Shift to LED leaves mixed picture for Zumtobel in 2011

Austrian lighting giant Zumtobel saw ‘sound’ growth last year in its luminaires and lighting solutions segment – which includes Thorn – but a downturn in its components business and a big overall fall in profits.

Zumtobel CEO Harald Sommerer

Annual financial results published last week showed that, for the Zumtobel Group as a whole, sales were up 4.2 per cent to €1.3 billion, but remained below the levels seen in 2007-08, and the pace of growth slowed during the year.

The group’s luminaires and solutions segment saw nine per cent growth to €949 million. Measures to strengthen profitability and growth at Thorn showed positive effects, the group said, with growth of more than than 10 per cent at Thorn Lighting in the UK.

But the performance of Zumtobel’s components segment, including Tridonic and Ledon, was ‘disappointing’. Turnover fell 6.7 per cent to €408 million, having grown 19.3 per cent in the previous year.

This, combined with the high price of LED chips, and investment of €70 million in R&D, cut into the group’s profits, which were down 69 per cent to €16 million. The company also shed 358 full-time equivalent staff, although headcounts were up in sales and R&D.

But there was good news from the LED side of the business – across the group, sales of LED products did better than expected, with sales up 83 per cent to €183 million. As a proportion of the group’s overall revenue, LED grew from eight per cent to more than 14 per cent.

The shift to LED means that ‘in the components segment we need to adapt our structures faster than we had anticipated while at the same time investing in both conventional and LED products,’ said Zumtobel’s CEO Harald Sommerer.

The group performed most strongly in Europe, where its business grew by more than five per cent. Other regions were more disappointing, with sales in Asia and the US, sales up by just one per cent, and in Australia and New Zealand, 1.5 per cent.

The firm said the outlook for the coming year was ‘uncertain’ because of the economic situation, especially in Europe, but that it expected to see improvements in turnover and profit margins. Sommerer said the firm needed to take into account the economic backdrop and ‘bring our activities into line with the market environment’. It stepped back from its previous medium-term revenue forecast of 10 per cent annual growth, to reflect the tough economic environment.

The main aim for 2012-13 would be ‘to make sure we justify the high investments in the future that we have made by achieving growth and higher earnings,’ said Sommerer.

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