Quarterly Report • Sep 2, 2014
Quarterly Report
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Report on the 1st Quarter 2014/15 of Zumtobel Group AG
| Key Data in EUR million | Q1 2014/15 | Q1 2013/14 | Change in % |
|---|---|---|---|
| Revenues | 323.5 | 309.3 | 4.6 |
| Adjusted EBIT | 19.1 | 17.7 | 7.5 |
| as a % of revenues | 5.9 | 5.7 | |
| EBIT | 9.1 | 10.9 | (16.3) |
| as a % of revenues | 2.8 | 3.5 | |
| Net profit/loss for the period | 5.7 | 6.7 | (14.3) |
| as a % of revenues | 1.8 | 2.2 | |
| Cash flow from operating results | 22.5 | 27.3 | (17.6) |
| Investments | 14.2 | 11.9 | 19.3 |
| 31 July 2014 | 30 April 2014 | Change in % | |
| Total assets | 1,023.2 | 1,006.6 | 1.6 |
| Equity | 329.2 | 327.6 | 0.5 |
| Equity ratio in % | 32.2 | 32.5 | |
| Net debt | 159.0 | 126.2 | 26.0 |
| Headcount incl. contract worker (full-time equivalent) | 7,206 | 7,291 | (1.2) |
The 2014/15 financial year is an important year of transition for the Zumtobel Group, in which we will create a stable foundation for profitable and dynamic growth. We want to bring our new structures to life, eliminate past inefficiencies and, in this way, leverage the growth potential and cost synergies from our multibrand strategy. With this report, we are pleased to inform you of the good progress in this transformation process and the sound development of revenues and earnings during the first quarter of 2014/15.
The reorientation of the Zumtobel Group and the implementation of the restructuring projects are proceeding as planned at all levels and locations. Our goal to improve capacity utilisation and reduce costs was reflected in the introduction of measures at the end of April and the beginning of May 2014 to terminate production in Tianjin (China), Landskrona (Sweden) and Ennenda (Switzerland). Tridonic sold the connecting clamp business (Tridonic connection technology) during the first quarter, whereby this step should be seen in connection with an even stronger focus on our core LED business. The planned adjustments in sales led to the reduction of roughly 100 employees due to the combination of previously separate sales organisations during the reporting period. In our newly created Group Purchasing Department, we launched a project together with an external consultant to maximise the realisation of synergy effects in this area. The results of the implemented measures will be gradually visible in earnings during the coming quarters.
A look at the income statement shows that the development of revenues and earnings met our expectations during the first quarter. At the Group level, revenues rose by 4.6% to EUR 323.5 million (prior year: EUR 309.3 million). The focal points of growth from a regional standpoint were Germany and Great Britain, two key core markets for the Zumtobel Group. The Lighting Segment, in particular, benefited from stabilisation in the European commercial construction industry and the newly implemented multi-brand sales structure. Segment revenues increased 5.9% to EUR 243.4 million. The Components Segment continues to make very good progress in transforming its business to LED technology. Revenues from the sale of LED components rose by 76.8% to EUR 45.2 million in the first quarter, which more than offset the declining demand for electronic ballasts as well as a large part of the revenues lost due to the exit from magnetic technology and the sale of the connecting clamp business. Segment revenues declined by 3.1% to EUR 96.6 million (prior year: EUR 99.7 million). Group EBIT adjusted for special effects rose by 7.5% to EUR 19.1 million (prior year: EUR 17.7 million), above all due to the increase in revenues. Both the Lighting Segment and the Components Segment recorded a year-on-year improvement in adjusted earnings.
Based on the continuing stable economic environment and the expected cost savings from the measures implemented to date, the Management Board confirms the previously communicated guidance for the 2014/15 financial year, which calls for an increase of roughly 3% in revenues and an improvement in the adjusted EBIT margin to 5% to 6% (adjusted EBIT margin for FY 2013/14: 3.8%). The necessary restructuring measures will result in negative special effects of approx. EUR 20 million on earnings during 2014/15. The first quarter results show that we are also on the right course regarding our medium-term goal to gradually raise the adjusted EBIT margin from the current level of 3.8% to 8% - 10% by 2016/17.
Ulrich Schumacher Chief Executive Officer
Ulrich Schumacher
Developments on the international financial markets in recent months were influenced by economic and political uncertainty and a subsequent increase in volatility. Against the backdrop of this environment the Zumtobel share rose by 2.7% during the reporting period and outperformed the leading Austrian Traded Index (ATX: minus 8.5%), which also includes the Zumtobel share.
Based on an unchanged number of 43.5 million common shares outstanding in year-on-year comparison, the market capitalisation of the Zumtobel Group totalled EUR 670 million at the end of July 2014 (prior year: EUR 401 million). There were no major changes in the shareholder structure of Zumtobel AG after the end of the 2013/14 financial year. The Zumtobel family has remained the stable core shareholder of Zumtobel Group AG since the initial public offering with a stake of 35.4%. Delta Lloyd Asset Management NV holds a stake of over 5%, and Blackrock Inc. increased its investment to over 4% of the issued shares as of 12 June 2014. SICAV Objetif Small Caps Euro (Lazard Freres Gestion) informed Zumtobel Group AG that it had reduced its investment in the company below 4% as of 2 July 2014. The remainder of the shares is held predominately by other institutional investors. In the ATX, the leading index of the largest listed companies in Austria, the Zumtobel share ranked 21st based on market capitalisation and 21st based on trading volume as of 31 July 2014. The average daily turnover on the Vienna Stock Exchange rose from 73,602 shares in the first quarter of the previous year to 84,975 shares in the reporting period (double-count, as published by the Vienna Stock Exchange). The company held 359,488 treasury shares as of 31 July 2014.
| Closing price at 30.04.14 | EUR 15,000 | Currency | EUR |
|---|---|---|---|
| Closing price at 31.07.14 | EUR 15,405 | ISIN | AT0000837307 |
| Performance 1st quarter 2014/15 | 2.7% | Ticker symbol Vienna Stock Exchange (XETRA) | ZAG |
| Market capitalisation at 31.07.14 | EUR 670 million | Market segment | Prime Market |
| Share price - high at 07.07.14 | EUR 17,490 | Reuters symbol | ZUMV.VI |
| Share price - low at 21.05.14 | EUR 14,880 | Bloomberg symbol | ZAG AV |
| Ø Turnover per day (shares) | 84,975 | Number of issued shares | 43,500,000 |
The July 2014 forecast by the International Monetary Fund (IMF) shows that global growth has been slowed by concerns over development in the two economic powers, the USA and China, as well as the crisis in Ukraine. The weak start into the 2014 calendar year is now only expected to be followed by a plus of 3.4%, which places the forecast 0.3 percentage points below the April report. However, the IMF continues to stand by its estimate of a 4% increase in the global economy during 2015 despite the growing number of international crises. Forecasts for the euro zone remain unchanged with an increase of 1.1% in 2014 and 1.5% in 2015, in part with substantial regional differences. On a more positive note, growth expectations for the Zumtobel Group's two largest sales regions – Germany and Great Britain – were raised slightly from plus 1.7% to plus 1.9% and from plus 2.8% to plus 3.2%.
The construction industry in Europe will not make a substantial contribution to economic recovery during the 2014/15 financial year. However, the June report by Euroconstruct confirms that the commercial construction sector should stabilise in 2014 and 2015 after a series of annual declines. In the seven most important European markets for the Zumtobel Group (Austria, Germany, Switzerland, France, Great Britain, Italy and Scandinavia), Euroconstruct is predicting growth of 1.1% for the 2014 calendar year and 1.6% for the 2015 calendar year.
In connection with the 2 April 2014 announcement of restructuring projects to improve cost structures in the operation network, the Zumtobel Group informed employees and the local union at the plant in Landskrona (Sweden) on 5 May 2014 about the termination of lighting production at this location by the end of the 2014 calendar year. This shutdown will affect 155 employees.
Tridonic, the Zumtobel Group brand for lighting components, started consultations with employee representatives at the Ennenda (Switzerland) plant on 8 May 2014 concerning the termination of production. The conventional ballasts for high-intensity discharge lamps that are produced in Ennenda are exposed to substantial competitive pressure and a resulting massive drop in price. A mutally agreed social plan has since been approved for the 115 employees affected by the closing. The production in Ennenda will be terminated as of February 2015.
On 6 June 2014 Tridonic announced the sale of its connecting clamp business. The local management of Tridonic connection technology GmbH, formerly a subsidiary of Tridonic with headquarters in Innsbruck (Austria), subsequently acquired all shares in the company retroactively as of 30 April 2014. Tridonic connection technology employs a workforce of 97. The parties have agreed not to disclose any information on the price for the transaction.
The Supervisory Board of Zumtobel Group AG accepted the request by Martin Brandt, member of the Management Board and Chief Operating Officer, to terminate his employment contract prematurely as of 31 July 2014. This contract would have ended on 30 April 2015.
The 38th annual general meeting on 25 July 2014 authorised the payment of a EUR 0.18 dividend per share for the 2013/14 financial year. This dividend was distributed to shareholders on 1 August 2014. In addition, the annual general meeting approved the change in the company's name from "Zumtobel AG" to "Zumtobel Group AG".
No other significant events occurred after the balance sheet date on 30 April 2014.
Continued moderate growth expected for the euro zone
Termination of lighting production in Landskrona
Termination of components production in Ennenda
Management buyout for Tridonic connection technology
COO Martin Brandt leaves Zumtobel Group
AGM approves dividend for FY 2013/14
Closely related persons include the Management Board and Supervisory Board of Zumtobel Group AG. As of 31 July 2014 there were no business transactions with closely related persons.
The Group has concluded supply and delivery agreements with associated companies, which reflect third party conditions.
4.6% increase in Group revenues Group revenues rose by 4.6% year-on-year to EUR 323.5 million (prior year: EUR 309.3 million) during the first quarter of the 2014/15 financial year (1 May to 31 July 2014) in a stable economic environment. Important growth impulses have been created, in particular, by the trend to intelligently managed, energyefficient lighting and in particular by LED technology. This was reflected in continued dynamic growth with LED products during the reporting period. Revenues from the sale of LED products rose by 56.0% over the first quarter of the previous year to EUR 139.3 million (prior year: EUR 89.3 million). The LED share of Group revenues grew to 43.1% within 12 months, compared with 28.9% in the first quarter of 2013/14. Both the Lighting Segment (plus 48.2%) and the Components Segment (plus 76.8%) benefited from the sharp rise in the demand for LED lighting with their extensive portfolio of innovative LED products.
| Segment development in EUR million | Q1 2014/15 | Q1 2013/14 | Change in % |
|---|---|---|---|
| Lighting Segment | 243.4 | 229.9 | 5.9 |
| Components Segment | 96.6 | 99.7 | (3.1) |
| Reconciliation | (16.5) | (20.3) | (18.8) |
| Zumtobel Group | 323.5 | 309.3 | 4.6 |
In the late cyclical Lighting Segment, there are growing signs of stabilisation in the European commercial construction industry. These signs were also confirmed in a June 2014 report by Euroconstruct, which forecasts growth of 1.1% for the 2104 calendar year and 1.6% for the 2015 calendar year after a series of annual declines in the seven most important European markets for the Zumtobel Group. Revenues in the Lighting Segment rose by 5.9% to EUR 243.4 million in the first quarter of 2014/15 (prior year: EUR 229.9 million). This development was also supported by positive impulses from the newly implemented multi-brand sales structure, which now markets the entire Zumtobel and Thorn product portfolio in all regions from a single hand. Solid revenue growth in Lighting Segment
The Components Segment is making good progress in strengthening its business focus on LED technology to create a stable foundation for future profitable and dynamic growth. The development of revenues in 2014/15 will still be negatively influenced by the exit from magnetic technology in the previous year, the sale of the non-core connecting clamp business as of 30 April 2014 and the substantially weaker demand for electronic ballasts. However, the sound increase in sales volumes of LED converters and LED modules confirms the strategic decision to concentrate resources more directly on LED technology. Revenues from the sale of LED components rose by 76.8% to EUR 45.2 million (prior year: EUR 25.6 million). This growth fully offset the declining demand for electronic ballasts as well as a large part of the revenues lost due to the exit from magnetic technology and the sale of the connecting clamp business. Segment revenues fell by 3.1% to EUR 96.6 million for the first quarter of 2014/15 (prior year: EUR 99.7 million). Good progress in the Components Segment
| Q1 2014/15 | Revenues in EUR million |
Change in % in % of Group | |
|---|---|---|---|
| D/A/CH | 92.1 | 5.5 | 28.5 |
| Northern Europe | 69.8 | 14.8 | 21.6 |
| Benelux & Eastern Europe | 27.1 | 3.9 | 8.4 |
| Southern Europe & Latin America | 53.7 | (2.9) | 16.6 |
| Asia & Pacific | 37.1 | (6.9) | 11.5 |
| Middle East & Africa* | 34.3 | 5.3 | 10.6 |
| Northern America | 9.3 | 26.3 | 2.9 |
| Total | 323.5 | 4.6 | 100.0 |
*incl. India, Central Asia & Turkey
In connection with the new organisational structure of the Zumtobel Group, the sales regions were redefined and the countries reassigned to the various regions as follows:
| Germany, Austria, Switzerland |
|---|
| Great Britain, Ireland, Sweden, Norway, Iceland, Finland, Denmark, Baltic |
| States |
| Belgium, Netherlands, Luxembourg and all countries in Eastern Europe, |
| including Russia |
| USA and Canada |
| France, Italy, Spain, Portugal, Greece and all countries in Latin America |
| All countries in the Far East, including China as well as Japan, Australia |
| and New Zealand |
| All countries in Middle East, India, Africa, Central Asia and Turkey |
These changes were also made retroactively, which led to the adjustment of the regional distribution in the first quarter of 2013/14.
The D/A/CH region, the strongest market in the Zumtobel Group, recorded a 5.5% increase in revenues to EUR 92.1 million. Revenue growth was particularly sound, above all in Germany due to orders from large retail chains. Revenues in Northern Europe rose by 14.8% to EUR 69.8 million, whereby Great Britain was the main driver in this region. In Benelux & Eastern Europe, economic uncertainty related to the crisis in Ukraine had a negative influence on the Russian market. Revenues in this region rose by only 3.9% to EUR 27.1 million. Business development in the Southern Europe and Latin America region was characterised, above all, by disappointing outdoor lighting sales in France following the elections. Revenues in this region fell by 2.9% to EUR 53.7 million. The Asia & Pacific region is undergoing extensive restructuring and was also affected by negative foreign exchange effects and the exit from magnetic technology. Revenues declined 6.9% to EUR 37.1 million in the first quarter of 2014/15. In the Middle East & Africa, the sound development from previous quarters continued during the reporting period with a 5.3% increase in revenues to EUR 34.3 million. After a very weak first quarter in 2013/14, North America recorded revenue growth of 26.3% in the reporting quarter.
| Income statement in EUR million | Q1 2014/15 | Q1 2013/14 | Change in % |
|---|---|---|---|
| Revenues | 323.5 | 309.3 | 4.6 |
| Cost of goods sold | (216.2) | (205.4) | 5.2 |
| Gross profit | 107.3 | 103.9 | 3.3 |
| as a % of revenues | 33.2 | 33.6 | |
| SG&A expenses adjusted for special effects | (88.2) | (86.2) | 2.4 |
| Adjusted EBIT | 19.1 | 17.7 | 7.5 |
| as a % of revenues | 5.9 | 5.7 | |
| Special effects | (10.0) | (6.9) | 45.2 |
| EBIT | 9.1 | 10.9 | (16.3) |
| as a % of revenues | 2.8 | 3.5 | |
| Financial results | (1.8) | (2.8) | 36.2 |
| Profit/loss before tax | 7.3 | 8.0 | (9.3) |
| Income taxes | (1.6) | (1.4) | 15.0 |
| Net profit/loss for the period | 5.7 | 6.7 | (14.3) |
| Earnings per share (in EUR) | 0.13 | 0.16 | (15.1) |
Note: EBITDA (EBIT plus depreciation and amortisation) amounted to EUR 22.4 million in the first quarter of 2014/15
Group EBIT adjusted for special effects rose by 7.5% year-on-year from EUR 17.7 million to EUR 19.1 million. The return on sales increased from 5.7% to 5.9%. Both the Lighting Segment and the Components Segment recorded a year-on-year improvement in adjusted earnings. The gross profit margin fell to 33.2% in the first quarter (prior year: 33.6%). This decline was related primarily to negative foreign exchange effects in the cost of materials and temporary inefficiencies resulting from the relocation of production. Development costs included in the cost of goods sold amounted to EUR 16.6 million in the first quarter and were only slightly higher than the previous year (EUR 16.3 million). Adjusted Group EBIT rises by 7.5%
Selling costs fell from 24.8% to 23.9% of revenues. One focal point of the Zumtobel Group's new structure is the merger of the previously separate Zumtobel and Thorn sales organisations. Related measures were introduced during the past six months. The number of employees in sales was reduced by roughly 100 during the first quarter and by nearly 150 over the past six months. Administrative expenses rose from EUR 9.5 million to EUR 11.6 million, primarily due to higher consulting expenses. Other operating results, excluding special effects, amounted to EUR 0.6 million (prior year: EUR 0.2 million) and included, among others, license income from the LED business. Selling expenses below prior year in % of revenues
Negative special effects totalling EUR 10.0 million were recognised during the first quarter of 2014/15 (prior year: EUR 6.9 million). These effects are related, above all, to the termination of production in Landskrona (Sweden) and Ennenda (Switzerland) and to restructuring measures in the Lighting Segment sales organisations. Additional information is provided in the notes to the consolidated interim financial statements. Negative special effects from transformation process
9
Improvement in financial results
| Reported EBIT | 9.1 | 10.9 | (16.3) |
|---|---|---|---|
| thereof special effects | (10.0) | (6.9) | (45.2) |
| Adjusted EBIT | 19.1 | 17.7 | 7.5 |
| as a % of revenues | 5.9 | 5.7 | |
| Financial results improved by EUR 1.0 million year-on-year to minus EUR 1.8 million (prior year: minus EUR 2.8 million). Interest expense consists mainly of interest on the current credit agreement. Other |
Adjusted EBIT in EUR million Q1 2014/15 Q1 2013/14 Change in %
EUR 2.8 million). Interest expense consists mainly of interest on the current credit agreement. Other financial income and expenses totalled plus EUR 0.5 million (prior year: minus EUR 0.8 million). The change in comparison with the prior year resulted from foreign exchange differences, above all due to an increase in key currencies for the Zumtobel Group versus the euro during the first quarter of 2014/15. Additional information is provided in the notes to the consolidated interim financial statements.
| Financial result in EUR million | Q1 2014/15 | Q1 2013/14 | Change in % |
|---|---|---|---|
| Interest expense | (2.4) | (2.2) | 12.4 |
| Interest income | 0.1 | 0.2 | (56.1) |
| Net financing costs | (2.3) | (1.9) | (20.0) |
| Other financial income and expenses | 0.5 | (0.8) | >100 |
| Result from companies accounted for at-equity | 0.1 | (0.1) | >100 |
| Financial results | (1.8) | (2.8) | 36.2 |
Profit before tax declined to EUR 7.3 million in the first quarter of 2014/15 (prior year: EUR 8.0 million), and income taxes equalled EUR 1.6 million. Net profit for the period amounted to EUR 5.7 million, versus EUR 6.7 million in the previous year, due to the substantial increase in negative special effects. Earnings per share for the shareholders of Zumtobel AG (basic EPS based on 43.1 million shares) equalled EUR 0.13 (prior year: EUR 0.16).
Cash flow was determined on a monthly basis in accordance with the indirect method. The resulting monthly cash flows were translated at the applicable average monthly exchange rate and then aggregated, while the balance sheet positions were translated at the exchange rate in effect on the respective closing date. Individual positions on the cash flow statement therefore differ significantly from the respective balance sheet positions, above all under cash flow from operating activities.
Working capital totalled EUR 239.6 million as of 31 July 2014 (prior year: EUR 200.0 million). The seasonal increase in working capital was stronger than the comparable period in 2013/14 due to the sound year-onyear growth in the volume of business (plus 4.6%). It included an increase in inventories and receivables as well as a reduction in trade payables. Stocks of raw materials and finished goods were expanded in line with the change in revenues in order to safeguard production and supply capabilities to customers. In comparison with the first quarter of the prior year, working capital rose from 18.2% to 19.0% of rolling 12-month revenues. The seasonal cash outflows from the increase in working capital since 30 April 2014 rose from EUR 32.6 million in the prior year to EUR 41.0 million. The positive cash flow effect from current provisions Seasonal cash outflows from increase in working capital
Net profit of EUR 5.7 million (EUR 5.1 million) resulted chiefly from the addition to provisions for current restructuring measures. In total cash flow from operating activities fell by EUR 17.3 million to minus EUR 29.9 million in the first quarter of 2014/15 (prior year: minus EUR 12.6 million).
Free cash flow of minus EUR 35.0 million Investments in property, plant and equipment for various production facilities totalled EUR 14.2 million in the first quarter of 2014/15 (prior year: EUR 11.9 million). These expenditures covered investments in the manufacture of tools for new products, expansion and maintenance investments as well as capitalised R&D costs of EUR 4.4 million. The positive cash effect in the position "change in liquid funds from changes in the consolidation range" is related to the sale of Tridonic connection technology GmbH and the initial consolidation of Thorn Lighting Limited Liability Company in Qatar. Free cash flow of minus EUR 35.0 million was EUR 11.6 million lower than the comparable prior year period, above all due to the higher cash outflows for the increase in working capital.
Cash flow from financing activities consists primarily of the increased use of the credit line provided by the consortium credit agreement and interest paid during the first quarter of 2014/15. The EUR 0.18 dividend per share for the 2013/14 financial year, which was approved by the annual general meeting on 25 July 2014, was distributed to the shareholders on 1 August 2014 (EUR 7.8 million) and was therefore not included in cash outflows for the first quarter of the reporting year.
| Balance sheet data in EUR million | 31 July 2014 | 30 April 2014 |
|---|---|---|
| Total assets | 1,023.2 | 1,006.6 |
| Net debt | 159.0 | 126.2 |
| Equity | 329.2 | 327.6 |
| Equity ratio in % | 32.2 | 32.5 |
| Gearing in % | 48.3 | 38.5 |
| Investments | 14.2 | 65.6 |
| Working capital | 239.6 | 200.0 |
| As a % of rolling 12 month revenues | 19.0 | 16.0 |
The quality of the balance sheet structure remains nearly unchanged. The equity ratio declined slightly from 32.5% on 30 April 2014 to 32.2% as of 31 July 2014. Net debt followed the normal seasonal pattern with an increase of EUR 32.8 million over the level on 30 April 2014 to EUR 159.0 million (prior year: EUR 126.2 million). Gearing – the ratio of net debt to equity – deteriorated from 38.5% to 48.3%.
Continued solid balance sheet structure
Based on the continuing stable economic environment and the expected cost savings from the measures implemented to date, the Management Board confirms the previously communicated guidance for the 2014/15 financial year, which calls for an increase of roughly 3% in revenues and an improvement in the adjusted EBIT margin to 5% to 6% (adjusted EBIT margin for FY 2013/14: 3.8%). The necessary restructuring measures will result in negative special effects of approx. EUR 20 million on earnings during 2014/15. The first quarter results show that we are also on the right course regarding our medium-term goal to gradually raise the adjusted EBIT margin from the current level of 3.8% to 8% - 10% by 2016/17.
Dornbirn, 2 September 2014
Ulrich Schumacher Karin Sonnenmoser Chief Executive Officer Chief Financial Officer
| in TEUR | Q1 2014/15 | Q1 2013/14 | Change in % |
|---|---|---|---|
| Revenues | 323,455 | 309,279 | 4.6 |
| Cost of goods sold | (216,176) | (205,406) | 5.2 |
| Gross profit | 107,279 | 103,873 | 3.3 |
| as a % of revenues | 33.2 | 33.6 | |
| Selling expenses | (77,229) | (76,853) | 0.5 |
| Administrative expenses | (11,639) | (9,537) | 22.0 |
| Other operating results | (9,318) | (6,625) | 40.6 |
| thereof special effects | (9,966) | (6,864) | 45.2 |
| Operating profit | 9,093 | 10,858 | (16.3) |
| as a % of revenues | 2.8 | 3.5 | |
| Interest expense | (2,427) | (2,160) | 12.4 |
| Interest income | 95 | 217 | (56.1) |
| Other financial income and expenses | 484 | (768) | >100 |
| Result from companies accounted for at-equity | 55 | (101) | >100 |
| Financial results | (1,793) | (2,812) | 36.2 |
| as a % of revenues | (0.6) | (0.9) | |
| Profit before tax | 7,300 | 8,046 | (9.3) |
| Income taxes | (1,579) | (1,372) | 15.0 |
| Net profit from continuing operations | 5,721 | 6,674 | (14.3) |
| Net loss from discontinued operations | 0 | 0 | |
| Net profit for the period | 5,721 | 6,674 | (14.3) |
| as a % of revenues | 1.8 | 2.2 | |
| thereof due to non-controlling interests | (77) | (155) | 50.1 |
| thereof due to shareholders of the parent company | 5,798 | 6,829 | (15.1) |
| Average number of shares outstanding – basic (in 1,000 pcs.) | 43,139 | 43,134 | |
| Average diluting effect (stock options) (in 1,000 pcs.) | 1 | 2 | |
| Average number of shares outstanding – diluted (in 1,000 pcs.) | 43,140 | 43,136 | |
| Earnings per share (in EUR) | |||
| Basic earnings per share | 0.13 | 0.16 | |
| Diluted earnings per share | 0.13 | 0.16 | |
| Earnings per share from continuing operations (in EUR) | |||
| Basic earnings per share | 0.13 | 0.15 | |
| Diluted earnings per share | 0.13 | 0.15 | |
| Earnings per share from discontinued operations (in EUR) | |||
| Basic earnings per share | 0.00 | 0.00 | |
| Diluted earnings per share | 0.00 | 0.00 |
| in TEUR | Q1 2014/15 | Q1 2013/14 | Change in % |
|---|---|---|---|
| Net profit/loss for the period | 5,721 | 6,674 | (14.3) |
| Currency differences | 1,984 | (7,867) | >100 |
| Currency differences arising from loans | 1,618 | (2,632) | >100 |
| Hedge accounting | (243) | 1,949 | <(100) |
| Deferred taxes due to hedge accounting | 61 | (487) | >100 |
| Total of items that will be reclassified ("recycled") subsequently to the income statement | 3,420 | (9,037) | >100 |
| Subtotal other comprehensive income | 3,420 | (9,037) | >100 |
| thereof due to non-controlling interests | 57 | (27) | >100 |
| thereof due to shareholders of the parent company | 3,363 | (9,010) | >100 |
| Total comprehensive income | 9,141 | (2,363) | >100 |
| thereof due to non-controlling interests | (20) | (182) | 89.3 |
| thereof due to shareholders of the parent company | 9,161 | (2,181) | >100 |
| in TEUR | 31 July 2014 | in % | 30 April 2014 | in % |
|---|---|---|---|---|
| Goodwill | 189,471 | 18.5 | 187,792 | 18.7 |
| Other intangible assets | 56,295 | 5.5 | 55,682 | 5.5 |
| Property, plant and equipment | 223,987 | 21.9 | 230,635 | 22.9 |
| Financial assets accounted for at-equity | 2,496 | 0.2 | 2,441 | 0.2 |
| Financial assets | 1,482 | 0.1 | 1,466 | 0.1 |
| Other assets | 4,315 | 0.5 | 4,354 | 0.4 |
| Deferred taxes | 37,719 | 3.7 | 37,509 | 3.7 |
| Non-current assets | 515,765 | 50.4 | 519,879 | 51.5 |
| Inventories | 186,265 | 18.2 | 181,426 | 18.1 |
| Trade receivables | 213,315 | 20.8 | 199,303 | 19.8 |
| Financial assets | 2,740 | 0.3 | 2,731 | 0.3 |
| Other assets | 31,208 | 3.1 | 29,071 | 2.9 |
| Liquid funds | 73,859 | 7.2 | 74,191 | 7.4 |
| Current assets | 507,387 | 49.6 | 486,722 | 48.5 |
| ASSETS | 1,023,152 | 100.0 | 1,006,601 | 100.0 |
| Share capital | 108,750 | 10.6 | 108,750 | 10.8 |
| Additional paid-in capital | 335,260 | 32.8 | 335,249 | 33.3 |
| Reserves | (124,579) | (12.2) | (115,215) | (11.5) |
| Net profit/loss for the period | 5,798 | 0.6 | (4,995) | (0.5) |
| Capital attributed to shareholders of the parent company | 325,229 | 31.8 | 323,789 | 32.1 |
| Capital attributed to non-controlling interests | 3,998 | 0.4 | 3,765 | 0.4 |
| Equity | 329,227 | 32.2 | 327,554 | 32.5 |
| Provisions for pensions | 76,829 | 7.5 | 77,486 | 7.7 |
| Provisions for severance compensation | 39,243 | 3.8 | 41,374 | 4.1 |
| Provisions for other employee benefits | 12,747 | 1.2 | 12,860 | 1.3 |
| Other provisions | 1,065 | 0.1 | 1,073 | 0.1 |
| Borrowings | 222,994 | 21.8 | 197,357 | 19.6 |
| Other liabilities | 2,727 | 0.3 | 2,575 | 0.3 |
| Deferred taxes | 4,196 | 0.4 | 4,337 | 0.4 |
| Non-current liabilities | 359,801 | 35.1 | 337,062 | 33.5 |
| Provisions for taxes | 20,253 | 2.0 | 20,057 | 2.0 |
| Other provisions | 38,192 | 3.7 | 32,985 | 3.3 |
| Borrowings | 11,813 | 1.2 | 5,314 | 0.5 |
| Trade payables | 140,244 | 13.7 | 159,912 | 15.9 |
| Other liabilities | 123,622 | 12.1 | 123,717 | 12.3 |
| Current liabilities | 334,124 | 32.7 | 341,985 | 34.0 |
| EQUITY AND LIABILITIES | 1,023,152 | 100.0 | 1,006,601 | 100.0 |
| in TEUR | Q1 2014/15 | Q1 2013/14 |
|---|---|---|
| Operating profit from continuing and discontinued operations | 9,093 | 10,858 |
| Depreciation and amortisation | 13,356 | 16,443 |
| Gain/loss from disposal of fixed assets | (61) | 11 |
| Changes in the consolidation range | 120 | 0 |
| Cash flow from operating results | 22,508 | 27,312 |
| Inventories | (5,080) | (5,432) |
| Trade receivables | (6,359) | (22,975) |
| Trade payables | (28,627) | (5,428) |
| Prepayments received | (974) | 1,203 |
| Change in working capital | (41,040) | (32,632) |
| Non-current provisions | (3,309) | (2,417) |
| Current provisions | 5,054 | 649 |
| Other current and non-current assets and liabilities | (11,709) | (4,207) |
| Change in other operating items | (9,964) | (5,975) |
| Taxes paid | (1,381) | (1,289) |
| Cash flow from operating activities | (29,877) | (12,584) |
| Proceeds from the sale of non-current assets | 210 | 122 |
| Capital expenditures on non-current assets | (14,157) | (11,865) |
| Change in non-current and current financial assets | (705) | 659 |
| Change in liquid funds from changes in the consolidation range | 9,522 | 297 |
| Cash flow from investing activities | (5,130) | (10,787) |
| FREE CASH FLOW | (35,007) | (23,371) |
| Change in net borrowings | 33,923 | 15,086 |
| thereof restricted cash | (41) | (6) |
| Change in minority interest | 0 | (1,524) |
| Exercise of options | 11 | 0 |
| Interest paid | (1,935) | (1,714) |
| Interest received | 95 | 217 |
| Cash flow from financing activities | 32,094 | 12,065 |
| Effects of exchange rate changes on cash and cash equivalents | 1,501 | (4,454) |
| CHANGE IN CASH AND CASH EQUIVALENTS | (1,412) | (15,760) |
| Cash and cash equivalents at the beginning of the period | 70,583 | 82,902 |
| Cash and cash equivalents at the end of the period | 69,171 | 67,142 |
| Change absolute | (1,412) | (15,760) |
1st Quarter 1st Quarter2014/15 2014/152014/15
| Attributed to shareholders of the parent company | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| in TEUR | Share capital |
Additional paid-in capital |
Other Reserves |
Currency reserve |
Hedge accounting |
Reserve for stock options |
Reserve IAS 19 |
Net profit/loss for the period |
Total | Non controlling interests |
Total equity |
| 30 April 2014 | 108,750 | 335,249 | 11,083 | (42,259) | (2,960) | 19,479 | (100,558) | (4,995) | 323,789 | 3,765 | 327,554 |
| +/- Additions to reserves | 0 | 0 | (4,995) | 0 | 0 | 0 | 0 | 4,995 | 0 | 0 | 0 |
| +/- Total comprehensive income |
0 | 0 | 0 | 3,545 | (182) | 0 | 0 | 5,798 | 9.161 | (20) | 9,141 |
| +/- Stock options – exercises |
0 | 11 | 0 | 0 | 0 | 0 | 0 | 0 | 11 | 0 | 11 |
| +/- Dividends | 0 | 0 | (7,765) | 0 | 0 | 0 | 0 | 0 | (7,765) | 0 | (7,765) |
| +/- Changes in the consolidation range |
0 | 0 | (336) | 0 | 0 | 0 | 369 | 0 | 33 | 253 | 286 |
| 31 July 2014 | 108,750 | 335,260 | (2,013) | (38,714) | (3,142) | 19,479 | (100,189) | 5,798 | 325,229 | 3,998 | 329,227 |
| Attributed to shareholders of the parent company | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| in TEUR | Share capital |
Additional paid-in capital |
Other Reserves |
Currency reserve |
Hedge accounting |
Reserve for stock options |
Reserve IAS 19 |
Net profit/loss for the period |
Total | Non controlling interests |
Total equity |
| 30 April 2013 | 108,750 | 335,210 | 9,894 | (29,466) | (4,371) | 19,732 | (91,831) | 5,959 | 353,877 | 3,509 | 357,386 |
| +/- Additions to reserves | 0 | 0 | 5,959 | 0 | 0 | 0 | 0 | (5,959) | 0 | 0 | 0 |
| +/- Total comprehensive income |
0 | 0 | 0 | (10,472) | 1,462 | 0 | 0 | 6,829 | (2,181) | (182) | (2,363) |
| +/- Dividends | 0 | 0 | (3,019) | 0 | 0 | 0 | 0 | 0 | (3,019) | 0 | (3,019) |
| +/- Changes in minority | |||||||||||
| interest | 0 | 0 | (1,883) | 0 | 0 | 0 | 0 | 0 | (1,883) | 359 | (1,524) |
| 31 July 2013 | 108,750 | 335,210 | 10,951 | (39,938) | (2,909) | 19,732 | (91,831) | 6,829 | 346,794 | 3,686 | 350,480 |
The balance sheet position "reserves" comprises other reserves as well as the currency reserve, the reserve for hedge accounting, the reserve for stock options and the IAS 19 reserve.
The 38th annual general meeting on 25 July 2014 approved a change in the name of the company from "Zumtobel AG" to "Zumtobel Group AG". This change took effect before the publication of the consolidated interim financial statements as of 31 July 2014.
The condensed consolidated interim financial statements as of 31 July 2014 were prepared in accordance with the principles set forth in International Financial Reporting Standards, (IAS 34, Interim Financial Reporting). The company has elected to make use of the option set forth in IAS 34 and provide selected explanatory notes. The condensed consolidated interim financial statements as of 31 July 2014 were neither audited nor reviewed by a certified public accountant.
The unaudited condensed consolidated interim financial statements were prepared in accordance with all IFRS/IAS issued by the International Accounting Standards Board (IASB) as well as all interpretations (IFRIC/SIC) of the International Financial Reporting Interpretations Committee and Standing Interpretations Committee that were adopted by the European Union through its endorsement procedure and were applicable as of the balance sheet date. The accounting and valuation methods applied as of 31 July 2014 reflect the methods applied in preparing the consolidated financial statements as of 30 April 2014, with the exception of the IFRS that require mandatory application as of 1 January 2014.
The following standards and interpretations were adopted by the European Union. Their application has been mandatory since the last balance sheet date:
| Mandatory application in | ||
|---|---|---|
| Revised standards and interpretations | financial years beginning on or after |
|
| IAS 27 | Separate Financial Statements | 1 January 2014 |
| IAS 28 | Investments in Associates and Joint Ventures | 1 January 2014 |
| IAS 32 | Offsetting of Financial Assets and Liabilities | 1 January 2014 |
| IAS 36 | Disclosures on the Recoverable Amount for Non-financial Assets | 1 January 2014 |
| IAS 39 | Conversion of Derivatives and Continuation of Hedge Accounting | 1 January 2014 |
| IFRS 10 | Consolidated Financial Statements | 1 January 2014 |
| IFRS 11 | Joint Arrangements | 1 January 2014 |
| IFRS 12 | Disclosures of Interests in Other Entities | 1 January 2014 |
| IFRIC 21 | Levies | 1 January 2014 |
The changes resulting from the new standards and interpretations were analysed, and these new rules do not have a significant effect on the consolidated interim financial statements.
In order to improve the clarity and informative value of these financial statements, individual positions on the income statement and balance sheet were combined and are reported separately in the notes. The amounts in the tables are presented in thousand euros (TEUR), unless indicated otherwise. The use of automatic data processing equipment can lead to rounding differences.
The quarterly financial statements of the companies included in the consolidated interim financial statements were prepared on the basis of uniform accounting and valuation principles.
The major currencies used to translate the financial statements of subsidiaries into the euro are as follows:
| Average exchange rate Income | ||||
|---|---|---|---|---|
| Statement | Closing rate Balance sheet | |||
| 1 EUR equals | 31 July 2014 | 31 July 2013 | 31 July 2014 | 30 April 2014 |
| AUD | 1.4561 | 1.3799 | 1.4396 | 1.4947 |
| CHF | 1.2178 | 1.2370 | 1.2169 | 1.2200 |
| USD | 1.3619 | 1.3080 | 1.3379 | 1.3850 |
| SEK | 9.1220 | 8.6380 | 9.2261 | 9.0723 |
| GBP | 0.8039 | 0.8545 | 0.7928 | 0.8230 |
The condensed consolidated interim financial statements include all major Austrian and foreign companies that are controlled by Zumtobel Group AG. The changes in the consolidation range during the interim financial period are shown below:
| Consolidation Method | ||||
|---|---|---|---|---|
| full | at equity | Total | ||
| 30 April 2014 | 96 | 2 | 98 | |
| Included during reporting period for first time | 2 | 2 | ||
| thereof newly founded | 2 | 2 | ||
| Deconsolidated during reporting period | (2) | (2) | ||
| 31 July 2014 | 96 | 2 | 98 |
The changes in the consolidation range did not have a material effect on the interim consolidated financial statements.
The following comments explain the major changes to individual items in relation to the comparable prior year period.
Sales volumes are generally higher during the first two quarters than in the second half-year for seasonal reasons; in particular, the third quarter falls significantly below the average. This distribution reflects the Group's dependency on developments in the construction industry as well as the seasonal distribution of business in this sector.
Revenues include an adjustment of TEUR 12,580 (prior year: TEUR 11,751) for sales deductions (primarily customer discounts. Gross revenues total TEUR 336,035 (prior year: TEUR 321,030).
The income statement was prepared in accordance with the cost of sales method. The following categories of income and expenses are included in the cost of goods sold (incl. development costs), selling expenses (incl. research costs), administrative expenses and other operating results:
| Cost of goods | Selling | Administrative | Other | Total | |
|---|---|---|---|---|---|
| in TEUR | sold | expenses | expenses | operating results |
|
| Cost of materials | (136,548) | (1,157) | (12) | 0 | (137,717) |
| Personnel expenses | (54,783) | (43,610) | (8,222) | (8,869) | (115,484) |
| Depreciation | (11,656) | (1,419) | (243) | (38) | (13,356) |
| Other expenses | (19,585) | (30,606) | (4,469) | (1,305) | (55,965) |
| Own work capitalised | 4,546 | 0 | 0 | 0 | 4,546 |
| Internal charges | 1,173 | (2,288) | 1,115 | 0 | 0 |
| Total expenses | (216,853) | (79,080) | (11,831) | (10,212) | (317,976) |
| Other income | 677 | 1,851 | 192 | 894 | 3,614 |
| Total | (216,176) | (77,229) | (11,639) | (9,318) | (314,362) |
| Cost of goods sold |
Selling expenses |
Administrative expenses |
Other operating |
Total | |
|---|---|---|---|---|---|
| in TEUR | results | ||||
| Cost of materials | (127,897) | (942) | (13) | 0 | (128,852) |
| Personnel expenses | (54,744) | (44,225) | (6,982) | (3,547) | (109,498) |
| Depreciation | (12,024) | (1,485) | (274) | (2,660) | (16,443) |
| Other expenses | (18,554) | (29,403) | (3,318) | (666) | (51,941) |
| Own work capitalised | 5,068 | 0 | 0 | 0 | 5,068 |
| Internal charges | 1,414 | (2,391) | 977 | 0 | 0 |
| Total expenses | (206,737) | (78,446) | (9,610) | (6,873) | (301,666) |
| Other income | 1,331 | 1,593 | 73 | 248 | 3,245 |
| Total | (205,406) | (76,853) | (9,537) | (6,625) | (298,421) |
The cost of goods sold includes development costs of TEUR 16,623 (prior year: TEUR 16,299).
Development costs of TEUR 4,398 were capitalised during the reporting period (prior year: TEUR 4,821). The amortisation of capitalised development costs amounted to TEUR 3,398 (prior year: TEUR 3,284).
| in TEUR | Q1 2014/15 | Q1 2013/14 |
|---|---|---|
| Government grants | 133 | (38) |
| License revenues | 505 | 77 |
| Special effects | (9,967) | (6,864) |
| Impairment charges to non-current assets | 0 | (2,650) |
| Restructuring | (9,535) | (4,161) |
| Impairment charges to current assets | (312) | 0 |
| Changes in the consolidation range | (120) | (53) |
| Miscellaneous | 10 | 200 |
| Total | (9,319) | (6,625) |
The development of government grants in the previous year reflects the partial repayment of a grant that was not utilised in full.
As in the first quarter of the previous year, license income for the reporting period comprises income from the LED business.
The impairment charges of TEUR 2,650 recognised in the prior year are attributable to the Components Segment and resulted from the signing of the sale contracts for the magnetic ballast plant in Australia during August 2013.
The amounts recorded under "restructuring" in 2014/15 include TEUR 4,312 for the Components Segment and TEUR 5,223 for the Lighting Segment. The expenses attributable to the Components Segment are related primarily to the termination of production in Ennenda, Switzerland. The restructuring expenses in the Lighting Segment are related chiefly to the closing of the lighting production plant in Landskrona, Sweden.
The impairment charges to current assets are connected with the shutdown of plants in the Components Segment.
The position "restructuring" in the prior year is attributable to the Components Segment and consists mainly of accrued expenses connected with the closing of wire production facilities in Australia and the termination of magnetic ballast production in Austria during 2013/14
Miscellaneous items represent the net total of income and expenses arising from ordinary business operations, which cannot be clearly allocated to other functional areas.
Interest expense consists primarily of interest on the current credit agreement.
| in TEUR | Q1 2014/15 | Q1 2013/14 |
|---|---|---|
| Interest component as per IAS 19 less income on plan assets | (1,027) | (1,150) |
| Foreign exchange gains and losses | 1,035 | (1,789) |
| Market valuation of financial instruments | 476 | 2,171 |
| Total | 484 | (768) |
Foreign exchange gains and losses consist mainly of effects from the valuation of receivables and liabilities that are denominated in a foreign currency. The year-on-year change resulted, above all, from an increase in the in the Zumtobel Group's most important currencies versus the euro during the first quarter of 2014/15, while the first quarter of the previous year saw an opposite effect with an increase in the value of the euro versus these currencies.
The market valuation of financial instruments shows the results from the valuation of forward exchange contracts at fair value as of the balance sheet date for these consolidated interim financial statements.
The classification of income taxes into current and deferred taxes is shown in the following table:
| in TEUR | Q1 2014/15 | Q1 2013/14 |
|---|---|---|
| Current taxes | (1,606) | (1,277) |
| thereof current year | (1,601) | (1,192) |
| thereof prior years | (5) | (85) |
| Deferred taxes | 28 | (95) |
| Income taxes | (1,578) | (1,372) |
Basic earnings per share were calculated by dividing net profit for the period by the average number of shares outstanding as of the balance sheet date for these interim financial statements.
Diluted earnings per share reflect the assumption that that the options granted under the stock option programme (SOP/MSP) will be exercised. These shares are included in the calculation of the average number of shares outstanding.
| in 1,000 pcs. | Balance Sheet Date |
Average |
|---|---|---|
| 1 May 2014 | 43,139 | 43,139 |
| Stock options – exercises | 1 | 1 |
| 31 July 2014 | 43,140 | 43,140 |
| in 1,000 pcs. | Balance Sheet Date |
Average |
|---|---|---|
| 1 May 2013 | 43,133 | 43,133 |
| Stock options – exercises | 5 | 3 |
| 30 April 2014 | 43,139 | 43,136 |
This position comprises translation effects resulting from the conversion of the financial statements of subsidiaries as well as the effects of foreign currency-related adjustments to goodwill following the application of IAS 21 ("The Effects of Changes in Foreign Exchange Rates").
These currency differences result from long-term SEK, GBP and USD loans that qualify for classification as a net investment in a foreign operation and must therefore be reported under comprehensive income. This position also includes currency differences resulting from an interest rate hedge.
This position consists solely of deferred taxes related to hedge accounting.
The following comments refer to major changes in individual items compared to the balance sheet date on 30 April 2014.
The Zumtobel Group implemented a new organisational structure in December 2013, which was also reflected in reporting as of 1 May 2014.
In accordance with IAS 36.87, the change in the organisational structure led to changes in the allocation of goodwill for impairment testing. The goodwill allocated by brand up to 30 April 2014 ("ZGE Zumtobel Brand" and "ZGE Thorn Brand"), which originally resulted from the acquisition of the Thorn Lighting Group, was reassigned for the preparation of consolidated financial statements in 2014/15. The reassignment is not expected to affect the carrying amount of this goodwill. Based on the development of business in the first quarter of the reporting year, there were no signs of impairment to goodwill as of 31 July 2014.
The organisational structure led to changes in the designation of operating segments as defined in IFRS 8.5. The two previous operating segments "Zumtobel" and "Thorn" were combined into a single operating "Lighting Segment". This represents the "Lighting Segment" previously presented in the segment report, which covered the Zumtobel and Thorn operating segments. Therefore, the organisational changes and the newly created units have no effect on segment reporting because they will still be aggregated into the "Lighting Segment" for this purpose.
The application of IAS 21 ("The Effects of Changes in Foreign Exchange Rates") led to foreign currency-based adjustments of TEUR 1,678 to goodwill in the first quarter of 2014/15 (prior year: TEUR -2,960), which were not recognised through profit or loss. These foreign exchange effects are allocated to assets in the "Lighting Segment" for segment reporting.
The decline resulted chiefly from the disposal of property, plant and equipment in connection with the sale of Tridonic connection technology GmbH & Co KG and Tridonic connection technology GmbH in the first quarter of 2014/15.
This position consists primarily of capitalised reinsurance for the fulfilment of pension commitments.
The increase in trade receivables over the level at 30 April 2014 resulted, above all, from the correlation of revenues with the seasonal development of business in the construction sector.
The increase in non-current financial liabilities resulted chiefly from an increase in the use of the financing line provided by the consortium credit agreement from TEUR 170,000 to TEUR 195,000.
The change in current financial liabilities resulted chiefly from the increased use of short-term working capital credit lines.
The increase in current provisions is related, above all, to additions to provisions for restructuring in connection with the shutdown of plants in Ennenda, Switzerland, and Landskrona, Sweden.
This position includes the dividend liability of TEUR 7,765 to the shareholders of Zumtobel Group AG for the 2013/14 financial year. The dividend was paid to shareholders after the end of the reporting period on 1 August 2014.
The determination of fair value is based on a three-level hierarchy that reflects the valuation certainty.
The financial instruments measured at fair value through profit or loss as of 31 July 2014 are classified in the valuation hierarchy as follows:
| in TEUR | Carrying amount |
Fair Value | Level 1 | Level 2 | Level 3 |
|---|---|---|---|---|---|
| Non-current financial assets | - | - | - | - | - |
| Securities and similar rights | 380 | 380 | - | - | 380 |
| Loans originated and other receivables | - | - | - | - | - |
| Current financial assets | - | - | - | - | - |
| Loans originated and other receivables | - | - | - | - | - |
| Positive market values of derivatives held for trading | 802 | 802 | - | 802 | - |
| Others | - | - | - | - | - |
| Total | 1,182 | 1,182 | - | 802 | 380 |
| in TEUR | Carrying amount |
Fair Value | Level 1 | Level 2 | Level 3 |
|---|---|---|---|---|---|
| Other current liabilities | |||||
| Derivatives (hedge accounting) | 1,696 | 1,696 | - | 1,696 | - |
| Derivatives held for trading | 7,787 | 7,787 | - | 7,787 | - |
| Total | 9,483 | 9,483 | - | 9,483 | - |
| Carrying | Fair Value | Level 1 | Level 2 | Level 3 | |
|---|---|---|---|---|---|
| in TEUR | amount | ||||
| Non-current financial assets | - | - | - | - | - |
| Securities and similar rights | 380 | 380 | - | - | 380 |
| Loans originated and other receivables | - | - | - | - | - |
| Current financial assets | - | - | - | - | - |
| Loans originated and other receivables | - | - | - | - | - |
| Positive market values of derivatives held for trading | 464 | 464 | - | 464 | - |
| Others | - | - | - | - | - |
| Total | 844 | 844 | - | 464 | 380 |
| in TEUR | Carrying amount |
Fair Value | Level 1 | Level 2 | Level 3 |
| Other current liabilities | |||||
| Derivatives (hedge accounting) | 1,832 | 1,832 | - | 1,832 | - |
Derivatives held for trading 7,521 7,521 - 7,521 - Total 9,353 9,353 - 9,353 - In the Zumtobel Group, the calculation of fair value is based primarily on input factors that can be monitored on the market (Level 2). The fair value of forward exchange contracts is determined by calculating the present value of the related cash flows based on the observable market interest rate curves for the respective currency and the exchange rates in effect on the valuation date. The fair value of the remaining derivative financial instruments can be reliably determined as of each balance sheet date because these measurements are based on input factors that can be monitored on the market. These valuations reflect the Level 2 criteria. The financial instruments classified under Level 2 represent the derivatives included under financial assets and financial liabilities. The risks arising from the non-fulfilment of financial assets and liabilities are reflected in discounts, in cases where these risks are material.
The consolidated interim financial statements of the Zumtobel Group do not include any financial instruments whose valuation is based on listed prices on active markets (Level 1).
The consolidated interim financial statements of the Zumtobel Group as of 31 July 2014 also include an insignificant amount of financial instruments whose valuation is not based on listed prices or input factors that can be monitored on the market (Level 3). These items consist primarily of minor shareholdings in various companies. There were no changes in the composition since 30 April 2014, and no distributions of profit were recognised from these shareholdings during the reporting period.
Cash flow was determined on a monthly basis in accordance with the indirect method. The resulting monthly cash flows were translated at the applicable average monthly exchange rate and then aggregated, while the balance sheet positions were translated at the exchange rate in effect on the respective closing date. Individual positions on the cash flow statement therefore differ significantly from the respective balance sheet positions, above all under cash flow from operating activities.
In agreement with the indirect method, operating profit is adjusted for the effects of non-cash transactions (e.g. depreciation and amortisation) as well as income and expenses that relate to investing or financing activities.
Cash flow from operating activities declined from TEUR -12,584 to TEUR -29,877, above all due to the seasonal increase in receivables and the reduction in trade payables. The positive cash flow effect shown under current provisions resulted chiefly from additions to provisions for restructuring in connection with the plant shutdowns in Ennenda, Switzerland, and Landskrona, Sweden.
Cash flow from investing activities consists primarily of investments in development projects and additions to property, plant and equipment at various production facilities. The position "change in liquid funds from changes in the consolidation range" represents the positive cash effect from the sale of Tridonic connection technology and the initial consolidation of Thorn Lighting Limited Liability Company, Qatar.
Cash flow from financing activities consists mainly of an increase in the use of the financing line provided by the consortium credit agreement and interest expense for the first quarter of 2014/15. The dividend for the 2013/14 financial year (TEUR 7,765) that was approved by the annual general meeting on 25 July 2014 was paid on 1 August 2014 and, consequently, is therefore not included in cash flow for the first quarter of the reporting year.
| in TEUR | 31 July 2014 | 30 April 2014 | 30 April 2013 |
|---|---|---|---|
| Liquid funds | 73,859 | 74,191 | 87,048 |
| Not available for disposal | (216) | (169) | (204) |
| Overdrafts | (4,473) | (3,439) | (3,942) |
| Cash and cash equivalents | 69,170 | 70,583 | 82,902 |
The annual general meeting on 25 July 2014 approved the payment of a EUR 0.18 dividend per share for the 2013/14 financial year. Based on this resolution, a dividend of TEUR 7,765 was paid on 1 August 2014 to the holders of the 43,140,512 shares outstanding as of 31 July 2014 (43,500,000 shares issued less 359,488 treasury shares).
This position includes profit carried forward.
This reserve includes the currency differences resulting from the application of the historical exchange rate on the initial consolidation date and the exchange rate in effect on the balance sheet date for companies that do not report in the euro as well as differences resulting from the translation of the income statement at the monthly average exchange rate and the exchange rate in effect on the balance sheet date. Also included here are the currency differences arising from long-term Group loans granted in SEK, GBP and USD, which are classified as net investments in foreign operations in accordance with IAS 21. This reserve also contains the foreign currency effects of an interest rate hedge and foreign currency-related adjustments to goodwill.
The changes in equity from the application of hedge accounting reflect the changes in the fair value of derivative contracts that are recorded directly in other comprehensive income as well as amounts transferred from equity to profit or loss following the exercise or realisation of contracts and the related deferred taxes.
| in pcs. | Total |
|---|---|
| Share buyback (to 30 April 2014) | 1,539,211 |
| Exercised (to 30 April 2014) | (1,178,271) |
| 30 April 2014 | 360,940 |
| Exercised | (1,452) |
| 31 July 2014 | 359,488 |
In the first quarter of 2014/15, 1,452 stock options (prior year: 0 options) were exercised from the Stock Option Programme (SOP).
This reserve is related to two former share-based remuneration programmes which are no longer active. Both the Stock Option Programme (SOP) and the Matching Stock Program (MSP) were terminated, and no further options will be allocated from either programme in the future.
This position includes the actuarial losses related to the application of IAS 19.
The change in the first quarter of 2014/15 resulted from the initial consolidation of Thorn Lighting Limited Liability Company, Qatar. The change in the first quarter of the previous year consisted chiefly of the effects from the purchase of the remaining 30% stake in Thorn Lighting (Tianjin) Co. Ltd., China. This purchase resulted in the derecognition of the related non-controlling interest.
Two operating segments represent the primary segments of business for the Zumtobel Group: the Lighting Segment (lighting solutions, interior and exterior lighting, electronic-digital lighting and room management systems) and the Components Segment (electronic lighting components, LED lighting components, connection technology up to June 2014 and, up to the end of the 2013/14 financial year, also magnetic ballasts). The transfer of goods and services between the two divisions is based on ordinary market conditions.
Segment reporting is principally based on the same presentation, accounting and valuation methods used to prepare the consolidated financial statements. In accordance with the management approach prescribed by IFRS 8, operating profit (EBIT) – a key indicator used for internal reporting – is included as part of the segment data.
The assets allocated to the two segments include proper ty, plant and equipment that can be directly assigned as well as intangible assets and working capital (excluding accrued interest, tax receivables and tax liabilities).
The column "Reconciliation" comprises assets and the related income statement items that could not be allocated to either segment as well as proper ty, plant and equipment, financial liabilities and taxes that involve both segments.
| Lighting Segment | Components Segment | Reconciliation | Group | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| in TEUR | Q1 2014/15 |
Q1 2013/14 |
Q1 2012/13 |
Q1 2014/15 |
Q1 2013/14 |
Q1 2012/13 |
Q1 2014/15 |
Q1 2013/14 |
Q1 2012/13 |
Q1 2014/15 |
Q1 2013/14 |
Q1 2012/13 |
| Net revenues | 243,358 | 229,905 | 243,038 | 96,553 | 99,652 | 98,099 | (16,456) | (20,278) | (17,750) | 323,455 | 309,279 | 323,387 |
| External revenues |
242,868 | 229,774 | 242,878 | 80,515 | 79,488 | 80,416 | 72 | 17 | 93 | 323,455 | 309,279 | 323,387 |
| Inter-company revenues |
490 | 131 | 160 | 16,038 | 20,164 | 17,683 | (16,528) | (20,295) | (17,843) | 0 | 0 | 0 |
| Operating profit/loss |
11,941 | 14,900 | 12,732 | 2,785 | (224) | 2,279 | (5,633) | (3,818) | (2,416) | 9,093 | 10,858 | 12,595 |
| Investments | 9,619 | 8,850 | 7,231 | 4,230 | 2,938 | 2,713 | 308 | 77 | 325 | 14,157 | 11,865 | 10,269 |
| Depreciation | (8,002) | (7,869) | (8,006) | (4,772) | (8,082) | (5,386) | (582) | (492) | (468) | (13,356) | (16,443) | (13,860) |
| in TEUR | 31 July 2014 |
30 April 2014 |
30 April 2013 |
31 July 2014 |
30 April 2014 |
30 April 2013 |
31 July 2014 |
30 April 2014 |
30 April 2013 |
31 July 2014 |
30 April 2014 |
30 April 2013 |
| Assets | 684,954 | 668,998 | 640,657 | 202,212 | 209,046 | 208,852 | 135,986 | 128,557 | 145,329 1,023,152 1,006,601 | 994,838 | ||
| 31 July 2014 |
30 April 2014 |
30 April 2013 |
31 July 2014 |
30 April 2014 |
30 April 2013 |
31 July 2014 |
30 April 2014 |
30 April 2013 |
31 July 2014 |
30 April 2014 |
30 April 2013 |
|
| Headcount (full time equivalent) |
5,141 | 5,186 | 5,091 | 1,926 | 1,971 | 1,946 | 140 | 134 | 125 | 7,207 | 7,291 | 7,162 |
The number of employees reported in the above table includes temporary employees working in the Zumtobel Group.
The elimination of inter-segment revenues is shown in the reconciliation column.
The reconciliation column comprises the following items:
| in TEUR | Q1 2014/15 | Q1 2013/14 |
|---|---|---|
| Group parent companies | (5,633) | (3,765) |
| Group entries | 0 | (53) |
| Operating profit/loss | (5,633) | (3,818) |
The Group parent companies represent companies that provide administrative or financing services for the entire Group and cannot be allocated to a specific segment. The transition to operating profit includes Group entries for the elimination of interim profits in current and non-current assets.
| in TEUR | 31 July 2014 | 30 April 2014 |
|---|---|---|
| Assets used by more than one segment | 131,043 | 129,266 |
| Group parent companies | 47,455 | 48,927 |
| Group entries | (42,511) | (49,636) |
| Assets | 135,987 | 128,557 |
No single external customer is responsible for more than 10% of total revenues.
Related parties include the Management Board and the Supervisory Board of Zumtobel AG. As of 31 July 2014 the Zumtobel Group had no business relationships with related parties.
The supply and delivery transactions with associated companies reflect standard market conditions. As of 31 July 2014 trade receivables due from associated companies totalled TEUR 387 (30 April 2014: TEUR 742) and trade payables amounted to TEUR 2,985 (30 April 2014: TEUR 3,528). No receivables due from associated companies were written off as uncollectible during the first quarter of 2014/15, and none of these receivables were classified as uncollectible as of 31 July 2014.
The Zumtobel Group has issued bank guarantees totalling TEUR 7,920 (30 April 2014: TEUR 8,135) for various purposes.
The dividend for the 2013/14 financial year that was approved by the annual general meeting on 25 July 2014 was paid on 1 August 2014.
Dornbirn, 2 September 2014
The Management Board
Ulrich Schumacher Karin Sonnenmoser Chief Executive Officer (CEO) Chief Financial Officer (CFO)
| Adjusted EBIT | EBIT adjusted for special effects |
|---|---|
| Adjusted EBIT margin | = Adjusted EBIT as a percentage of revenues |
| Adjusted EBITDA | EBITDA adjusted for special effects |
| Average capital employed | = Goodwill + intangible assets + property, plant and equipment + inventories + trade receivables - trade payables - provisions for income taxes - other provisions - other liabilities, as an average over four quarters |
| CAPEX | Capital expenditure |
| Debt coverage ratio | Net debt divided by EBITDA |
| EBIT | Earnings before interest and taxes |
| EBITDA | Earnings before interest, taxes, depreciation and amortisation |
| Equity ratio | = Equity as a percentage of assets |
| Gearing | = Net debt as a percentage of equity |
| Labour productivity | = Adjusted EBIT as a percentage of personnel expenses |
| Net debt | = Non-current borrowings + current borrowings - liquid funds - current financial receivables from associated companies |
| WACC | Weighted average cost of capital (debt and equity) |
| Working capital | = Inventories + trade receivables - trade payables - prepayments received |
Report on the First Quarter 2014/15 (1 May 2014 – 31 July 2014) 02 September 2014 Report on the First Half-year 2014/15 (1 May 2014 – 31 October 2014) 09 December 2014 Report on the First Three Quarters 2014/15 (1 May 2014 – 31 January 2015) 03 March 2015 Annual Results 2014/15 24 June 2015 39th ordinary Shareholders' meeting 24 July 2015 Ex-dividend Day 28 July 2015 Dividend Payout Day 31 July 2015 Report on the First Quarter 2015/16 (1 May 2015 – 31 July 2015) 08 September 2015
Contact Information
| Investor Relations Relations | Press / Corporate Communications Corporate Communications |
|---|---|
| Harald Albrecht | Astrid Kühn-Ulrich |
| Head of Investor Relations | Head of Corporate Communications |
| Telephone +43 (0)5572 509-1125 | Telephone +43 (0)5572 509-1570 |
| E-Mail [email protected] | E-Mail [email protected] |
Our financial reports are available in English and German for download under: http://www.zumtobelgroup.com. You can also order a copy by calling +43 (0)5572 509-1510.
on Zumtobel AG and our brands can be found in the Internet under:
www.zumtobelgroup.com www.zumtobel.com www.thornlighting.com www.tridonic.com
Publisher: Zumtobel AG, Investor Relations, Harald Albrecht Coordination Financials: Stefan Tschol Translation: Donna Schiller-Margolis Copyright: Zumtobel AG 2014
Produced in-house with FIRE.sys
This quarterly financial report includes statements on future developments, which are based on information available at the present time and involve risks and uncertainties that could cause the results realised at a later date to vary from these forward-looking statements. These statements on future developments are not to be under-stood as guarantees. On the contrary, future developments and results are dependent on a wide range of factors and connected with various risks and incalculable events. Moreover, they are based on assumptions that may prove to be incorrect. Included here, for example, are unforeseeable changes in the political, economic and business environment, especially in the regions where the Zumtobel Group operates, as well as the competitive situation, interest rates and foreign exchange rates, technological developments and other risks and incalculable events. Other risks may arise as a result of price developments, unforeseeable events in the operating environments of acquired companies or Group companies as well as ongoing cost optimisation programmes. The Zumtobel Group does not plan to update these forward-looking statements. This interim financial report is also presented in English, but only the German text is binding.
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