PRESS RELEASE : Gigaset AG publishes report for the third quarter and first nine months of 2020: 14% increase in revenue in the third quarter

 
 DGAP-News: Gigaset AG / Key word(s): Quarterly / Interim Statement/9 Month 
figures 
Gigaset AG publishes report for the third quarter and first nine months of 
2020: 14% increase in revenue in the third quarter 
 
2020-11-26 / 08:00 
The issuer is solely responsible for the content of this announcement. 
 
*Press release* 
Munich, November 26, 2020 
 
Gigaset AG publishes report for the third quarter and first nine months of 
2020 
_14% increase in revenue in the third quarter of 2020_ 
 
· 14% increase in revenue in the third quarter partly cushions declines in 
the first half of 2020 
 
· Normalization of everyday life is buoying demand in particular among 
private consumers in the core Phones business and the Smartphones segment 
 
· Rigorous cost cuts result in positive EBITDA 
 
· Earnings back in the black in the third quarter thanks to prompt 
instigation of cost-cutting measures coupled with a strong cash position 
 
Bocholt, November 26, 2020- Gigaset AG (ISIN: DE0005156004), an 
internationally operating company in the area of communications technology, 
today published its report for the third quarter and first nine months of 
2020. A strong third quarter, with a sharp 14% increase in revenue compared 
with the same period in 2019, partly cushioned its performance in the first 
half of the year. The economic recovery after the lockdown was lifted in 
Europe and the associated normalization of everyday life resulted in strong 
revenue growth at the Phones and Smartphones business segments in 
particular. The company continued its rigorous cost-cutting measures, as a 
result of which consolidated net income for the third quarter was back in 
the black. 
 
Gigaset generated consolidated revenue of &euro133.5 million in the first 
nine months of 2020 compared with &euro157.5 million in the same period of 
the previous year. Revenue for the quarter increased by 14% to &euro57.6 
million (Q3 2019: &euro50.4 million). At &euro5 million, earnings before 
interest, taxes, depreciation and amortization (EBITDA) for the quarter were 
likewise slightly higher than the previous year (Q3 2019: &euro4.9 million). 
 
"I'm pleased to say that our liquidity is higher year over year despite the 
challenging overall situation. That demonstrates clearly that the prompt 
cost-cutting and optimization measures we initiated have had a good impact," 
says Thomas Schuchardt, CFO of Gigaset AG. "We took countermeasures in good 
time, while catch-up effects in the third quarter also bolstered our 
revenue, with the result that we returned to profitability. We will, 
however, continue to focus intensively on cash management in view of the 
continuing crisis and the fact that it is now taking a turn for the worse 
again. 
 
We believe that our flexible management makes us well-equipped to benefit 
from potential changes, such as increasing digitization. We assume that 
working from a home office and remotely as a consequence of the coronavirus 
crisis will lead to a large-scale redesign and adjustment of the IT and 
telecommunications structures both at work and home. We can and aim to 
capture a slice of that market." 
 
*Rapid response to the coronavirus* 
As soon as the coronavirus crisis broke out, the company undertook three 
core measures and has maintained them to date. Their aim is to protect the 
company and its employees and to safeguard Gigaset's existence as a going 
concern. 
 
Liquidity and cash management was intensified in order to ensure the 
company's financial stabilization and flexibilization. The company further 
expanded its e-commerce commitment as a result of the partial closure of 
many retail stores in Europe due to the coronavirus. That is also reflected 
in the proportion of online sales, which rose by 135% in the first nine 
months of 2020 compared with the same period in 2019. In order to protect 
employees and ensure its ability to deliver, the company was also quick to 
implement hygiene measures in line with the recommendations of the Robert 
Koch Institute and the German government. 
 
*Performance by business segments* 
The Phones segment turned in a particularly positive performance, growing 
its revenue by around 30% year over year. Although revenue in the first nine 
months of 2020 was &euro100.6 million and so a total of 8.6% down on the 
previous year (&euro110.1 million), revenue for the quarter rose by 
&euro10.3 million to &euro44.0 million or by 30% year on year. 
 
Revenue in the Smartphones segment likewise increased. Although its revenue 
was also lower in the first nine months of 2020 at &euro4.0 million, a fall 
of &euro3.5 compared with the same period in 2019, it surpassed the revenue 
it posted in the same quarter of the previous year by 12.1%. 
 
The Smart Home segment generated revenue of &euro1.8 million in the period 
under review (previous year: &euro2.3 million), with the third quarter 
contributing &euro0.4 million to that. That was slightly below the figure 
for the same period of the previous year (Q3 2019: &euro0.7 million) and was 
attributable to lower sales of security components. Since smart home 
solutions are still regarded as a "luxury," consumers temporarily abstain 
from buying such products and purchase other goods instead in times of 
crisis and greater uncertainty. 
 
The Professional business segment posted revenue of &euro27.1 million in the 
first nine months of the fiscal year, a decline of 27.9% compared with the 
same period of 2019 (&euro37.6 million). That was due to numerous projects 
being scrapped or postponed. Revenue in the third quarter declined to 
&euro9.5 million (previous year: &euro12.7 million). However, the situation 
has eased again, since companies have begun resuming the projects they had 
put off. 
 
*Complete write-off of Gigaset Mobile Pte. Ltd.* 
Gigaset Mobile Pte. Ltd. is a financial investment of Gigaset and Goldin 
Fund Pte. Ltd. in which Gigaset has a 14.98% stake. That means Goldin Fund 
Pte. Ltd. holds majority control of the company. Since there are no longer 
any justified grounds to assume that the stake in Gigaset Mobile Pte. Ltd. 
is recoverable, one possible reason for which may be the upheavals caused by 
the coronavirus crisis, Gigaset's Executive Board has now decided in 
accordance with the precautionary principle to fully write off the minority 
stake of &euro7.7 million and recognize that impairment directly in equity. 
 
Despite the above-described recovery in Gigaset's operational business in 
the third quarter of 2020 and the intensive financial stewardship over the 
past nine months, this non-recurring negative special effect will therefore 
reduce consolidated equity to minus &euro2.6 million. 
 
"That's a regrettable development. Our recent history is catching us up to 
some extent. The special effect does not reflect the team's work and the 
successes we've achieved - whether that be higher revenue or a positive 
EBITDA - in the context of the coronavirus," adds Thomas Schuchardt. 
 
*Explanations on the outlook for 2020* 
All in all, the company is sticking to its statement that it will not issue 
any guidance for 2020, since a reliable forecast is not possible given the 
unique nature of the current situation. However, the company still expects 
its relevant key figures to fall year on year. 
 
In Germany and Europe, the situation at present has worsened significantly 
compared with when restrictions were eased in the third quarter of 2020. The 
number of infections throughout Europe has risen dramatically, with tighter 
measures being imposed to contain the virus, whether in the shape of the 
"wave-breaker" shutdown in Germany or actual lockdowns like in Austria. 
 
That once more shows the company's dependence on external factors that it 
cannot control, in other words, mainly decisions by governments on combating 
the pandemic, as well as consumer sentiment in the face of the pandemic and 
the fact that public life is increasingly grinding to a halt again. 
 
As a result, it is not possible to give a more accurate prediction for the 
final weeks of the year. Gigaset will therefore stick to its strategy of 
responding flexibly and dynamically to economic developments due to the 
incidence of infection and associated political decisions. 
 
The full report can be downloaded *here [1]*. 
 
Gigaset is an internationally operating company in the area of 
communications technology. The company is Europe's market leader in DECT 
cordless phones and is also a leader in the international arena, with just 
under 900 employees and sales activities in around 55 countries. Its 
business activities comprise not only DECT cordless phones, but also 
Android-based smartphones, cloud-based smart home systems, and business 
telephony solutions for SMEs and enterprise customers. 
 
Follow us on: Facebook [2] | Instagram [3] | Pinterest [4] | YouTube [5] | 
Twitter [6] | Xing [7] | LinkedIn [8] | Corporate Blog [9] 
Visit our homepage: http://www.gigaset.com [10] 
 
2020-11-26 Dissemination of a Corporate News, transmitted by DGAP - a 
service of EQS Group AG. 
The issuer is solely responsible for the content of this announcement. 
 
The DGAP Distribution Services include Regulatory Announcements, 
Financial/Corporate News and Press Releases. 
Archive at www.dgap.de 
Language:    English 
Company:     Gigaset AG 
             Frankenstr. 2 
             46395 Bocholt 
             Germany 
Phone:       [phone] 
Fax:         [phone] 
E-mail:      [e-mail] 
Internet:    www.gigaset.com 
ISIN:        DE0005156004 
WKN:         515600 
Listed:      Regulated Market in Frankfurt (Prime Standard); Regulated 
             Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, 
             Munich, Stuttgart, Tradegate Exchange 
EQS News ID: 1150643 
 
End of News DGAP News Service 
 
1150643 2020-11-26 
 
 
1: https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=96f5a488168d26ed80a32d4f21341585&application_id=1150643&site_id=vwd&application_name=news

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