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Gigaset AG publishes report on the first quarter of 2022

24. May 2022 Published by Raphael Doerr

Gigaset AG (ISIN: DE0005156004), an internationally operating company in the area of communications technology, today published its report for the first quarter of 2022. Gigaset increased its consolidated revenues slightly by 1.4% and thus in line with the expectations it had communicated. However, higher material costs weighed on earnings, resulting in a decline in EBITDA for the quarter.

In the first quarter of 2022, the company generated total revenues of EUR 51.2 million (Q1 2021: EUR 50.5 million) and earnings before interest, taxes, depreciation and amortization (EBITDA) of EUR 0.5 million (Q1 2021: EUR 1.6 million).

Thomas Schuchardt_FD“Gigaset also has to contend with the ongoing realities in the area of logistics and material availability,” said Thomas Schuchardt, CFO of Gigaset AG. “Our earnings in the first quarter were therefore weighed down mainly by sourcing and supply chain problems in the wake of the coronavirus pandemic. Our long-standing and good relationships with our suppliers ensure we are supplied with intermediate products and raw materials as best possible in this challenging environment. What’s important for us in this context is to keep costs under control while managing the extraordinary uncertainty prevailing at present.”

Performance by segments

In the mainly consumer-oriented Phones, Smartphones and Smart Home segments, revenues totaled EUR 36.9 million, -6.2% down compared with the same quarter of the previous year (Q1 2021: EUR 39.3 million). However, the Professional segment grew its revenues sharply year on year by 27.7% to EUR 14.3 million (Q1 2021: EUR 11.2 million).

Phones, the largest segment and so the one that is particularly material-intensive, was impacted in the first quarter of 2022 by continuing supply chain and material sourcing problems caused by the coronavirus. Its revenues therefore fell by 8.2% to EUR 32.4 million (Q1 2021: EUR 35.3 million). If Gigaset had been able to meet demand in full, it would have been able to post a strong increase.

In the overall context of a European market that continues to decline as a whole and remains fiercely contested, Gigaset is sticking to its strategy of positioning itself as the vendor of choice for premium phones and thereby capturing further market share.

The Smartphones segment was able to follow on from its pleasing performance in fiscal 2021 in the first quarter of 2022. Revenues rose to EUR 4.2 million or by 16.7% over the first quarter of 2021 (EUR 3.6 million). The main revenue drivers in this segment were again the GS5 and the GS290pro/GS290 Plus models. Gigaset also increasingly sees future growth for smartphones in B2B business, which Gigaset is able to cater for with great flexibility and numerous personalization options because it has its production operations in Germany.

Business in the Smart Home segment also declined slightly in the first quarter of 2022. Its revenues fell by 25.0% to EUR 0.3 million (Q1 2021: EUR 0.4 million). Together with the Purchasing Group of the German Broadband Association (BREKO), Gigaset premiered a router that members of BREKO can procure exclusively. The cooperation project holds out the promise of potential synergy effects with the Telephony and Smart Home segments in relation to future router generations.

The Professional segment continued to perform very pleasingly in the first quarter of 2022. Its revenues grew sharply year on year by 27.7% to EUR 14.3 million (Q1 2021: EUR 11.2 million). The cooperation with Unify, for which Gigaset is developing a new series of desktop phones, is still proceeding as planned; initial shipments are envisaged in the current year.

Klaus_Weßing_Dunkel“We’re in a situation characterized by extraordinary uncertainty,” said Klaus Weßing, CEO of Gigaset AG. “Nevertheless, we look to the future with confidence, also because we’ve done our homework since the coronavirus pandemic broke out in 2020 and given our organization a more resilient setup as a whole. New, customer-centric products, long-term cooperation ventures with powerful partners, and our production operations in Germany and the exceptional agility that gives us, are key assets moving ahead.”

The outlook in context

Gigaset believes that there will still be great uncertainty in 2022, in particular as regards the medium- and long-term effects of the coronavirus pandemic. Policymakers are already warning about new variants of the virus. Consequently, Gigaset also continues to see itself significantly dependent on external factors beyond its control, such as the massive impacts that are already visible in the wake of the strict lockdown in Shanghai, China, and the resultant problems in the manufacture and supply of intermediate products. The conflict in Ukraine is also a risk that is difficult to define, especially for Europe. Rising inflation and foreign exchange risks are likewise components of an overall economic situation marked by growing complexity and increasing risks. Consequently, utilization of production capacities at a constant level might not be able to be ensured as a result of existing shortages (such as for chipsets) on the procurement market and the described risks.

General statement by the Executive Board for 2022

Given the assumptions stated in the forecast and assuming that there is no sudden and significant deterioration in the situation as regards the pandemic, the war or supply chains, Gigaset anticipates the following financial performance, financial position and cash flow situation in fiscal 2022:

  1. A slight increase in revenues and EBITDA
  2. A moderately positive free cash flow

The complete report on the first quarter of 2022 can be found here.

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