Zumtobel Group AG: Zumtobel Group on track for success

Dornbirn (pta008/01.07.2022/07:30 UTC+2)

Zumtobel Group on track for success

• Revenue growth of 9.9%, earnings reach pre-corona level (EUR 1,148.3 million)
• With EUR 60.8 million, best operating results (EBIT) in the past five years
• Goals for revenues and EBIT margin exceeded in 2021/22
• Forecast for 2022/23: revenue growth of 3% to 6% and EBIT margin of 4% to 5%

Dornbirn, Austria – The Zumtobel Group successfully continued the positive trend from the past two financial years with its business performance in 2021/22. In spite of the challenging conditions – which have become more difficult in recent months due to the war in Ukraine – revenues nearly matched the level prior to the outbreak of the corona pandemic: Group revenues rose by 9.9% to EUR 1,148.3 million (2020/21: EUR 1,044.5 million). This positive development was also reflected in EBIT, which increased to EUR 60.8 million and marked the best operating results in the past five years. The EBIT margin equalled 5.3%. The Zumtobel Group also exceeded its own goals for 2021/22 – the original forecast called for revenue growth of 4% to 7% and an EBIT margin of 4% to 5%.

CEO Alfred Felder commented: "We can look back with pride at the past year, which we successfully mastered despite an exorbitant rise in raw material prices, interrupted supply chains and a chronic undersupply of critical components."

Sound growth in both segments

After an adjustment for foreign exchange effects, Group revenues rose by 8.8% in 2021/22. Revenues increased by 6.4% to EUR 844.7 million (2020/21: EUR 794.1 million) in the Lighting Segment and by 19.9% to EUR 363 million in the Components Segment. Revenues in the D/A/CH region, the largest market for the Zumtobel Group, rose by a slightly lower 4.2% compared with the other regions because of the prior year growth recorded by Switzerland and Austria despite the Covid-19 crisis. The Northern and Western Europe region and Southern and Eastern Europe region reported revenue increases in the low double-digit percentage range. The Zumtobel Group generated solid growth, above all, in Great Britain, France, Spain and Italy as well as double-digit revenue growth in the Asia & Pacific region.

The development of revenues supported an increase in Group EBIT to EUR 60.8 million in 2021/22 (2020/21: EUR 43.4 million) and an improvement in the return on sales from 4.2% to 5.3%. Positive effects involved a decline in depreciation/amortisation as well as lower guarantee expenses and efficiency improvements in direct labour costs. Negative factors included the sharp rise in raw material, transport and energy expenses as well as the partial absence of government-supported short-time work models and higher consulting fees.

Selling expenses (incl. research) were 7.8% higher at EUR –282.9 million in 2021/22 (2020/21: EUR
–262.6 million). The largest increases were recorded in personnel costs after the expiration of short-time work programmes. Transport costs and travel expenses were also substantially higher, as were customs duties as a result of the Brexit. Administrative expenses rose by 10.7% to EUR –43.1 million (2020/21: EUR –38.9 million) owing to an increase in personnel costs and depreciation/amortisation. Other operating income fell to EUR 5.8 million (2020/21: EUR 9.6 million), chiefly due to a decline in license income and higher miscellaneous costs.

Profit before tax rose to EUR 47.5 million in 2021/22 (2020/21: EUR 34.0 million). The reported tax expense equalled EUR –1.7 million, compared with tax income of EUR 11.6 million in 2020/21. Net income increased only marginally to EUR 45.8 million (2020/21: EUR 45.6 million). Earnings per share for the shareholders of Zumtobel Group AG (basic EPS based on 43.1 million shares) equalled EUR 1.06 (2020/21: EUR 1.06).

The crisis on global procurement markets was also reflected in the development of inventories, which rose by EUR 54.8 million. Working capital totalled EUR 211.3 million as of 30 April 2022 and was EUR 58.9 million over the level on 30 April 2021. Cash flow from operating activities declined from EUR 140.7 million to EUR 57.6 million in 2021/22, while cash flow from investing activities was slightly higher year-on-year. Free cash flow therefore declined to EUR 15.9 million (2020/21: EUR 100.0 million).

Improvement in the balance sheet structure/dividend recommendation

The balance sheet total rose to EUR 1,005.4 million as of 30 April 2022 (2020/21: EUR 943.3 million), primarily due to an increase in inventories and trade receivables. The equity ratio equalled 32.7% as of 30 April 2021, compared with 38.1% on 30 April 2022. The EUR 6.6 million increase in net liabilities to EUR 95.1 million as of 30 April 2022 resulted chiefly from a higher balance of borrowings.

"We have a very good year behind us and want to share this success with our shareholders", added CEO Alfred Felder. "Our recommendation to the annual general meeting will therefore include an increase in the dividend to EUR 0.35 for the 2021/22 financial year. That represents roughly 33% of net profit."

Systematic implementation of corporate strategy

"This sound performance also underscores the success of the Zumtobel Group's corporate strategy with its focus on innovation, digitalisation and sustainability," added Felder, confirming that the strategy will be systematically continued. "Despite the difficult market environment, we invested EUR 68 million in research and development during the 2021/22 financial year. Innovative products are decisive for the Group's future success."

Digitalisation represents another focal point for the Zumtobel Group: the goal, among others, is to create a digital customer interface and to optimise business processes along the value chain up to fully digitalised process flows. The first step will involve the implementation of a new customer relations management system for the D/A/CH region. In order to accelerate the digital transformation, Marcus Frantz will join the Management Board of the Zumtobel Group as Chief Digital Transformation Officer (CDTO) in November 2022.

Clear goals were also defined during the past financial year to make the Zumtobel Group even more sustainable in the true sense of the word. The first goal is to achieve climate neutrality in its own plants by 2025, whereby the focus will be placed on avoidance and reduction before the compensation of emissions. The second goal is to become the partner of choice and work continuously with suppliers on sustainable procurement and suitable solutions along the entire value chain. On top of that, the Zumtobel Group is committed to the circular economy concept, which it views as a future-oriented innovation tool where products serve as raw materials for the next product generation.

These sustainability activities have already been recognised internationally: in October 2021, EcoVadis, a global sustainability rating agency, presented the Zumtobel Group with a gold medal that confirms its ranking among the top three per cent of over 75,000 rated companies worldwide.

Outlook

Continuous improvement, also during the 2021/22 financial year, shows that the Zumtobel Group is well on its way to generate sustainable and profitable growth. However, further developments in Ukraine, the rising cost of raw materials, transport and energy, and the availability of semiconductors will have a major impact on the course of the global economy and, in turn, on the development of the Zumtobel Group. The future economic effects of the Covid-19 pandemic are also impossible to predict in detail at the present time.

However, the Zumtobel Group sees itself in a strong position to master these challenges. Against this backdrop and with reference to the above-mentioned uncertainties, the Management Board of the Zumtobel Group expects an increase of 3% to 6% in revenues and an EBIT margin of 4% to 5% for the 2022/23 financial year.

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Emitter:	Zumtobel Group AG Höchster Straße 8 6850 Dornbirn Austria
Contact Person:	Eric Schmiedchen
Phone:	+43 5572 509 1125
E-Mail:	eric.schmiedchen@zumtobelgroup.com
Website:	z.lighting
ISIN(s):	AT0000837307 (Share)
Stock Exchange(s):	Vienna Stock Exchange (Official Trade)