Loewe third-quarter sales slightly higher year-on-year
3rd quarter 2011:
Fiscal year 2011:
Kronach, November 3, 2011 – At EUR 67.4 million, Loewe Group sales in the third quarter of 2011 were 1% higher than the 2010 figure of EUR 66.5 million. Although the value of the European market for LCD TVs declined by 9% in the third quarter, the Loewe sales trend for LCD televisions was very gratifying. Sales of LCD TVs rose by 4% to EUR 55.9 million in the third quarter (Q3 2010: EUR 53.9 million). While Loewe sales in Germany developed positively with 13% growth to EUR 45.9 million in the third quarter of 2011, the persistent difficult economic conditions in parts of Europe strained Loewe's export business. Export sales declined by 17% to EUR 21.5 million in the third quarter. At EUR 186.1 million, total sales of the Loewe Group in the first nine months of 2011 were 13% lower than the 2010 figure of EUR 213.9 million.
Following the traditionally somewhat weaker summer months of July and August, the International Consumer Electronics Fair 2011 held in Berlin in September was a good start into the important holiday shopping season for Loewe. "Our high-quality Loewe Home Entertainment systems offering the best picture and individual sound contributed as much to our success at the IFA as the new appealing audio solutions. The orders from our retail partners exceeded those of the previous year and, together with the positive market outlook, support our expectations for a robust year-end spurt," was how Loewe CEO Oliver Seidl summed up the current business development.
The slightly increased sales level and successful cost savings within the context of the Loewe "Fast Forward" future strategy program enabled the Company to reduce its losses in the third quarter of 2011. In this period, Loewe generated an EBIT loss of EUR 3.9 million (Q3 2010: EBIT loss of EUR 5.0 million). EBIT amounted to a loss of EUR 11.7 million in the first nine months (Q1-3 2010: EBIT loss of EUR 9.1 million).
After having successfully reorganized product development and further optimizing the internal processes in recent months, Loewe implemented all planned conversions of the TV products from 2D to 3D on schedule. "We will expand our product portfolio to include a completely new segment of new audio standalone products in the next few weeks. This means that Loewe will be able to offer a very up-to-date and attractive product portfolio in time for the important holiday shopping season in 2011,” continued Seidl.
The measures for reducing costs initiated through "Fast Forward" will continue to be carried out using a targeted approach. The potentials for cutting costs will be utilized systematically in particular in the area of cost of materials. Another focus is the expansion of the premium-based marketing of Loewe products within and outside of Germany. "In addition to the two existing pilot projects with the retail chain FNAC in France, five additional points of sale are planned for year-end. In the case of John Lewis in the United Kingdom, four test branches were set up initially; another three joined the network in October," explained Manfred L. Fitzgerald, Chief Marketing and Sales Officer.
Another key element of “Fast Forward” is the current communication offensive. A number of campaigns with ads in large daily newspapers and target group oriented, regional radio advertising are underway at the present time. And Loewe is starting an eye-catching TV campaign just in time for the holiday shopping season. "The central focus will be our Loewe Individual product line with its many configuration options. With a total of 450 spots, we will reach the target groups for Loewe in an optimal way," said Fitzgerald. The TV spots will be broadcast on the news channels n-tv and N24 in November and December.
In the future, Loewe will continue to expand its position as the European premium brand in consumer electronics, building on the “Fast Forward” future strategy program. After Loewe's successful presence at this year's International Consumer Electronics Fair in Berlin, the Company expects to have a good holiday shopping season in the context of the expectations for the general economy. However, due to the business development in the first nine months of 2011, sales for 2011 as a whole will be lower than in the previous year. This will prevent Loewe from achieving positive EBIT for fiscal 2011.
Despite the fact that the persistent difficult economic conditions in parts of Europe represent a strain for Loewe's export business in particular, the consumer electronics market offers good medium-term prospects in the premium segment. In addition to the continued replacement demand and the increasing ownership of more than one LCD TV in Europe, new technologies like 3D television and HbbTV (the connection of television and the Internet) offer positive stimuli that will last beyond the current fiscal year.