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Gigaset AG publishes report on the first quarter of 2020
28. May 2020 Published by Raphael DoerrGigaset AG (ISIN: DE0005156004), an internationally operating company in the area of communications technology, today published its report for the first quarter of 2020. Its key revenue and earnings figures were negatively impacted by the measures to combat the coronavirus pandemic that were initiated in March. The considerable restrictions on public life imposed by governments in Europe were felt in full force by brick-and-mortar retailing, causing a slump in sales and revenue.
The company posted total revenue of €32.4 million (Q1 2019: €45.8 million) and earnings before interest, taxes, depreciation and amortization (EBITDA) of minus €7.4 million (Q1 2019: minus €1.9 million) in the first quarter of 2020.
“Like many other companies worldwide, we have also been hit by the coronavirus pandemic,” says Klaus Weßing, CEO of Gigaset AG. “In particular, the Smartphones and Phones business segments suffered in the first quarter. Nevertheless, we believe we are still well-positioned moving ahead once the crisis ends. The Smart Home segment is also performing positively in the current crisis thanks to our new technology partnership. We still see great potential in B2B business, and the assumption that the coronavirus pandemic will accelerate digitization in private and professional life bodes well for the company’s future.”
Performance by business segments
From the operational perspective, the company is divided into the four business segments Phones, Smartphones, Smart Home and Professional.
Revenue in the Phones segment was still at the budgeted level up to mid-March of fiscal 2020, despite the fact that the market environment remained challenging. Since March it has been impacted negatively by the measures initiated to combat the coronavirus pandemic. Sales and revenue fell sharply as a result of the massive curtailments in public life and store closures. Phones generated total revenue of €25.3 million (Q1 2019: €33.0 million).
The Smartphones business segment was hit particularly hard by the measures to contain coronavirus in all sales markets. The measures resulted in distributors returning devices and so negative quarterly revenue of minus €3.7 million (Q1 2019: €1.8 million).
The coronavirus pandemic also affected the Professional business segment: Enterprises deferred projects and orders and so revenue declined by 7.7% to €9.6 million (Q1 2019: €10.4 million).
However, business with Smart Home products was very satisfactory, with revenue in that segment doubling to €1.2 million (Q1 2019: €0.6 million). This increase was attributable to the launch of a strategic partnership with a leading European telecommunications company.
“The coronavirus pandemic is hitting Gigaset, as well as hundreds of thousands of businesses and millions of people worldwide, hard,” says Thomas Schuchardt, CFO of Gigaset AG. “However, because we have been extremely cost-conscious in running Gigaset for a long time, we took prompt measures to cut costs further and achieve additional savings and implemented them with the necessary resolve and focus. These measures are already reaping initial rewards and will help us withstand the crisis.”
Outlook for 2020
In view of the direct effects of the coronavirus pandemic, as well as Gigaset’s dependence on external factors outside its control, in other words, decisions by governments to impose lockdowns and close businesses and borders, as well as the duration and further evolution of the pandemic itself –, the company will not issue a detailed guidance for 2020, since a reliable forecast is not possible given the unique nature of the current situation. However, Gigaset expects its relevant key figures to fall year on year as a result of the crisis.
The complete report on the first quarter of 2020 can be downloaded here.
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