"Fast Forward" future strategy program reports first success
Fiscal year 2010:
Fiscal year 2011:
Kronach, January 27, 2011 – At EUR 307.3 million, Loewe Group sales in fiscal year 2010 (January 1 to December 31, 2010) were 5% lower than the previous year's figure of EUR 324.0 million. The reduced sales and production volume led to an EBIT loss for Loewe of EUR 5.3 million in fiscal year 2010 (previous year: positive EBIT of EUR 13.5 million). "The 'Fast Forward' future strategy program enabled us to achieve a further significant increase in our Company's efficiency in the last few months and generate a positive contribution to earnings of EUR 3.8 million in the fourth quarter of 2010. Unfortunately, we were not able to accomplish everything that we had planned in the first half of 2010," commented Loewe CEO, Oliver Seidl.
Due to necessary price adjustments and higher purchasing costs (especially for the LCD panels highly in demand) Loewe recorded a gross margin of just 22.8% in fiscal year 2010 (previous year: 29.2%). Moreover, the business associated with the FIFA World Cup in South Africa in the first six months fell short of expectations because of the delayed market launch of the new Individual TV family. The Company responded early to this trend and started the "Fast Forward" future strategy program already in June 2010 with the objective of systematically enhancing Loewe's particular strengths of fast action, flexibility and a competitive edge in innovation. Seidl summed up by stating, "We have been deliberately working on our defined individual measures since June 2010 – "Fast Forward" is seeing very good results."
Loewe's overall objective is to create the basis for profitable growth through structural and organizational measures as well as stringent cost discipline. To that end, the organizational structure was deliberately streamlined in the last few months. Management with responsibility for product development was given an expanded range of competence across divisions. Furthermore, Loewe has started the restructuring of the central divisions of development, marketing and sales, which will continuously increase the effectiveness of the Company as a whole and enable it to bring new products to the market faster and accordingly create additional customer benefit. "Although the necessary elimination of TV sets with standard backlighting from the product line impacted sales in the fourth quarter, our work has begun to show results. All of the product lines with the most innovative LED technology were successfully launched in time for the Christmas shopping season," continued Seidl. In addition, income-relevant savings of approximately EUR 6 million were realized primarily in purchasing.
Loewe has also set ambitious goals for fiscal year 2011 and will continue to protect its future viability through "Fast Forward." The focus will be on pressing ahead with the themes initiated in 2010. "Following the reorganization of product development, we will continue to optimize our processes as a way to push ahead with the ongoing product offensive," said Seidl. "In addition, we aim to further reduce product costs, bring new products to market faster and align our product portfolio more closely with the preferences of customers in the European premium segment." The launch of the Individual Compose by the end of the first quarter of 2011 will represent the first of ten new 3D televisions to be launched by Loewe. The Company will continue to broaden its market leadership in the convergence of Internet and TV. Furthermore, Loewe will add innovative speaker and multi-room solutions to its home entertainment systems line in 2011.
Together with its new Executive Board member Manfred Fitzgerald, the Loewe management team in the current fiscal year 2011 will also optimize the premium-based marketing of Loewe's top quality products within and outside of Germany through closer cooperation with qualified retailers. Manfred Fitzgerald most recently served on the management team of the Italian sports car manufacturer Lamborghini, a subsidiary of the Volkswagen Group, and will take over responsibility for marketing, sales, design and customer service as of February 1, 2011. A focus of the marketing and sales activities in the current fiscal year will be on expanding qualitative distribution in Italy and France. Loewe plans to open eight new premiere points of sale in these two markets alone. The international sales organization as a whole will be strengthened further and aligned more systematically with the requirements of the markets and customers.
In the future, Loewe will put a stronger emphasis on demonstrating its position as the European premium brand in consumer electronics. The Company has already set the stage for this with its "Fast Forward" future strategy program and the market also offers very good opportunities for Loewe. In addition to the continued high replacement demand and the increasing ownership of more than one LCD TV in Europe, new technologies like 3D television, HbbTV (the connection of television and the Internet) and even more individual operating concepts offer Loewe growth opportunities that will last beyond the current fiscal year. For that reason, the Company expects growth in sales of approximately 10% to EUR 340 million and positive EBIT for fiscal year 2011.