 0 | 0 | -9, 800 |
-9, 800 |
| 5 | Rev lua f fe lia bi lity tio cts t a n e , ne de de f in d be f it lan un r e ne p s |
0 | 0 | 0 | 55 7 |
55 7 |
| 6 | l c han d i he To niz ta t ge s re cog e n o r he nsi inc co mp re ve om e |
0 | 0 | 0 | -8, 946 |
-8, 946 |
| 7 | l n ( ) To inc 1+ 5 ta et om e |
0 | 0 | 0 | -14 19 4 , |
-14 19 4 , |
| be Se r 3 0, 20 18 tem p |
13 2, 45 6 |
86 07 6 , |
68 97 9 , |
-27 8, 13 8 |
9, 37 3 |
| € th and ous s |
1/1 /30 /20 - 9 18 |
1/1 /30 /20 - 9 17 |
|---|---|---|
| lt fro din tiv itie Re su m or ary ac s |
-6, 41 8 |
13 5 |
| f p lan d e d a f in b le a De cia tio ipm rtiz atio i ert t a t a tan ts pre n o rop y, p n qu en n mo n o g sse |
10 236 , |
11 059 , |
| de Inc (+ ) / (- ) in p sio isio rea se cre ase en n p rov ns |
63 1 |
552 1, |
| Ga in ( -) / los (+ ) fro he le o f n m t nt ets s sa on cu rre ass |
2 | -29 |
| Ga in ( -) / los (+ ) fro lati tra s m cu rre ncy ns on |
25 7 |
1, 098 |
| lt Int st r ere esu |
722 | 77 2 |
| d Int ive st r ere ece |
146 | 23 |
| Int d ai st p ere |
-47 7 |
-27 5 |
| d Inc ai e t om axe s p |
-3, 805 |
-1, 984 |
| (- ) de (+ ) Inc / in i ries nto rea se cre ase nve |
-27 152 , |
-11 686 , |
| de de b les d o he b les Inc (- ) / (+ ) in t eiv cei t rea se cre ase ra rec a an r re va |
16 83 7 , |
-4, 359 |
| Inc (+ ) / de (- ) de b les he lia bi litie d o he in t isio t t rea se cre ase ra pay a , o r s a n r p rov ns |
-15 504 , |
-16 934 , |
| (+ ) / de (- ) he f t he f f in l po Inc in o r it cia siti t sta tem t o rea se cre ase em s o en an on |
-87 0 |
-55 0 |
| h i f lo (+ ) f lo (- ) fro nti ing tio (ne h f lo w) Ca / o ut t c s n w w m co nu op era ns as |
-25 39 5 , |
-21 17 8 , |
| fro f n Pro ds he dis l o m t nt ets cee po sa on cu rre ass |
0 | 29 |
| Dis bu for l ex dit ita s in nts nt ets rse me ca p pe n ure no ncu rre ass |
-9, 44 1 |
-8, 88 1 |
| h i f lo (+ ) f lo (- ) fro inv ing tiv itie Ca / o ut est s n w w m ac s |
-9, 44 1 |
-8, 85 2 |
| € th and ous s |
1/1 /30 /20 - 9 18 |
1/1 /30 /20 - 9 17 |
|---|---|---|
| h f lo Fre e c as w |
-34 83 6 , |
-30 03 0 , |
| fro he f cu f in l lia bi litie Pay rais ing (+ ) /re (- ) o cia nts m t nts nt me pay me rre an s |
0 | 58 |
| Ca h in f lo fro he f n f in l lia bi litie rais ing cia m t nt s w o on cu rre an s |
5, 000 |
0 |
| Ca h i f lo (+ ) / o f lo (- ) fro f in cin ivit ies ut act s n w w m an g |
5, 00 0 |
58 |
| h a d c h e len he be f t he d Ca iva inn ing rio ts a t t s n as qu g o pe |
44 548 , |
39 86 7 , |
| f fe C han du han di e t rat ge s o e xc ge e ren ces |
-98 | -27 4 |
| Ca h a d c h e len he be f t he d m d a he los f t he iva inn ing rio ing ior ts a t t t t rat s n as qu g o pe eas ure c e o pr y ear |
44 646 , |
40 141 , |
| (- ) / de (+ ) d c h Inc in r rict est rea se cre ase e as |
958 | 2, 874 |
| han h a d c h e len C in c iva ts ge as n as qu |
-29 836 , |
-29 972 , |
| h a d c h e len he d o f t he d Ca iva rio ts a t t s n as qu en pe |
67 0 15 , |
12 76 9 , |
| Res d c h tric te as |
3, 49 3 |
4, 47 5 |
| Ca h a d c h e iva len d o he f f in cia l p itio ts ort n t st ate nt s n as qu rep e me o an os n |
19 16 3 , |
17 24 4 , |
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