Quarterly Report • Dec 9, 2009
Quarterly Report
Open in ViewerOpens in native device viewer
zumtobel group
Half-year revenues decline 9.0% after adjustment for foreign exchange effects (2nd Quarter: minus 7.8%)
Currency translation effects reduce revenues by EUR 11.6 million
Adjusted EBIT margin at solid 8.2% despite adverse market conditions
Effectiveness of cost savings measures reflected in earnings
Positive development of working capital continues
Revenues from the sale of LED-based products grow by 57.6% in first half-year
| Key Data in EUR million | Q2 2009/10 |
Q2 2008/09 |
Change in % |
1st HY 2009/10 |
1st HY 2008/09 |
Change in % |
FY 2008/09 |
|---|---|---|---|---|---|---|---|
| Revenues | 293.4 | 324.5 | (9.6) | 572.0 | 641.1 | (10.8) | 1,174.0 |
| Adjusted EBITDA | 35.4 | 43.0 | (17.6) | 69.0 | 81.2 | (15.1) | 121.6 |
| as a % of revenues | 12.1 | 13.2 | 12.1 | 12.7 | 10.4% | ||
| Adjusted EBIT | 24.2 | 32.0 | (24.4) | 47.0 | 60.1 | (21.7) | 78.9 |
| as a % of revenues | 8.3 | 9.9 | 8.2 | 9.4 | 6.7% | ||
| EBIT | 20.8 | 30.4 | (31.7) | 40.0 | 57.4 | (30.4) | 57.0 |
| as a % of revenues | 7.1 | 9.4 | 7.0 | 9.0 | 4.9% | ||
| Net profit for the period | 14.7 | 27.9 | (47.2) | 24.9 | 42.1 | (41.0) | 13.3 |
| as a % of revenues | 5.0 | 8.6 | 4.3 | 6.6 | 1.1% | ||
| Total assets | 1,095.7 | 1,133.6 | 1.0 | 1,053.9 | |||
| Equity | 480.5 | 497.9 | 1.0 | 456.0 | |||
| Equity ratio in % | 43.9 | 43.9 | 43.3 | ||||
| Net debt | 144.6 | 178.4 | (18.9) | 163.5 | |||
| Cash flow from operating results | 62.7 | 79.2 | (20.8) | 107.3 | |||
| ROCE in % | 10.4 | 16.2 | 11.9 | ||||
| Investments | 9.3 | 15.8 | (41.0) | 17.1 | 30.3 | (43.6) | 64.7 |
| Headcount incl. contract worker | |||||||
| (full-time equivalent) | 7,365 | 7,921 | (7.0) | 7,165 |
Despite the late cyclical nature of the lighting business, the Zumtobel Group has noted the first signs of an easing in the tense market environment. Group revenues fell by 9.6% during the seasonally strong second quarter of 2009/10 to EUR 293.4 million (minus 7.8% after an adjustment for foreign exchange effects), but nevertheless represent an improvement over the first quarter when the year-on-year decline reached 12% (minus 10.2% after an adjustment for foreign exchange effects). In comparison with the first three months of this financial year, the second quarter brought a 5.3% improvement in revenues (prior year: 2.5%). The past 12 months were especially influenced by the implementation of the "Excellerate" efficiency improvement programme that was launched in autumn 2008 and has already had a positive effect on earnings. Wideranging cost reduction measures in all areas of the corporation during the last four quarters have cut expenses by more than EUR 45 million. This places us in a good position to realise the previously announced gross savings of up to EUR 100 million by the end of the 2010/11 financial year. EBIT for the second quarter totalled EUR 20.8 million, or EUR 24.2 million after an adjustment for non-recurring effects. Although the economic environment remained difficult, the adjusted EBIT margin for the first half-year reached 8.2% (prior year: 9.4%). An analysis of the Zumtobel segments shows that we were able to expand our share of the European components market over the past months with our large range of innovative products. Rising demand was also registered on selected submarkets towards the end of the second quarter due to a slight increase in stocks by TridonicAtco customers. Less surprising developments were the continuing adverse conditions and strong price competition that affected the cyclically slower project business in our Lighting Segment on all core markets across Europe. Our LED business continues to record dynamic growth: With a 57.6% increase in revenues from LED-based products during the first half-year, we are on course to meet our growth targets.
With respect to our balance sheet structure and liquidity, the foundation of the Zumtobel Group remains very solid. Compliance with the financial covenants defined in the current financing agreement is guaranteed with an equity ratio of 43.9% and debt coverage ratio of 1.55. We can also report further success in working capital management: working capital as a percentage of revenues fell to a historical second quarter low of 18.0%. Free cash flow was also clearly positive at EUR 23.0 million at the end of October.
In spite of isolated positive signals, we are unable to report a turnaround in demand because the economic situation remains tense and visibility is limited. However, we still assume the lighting industry will only reach the low point of the crisis in 2010 due to the late cyclical nature of our business. We therefore expect a decline in revenues for the full 2009/10 financial year ending on 30 April 2010, which should be more moderate during the second six months because of the lower prior year comparative values. The measures from the "Excellerate" programme should make it possible for us to also generate positive operating results in the seasonally weaker second half of the year. We are convinced that the company will be substantially leaner and more flexible after the implementation of the restructuring measures, without losing any of its strength as a market and technology leader.
Andreas Ludwig Chief Executive Officer
Andreas Ludwig
The development of the Zumtobel share during the first half of the 2009/10 financial year (beginning on 1 May 2009) was supported by a generally favourable market climate as well as capital market expectations of a recovery in the operating business beginning in 2010. During the six months up to the end of October, the price of the Zumtobel share rose by 73% to EUR 11.78. The EUR 14-mark was even exceeded intraday in mid-September. This increase was triggered by an upgrading of the stock by financial analysts, who raised their target prices along a range of up to EUR 16. The leading Austrian ATX index, which also includes the Zumtobel share, rose by 33% during this same period. Based on market capitalisation, the Zumtobel Group had a total value of more than EUR 512 million as of 31 October 2009. The shareholder structure remained nearly unchanged, with the Zumtobel family continue to hold a stake of approx. 35%. The company is aware of one institutional investor with more than 5% of voting rights, the British insurance company Aviva plc. The remainder of nearly 60% represents free float. By the copy deadline for this quarterly report at the end of November, the price of the Zumtobel share had risen to EUR 12.67.
| Closing price at 30.04.09 | € 6.80 | Currency | EUR |
|---|---|---|---|
| Closing price at 31.10.09 | € 11.78 | ISIN | AT0000837307 |
| Performance 1st half-year 2009/10 | 73.2% | Ticker symbol Vienna Stock Exchange (XETRA) | ZAG |
| Performance Q2 2009/10 | 56.0% | Market segment | Prime Market |
| Market capitalisation at 31.10.09 | € 512 Mio | Reuters symbol | ZUMV.VI |
| Share price - high at 17.09.09 | € 14.25 | Bloomberg symbol | ZAG AV |
| Ø Turnover per day (shares) | 143,281 | Datastream | O:ZAG |
| Free float | 59.4% | Number of issued shares | 43,500,000 |
Many experts interpret the positive signals sent by numerous economies since mid-2009 as a sign that the worst global recession in more than 60 years is drawing to a close. However, the recovery forecasted for the coming year will most likely remain modest – above all due to the end of the extensive government stimulus packages that played such an important role in lessening the impact of the crisis as well as the continuing restrictive lending practices followed by financial institutions and the resulting negative effect on capital investment. Economic forecasts are accordingly reserved: estimates by the International Monetary Fund (IMF) call for a decline of 1.1% in the global economy during 2009 and growth of 3.1% in 2010. The traditional industrialised economies will only gain momentum at a slow pace during the coming year. The USA can hope for a turnaround to plus 1.5% in 2010 after a minus of 2.7% this year. Following a sharp 4.2% drop in the GDP, the Euro zone cannot expect any notable impulses for growth in the coming year (+0.3%). The Organisation for Economic Cooperation and Development (OECD) has forecasted a GDP decline of 2.7% to 6.1% in the D/A/CH countries (Germany, Austria and Switzerland), a key region for the Zumtobel Group, whereby Germany will suffer the most because of its strong dependence on exports. All three countries can expect moderate growth of less than 1% for the coming year. In contrast, economic development in many emerging countries remains dynamic. China can look to growth of 8.5% in 2009 and even 9.0% for 2010 according to the IMF. The experts have also issued positive forecasts for the so-called BRIC-states (Brazil, India and Russia), especially for 2010.
In its November 2009 report, Euroconstruct issued a further downward revision to its growth forecasts for the seven most important European markets of the Zumtobel Group (Austria, Switzerland, Germany, France, Great Britain, Italy and Scandinavia) with an adjustment from minus 6.3% to minus 8.8% for the 2009 calendar year and from minus 2.6% to minus 2.7% for the 2010 calendar year. The 2011 calendar year is expected to bring a slight decline of 0.3%.
The Zumtobel Group and the Dutch Philips Group signed an extensive worldwide cross-licensing agreement in May 2009 for current and future patents in the areas of lighting technology and solid state lighting. This agreement includes a balanced mutual settlement payment that reflects the strong position of both companies in the lighting technology sector. As a result of this agreement the Zumtobel Group with all its brands becomes a qualified supplier under the Philips LED-based luminaires licensing programme. One immediate benefit of this status is that customers of the OEM brands sold by the Zumtobel Group, TridonicAtco and Ledon will in any case be exempted from paying royalties to Philips. The positive financial effect of this agreement was recognised to the income statement in the first quarter.
The annual general meeting on 24 July 2009 approved a capital decrease through the withdrawal of 1,204,344 treasury shares. This measure took effect on 20 August 2009 with recording in the company register. The withdrawal of treasury shares reduced the company's share capital from EUR 111,760,860.00 to EUR 108,750,000.00, which is now divided into 43,500,000 bearer shares with zero par value (previously 44,703,344 shares).
The Supervisory Board of Zumtobel AG appointed Martin Brandt to the Management Board as of 1 September 2009. As Chief Operating Officer (COO), he is responsible for the operating business in the lighting segment.
Extensive crosslicensing agreement with Philips
Capital decrease completed
Management Board of Zumtobel AG expanded
In November 2009 the Zumtobel Group together with the Fraunhofer-Gesellschaft and several staff members of the Fraunhofer Institute for Photonic Microsystems (IPMS) founded a joint venture "LEDON OLED Lighting GmbH & Co. KG", which will focus on the development and production of future-oriented OLED (organic lighting diodes) lighting modules.
There were no other significant events after the balance sheet date on 30 April 2009.
Closely related persons include the Management Board and Supervisory Board of Zumtobel AG. As of the closing date for the interim financial statements on 31 October 2009, there were no business transactions with closely related persons.
The Group has concluded supply and delivery agreements with associated companies and joint ventures, which reflect third party conditions.
9.0% decrease in FX-adjusted revenues
Both segments and nearly all markets affected by economic crisis
57.6% increase in revenues from LED-based products
9.0% decrease in FXadjusted revenues
During the first half of the 2009/10 financial year (1 May to 31 October 2009) revenues fell by 10.8% yearon-year to EUR 572.0 million (prior year: EUR 641.1 million). The development of business was negatively influenced by currency translation effects of EUR 11.6 million or 1.8%. After an adjustment for these effects, revenues were 9.0% lower than the comparable prior year period. The extremely difficult operating environment represented a challenge for both segments during the first six months of 2009/10. However, an analysis of the declines in per cent compared with earlier quarters indicates first signs of an easing in the tense market environment (3rd Quarter 2008/09: minus 13.6%; 4th Quarter 2008/09: minus 13.5%; 1st Quarter 2009/10: minus 12%; 2nd Quarter 2009/10: minus 9.6%).
The negative foreign exchange effects resulted from the strength of the Euro, above all versus the British Pound (GBP) and the Swedish Krone (SEK). The increase in the value of the Euro over the comparable prior year period was responsible for a 9.7% reduction in revenues denominated in the British Pound and 9.6% for the Swedish Krone, based on the respective average monthly exchange rates. Further negative effects resulted from a decline in the value of revenues recorded in the New Zealand Dollar (NZD), Turkish Lira (TRY) and several East European currencies. These factors were only offset to a limited extent by positive contributions from the Swiss Franc (CHF), US Dollar and certain Asian currencies. The combined total of all currency translation adjustments was a negative translation effect of EUR 11.6 million.
Development of revenues (in EUR million)
Foreign currency factors had an above-average effect of EUR 8.9 million on the Lighting Segment, with revenues falling 10.0% to EUR 426.7 million (prior year: EUR 473.9 million). An adjustment for foreign exchange factors shows a minus of 8.1% for the first half-year and 6.5% for the second quarter.
Substantial decline in both segments
The Components Segment reported negative foreign exchange effects of EUR 2.7 million for the first half of 2009/10. Revenues for this period fell by 13.5% (minus 12.2% after FX adjustments) to EUR 180.6 million (prior year: EUR 208.8 million). Foreign exchange effects in the second quarter were responsible for an 11.4% reduction in revenues. In the components business, the technical substitution trend continued in favour of technologically more sophisticated electronic ballasts.
| Segment development in EUR million | Q2 2009/10 |
Q2 2008/09 |
Change in % |
1st HY 2009/10 |
1st HY 2008/09 |
Change in % |
FX adjusted in % |
|---|---|---|---|---|---|---|---|
| Lighting Segment | 219.3 | 239.3 | (8.4) | 426.7 | 473.9 | (10.0)% | (8.1)% |
| Components Segment | 92.8 | 106.2 | (12.7) | 180.6 | 208.8 | (13.5)% | (12.2)% |
| Reconciliation | (18.6) | (21.0) | 11.4 | (35.4) | (41.6) | - | |
| Zumtobel Group | 293.4 | 324.5 | (9.6) | 572.0 | 641.1 | (10.8)% | (9.0)% |
The Zumtobel Group continued its growth in the future-oriented technological field of light emitting diodes (LED) during the past quarter. Revenues from the sale of LED-based products and solutions rose by a strong 57.6% to EUR 34.4 million also partly due to the conclusion of a major LED-component contract (2nd Quarter: plus 74.5%).
57.6% increase in revenues from LEDbased products
| Distribution of regional revenues | Q2 2009/10 | 1st HY 2009/10 | |||
|---|---|---|---|---|---|
| Revenues in EUR million |
Change in % | Revenues in EUR million |
Change in % | in % of Group | |
| D/A/CH | 77.0 | (9.2) | 149.8 | (8.0) | 26.2 |
| Eastern Europe | 15.9 | (27.2) | 31.8 | (21.5) | 5.6 |
| Northern Europe | 26.1 | (7.9) | 46.0 | (12.5) | 8.0 |
| Western Europe | 91.3 | (11.1) | 178.3 | (13.3) | 31.2 |
| Southern Europe | 20.6 | (20.8) | 45.9 | (23.3) | 8.0 |
| Europe | 231.0 | (12.5) | 451.8 | (13.4) | 79.0 |
| Asia | 24.9 | 5.5 | 48.3 | 7.0 | 8.4 |
| Australia & New Zealand | 27.0 | 0.8 | 50.6 | (4.5) | 8.8 |
| America | 7.6 | (6.9) | 15.7 | (4.6) | 2.7 |
| Others | 2.9 | 42.5 | 5.6 | 11.2 | 1.0 |
| Total | 293.4 | (9.6) | 572.0 | (10.8) | 100.0 |
Revenues recorded by the Zumtobel Group in Europe declined 13.4% (minus 10.8% after FX adjustments) to EUR 451.8 million for the reporting period (prior year: EUR 521.5 million), and represent 79% of Group revenues. With the exception of the D/A/CH region (Germany, Austria, Switzerland), the Zumtobel Group recorded double-digit year-on-year declines throughout Europe. After an adjustment for negative currency translation effects from the previously mentioned decrease in the Swedish Krone and the British Pound, revenues fell by 6.3% (nominal: minus 12.5%) during the reporting period in Northern Europe and 8.6% (nominal: minus 13.3%) in Western Europe. Eastern Europe recorded a minus of 21.5% (minus 17.8% after FX adjustments).
Revenues in Asia rose by 7.0% to EUR 48.3 million (prior year: EUR 45.2 million), with strong growth recorded above all by the Lighting Segment. After an adjustment for foreign exchange effects, revenues in this region were 4.4% higher than the prior year. Business in America is still negatively influenced by the extremely weak condition of the construction industry. Revenues in this region fell by 4.6% to EUR 15.7 million (prior year: EUR 16.4 million) – or by 8.0% year-on-year after an adjustment for foreign exchange effects. Australia/New Zealand reported a 4.5% decrease in revenues for the reporting period, but second quarter revenues reached the prior year level. The development of the segments in this region differed significantly: the Components Segment was faced with the effects of declining demand, while the Lighting Segment recorded positive growth.
EBIT margin reaches solid 7.0%
Gross profit margin equals 36.0%
Positive results of "Excellerate" efficiency programme
Selling and administration expenses cut by approx. EUR 20 million
Improvement in financing costs
| Income statement in EUR million | Q2 2009/10 |
Q2 2008/09 |
Change in % |
1st HY 2009/10 |
1st HY 2008/09 |
Change in % |
|---|---|---|---|---|---|---|
| Revenues | 293.4 | 324.5 | (9.6) | 572.0 | 641.1 | (10.8) |
| Cost of goods sold | (186.5) | (199.5) | 6.5 | (365.9) | (394.9) | 7.4 |
| Gross profit | 106.9 | 124.9 | (14.4) | 206.1 | 246.2 | (16.3) |
| as a % of revenues | 36.4 | 38.5 | 36.0 | 38.4 | ||
| SG&A expenses adjusted for | ||||||
| special effects | (82.7) | (92.9) | 11.0 | (159.0) | (186.1) | 14.6 |
| Adjusted EBIT | 24.2 | 32.0 | (24.4) | 47.0 | 60.1 | (21.7) |
| as a % of revenues | 8.3 | 9.9 | 8.2 | 9.4 | ||
| Special effects | (3.4) | (1.6) | <(100) | (7.1) | (2.7) | <(100) |
| EBIT | 20.8 | 30.4 | (31.7) | 40.0 | 57.4 | (30.4) |
| as a % of revenues | 7.1 | 9.4 | 7.0 | 9.0 | ||
| Financial results | (4.4) | 3.0 | <(100) | (12.2) | (7.0) | (74.7) |
| Profit before tax | 16.4 | 33.4 | (50.9) | 27.8 | 50.4 | (45.0) |
| Income taxes | (1.9) | (4.3) | 55.8 | (2.4) | (7.3) | 67.2 |
| Net profit for the period from | ||||||
| discontinued operations | 0.2 | (1.3) | >100 | (0.5) | (1.0) | 51.1 |
| Net profit for the period | 14.7 | 27.9 | (47.2) | 24.9 | 42.1 | (41.0) |
| Depreciation and amortisation | 11.3 | 10.9 | 3.2 | 22.0 | 21.2 | 4.1 |
| Earnings per share (in EUR) | 0.35 | 0.63 | (44.4) | 0.57 | 0.95 | (40.2) |
Note: EBITDA (EBIT plus depreciation and amortisation) totalled EUR 62.0 million for the first half of 2009/10.
EBIT declined by EUR 17.4 million to EUR 40.0 million for the reporting period (prior year: EUR 57.4 million). This represents a decrease of 200 basis points from the comparable prior year level to a return on sales of 7.0%. EBIT was affected by negative special effects of EUR 7.1 million resulting above all from the "Excellerate" programme and non-recurring income from the cross-licensing agreement with the Philips Group.
EBIT margin reaches solid 7%
Development of adjusted EBIT (in EUR million)
* COGS = Cost of goods sold; SG&A = Selling, general and administrative expenses and other operating results
The gross profit margin fell 240 basis points to equal 36.0% of revenues for the first half of 2009/10. Gross profit was negatively influenced above all by lower volumes and prices as well as significant currency transaction effects. The growing strength of the Euro in relation to the British Pound during the reporting period was responsible for a negative currency transaction effect of roughly EUR 9.2 million alone on exports to Great Britain. The cost of materials rose to 44.1%. (prior year: 42.2%), in particular due to the above-mentioned negative effects of the weak British Pound and the expiration of favourable USD procurement hedges in the Components Segment by the end of the 2008/09 financial year. Capacity adjustments and productivity improvements as part of the "Excellerate" programme held production-related personnel expenses to 14.5% of revenues (prior year: 14.5%) despite a substantial drop in sales, extended insourcing and compensation increases mandated by collective bargaining agreements. Gross profit margin declines to 36.0%
Cost reduction measures supported a 10.3% (EUR 19.2 million) year-on-year reduction in selling and administrative expenses to EUR 168.6 million for the first half of 2009/10 (prior year: EUR 187.8 million). Other income reached an unusually high EUR 9.8 million (prior year: EUR 1.8 million). This development reflected the full recognition of the positive effects from the cross-licensing agreement with the Philips Group during the first quarter, while the scheduled license payments to Philips are expensed as incurred. Effectiveness of cost savings measuresincreasingly visible
Special effects of EUR 7.1 million (prior year: EUR 2.7 million) were recognised as expenses during the first half of 2009/10. These costs are related above all to the "Excellerate" efficiency improvement programme that was launched during the second half of the previous financial year. Special effects in operating profit
The following table shows the Group's operating performance after an adjustment for the above-mentioned special effects:
| Adjusted EBIT in EUR million | Q2 2009/10 |
Q2 2008/09 |
Change in % |
1st HY 2009/10 |
1st HY 2008/09 |
Change in % |
|---|---|---|---|---|---|---|
| Reported EBIT | 20.8 | 30.4 | (31.7) | 40.0 | 57.4 | (30.4) |
| thereof special effects | (3.4) | (1.6) | <(100) | (7.1) | (2.7) | <(100) |
| Adjusted EBIT | 24.2 | 32.0 | (24.4) | 47.0 | 60.1 | (21.7) |
| as a % of revenues | 8.3 | 9.9 | 8.2 | 9.4 |
Financial results declined EUR 5.2 million in relation to the comparable prior year period to total minus EUR 12.2 million for the first half of 2009/10. The reduction in interest expense during the reporting year is attributable above all to lower interest rates and improved financing conditions. In addition, interest expense for the prior year included non-recurring costs of approx. EUR 4.4 million related to the refinancing of the expired acquisition credit agreement concluded in 2001. Other financial income and expenses totalled minus EUR 6.4 million (prior year: plus EUR 4.8 million) and are comprised primarily of results from the fair value measurement of forward exchange contracts as of 31 October 2009.
| Financial result in EUR million | Q2 2009/10 |
Q2 2008/09 |
Change in % |
1st HY 2009/10 |
1st HY 2008/09 |
Change in % |
|---|---|---|---|---|---|---|
| Interest expense | (2.9) | (5.4) | 47.1 | (5.5) | (14.3) | 61.8 |
| Interest income | 0.4 | 0.4 | (9.7) | 0.5 | 1.5 | (64.0) |
| Net financing costs | (2.5) | (5.0) | 50.1 | (4.9) | (12.8) | 61.5 |
| Other financial income and expenses | (1.2) | 7.4 | <(100) | (6.4) | 4.8 | <(100) |
| Profit/(loss) from associated companies | (0.7) | 0.6 | <(100) | (0.9) | 1.0 | <(100) |
| Financial results | (4.4) | 3.0 | <(100) | (12.2) | (7.0) | (74.7) |
45.0% decline in profit
before tax
Profit before tax fell by 45.0% to EUR 27.8 million for the first half of 2009/10 (prior year: EUR 50.4 million), and income tax expense equalled EUR 2.4 million. Results from discontinued operations totalled minus EUR 0.5 million and included subsequent expenses from the residential lighting activities that were terminated at the end of 2008/09. Net profit for the period declined to EUR 24.9 million (prior year: EUR 42.1 million). Earnings per share for the shareholders of Zumtobel AG (diluted EPS based on 43.2 million shares) equalled EUR 0.57 (prior year: EUR 0.95).
Working capital totalled EUR 199.1 million as of 31 October 2009 (prior year: EUR 244.1 million). As a percentage of rolling 12-month revenues, this indicator declined year-on-year for the ninth quarter in succession to equal 18.0% (prior year: 19.4%). The reduction in working capital was responsible for cash inflows of EUR 3.5 million during the reporting period (prior year: cash outflows of EUR 10.9 million from an increase in working capital). The increased change of EUR 22.3 million in other operating items (prior year: minus EUR 14.3 million) was comprised primarily of the recognition of the receivable from the crosslicensing agreement, a reduction in holiday liabilities and special contractually mandated payments to employees.
Working capital as % of rolling 12-month revenues
Investments in property, plant and equipment amounted to EUR 17.1 million for the first half of 2009/10, which is substantially less than the comparable prior year period (prior year: EUR 30.3 million). This position consists primarily of capitalised research and development costs as well as investments in production equipment for the Dornbirn, Lemgo and Spennymoor plants. The higher cash outflows for equipment purchases in the first half of 2008/09 reflect investments at the new factory in Spennymoor. Free cash flow equalled EUR 23.0 million and matched the good prior year level (EUR 23.1 million), which was positively influenced by EUR 13.3 million from the sale of a financial investment. The improvement in cash flow from financing activities resulted from a decline in interest expense, the fact that no dividend was paid for the 2008/09 financial year and the share buyback in 2008/09.
Positive free cash flow at prior year level
| Balance sheet data in EUR million | 31 October 2009 | 31 October 2008 | 30 April 2009 |
|---|---|---|---|
| Total assets | 1,095.7 | 1,133.6 | 1,053.9 |
| Net debt | 144.6 | 178.4 | 163.5 |
| Equity | 480.5 | 497.9 | 456.0 |
| Equity ratio in % | 43.9 | 43.9 | 43.3 |
| Gearing in % | 30.1 | 35.8 | 35.9 |
| Average capital employed | 630.4 | 661.1 | 664.0 |
| ROCE in % | 10.4 | 16.2 | 11.9 |
| Investments | 17.1 | 30.3 | 64.7 |
| Working capital | 199.1 | 244.1 | 196.4 |
| As a % of rolling 12 month revenues | 18.0 | 19.4 | 16.7 |
Solid balance sheet structure
The balance sheet structure continued to improve during the first half of 2009/10. The equity ratio rose from the level at 30 April 2009 to 43.9%. Net liabilities declined to EUR 18.9 million, and reduced gearing from 35.9% to 30.1%.
More information on other potential risks is provided in the 2008/09 annual report.
In spite of isolated positive signals, we are unable to report a turnaround in demand because the economic situation remains tense and visibility is limited. However, we still assume the lighting industry will only reach the low point of the crisis in 2010 due to the late cyclical nature of our business. We therefore expect a decline in revenues for the full 2009/10 financial year ending on 30 April 2010, which should be more moderate during the second six months because of the lower prior year comparative values. The measures from the "Excellerate" programme should make it possible for us to also generate positive operating results in the seasonally weaker second half of the year. We are convinced that the company will be substantially leaner and more flexible after the implementation of the restructuring measures, without losing any of its strength as a market and technology leader.
Dornbirn, 9 December 2009
The Management Board
Andreas Ludwig Thomas Spitzenpfeil Martin Brandt
Chief Executive Officer Chief Financial Officer Chief Operating Officer
Concrete outlook for 2009/10 not possible
01 HONG KONG INTERNATIONAL LIGHTING FAIR: This was the third time that TridonicAtco had showcased its products at the Hong Kong International Lighting Fair, the largest event of its kind in Asia and the world's second-largest lighting industry fair. On its 18 square-metre stand, the brand presented its key products for the OEM market, including electronic ballasts and the latest TALEXX LED products, to some 250 trade visitors. 02 THE WOLFSBURG PROJECT: Twelve metres high and encompassing an area of 700 square metres, the "Ganzfeld Piece" in Wolfsburg is the largest installation ever implemented in a museum or gallery by American artist James Turrell. Zumtobel supplied all the necessary luminaires and control systems and is also supporting this high-calibre exhibition with the project "Tall glass", co-created by Zumtobel and James Turrell. 03 LED LIGHTING SEMINAR: In October 2009, Thorn Hong Kong held a technical LED lighting seminar on the topic of "Energy Efficient Lighting Solutions – Thorn LED Lighting". Over 50 delegates from government departments and private design consultants learned about LED lighting
applications and design. Selected Thorn LED products were displayed at the seminar to demonstrate the LED light rendering and control effect. 04 HELLO HIGH FREQUENCY ROADSHOW: The first of Thorn's two new "HF Trucks" is on the road and visiting electrical wholesalers throughout the UK. Along with the company's message "Goodbye Switch Start, Hello High Frequency", the truck shows how much energy and CO2 can be saved through a range of innovative products, from battens to bulkheads. The tour runs through February 2010 with 120 stops. 05 DORNIER MUSEUM FRIEDRICHSHAFEN: The new aerospace museum in Friedrichshafen looks like a giant aircraft hangar, reflecting its mission, which is to convey the fascination of flying. Thanks to an integrated lighting solution provided by Zumtobel, the historical planes on display are shown in the ideal light. One special highlight is the artwork on the façade by James Turrell, realised with the aid of floodlights and spotlights from SpaceCannon, a sub-brand of Zumtobel specialising in outdoor lighting scenarios.
| in TEUR | Q2 2009/10 |
Q2 2008/09 |
Change in % |
1st HY 2009/10 |
1st HY 2008/09 |
Change in % |
|---|---|---|---|---|---|---|
| Revenues | 293,391 | 324,460 | (9.6) | 571,971 | 641,130 | (10.8) |
| Cost of goods sold | (186,488) | (199,549) | 6.5 | (365,903) | (394,949) | 7.4 |
| Gross profit | 106,903 | 124,911 | (14.4) | 206,068 | 246,181 | (16.3) |
| as a % of revenues | 36.4 | 38.5 | 36.0 | 38.4 | ||
| Selling expenses | (66,522) | (73,377) | 9.3 | (133,943) | (148,897) | 10.0 |
| Administrative expenses | (17,678) | (19,980) | 11.5 | (34,609) | (38,935) | 11.1 |
| Other operating results | (1,927) | (1,125) | (71.3) | 2,449 | (932) | >100 |
| thereof special effects | (3,435) | (1,616) | <(100) | (7,078) | (2,652) | <(100) |
| Operating profit | 20,776 | 30,429 | (31.7) | 39,965 | 57,417 | (30.4) |
| as a % of revenues | 7.1 | 9.4 | 7.0 | 9.0 | ||
| Interest expense | (2,873) | (5,429) | 47.1 | (5,459) | (14,292) | 61.8 |
| Interest income | 372 | 412 | (9.7) | 533 | 1,482 | (64.0) |
| Other financial income and expenses | (1,174) | 7,414 | <(100) | (6,402) | 4,789 | <(100) |
| Profit/(loss) from associated companies | (700) | 572 | <(100) | (878) | 1,036 | <(100) |
| Financial results | (4,375) | 2,969 | <(100) | (12,206) | (6,985) | (74.7) |
| as a % of revenues | (1.5) | 0.9 | (2.1) | (1.1) | ||
| Profit before tax | 16,401 | 33,398 | (50.9) | 27,759 | 50,432 | (45.0) |
| Income taxes | (1,881) | (4,254) | 55.8 | (2,396) | (7,305) | 67.2 |
| Net profit from continuing operations | 14,520 | 29,144 | (50.2) | 25,363 | 43,127 | (41.2) |
| Net profit from discontinued operations | 179 | (1,288) | >100 | (486) | (994) | 51.1 |
| Net profit for the period | 14,699 | 27,856 | (47.2) | 24,877 | 42,133 | (41.0) |
| as a % of revenues | 5.0 | 8.6 | 4.3 | 6.6 | ||
| thereof due to minority shareholders | 26 | (110) | >100 | 338 | (109) | >100 |
| thereof due to shareholders of the parent company | 14,673 | 27,965 | (47.5) | 24,539 | 42,241 | (41.9) |
| Average number of shares outstanding - basic (in 1000 pcs.) | 41,750 | 44,235 | 43,137 | 44,421 | ||
| Average diluting effect (stock options) (in 1000 pcs.) | 75 | 104 | 75 | 104 | ||
| Average number of shares outstanding - diluted (in 1000 pcs.) | 41,825 | 44,339 | 43,211 | 44,525 | ||
| Earnings per share (in EUR) | ||||||
| Basic earnings per share | 0.35 | 0.63 | 0.57 | 0.95 | ||
| Diluted earnings per share | 0.35 | 0.63 | 0.57 | 0.95 | ||
| Earnings per share from continuing operations (in EUR) | ||||||
| Basic earnings per share | 0.35 | 0.66 | 0.59 | 0.97 | ||
| Diluted earnings per share | 0.35 | 0.66 | 0.59 | 0.97 |
| in TEUR | Q2 2009/10 | Q2 2008/09 | Change in % | 1st HY 2009/10 |
1st HY 2008/09 |
Change in % |
|---|---|---|---|---|---|---|
| Net profit for the period | 14,699 | 27,856 | (47.2) | 24,877 | 42,133 | (41.0) |
| Currency differences | 63 | 3,740 | (98.3) | (3,165) | 3,364 | <(100) |
| Currency differences arising from loans | (2,144) | (1,471) | (45.8) | 865 | (1,799) | >100 |
| Hedge accounting | (403) | 1,016 | <(100) | (587) | 871 | <(100) |
| Actuarial loss / gain | 0 | (25,671) | 100.0 | 0 | (25,671) | 100.0 |
| Taxes | 101 | 6,904 | (98.5) | 147 | 6,967 | (97.9) |
| Subtotal other comprehensive income | (2,383) | (15,482) | 84.6 | (2,740) | (16,268) | 83.2 |
| thereof due to minority shareholders | 225 | 553 | (59.3) | (190) | 140 | <(100) |
| thereof due to shareholders of the parent company |
(2,608) | (16,035) | 83.7 | (2,550) | (16,408) | 84.5 |
| Total comprehensive income | 12,316 | 12,374 | (0.5) | 22,137 | 25,865 | (14.4) |
| thereof due to minority shareholders | (111) | 27 | <(100) | 148 | 32 | >100 |
| thereof due to shareholders of the parent company |
12,427 | 12,347 | 0.7 | 21,989 | 25,833 | (14.9) |
| in TEUR | 31 October 2009 | in % | 30 April 2009 | in % |
|---|---|---|---|---|
| Goodwill | 275,455 | 25.1 | 275,455 | 26.1 |
| Intangible assets | 49,581 | 4.5 | 49,669 | 4.7 |
| Property, plant and equipment | 226,369 | 20.7 | 233,427 | 22.1 |
| Investments in associated companies | 3,286 | 0.3 | 7,861 | 0.7 |
| Financial assets | 633 | 0.1 | 624 | 0.1 |
| Other receivables & assets | 20,070 | 1.8 | 15,436 | 1.5 |
| Deferred taxes | 45,171 | 4.1 | 46,228 | 4.4 |
| Non-current assets | 620,565 | 56.6 | 628,700 | 59.7 |
| Inventories | 142,191 | 13.0 | 148,819 | 14.1 |
| Trade receivables | 186,780 | 17.0 | 169,378 | 16.1 |
| Other receivables & assets | 45,493 | 4.2 | 37,946 | 3.6 |
| Financial assets | 24 | 0.0 | 21 | 0.0 |
| Liquid funds | 100,646 | 9.2 | 69,008 | 6.5 |
| Current assets | 475,134 | 43.4 | 425,172 | 40.3 |
| ASSETS | 1,095,699 | 100.0 | 1,053,872 | 100.0 |
| Share capital | 108,750 | 9.9 | 111,761 | 10.6 |
| Additional paid-in capital | 342,059 | 31.2 | 339,048 | 32.2 |
| Reserves | 1,371 | 0.1 | (10,217) | (1.0) |
| Net profit for the period | 24,539 | 2.3 | 13,426 | 1.3 |
| Capital attributed to shareholders of the parent company | 476,719 | 43.5 | 454,018 | 43.1 |
| Capital attributed to minority shareholders | 3,799 | 0.3 | 1,962 | 0.2 |
| Equity | 480,518 | 43.8 | 455,980 | 43.3 |
| Provisions for pensions | 45,399 | 4.1 | 47,370 | 4.5 |
| Provisions for severance compensation | 30,438 | 2.8 | 30,758 | 2.9 |
| Other provisions | 11,375 | 1.1 | 10,718 | 1.0 |
| Borrowings | 214,899 | 19.6 | 215,600 | 20.5 |
| Other liabilities | 79 | 0.0 | 84 | 0.0 |
| Deferred taxes | 10,823 | 1.0 | 9,133 | 0.9 |
| Non-current liabilities | 313,013 | 28.6 | 313,663 | 29.8 |
| Provisions for taxes | 27,038 | 2.5 | 25,332 | 2.4 |
| Other provisions | 31,555 | 2.9 | 34,534 | 3.3 |
| Borrowings | 30,366 | 2.8 | 16,886 | 1.6 |
| Trade payables | 116,456 | 10.6 | 109,895 | 10.4 |
| Other liabilities | 96,753 | 8.8 | 97,582 | 9.3 |
| Current liabilities | 302,168 | 27.6 | 284,229 | 27.0 |
| EQUITY AND LIABILITIES | 1,095,699 | 100.0 | 1,053,872 | 100.0 |
| in TEUR | 1st HY 2009/10 |
1st HY 2008/09 |
|---|---|---|
| Operating profit from continuing and discontinued operations | 39,478 | 56,422 |
| Depreciation and amortisation | 22,015 | 21,153 |
| Other non-cash changes | 0 | 1,604 |
| Gain/loss from disposal of fixed assets | 498 | 0 |
| Results from discontinued operations | 113 | 0 |
| Cash flow from operating results | 62,104 | 79,179 |
| Inventories | 8,121 | (9,231) |
| Trade receivables | (8,245) | 15,405 |
| Trade payables | 1,983 | (17,472) |
| Prepayments received | 1,632 | 409 |
| Change in working capital | 3,491 | (10,889) |
| Non-current provisions | (3,097) | (2,905) |
| Current provisions | (2,749) | (3,068) |
| Other current and non-current receivables and liabilities | (16,474) | (8,293) |
| Change in other operating items | (22,320) | (14,266) |
| Taxes paid | (2,858) | (6,178) |
| Cash flow from operating activities | 40,417 | 47,846 |
| Proceeds from the sale of non-current assets | 1,754 | (130) |
| Capital expenditures | (17,107) | (30,330) |
| Change in non-current and current financial assets | (2,087) | 13,317 |
| Change in liquid funds from changes in the consolidation range | 0 | (7,554) |
| Cash flow from investing activities | (17,440) | (24,697) |
| FREE CASH FLOW | 22,977 | 23,149 |
| Change in net borrowings | 22,485 | 11,375 |
| thereof restricted cash | (154) | 162 |
| Dividends | (329) | (31,255) |
| Share buyback / exercise of options | 0 | (11,901) |
| Interest paid | (4,028) | (10,438) |
| Cash flow from financing activities | 18,128 | (42,219) |
| Effects of exchange rate changes on cash and cash equivalents | 528 | 1,624 |
| CHANGE IN CASH AND CASH EQUIVALENTS | 41,633 | (17,446) |
| Cash and cash equivalents at the beginning of the period | 55,953 | 86,163 |
| Cash and cash equivalents at the end of the period | 97,586 | 68,717 |
| Change absolute | 41,633 | (17,446) |
| Attributed to shareholders of the parent company | |||||||
|---|---|---|---|---|---|---|---|
| in TEUR | Share capital |
Additional paid-in capital |
Reserves | Net profit for the period |
Total | Minority | interests Total equity |
| 30 April 2009 | 111,761 | 339,048 | (10,217) | 13,426 | 454,018 | 1,962 | 455,980 |
| +/- Additions to reserves | 0 | 0 | 13,426 | (13,426) | 0 | 0 | 0 |
| +/- Total comprehensive income | 0 | 0 | (2,550) | 24,539 | 21,989 | 148 | 22,137 |
| +/- | (3,011) | 3,011 | 0 | 0 | 0 | 0 | 0 |
| +/- Dividends | 0 | 0 | 0 | 0 | 0 | (329) | (329) |
| +/- Change in consolidation method | 0 | 0 | 0 | 0 | 0 | 2,018 | 2,018 |
| +/- Stock options - addition | 0 | 0 | 712 | 0 | 712 | 0 | 712 |
| 31 October 2009 | 108,750 | 342,059 | 1,371 | 24,539 | 476,719 | 3,799 | 480,518 |
| Attributed to shareholders of the parent company | |||||||
|---|---|---|---|---|---|---|---|
| in TEUR | Share capital |
Additional paid-in capital |
Reserves | Net profit for the period |
Total | Minority | interests Total equity |
| 30 April 2008 | 111,761 | 355,893 | (48,409) | 92,986 | 512,231 | 1,969 | 514,200 |
| +/- Additions to reserves | 0 | 0 | 92,986 | (92,986) | 0 | 0 | 0 |
| +/- Total comprehensive income | 0 | 0 | (16,408) | 42,241 | 25,833 | 32 | 25,865 |
| +/- Share buyback / exercise of options | 0 | (11,901) | 0 | 0 | (11,901) | 0 | (11,901) |
| +/- Dividends | 0 | 0 | (31,255) | 0 | (31,255) | 0 | (31,255) |
| +/- Stock options - addition | 0 | 0 | 832 | 0 | 832 | 0 | 832 |
| +/- Initial consolidation | 0 | 0 | 0 | 0 | 0 | 190 | 190 |
| 31 October 2008 | 111,761 | 343,992 | (2,254) | 42,241 | 495,740 | 2,191 | 497,931 |
The interim financial statements as of 31 October 2009 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.
These 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 valid as of the balance sheet date and have been adopted by the European Union through its endorsement procedure.
The accounting and valuation methods remain unchanged as of 31 October 2009. Additional information on these methods is provided in the consolidated financial statements as of 30 April 2009. The following new or revised IAS/IFRS were applied for the first time in preparing the interim financial statements as of 31 October 2009:
In accordance with the changes to IAS 1 "Presentation of Financial Statements", the income statement was expanded to include the income and expenses recognised in equity and the results of this calculation are presented in a statement of comprehensive income. The statement of changes in equity only shows transactions with shareholders. Total comprehensive income is shown on a separate line in the statement of changes in equity.
IFRS 8 "Operating Segments" requires internal reports (management approach) to be used as the basis for identifying operating segments and for selecting the revenue and asset data to be disclosed. Since the external segment reporting of the Zumtobel Group already reflects these internal reports, the application of IFRS 8 will not result in any major changes.
The change to IAS 23 "Borrowing Costs" requires the capitalisation of borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset. The effect of this change on the interim financial statements as of 31 October 2009 is negligible.
The quarterly financial statements of all companies included in the consolidated financial statements were prepared in accordance with 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 October 2009 |
31 October 2008 |
31 October 2009 |
30 April 2009 | |
| AUD | 1.7175 | 1.7191 | 1.6274 | 1.8146 | |
| CHF | 1.5167 | 1.5971 | 1.5123 | 1.5066 | |
| USD | 1.4245 | 1.4894 | 1.4800 | 1.3275 | |
| SEK | 10.5055 | 9.5008 | 10.3845 | 10.6915 | |
| GBP | 0.8781 | 0.7925 | 0.8938 | 0.8934 |
The condensed consolidated interim financial statements include all major Austrian and foreign companies that are controlled by Zumtobel AG.
The changes in the consolidation range during the interim financial period are shown below:
| Consolidation Method | |||||||
|---|---|---|---|---|---|---|---|
| Consolidation Range | full | at equity | TOTAL | ||||
| 30 April 2009 | 96 | 5 | 101 | ||||
| Change in consolidation method | 1 | (1) | 0 | ||||
| Included during reporting period for first time | 1 | 0 | 1 | ||||
| Merged / liquidated during reporting period | (2) | 0 | (2) | ||||
| 31 October 2009 | 96 | 4 | 100 |
The following companies were liquidated during the first quarter of 2009/10:
Multilux (Pty) Ltd., Australia
Staff/Conlux Administration Coy. Pty. Ltd., Australia
Thorn Gulf LLC, Dubai, which was previously included in the consolidated financial statements at equity, was fully consolidated as of 1 May 2009. LEDON Lamp GmbH, which maintains its registered headquarters in Austria, was founded during the first half of 2009/10.
The following comments explain the major changes to individual items in relation to the comparable prior year period.
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 are based on the assumption 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.
Sales volumes are generally higher during the first two quarters than during 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.
The income statement was prepared in accordance with the cost of sales method. The cost of goods sold (incl. development expenses), selling expenses (incl. research expenses) and administrative expenses as well as other operating results include the following categories of expenses and income:
| in TEUR | Cost of goods sold |
Selling expenses |
Administrative expenses |
Other operating results |
Total |
|---|---|---|---|---|---|
| Cost of materials | (252,173) | (2,037) | (154) | (8) | (254,372) |
| Personnel expenses | (82,760) | (67,850) | (22,132) | (2,055) | (174,797) |
| Depreciation | (18,421) | (2,741) | (750) | (103) | (22,015) |
| Other expenses | (27,950) | (57,713) | (14,612) | (5,039) | (105,314) |
| Own work capitalised | 5,593 | 0 | 0 | 0 | 5,593 |
| Internal charges | 2,679 | (5,052) | 2,471 | (98) | 0 |
| Total expenses | (373,032) | (135,393) | (35,177) | (7,303) | (550,905) |
| Other income | 7,129 | 1,450 | 568 | 9,752 | 18,899 |
| Total | (365,903) | (133,943) | (34,609) | 2,449 | (532,006) |
| in TEUR | Cost of goods sold |
Selling expenses |
Administrative expenses |
Other operating results |
Total |
|---|---|---|---|---|---|
| Cost of materials | (270,575) | (2,897) | (312) | 0 | (273,784) |
| Personnel expenses | (92,737) | (73,842) | (22,323) | (24) | (188,926) |
| Depreciation | (17,176) | (3,022) | (955) | 0 | (21,153) |
| Other expenses | (27,805) | (65,883) | (18,266) | (2,720) | (114,674) |
| Own work capitalised | 7,044 | 18 | 513 | 0 | 7,575 |
| Internal charges | 3,041 | (5,263) | 2,221 | 0 | 0 |
| Total expenses | (398,207) | (150,888) | (39,123) | (2,744) | (590,961) |
| Other income | 3,258 | 1,991 | 187 | 1,812 | 7,248 |
| Total | (394,949) | (148,897) | (38,935) | (932) | (583,713) |
The cost of goods sold includes development costs of TEUR 17,105 (prior year: TEUR 16,701). Development costs totalling TEUR 5,080 were capitalised during the reporting period (prior year: TEUR 6,840), and the amortisation of capitalised development costs equalled TEUR 3,915 (prior year: TEUR 2,873).
| Q2 | Q2 | 1st HY | 1st HY | |
|---|---|---|---|---|
| in TEUR | 2009/10 | 2008/09 | 2009/10 | 2008/09 |
| Government grants | 0 | 0 | 573 | 584 |
| License revenues | 561 | 617 | 8,711 | 978 |
| Special effects | (3,435) | (1,616) | (7,078) | (2,652) |
| Impairment charges (-) / write up (+) to non-current assets | (99) | 0 | (99) | 0 |
| Restructuring | (1,479) | (1,600) | (5,121) | (2,636) |
| Gains / losses on sale | 0 | (16) | 0 | (16) |
| Litigation | (1,857) | 0 | (1,857) | 0 |
| Miscellaneous | 947 | (126) | 243 | 158 |
| Total | (1,927) | (1,125) | 2,449 | (932) |
The government grants are comprised entirely of grants related to income.
The Zumtobel Group and the Philips Group signed an extensive worldwide cross-licensing agreement in May 2009 for current and future patents in the areas of lighting technology and solid state lighting. This exchange of patents had a positive, non-recurring effect on license income. In connection with the agreement, the Zumtobel Group is required to make revenue-based license payments.
A wide-ranging package of measures was implemented during the second half of the 2008/09 financial year as part of the "Excellerate" efficiency improvement programme, which calls for savings of up to EUR 100 million by 2010/11. The expenses related to this programme are reported on the line "restructuring". In the comparable prior year period, this position was comprised mainly of redundancy payments in Great Britain and other costs related to the construction of the new plant in Spennymoor (TEUR 1,969) as well as redundancy expenses in Australia (TEUR 452).
The position "litigation" covers the expenses relating to a lawsuit filed by a supplier.
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 is comprised primarily of interest for the current credit agreement. The reduction resulted from the general decline in interest rates as well as a bonus margin, transaction costs and commitment fees of approx. TEUR 4,370 in the prior financial year that were related to the refinancing of the 2001 acquisition credit agreement.
| in TEUR | Q2 2009/10 |
Q2 2008/09 |
1st HY 2009/10 |
1st HY 2008/09 |
|---|---|---|---|---|
| Interest component as per IAS 19 less income on plan assets | (902) | (708) | (1,807) | (1,365) |
| Foreign exchange gains and losses | (926) | (472) | (166) | (560) |
| Market valuation of financial instruments | 654 | 8,594 | (4,429) | 6,840 |
| Gains / losses on sale | 0 | 0 | 0 | (126) |
| Total | (1,174) | 7,414 | (6,402) | 4,789 |
Foreign exchange gains and losses consist above all of effects from the valuation of receivables and liabilities that are denominated in a foreign currency. The change in the GBP and CHF exchange rates had a negative effect on foreign exchange results, particularly during the second quarter.
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 interim financial statements.
The classification of income taxes into current and deferred taxes is shown in the following table:
| in TEUR | Q2 2009/10 |
Q2 2008/09 |
1st HY 2009/10 |
1st HY 2008/09 |
|---|---|---|---|---|
| Current taxes | (1,448) | (2,874) | (2,565) | (6,080) |
| Deferred taxes | (433) | (1,380) | 169 | (1,225) |
| Income taxes | (1,881) | (4,254) | (2,396) | (7,305) |
The results of discontinued operations include the subsequent effects from the termination of the residential lighting business at the end of 2008/09. The comparable prior year data include a valuation adjustment to a purchase price receivable, which resulted from the sale of a plant in a previous financial year.
This position comprises effects resulting from the conversion of subsidiary financial statements into the Group reporting currency.
These currency differences result from long-term SEK and GBP loans that qualify as a net investment in a foreign operation and must therefore be reported under comprehensive income. Currency differences for the second quarter of 2009/10 were caused above all by the change in the GBP exchange rate.
The prior year actuarial loss resulted primarily from a decline in plan assets, which are connected with the provision for pensions in Great Britain.
The following comments refer to major changes in individual items compared to the balance sheet date on 30 April 2009.
The decline in investments in associated companies resulted primarily from a change in the method used to consolidate Thorn Gulf LLC, Dubai. This company was included in the consolidated financial statements at equity up to 30 April 2009, but was fully consolidated as of 1 May 2009 due to the attainment of control. In addition, an impairment charge was recognised to z-werkzeugbau gmbh as of 31 October 2009 to reflect the diminished prospects for earnings.
The decline in property, plant and equipment resulted above all from scheduled depreciation in comparison with a decline in investment activity.
This position includes the non-current portion of the receivable arising from the sale of the old factory in Spennymoor during December 2008 as well as the non-current components of the cross-licensing agreement with the Philips Group.
The increase in this position resulted chiefly from the inclusion of trade receivables from the full consolidation of Thorn Gulf LLC, Dubai (TEUR 5,880).
This position includes the current portion of the receivable arising from the cross-licensing agreement with the Philips Group.
The provisions for restructuring (TEUR 12,181) that are included under this position declined by TEUR 5.401 in comparison with 30 April 2009, whereby TEUR 466 are related to the reversal of provisions for restructuring measures.
The increase in current financial liabilities resulted from the use of short-term lines of credit to finance the seasonal increase in working capital.
Cash flow from operating results totalled TEUR 62,104 for the reporting period, but was lower than in the first half of 2008/09 (TEUR 79,179) because of the decline in operating profit. However, cash flow from operating activities was clearly positive (TEUR 40,417; prior year: TEUR 47,846) due to the steady improvement in working capital management. The change in other current and non-current receivables and liabilities resulted above all from a receivable arising from the exchange of patents, a reduction in holiday liabilities and special contractually mandated payments to employees.
Cash flow from investing activities is comprised primarily of capitalised research and development costs as well as investments in production equipment for the plants in Dornbirn, Lemgo and Spennymoor. The higher expenditures for property, plant and equipment in the first half of 2008/09 were related to investments in the new plant in Spennymoor.
Positive cash flow from financing activities resulted above all from the waiver of the dividend, the share buyback in 2008/09 and a decline in interest expense.
| in TEUR | 31 October 2009 |
30 April 2009 |
|---|---|---|
| Liquid funds | 100,646 | 69,008 |
| Not available for disposal | (538) | (412) |
| Overdrafts | (2,522) | (12,643) |
| Cash and cash equivalents | 97,586 | 55,953 |
The annual general meeting on 24 July 2009 approved a capital decrease through the withdrawal of treasury shares. This measure took effect on 20 August 2009 with recording in the company register. The withdrawal of these treasury shares reduced the company's share capital from EUR 111,760,860.00 to EUR 108,750,000.00. Share capital is now divided into 43,500,000 bearer shares with zero par value (previously 44,703,344 shares).
| in psc. | Total |
|---|---|
| 30 April 2009 | 286,767 |
| Share buyback | 0 |
| Exercised | 0 |
| 31 October 2009 | 286,767 |
No stock options were exercised to date during the 2009/10 financial year (prior year: 64,625 pcs.).
| in TEUR | SOP | MSP | Total |
|---|---|---|---|
| 30 April 2009 | 15,986 | 1,732 | 17,718 |
| Addition through profit or loss | - | 712 | 712 |
| 31 October 2009 | 15,986 | 2,444 | 18,430 |
The Stock Option Programme (SOP) was replaced by the Matching Stock Programme (MSP) in 2008. No further options were allocated from the SOP.
The addition to the MSP equalled TEUR 712 for the first half of 2009/10 (prior year: TEUR 832) and will be accrued over two years.
Related parties include the Managing Board and Supervisory Board of Zumtobel AG. The company had no business relationships with related parties as of the closing date for the interim financial statements on 31 October 2009.
Supply and delivery transactions are conducted with associated companies at normal market conditions.
The Zumtobel Group holds no contingent liabilities arising from guarantees or warranties (30 April 2009: TEUR 29). Bank guarantees of TEUR 9,560 (30 April 2009: TEUR 7,881) have been provided for various liabilities.
Together with the Fraunhofer Institute a new joint venture, LEDON OLED Lighting GmbH & Co. KG, was founded in November 2009 with registered headquarters in Dresden. This cooperation is designed to intensify investments in the future-oriented OLED (organic light-emitting diode) technology.
There were no other significant events after the balance sheet date.
The segment reporting of the Zumtobel Group is based on the Lighting Segment (lighting solutions, interior and exterior lighting, electronic-digital lighting and room management systems) and the Components Segment (electronic and magnetic lighting components). The prices charged on inter-segment sales reflect normal market conditions.
Segment assets comprise directly allocated property, plant and equipment, intangible assets and working capital (excluding accrued interest, tax refunds and tax liabilities.
The column "reconciliation" includes consolidation entries as well as property, plant and equipment, financial liabilities and taxes and the assets, liabilities and related income statement items that were not allocated to the individual segments.
| Lighting Segment | Components Segment | Reconciliation | Group | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| in TEUR | Q2 2009/10 |
Q2 2008/09 |
Q2 2007/08 |
Q2 2009/10 |
Q2 2008/09 |
Q2 2007/08 |
Q2 2009/10 |
Q2 2008/09 |
Q2 2007/08 |
Q2 2009/10 |
Q2 2008/09 |
Q2 2007/08 |
| Net revenues | 219,257 | 239,277 | 256,750 | 92,763 | 106,215 | 103,960 | (18,629) | (21,032) | (17,671) | 293,391 | 324,460 | 343,039 |
| External revenues |
218,671 | 238,744 | 256,875 | 74,594 | 85,409 | 85,704 | 126 | 307 | 460 | 293,391 | 324,459 | 343,039 |
| Inter-company revenues |
587 | 533 | (125) | 18,169 | 20,806 | 18,256 | (18,756) | (21,339) | (18,131) | 0 | 0 | 0 |
| Operating profit | 10,033 | 20,193 | 30,510 | 12,601 | 13,398 | 12,499 | (1,858) | (3,162) | (1,004) | 20,776 | 30,429 | 42,005 |
| Investments | 7,190 | 9,638 | 7,322 | 1,954 | 5,905 | 4,945 | 184 | 258 | 50 | 9,328 | 15,801 | 12,317 |
| Depreciation | (6,608) | (6,260) | (6,106) | (4,341) | (3,877) | (4,596) | (319) | (777) | 1,236 | (11,268) | (10,915) | (9,466) |
| Lighting Segment | Components Segment | Reconciliation | Group | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| in TEUR | 1st HY 2009/10 |
1st HY 2008/09 |
1st HY 2007/08 |
1st HY 2009/10 |
1st HY 2008/09 |
1st HY 2007/08 |
1st HY 2009/10 |
1st HY 2008/09 |
1st HY 2007/08 |
1st HY 2009/10 |
1st HY 2008/09 |
1st HY 2007/08 |
| Net revenues | 426,739 | 473,941 | 492,680 | 180,611 | 208,838 | 209,003 | (35,379) | (41,648) | (35,583) | 571,971 | 641,130 | 666,100 |
| External revenues |
425,902 | 472,296 | 492,936 | 145,825 | 168,246 | 172,532 | 244 | 588 | 632 | 571,971 | 641,130 | 666,100 |
| Inter-company revenues |
837 | 1,645 | (255) | 34,786 | 40,592 | 36,471 | (35,623) | (42,237) | (36,216) | 0 | 0 | 0 |
| Operating profit | 16,629 | 35,633 | 51,752 | 27,936 | 27,711 | 24,842 | (4,600) | (5,927) | (1,906) | 39,965 | 57,417 | 74,688 |
| Investments | 12,735 | 19,557 | 13,855 | 4,151 | 9,785 | 8,528 | 221 | 988 | 119 | 17,107 | 30,330 | 22,502 |
| Depreciation | (13,039) | (12,436) | (12,153) | (8,358) | (7,645) | (9,822) | (618) | (1,072) | 2,443 | (22,015) | (21,153) | (19,531) |
| in TEUR | 31 Oct 2009 |
30 April 2009 |
30 April 2008 |
31 Oct 2009 |
30 April 2009 |
30 April 2008 |
31 Oct 2009 |
30 April 2009 |
30 April 2008 |
31 Oct 2009 |
30 April 2009 |
30 April 2008 |
| Assets | 713,508 | 698,053 | 754,848 | 199,418 | 204,661 | 233,295 | 182,773 | 151,158 | 117,805 1,095,699 1,053,872 1,105,948 | |||
| 31 Oct 2009 |
30 April 2009 |
30 April 2008 |
31 Oct 2009 |
30 April 2009 |
30 April 2008 |
31 Oct 2009 |
30 April 2009 |
30 April 2008 |
31 Oct 2009 |
30 April 2009 |
30 April 2008 |
|
| Headcount (full time equivalent) |
4,968 | 5,167 | 5,670 | 1,855 | 1,745 | 1,926 | 128 | 129 | 112 | 6,951 | 7,041 | 7,708 |
We confirm to the best of our knowledge that the condensed consolidated interim financial statements, which were prepared in accordance with International Financial Reporting Standards (IAS 34, Interim Financial Reporting), provide a true and fair view of the financial position and financial performance of the group and that the group management report on the first half-year provides a true and fair view of the financial position and financial performance of the group with respect to important events that occurred during the first six months of the financial year and their impact on the condensed consolidated interim financial statements as well as the principal risks and uncertainties for the remaining six months of the financial year and the major related party transactions disclosed.
Dornbirn, 9 December 2009
The Management Board
Andreas Ludwig Thomas Spitzenpfeil Martin Brandt
We have reviewed the accompanying condensed consolidated interim financial information of
as of 31 October 2009. This condensed consolidated interim financial information comprises the consolidated balance sheet as of 31 October 2009, the related consolidated statements of income, statement of comprehensive income of the Group, cash flows and changes in equity for the period then ended and a summary of significant accounting policies and other explanatory notes.
The Company's management is responsible for the preparation and fair presentation of this condensed consolidated interim financial information in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU.
Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review. Our liability towards the Company and third parties with respect to this review is limited in accordance with para 275 Austrian Commercial Code (§ 275 (2) UGB).
We conducted our review in accordance with Austrian standards for chartered accountants and with International Standard on Review Engagements (ISRE) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial information are not presented fairly in all material respects in accordance with International Financial Reporting Standards (IFRS) as adopted in the EU.
We have read the Group Management Report for the six month period ended as of 31 October 2009 in order to see if it is not obviously contradictionary to the condensed consolidated interim financial information. In our opinion, the Group Management Report includes no obvious contradictions to the condensed consolidated interim financial information.
The Group Management Report for the six month period ended as of 31 October 2009 includes the declaration of the Company's management according to para 87 (1) fig 3 BörseG.
Vienna, 9 December 2009
KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
Thomas Smrekar, Mag. Michael Schlenk Certified Public Accountant
| Financial Terms | |
|---|---|
| ----------------- | -- |
| 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 + tangible assets + inventories + trade receivables – trade payables – provisions for income taxes – other provisions – other liabilities, as average over a period of 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 |
| Net debt | = Non-current borrowings + current borrowings – liquid funds |
| ROCE | (Return On Capital Employed) = Total return based on adjusted EBIT as a percentage of average capital employed |
| WACC | Weighted average cost of capital (debt and equity) |
| Working capital | = Inventories + trade receivables – trade payables – prepayments received |
3rd Quarterly Report 2009/10 (1 May 2009 – 31 January 2009) 16 March 2010 Annual Results 2009/10 28 June 2010 Annual Shareholders' Meeting 23 July 2010 Ex-dividend day 27 July 2010 Dividend payout day 31 July 2010 1st Quarterly Report 2010/11 (1 May 2010 – 31 July 2010) 14 September 2010 Interim Financial Report 2010/1 (1 May 2010 – 31 October 2010) 09 December 2010
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 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.tridonicatco.com www.ledonlighting.com
Publisher: Zumtobel AG, Investor Relations, Harald Albrecht Design: Lisa Pfurtscheller Coordination Financials: Christa Pfeiffer Translation: Donna Schiller Cover: Dornier Museum (Picture: Florian Holzherr) Project part: The Wolfsburg Project (Picture: Kunstmuseum Wolfsburg) Copyright: Zumtobel AG 2009 Produced in-house with FIRE.sys
This interim 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.
zumtobel group
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.