loewe AG, Kronach

– Positive sales and earnings trend
– Opening up of new market segments in audio and TV
– Sales cooperation with Apple
– Online sales in cooperation with retailers
– Sound capital structure                       

Kronach/Munich.  – "The strategic development of our Company is moving in the right direction," stated CEO Oliver Seidl during the financial statements press conference of Loewe AG in Munich. "During the past fiscal year Loewe picked up increasing momentum, which allowed us to again generate positive EBIT in the fourth quarter of 2011." Loewe also significantly increased sales in the early months of the current fiscal year. "We moreover expect an improvement in earnings, and we are accordingly within the budgeted figures," Seidl continued.

In 2011, Loewe generated sales of EUR 274.3 million, down from EUR 307.3 million in 2010. With regard to EBIT, the positive fourth quarter was insufficient to offset the strains of the previous months, so that an EBIT loss of EUR 10.5 million (2010: EBIT loss of EUR 5.3 million) was ultimately recorded.

Despite the loss in earnings, Loewe’s stringent cost discipline and successful working capital management significantly improved its free cash flow from a negative figure of EUR -23.1 million to a positive figure of EUR +18.9 million. This increased liquidity to EUR +27 million as of December 31, 2011. "This provides us with a solid financial base that will support our growth targets in the current fiscal year," said Seidl.

Loewe achieved a slight increase in its gross margin to 22.9% for full-year 2011. "The conceptual revision of two lines of TV sets improved the gross margin significantly to 24.4% in the final months of 2011 and will also have a positive impact on the margin trend in 2012," explained Seidl. Moreover, Loewe successfully opened up a completely new market segment for the Company in the fourth quarter with its Audiodesign devices.

Of fundamental importance for the corporate strategy is the premium brand Loewe. Minimalist design, intelligent innovations and exclusive individuality set Loewe off from all other brands in the consumer electronics industry. Individualizability in particular and the unique connection of technology and emotion are competitive advantages that can have a strong influence on purchasing decisions in the premium segment. "As the inventor of the television, we will in the future focus even more intensely on user-friendly systems that combine the best picture quality with the best sound to meet the high expectations of sophisticated users and can be optimally integrated into individual living situations," said Loewe CTO Dr. Detlef Teichner. In the medium term, the strategic goal is for Loewe to become the internationally leading premium brand for individual home entertainment solutions.

Loewe will ease its entry into the premium world with two new TV lines in the spring. One of these will be the uniquely individualized TV line Connect ID, which will be made attractive by a price category starting at EUR 1,500. The other is the expansion of the Xelos product line to include large screen diagonals that will be launched on the market earlier than planned.

Moreover, the new Audiodesign category will be expanded further this year. In cooperation with Apple, Loewe will also extend its distribution in this area. As a part of this product line, the Loewe AirSpeaker will be available from qualified retailers and also from Apple Stores in Germany and Apple's online sales throughout Europe.

In addition, Loewe is developing individual distribution concepts for the very diverse European markets. In its German-speaking core markets, distribution will continue to be based on the Company’s partnership with qualified retailers. In cooperation with these partners, a greater emphasis will be placed on online marketing. In European countries outside of Germany, Loewe will in the future collaborate even more intensely with retail cooperatives. Furthermore, the Company is becoming intensely involved with the global growth markets and will soon decide whether key future markets such as China should be opened up for Loewe.

After the positive result in the fourth quarter of 2011 and the good start to the current fiscal year, Loewe expects growth in sales and a significant improvement in earnings for 2012 as a whole. The stage is now set: The Company is tapping new customer segments by offering new products in the TV and audio segment. Moreover, Loewe will make targeted expansions to its sales organization and launch a communications offensive to broaden contact with premium brand target groups.