Gigaset AG publishes 2022 Annual Report: significant increase in revenues and rise in EBITDA27. April 2023 Published by Raphael Doerr
Gigaset AG (ISIN: DE0005156004), an internationally operating company in the area of communications technology, today published its Annual Report for 2022. Gigaset AG fully met its revenue and EBITDA forecasts in the 2022 fiscal year despite challenging market conditions.
The outlook for revenues and EBITDA, which had been adjusted in November 2022, was even raised at the end of February 2023 due to a slight slowdown in inflation and a general brightening of the economic outlook, and was subsequently achieved in full. The company faced various challenges in 2022, especially due to geopolitical tensions and economic uncertainties. Bottlenecks on the procurement markets and higher prices for energy, raw materials and intermediate products weighed on business, as did the appreciation of the dollar against the euro. Irrespective of that, Gigaset performed successfully and achieved its targets.
Gigaset generated consolidated revenues totaling EUR 241.3 million in fiscal 2022, 11.1% up on the previous year (2021: EUR 217.1 million). Three of the company’s four business segments – Phones, Smartphones and Professional – posted increases in revenues. The Phones segment in particular performed very strongly in the second half of 2022 and additionally benefited from solid Christmas trade in the fourth quarter. Continuous cost management and efficient working capital management resulted in an improved EBITDA of EUR 17.9 million, which was above the operating result of the previous year (2021: EUR 17.4 million).
“The fact that we were able to increase revenues and EBITDA last year is a great success,” says Thomas Schuchardt, CFO of Gigaset AG. “Operating business was heavily impacted by the depreciation of the euro against the US dollar, which led to a significant increase in material costs, which Gigaset largely settles in US dollars. However, our long-standing and good relationships with suppliers helped us ensure an ideal supply of intermediate products and raw materials.”
“In view of the overall circumstances, I regard the increase in revenues in the past year as a positive signal for our investors,” adds Dr. Magnus Ekerot, the new CEO and Chairman of the Board of Gigaset AG since January 1, 2023. “We will build on this positive trend and achieve substantial revenue growth and improved profitability by the end of 2025. We are pursuing a three-year plan whose cornerstones are based on a change in the way of working, future-proof products and solutions tailored to customer needs, and an optimized go-to-market process.”
Performance by segments
In the mainly consumer-oriented Phones, Smartphones and Smart Home segments, revenues in 2022 totaled EUR 179.0 million, an 11.9% improvement compared with the previous year (2021: EUR 159.9 million). In Professional business with B2B customers, Gigaset generated an 8.9% increase in revenues to EUR 62.3 million (2021: EUR 57.2 million).
The Phones business segment recorded the strongest increase in revenues in fiscal year 2022, posting EUR 158.7 million or a year-over-year increase of 13.2% (2021: EUR 140.2 million). This positive trend is due in particular to the fact that Gigaset is better able to deliver cordless phones than its competitors. Although the European market continues to decline, Gigaset again maintained or expanded its leadership in its core market of Europe (EU6). The company’s dominance is evident from its market share. According to market research company GfK, Gigaset had a 45% share in terms of revenues and 44% in terms of units in the EU6 at the end of 2022. In the United Kingdom, Germany, France and Italy, Gigaset was able to further expand its market share in terms of unit sales.
A major prestigious success is the intensified cooperation with Telekom Deutschland, which has sold DECT cordless phones from Gigaset exclusively at its Telekom stores and in the Telekom online shop since July 2022.
Revenues in the Smartphones segment also improved to EUR 18.8 million (2021: EUR 18.2 million), an increase of 3.3%. Although the general growth of the smartphone market has slowed down in recent years, Gigaset can still gain further market share with its strategy. The two unique selling points “Made in Germany” and “customizability” also for B2B customers are paying off. For instance, not only were two new rugged smartphones – the GX4 and GX6 – launched last year, but a new PRO version of the GS5 was also released. The latter enabled the company to win another invitation to tender from Deutsche Bahn AG. The strategy of acquiring new customers in the OEM and B2B arenas in particular, in addition to the established clientèle in the B2C segment, therefore continues to reap rewards.
The Smart Home segment moved sideways in 2022 and generated revenues of EUR 1.5 million in line with the previous year (2021: EUR 1.5 million). The smart home market continues to be highly fractured and lacking clear momentum. In order to expand its market share in this segment, Gigaset is also increasingly pursuing a B2B strategy. For example, the company is now a partner on Bosch’s Home Connect Plus platform. Stadtritter, a professional alarm receiving center, was acquired as a partner and, in the area of age-appropriate assistance systems (Smart Care), a new sales partner for the B2B2C channel was acquired in the shape of BeHome.
The Professional business segment also made a significant positive contribution, to consolidated revenues, posting a total of EUR 62.3 million in fiscal 2022 (2021: EUR 57.2 million) – an increase of 8.9%. The overall positive development is due to catch-up effects in relation to larger installations that were not able to be implemented in 2021 due to the dynamics of the pandemic, as well as to high demand and new projects.
Contrary to the global trend, a slight increase in the business DECT arena was recorded in Germany, the largest DECT market in Europe. In the same period, Gigaset, as a supplier of DECT multi-cell cordless phones, was able to stabilize its second largest market share in Western Europe at 25%, according to MZA Consultants.
The economic prospects for 2023 remain cloudy, although the fears of a recession in Germany are likely to prove unfounded. In addition to the general uncertainty about future economic developments, continuing high prices are a particular cause for concern. External factors on which Gigaset’s business is also dependent include the significant appreciation of the US dollar against the euro, higher energy and material costs, logistics problems and the inflation-related decline in consumer purchasing power, as well as semiconductor bottlenecks, which will persist in the medium term. It is not yet possible to estimate what impact all this will have on the course of business this year.
General statement by the Executive Board for 2023
Despite the challenges described above, Gigaset is confident about its own growth prospects. The company will concentrate on its core expertise and meet the needs of its customers with precisely tailored products. The company will also invest in a more focused manner in research and development with immediate effect in order to gain market relevance as part of its strategic realignment.
Accordingly, assuming that there is no sudden deterioration in exchange rate effects, the supply chain situation, the war in Ukraine, further geopolitical tensions or new negative dynamics as regards the pandemic, the company anticipates the following financial performance, financial position and cash flow situation in fiscal 2023:
- A moderate increase in revenues (EUR 241.3 million in 2022)
- A significant increase in EBITDA (EUR 17.9 million in 2022) and
- A significant increase in free cash flow (EUR 1.0 million in 2022)