Munich’s Gigaset AG was formerly known as Siemens Home and Office Communication Devices. It has around 1,250 employees and seems to be recovering from a rough patch, according to the most recent numbers and following below press release. The shares of the company exploded 59% upwards, aktiencheck.de reports today, August 12, 2016.
Gigaset AG is back in the black, reporting a positive income from ordinary activities (income before taxes) for 2016 of EUR0.6 million after a loss of EUR9.3 million in the previous year. EBIT* improved by EUR16.7 million to EUR1.4 million. In view of the good first half of the year, the Gigaset AG Executive Board is raising its forecast for the whole of fiscal 2016. "We now expect to make a positive income from ordinary activities for the entire 2016," as Chief Financial Officer Hans-Henning Doerr reports, announcing an upward adjustment to the original forecast. The anticipated EBITDA is also being raised to approximately EUR20 million for the year as a whole. Accordingly, the company's cash position for the whole of 2016 will hardly change year on year. If tax payments for previous years are excluded from the cash flow, the free cash flow will also be well in the black this year.
These financial figures are proof that Gigaset AG's cost-cutting measures are having full impact. "We've adopted and rigorously implemented a large number of measures," underscores Klaus We?ing. "And even if revenue per se fell further in the first half of the year, we nevertheless believe we have a good foundation for the future. We now have room again to press ahead vigorously with our strategic realignment."
The new Executive Board of Klaus We?ing and Hans-Henning Doerr has declared that one of its core tasks will be to formulate a sustainable corporate strategy. "We are convinced that Gigaset will grow again," said Klaus We?ing with optimism. "Since we will also cut costs in 2017 as a result of staff reductions, we will gain further freedom to invest in our future."
Gigaset is already working intensively on the following fields to create a successful setup for the future:
Gigaset is achieving a good contribution margin in DECT business thanks to the cost savings it has made and will win market share.
Gigaset sees significant growth potential in the field of business telephony and will further expand the Business Customers Business Unit, which will contribute EUR60 million in revenue in fiscal 2016.
Optimized marketing of the security solution Gigaset elements will achieve further sales successes.
Gigaset continues to work on new applications and solution offerings in the Smart Home segment that will offer growth potential.
The successful turnaround also means that the extremely important cash position for Gigaset AG has improved significantly. As expected, liquid funds were low in the first half for seasonal reasons and, at EUR27.4 million, were at approximately the planned level. However, the company serviced supplier loans early to an amount of EUR8 million and earned cash discounts. "Without these measures, our cash position would be around 30% above our original planned figures," says CFO Doerr.