Gigaset AG publishes figures for the first quarter of 201931. May 2019 Published by Raphael Doerr
• Consolidated revenue of €45.8 million in the first quarter of 2019
• Free cash flow well above the level of the previous year
• Positive outlook for 2019 reaffirmed unchanged
Gigaset AG (ISIN: DE0005156004), an internationally operating company in the area of communications technology, today published its report for the first quarter of 2019. Revenue for the quarter was €45.8 million (previous year: €51.1 million). The figure was impacted by the continuing slight decline in business in the Phones segment, which had already been factored in, and revenue shifts due to the particularly strong fourth quarter of 2018. High consumer demand at the end of 2018 slightly dampened sales overall in the first quarter of 2019. An especially pleasing aspect in this context is the positive performance of the Smart Home business segment, where revenue surged by 97.8%. The result from core business before depreciation and amortization (EBITDA) fell in line with the drop in revenue to minus €1.9 million (previous year: €1.6 million), while the free cash flow was minus €10.4 million, hence well up on the previous year (minus €23.1 million).
“As Gigaset transforms into a digitized company with a unified ecosystem, our focus is set on the big picture. We are developing the young business segments Professional, Smart Home and Smartphones systematically. Our successes over the past year makes us optimistic that we are on the right track moving ahead. Our outstanding end-of-year business in 2018 meant we suffered slight drops in revenue in the first quarter of 2019,” said Klaus Weßing, CEO of Gigaset AG.
Revenue by business segment
In the Phones business segment, Gigaset was able to maintain its leading position in the main European sales markets, growing its share there by a further 2.7 percentage points in terms of units. Overall, revenue in this segment fell by 11.3% in the first quarter of 2019 to €33 million (previous year: €37.2 million). Gigaset was therefore able to win share in a declining market and consolidate its position.
Revenue in the Professional segment was €10.4 million, slightly down year over year (previous year: €11.7 million). Revenue declined in particular in France, Italy and Spain. Business in this segment is heavily project-driven and so by its nature is subject to fluctuations. Gigaset intends to further expand the product portfolio, mainly by developing tailored solutions and services, and so capture an increasing number of projects in the enterprise arena.
Revenue from smartphones fell by 3.6% to €1.8 million (previous year: €1.9 million), in particular due to strong end-of-year business in 2018, which had the effect of dampening consumer demand in Q1 2019. Intensive expansion of the product portfolio in the 3rd quarter will deliver products for the company’s end-of-year business and strengthen its market position in this segment.
The Smart Home business segment performed pleasingly in the first quarter of 2019, doubling revenue to €0.6 million (previous year: €0.3 million).
Positive outlook for 2019 confirmed
In 2019, Gigaset intends to continue the operational strategy it launched in 2016. Its entrepreneurial focus is on expanding the product portfolio while securing its Phones business. Accordingly, there will be an increase in research and development expenditure, part of which will be compensated for by strict cost management.
With regard to compensating for the factored-in decline in the market at the Phones segment, which Gigaset aims to cushion by expanding its activities and growing revenue in the Smartphones, Smart Home and Professional segments, the company expects for the current fiscal year 2019:
• A slight increase in revenue over 2018
• A sharp improvement in free cash flow and
• EBITDA at the level of the previous year
The complete report on the first quarter of 2019 can be downloaded from www.gigaset.ag.