Zumtobel Group AG (ZAG) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the Zumtobel Group AG Conference Call. [Operator Instructions]. I would now like to turn the conference over to Emanuel Hagspiel, Head of Investor Relations. Please go ahead.

Yes. Good morning, everybody, from our side. Welcome to our conference call for the full year results of the 2019/'20 financial year. I hope that you were all able to download the presentation from our new website. I'm showing a figure what we are like in the new website since 2 weeks. It's still a beta version, so if you have any suggestions or ideas how to improve, especially the Investor Relations part of the website, we're happy to consider your feedback. Thanks a lot for that. Today's call will be hosted by Mr. Alfred Felder, CEO of the Zumtobel Group; and Mr. Thomas Tschol, CFO. As always, Thomas will start the presentation, talk you through the financial part of the presentation, and then Alfred will give you an update on the regional sales development as well as on the COVID-19 situation of the Zumtobel Group. May I now hand over to Thomas and ask him to start with the financial part.

Good morning, ladies and gentlemen. Yes, let's start as always on Slide #2, and I will give you a brief overview on the major developments in the 2019/'20 financial year. It's obviously no surprise that the last 2 months of our financial year have been severely impacted by the coronavirus, which overall led to a decline in revenues. However, in spite of the decline in revenues, we were still able to show an encouraging improvement of profitability. This once again confirms that we are on the right track. Anyway, group revenues are down by 2.6%. Adjusted for foreign exchange, revenues would be at minus 3.1%. The top line decline is coming from both segments. The Lighting Segment is down by 3.2%, and the Components Segment is slightly below the previous year level and shows a decline of 2%. And price pressure in the Components Segment is still roughly at 4%. In terms of recent development, we see, despite the crisis, a lot of positive development in the margin strong DACH region with a growth of 1.5% and overall growth of the year. And even in the COVID impacted fourth quarter, decline was relatively small with minus 3.2%. Anyway, the fourth quarter of our financial year shows, as mentioned before, a severe decline of revenues for the group, which amounted to minus 12.7%. Coming now to the positive news. The group adjusted EBIT increased from EUR 27.6 million to EUR 53.9 million and was driven by 2 main impacts: an increase of the gross profit of roughly EUR 8 million, which is due to the better performance in the strong margin markets like the DACH region as well as cost reductions in our cost of goods sold; and second, improvement of the cost base, again, this year compared to previous year. In the SG&A, we were able to lower our cost by roughly EUR 18 million compared to previous year. The good news here is that the corrective actions initiated in the past financial year are clearly visible in our P&L, and we can substantially lower our -- we could substantially lower our breakeven point. The group -- the competitive position of the group has grown increasingly, and the company is now more robust. However, given the current crisis, it's needless to say that we will need to continue this effort also in the new businesses. The Zumtobel group recorded net profit of EUR 14.5 million. Therefore, we were able to significant increase the net profit by roughly EUR 30 million compared to previous year. The recorded one-off costs for restructuring measures of EUR 18.8 million, and these measures are primarily related to cost arising from a quality issue in the U.K. roughly EUR 8 million and restructuring measures involving the sales organizations and plants. In the light of this positive development of our net income, we are now in a position to let the Zumtobel shareholders participate in this development after 2 years without dividends. For the 2019/'20 financial year, we will therefore recommend a dividend of EUR 0.10 per share to the Supervisory Board and subsequently to the Annual General Meeting. To sum it up, the Zumtobel Group is again generating solid earnings and an adjusted EBIT margin of 4.9 -- 4.8%, sorry, and this places us at the upper end of our target range of between -- it was the target range between 3% and 5% in spite of the missed top line target. However, the corona pandemic has triggered an economic downturn whose development is difficult to estimate at present time. Consequently, we are not in a position to issue any guidance on the development of revenues and the earnings for the current financial year. Let me now move to the next chart to give you more details on the development of each segment. Now we're on Slide #3. As usual, you can see the revenue development by quarter on the left-hand side and the adjusted EBIT development by quarter on the right side. Revenues in the fourth quarter declined by 16%, and the decrease in revenues of roughly EUR 36 million was mainly driven by declines in APAC as well as important European markets, especially France, Italy and U.K. These countries saw the most severe hits. There's also countries like Austria or Belgium that are not doing very well in the fourth quarter due to the strong lockdown in these countries. On the right-hand side, you will see the adjusted EBIT development. As a result of improved cost base, the adjusted EBIT in the fourth quarter increased to EUR 7.3 million versus EUR 2.4 million in the previous year. This confirms that as we -- as a management team, we actually treated the crisis and thus implemented measures like the utilization of the short-time work that have been able to secure a satisfying profit given the circumstances. Let's move on to the Components Segment on Slide #4. The revenues in Components Segment during the fourth quarter are 6.4% below previous year. After an adjustment for foreign exchange, the segment was shrinking by roughly 6%. At a first glance, the decline looks relatively small compared to the Lighting Segment, however, predominantly benefited from a component shortage from Asia early in the crisis. Therefore, many customers were building up stocks. In addition, Tridonic has been able to increase prices to reflect increased logistic costs. As a consequence, the corona hit came later for the Components Segment than it did for Lighting Segment. The price pressure remains high but decreased slightly compared to the previous year where we talked about 5% to 6%. However, it is still -- the price pressure is still at roughly 4%. On a adjusted EBIT level, the profitability decreased from 6.8% to 3.6% mainly due to the top line decline. And yes, please remember that in fourth quarter last year which looks disproportionally higher, this quarter benefited from the income of research subsidies. Now let's move on to the Zumtobel Group on Slide #5. Here, you see the combined results of both segments, and I think, yes, this is -- there is not much more to add. And we can move to Page #6 showing the main building blocks of the adjusted EBIT development. Starting with the prior year adjusted EBIT of 27.6% (sic) [ EUR 27.6 million ] on the left side of the slide, and the absolute gross profit of the group before R&D increased by 8.5 -- EUR 8.4 million, sorry, whereby the increase is mainly coming from the Lighting Segment. And as mentioned before, this is the impact of top line increase in margin strong markets as well as a decrease of the cost of goods sold. In the functional areas, selling and administration, we can -- the additional cost savings versus prior -- previous year, and this -- the efficiency improvement and cost reduction measures resulted in the full decrease in the SG&A expenses of close to EUR 18 million in spite of several increases required by the collective bargaining agreements. And especially the streamlining, the management structures and the strict cost control contributed to this improvement. And this brings us all together to an adjusted EBIT of EUR 53.9 billion (sic) [ EUR 53.9 million ] in the past financial year. On Slide #7, you can see our income statement. And I'm -- also here on this slide, there is not too much to add. Maybe just a word about the special effects that amounted to EUR 18.8 million, and these special effects are primarily related to provisions for a guarantee case in Great Britain, as already mentioned, of roughly EUR 8 million, write-off of software that we do not use or cannot use any longer and also various adjustments in our global production network as well as in our sales organizations. The financial result improved slightly by EUR 0.3 million year-on-year to minus EUR 12.4 million. And the income taxes increased from EUR 5.2 million to EUR 8.3 million in the past financial year. This brings us to the improved bottom line or net profit of EUR 14.5 million compared to that minus EUR 15 million in the previous financial year. Now let's move on to the cash flow statement on Slide #8. The cash flow from operating results increased from EUR 56.8 million to EUR 101.3 million. The working capital improved again and decreased by roughly EUR 10 million compared to previous year. And the cash flow from operating activities increased from EUR 72.7 million to EUR 108.2 million. Cash flow from investing activities was lower than the comparable prior year period. And it was at 50.7 point 9 -- EUR 57.9 million. And the increase in the cash flow from operating activities and the lower investment activities led to an improved free cash flow, which is now at a plus EUR 53.3 million versus the roughly EUR 4 million in the prior year. To be fair, the increase has also been positively impacted by roughly EUR 16 million due to the first implementation of IFRS 16 in the past financial year. On Slide #9, some key balance sheet data, especially our liquidity position. The net debt totaled EUR 165.7 million as of end of April 2020. This is EUR 17 million above the value as of end of April 2019. But this increase is mainly due to the first-time implementation of the IFRS 16, and we will provide you some more details on the fact on that and also on the next slide. But coming to the liquidity position, this -- we consider the liquidity position as very solid and is backed by a consortium credit agreement with the term ending in November '22 and a maximum volume of EUR 200 million, whereof EUR 75 million have been drawn. And second, we have 2 long-term credit agreements of EUR 40 million each with the European Investment Bank. Here, we have bullet payments in September '24, respectively, February '25. Both are fully drawn. And third, we have uncommitted lines of credit totaling roughly EUR 63 million. And as you know, there are 2 financial covenants attached to the financing agreement, namely: a debt coverage ratio of less than 3.55, first; and second, an equity ratio of more than 23.5%. These financial covenants are tested biannually, end of October and end of April. And both covenants were fully met as of end of April 2020. That debt coverage ratio was at 1.55, and the equity ratio was at 28.2%. On the Slide #10, you can see the effects of the new standard of IFRS 16 that we had to apply for the first time in the past financial year. I'm sure that you all know the general effects of the IFRS 16 implementation. And so therefore, I will only focus on the specific effects for Zumtobel Group. The effects are as follows. We have an extension of the balance sheet. And due to the recognition of the right-of-use assets as well as the lease liability, the balance sheet was extended by roughly EUR 46 million end of April 2020; and the impact -- second, the impact on the income statement. The EBITDA increased by EUR 16.4 million due to IFRS 16. There is a -- EBIT increased by EUR 1.2 million, which is a net impact of expenses for rent and leasing minus the depreciation for the right-of-use asset. And we have a decrease of the interest result at EUR 2.1 million. And so overall, this means that the so-called front-loading impact on the net income is minus EUR 0.9 million, which is a difference of depreciation and the interest minus the expense for rent and leasing. So this is all with respect to the financials development in the past financial year. I think we made a very good progress on lowering the cost base, enhancing our liquidity situation and as a consequence, making the company more robust. Anyway, since beginning of March, we are in a exception of circumstances, and we need to focus our efforts now to see the company safely through the ongoing crisis. And I am very confident that we will do so. Now may I hand over to Alfred to provide you with a brief update on the regional sales development, and he will then also give an update on the corona situation and the impact on the Zumtobel Group.

Yes. Thank you, Thomas. Very warm welcome, and good morning also from my end. I'm Alfred Felder, the CEO of the group. What you can see here on the Page 11, you know it already, our development by quarters. We have been able to steer the company in the last fiscal year until quarter 3 into a growth mode. We had also a slight growth of roughly 1.5% planned for the entire quarter 4, the entire fiscal year, which was valid until, yes, let me say, middle of February. And then due to the severe lockdown in most of our key countries, more or less, our business came to a almost standstill. And fortunately, now it's easing up a little bit again, but getting out of it is much slower. So that basically resulted in a 12.7% drop in quarter 4 mainly, I would say, in the months of April and in the last week of March where we saw this very, very steep deterioration. If you look at Page #12, in our distribution, you can see the following that in the DACH region, yes, we had the impact in quarter 4, but here, we have to differentiate between the different countries. Switzerland, with the exception of the districts close to Italy, more or less, we're operating normally. When it came to construction, they had a lockdown, but not everything was locked down. So we saw less deterioration in the quarter 4. More difficult in Germany, and in the middle, some are Austria. But all in all, we have been able to manage a very slight growth over the last 4 quarters, which obviously was also heavily contributing to the results what Thomas showed and proves that our, let me say, focus strategy, focusing on high-margin countries in the European countries, the DACH obviously is one of them based off -- and also based off in a crisis. Looking a little bit different in the region what we consolidate into Northern and Western Europe where also U.K. is in there. Benelux is in there. Nordic is in there, where we saw in Nordic a slower decrease. And obviously, you know how Sweden was handling the crisis. We saw no step in the Benelux. And we had, until the lockdown in U.K., a good and reasonable, well business. But you see all in all, that was also ending in a very difficult situation with minus 16.8% in quarter 4 and then minus 4.7% for the entire year. Southern Europe is also very difficult. And starting with Italy, what was more or less from end of February was more or less not existent anymore as a market. Customers were not there. We were working out-of-home office as always, but the situation was extremely difficult. A little bit later, France, resulting in minus 11%. All in all, only 2.5% because these countries -- France was, after 2 years, in a nice growth mode until the end of quarter 3. Same as Italy who had a very strong rebound in the revenues, especially in quarter 4 and beginning of -- quarter 3 and beginning of quarter 4. A slightly different picture in Asia. When it comes to China, China was hit first, so more or less prior to Chinese New Year, we were not able to open anything up until the end of March. Also resulting that what Thomas mentioned already in quite a significant impact in our global supply chain, especially on the Tridonic level because we have the factory in Shenzhen. There, what is roughly 1/3 of our production capacity. Pacific, a little bit different. We had a complete lockdown in New Zealand for many, many months. And we had in Australia, as you know, first, the bushfires, where we had already a weak quarter 3 and then the COVID in quarter 4. So that basically what then resulting in this 1/3 drop in quarter 4 and then in the total year of 12.8%. Obviously, if you look now at the situation, especially China, it was the first coming out, and we've seen already revenues what are above previous year at the same quarter, so which is a good sign, but obviously, you'd see that's a low level here. So as Thomas mentioned earlier, that results in a 12.5 -- 12.7% minus in quarter 4, also 2.6% in the entire year. If you go to the Page #12 (sic) [ Page #13 ], then you see the latest outlook of what we received from Euroconstruct on nonresidential construction combined also with what the latest numbers are on GDP. So if you take an average, we -- in the nonresidential construction, it's expected to drop in 2020 by 13.2%. More or less, if you look into U.K., outside of even the discussions what we might have also on the Brexit situation, but that's a drop of close to 36%. But what you also see is that in countries in the DACH region, we will have a decline, but decline is in the range of 2.7%, 2.8%, a little bit larger in Austria here, what basically helps us to go through that. France and Italy, not surprising, a double-digit drop as well. It is reviving a little bit, especially now in June. We are seeing life is coming back into our businesses also in that countries. The issue is that for 2021, there is a recovery projected but again, average in the range of 5%. And if you see the drops, that will mean that in 2021, we will not reach again the revenue streams, obviously, what we had prior to COVID. Moving on to the next page, and I think Thomas has already highlighted this. The status quo is that we had taken severe methods in all, let me say, the healthy precautions to master the crisis. Luckily, we had, in all our factories, only one corona situation that was in our factory in France, where we had to close down the factory for 2 weeks. But all the remaining factories were up and running. Yes, we had some challenges on the supply chain, but we will have been able to ship the goods. We were also doing everything, with borders closed, to transport and to provide the transport way. We had immediately reacted in the safety measures with home office regulations. We're changing the shifts in our factories to have the distances as all the other companies. This -- but we were very lucky that we did not have any additional cases in there. Now all business functions are up and running. The product availability for customer is there. We are able to ship, and we are not having here the restrictions. But obviously, what we have done over the last 2 years, we need to continue efficiently on cost management, even more important now in corona times than previously. Obviously, the short-term work in the different countries where we use it helps us. But we're already thinking of the time afterwards in getting up even more leaner and more effect this year. Hiring freeze implemented and also very careful in CapEx. But on the other hand, we are not slowing down the key projects, what are driving our innovations and the new lighting generations. There's a lot in the pipeline. What we plan to launch in our windows in autumn. Obviously, there might be a little bit of delay because also here, certain suppliers of components for the new stuff has been on lockdown. But all in all, we are okay. And obviously, lessons learned. We are seeing now that home office solutions, virtual reality, digital customer experience. We have conducted thousands of webinars with our customers very well-received that will change our business behavior, in terms of home office versus office, and also the travel behavior. So we believe also that will be a beneficial outcome or at least one beneficial outcome of this crisis moving forward. So that is the work. What we, as a management team, need to conduct until, let me say, the end of September, you will read it also today in the newspaper that we have applied for an extension of the short-term work in Austria until September a little bit differently. We will have more working hours. But we believe that this umbrella of security is helping us especially in our manufacturing environment here in Austria through this situation. And hoping that after the summer break, we have a clearer visibility, no second wave that we are able then to move on to continue with our path towards the profitability and the profitable growth. Looking at the next and then last page. Thomas mentioned it already. Good news is we have been able to get close to the upper end of our guidance when it comes to EBIT at 4.8%. Guidance was between 3% and 5%. Obviously, we were not able to meet the guidance on growth. And with the huge uncertainty, currently we are not having a guidance for 2021. We might be able to come up with some more solid guidance after the October timeframe where we have a clearer visibility how our business develops. Yes. And the last page, it's more or less what you know already, our financial calendar. So that would bring us to the end of the presentation. And now we are open to your questions. Thank you very much for listening.

[Operator Instructions] The first question comes from the line of Markus Remis with Raiffeisen CENTROBANK.

A couple of questions, please, if I can have them one by one. Firstly, on the current trading conditions, can you provide a bit more granularity on the demand you're seeing at the moment? Maybe give us some indications how May, June top line developed. I understand that midterm projections are pretty tough these days, but some sort of indications regarding the top line range for the first quarter would be -- that would be very helpful.

All right. Yes. And obviously, I said, we have been dropping significantly 12.7% in 5 weeks, so you could extrapolate this quarter, so then it would be close to 30%, 35%. What we are seeing now in May and in June and the quarter 1 in total, May, a little bit weaker; June, stronger; July, even more stronger. That roughly over both segments, we see a 20% lower top line than the quarter 1 of last fiscal year. On -- I think Thomas Tschol mentioned it already on the Tridonic level. The situation might be a little bit different at the end when it comes to quarter 2 because in Tridonic, typically customers were filling up their stocks and prior the main crisis due to the shortage of the supply chain. And obviously, if they come out now depleting the stock, that could be a different situation in quarter 2. On the Lighting Segment, depending on the countries, but what we see in the countries where the lockdown is easing up. And life is getting back to normal at least when it comes to construction, to projects. We are seeing, especially on the order intake, quite some rebound. But all in all, quarter 1, we believe, will end up in that range of minus 20% versus previous year.

Okay. Okay, that was very clear. Can I ask you then on the short-time work compensation? And maybe that's a question for you, Mr. Tschol. How much of benefits have been booked in the fourth quarter? I guess, it's a bit tough from the outside to assess the impact on the cost base. But can you help us understand the dynamics? How much payments you have received from the state?

Yes. Yes, I think here, to be clear, here, we have to consider this was related basically to 1 month, the month of April. And we had short-time work basically in Austria and Germany, France and U.K. and just effect out of short-time work. This effect amounts to roughly EUR 4 million. And -- but the overall effect because there, we have a very strong lockdown, yes, in these countries. The overall effect, that includes reduction of flextime accounts, reduction of holiday or consumption of holiday, also of course, less or no travel and less discretionary spendings. So the overall effect, I would consider it roughly EUR 8 million up to EUR 9 million in the month of April. But now, of course, if you look in May or June, here, we have now a different situation because there is no longer strong lockdown. People are back at work. People are -- and so the effects in these months are significantly lower or will be significantly lower compared to the strong lockdown months of April.

Okay. But the EUR 8 million to EUR 9 million, that was also related just to April, EUR 4 million short-time work, plus vacations, flextime, et cetera, just in April.

Yes.

Yes. And we could -- if I can -- so this -- can I add? Just obviously, you can imagine the lockdown had one positive effect. People were not traveling. People were not using their company cars. People were not spending money in entertainment. In customer visits, we had no customer visits that's also quite a significant effect, if this comes more or less [ too expensive ]. And that was the case in April.

All right. I mean, do you plan any kind of steeper restructuring to accommodate for lower demand once the kind of the short-time work runs up? I think there are kind of considerations that will be potentially even extended until the end of the year in Austria. But any plans for headcount reductions? Or I think in the last call, you mentioned temporary plant closures. Is that eventually off the table?

Yes, we will continue with our plans to do efficiency gains every week, every month, every quarter. That has not stopped since then. With our focused strategy, we are still investing into Europe, but we're also considering up and seeing what in, let me say, not high profit margins, we might reduce our activities. That's still ongoing. To answer your question, obviously, we will -- with low visibility what we had back in April and with a slightly better visibility what we have now and hopefully a much better visibility in September, we will then decide how to move forward. We are already working on further efficiency programs also in a more efficient management structure moving forward. Obviously, if this is possible in September, we would prefer to move out, especially in Austria, out of the short-time work. And do the restructuring would then -- would result in some reductions of workforce. But we believe, in line with what we did 2 years, and with that, what we plan -- let me, say, give you an example. Digitization of our business automatically means that certain functions will move into the digital work, and they're not necessarily more in a analog work. That is not anyhow planned, but over a period of time. Right now, we are looking very, very carefully to what level the business comes back. Out of today's perspective, it will not come back to the previous corona levels. And depending on how much we are down, we need to do actions to practice.

That could also include the production footprint, or was the statement referring to...

Well, on the production footprint, that is something what we are continuing to do. As you know, we have the factory in Serbia, where we have a step in ramping it up and optimizing it but helps us also on the cost. And we have already, let me say, downsized factories but are not core factories. We still are listing in these factories in our footprint, in our slides, what you have. But obviously, we do have an assembly setup in New Zealand, an assembly setup in Australia. We have closed down Guangzhou. We have closed down Jennersdorf, and we are starting now to reduce also this in the U.S., which will be then, at the end, an application engineering set up and not an anymore effect. But we will spend with our top factories what we have right now moving forward in the footprint.

Okay. All right. Final question from my side regarding the operating leverage in the Lighting Segment, specifically. If I remember correctly, in the past, you always hinted towards 50% operating leverage so every lost revenue, meaning about 50% less EBIT. Can you maybe give us an update after kind of your efficiency measures and cost-saving measures? Has that operating or the drop-through rate been lowered? Or is it still like the 50%?

It is still around the 50% because not -- you're seeing that we had made some improvements compared to previous year. The magnitude of 1 to 2 points, particularly at this level. And of course, it's heavily depending on the product mix, on the country mix because we have very different profitability levels across the countries. But overall, the 50% still rests.

Next question is of the line of Michael Marschallinger with Erste Group.

My first question would be on the current situation in the already mentioned your new plant in Niš in Serbia. I think that this ramp-up was already a big story of you restructure -- a big part of your restructuring story. How is the current situation? And how will this corona impact this ramp up? Just to get a feeling, is that on hold or stopped now? Or how is the current situation? The second one, if you could give us a quick guidance on the CapEx for 2021. And lastly, on the pricing pressure, I think Mr. Tschol mentioned at the beginning, but I couldn't hear it, I'm sorry for that, on components and on lighting, please.

Maybe if I start with the Niš. In Niš, as you know, we have 2 businesses located in the same factory. One is components business and one is lighting brands business. Let me start with the components business first. Here, the ramp-up maybe took place because we downsized the Shenzhen factory. We moved to a different location, and we moved all products, what are supposed to be sold in Europe into Niš, and that's closed now. Secondly, we have closed the LED module factory by November '19 last year, and all this is done in Niš now. So more or less, that's completed. What is open now, that certain products -- what's Tridonic manufacturers in Dornbirn are moved on, those especially who could not highly automate it. And this is a process what has been started almost 2 years ago now. We opened a factory in September and will continue. And here, that means that gradually, we are reducing the workforce in Dornbirn, but still, it starts now with temporary staff. And also, you would not believe but in Austria, here, we have a natural fluctuation of between 5% and 7%. And that's already good enough now to do these transfers. In the lighting brand, a little bit more difficult because, obviously, we have huge capacity there. We have moved all the cost-sensitive products over there. And we are now doing -- as the factory is extremely lean, is extremely cost efficient, certain products, what we have outsourced into Eastern European suppliers, we are in-sourcing right now. That's the process. And obviously, the rest is a little bit slowed down in the situation where we are in because we need more growth for doing that. And obviously, if this comes back, let me say, somewhere in quarter 3 or quarter 4 of this year, we will continue. But all in all, we are sticking with this plan. Obviously, it's clear, factory Niš is still not fully loaded yet.

I think you mentioned...

Yes?

Yes. Sorry.

No. Go ahead.

I think you said last time that you have 600 full-time employees at the end of the year, and the plan was always to increase then to 1,100. So is that still the target?

We have 550 at the moment. We are close to the 600, yes, and that is a combination of both the components business and the lighting. And the ultimate plan would go up to something like 1,000, a little bit over 1,000.

So does this plan still exist but that is delayed, and you expect in the third and the fourth quarter to very much continue?

Yes. But we are also doing -- yes, what we are also doing, obviously, is this factory of infrastructure offers us also the possibility to build up certain other resources. So we have continued to do both on component level as well as on lighting level, as it is partly extremely difficult to hire good R&D guys here in Vorarlberg in the headquarters. We intentionally have started 18 months ago to build up R&D resources also in Serbia, and that we will continue to do. So obviously, that are also -- and also helping us to increase headcount somewhat. So it's not only the manufacturing. It's also support functions plus slowly also shared service function. That's a process what we have planned. And we are looking into that all, especially when we say what do we need to do in structural changes and efficiency gains. And that might be that we reduce some people here and build up the functions in Niš. That's currently on the equation.

Referring to your second question about CapEx, the planned results this year was a CapEx of roughly EUR 50 million. And the next question was about pricing pressure in both segments. As mentioned in the Components Segment, we had roughly 4%, and this was lower compared to previous year where we were talking about 5% to 6%. And this was -- also, this reduction was positively impacted or was due to the price increase that Tridonic could have in the first quarter due to increased logistics costs and then that were given over to the clients. In the Lighting Segment, we have still a price pressure in the roughly between 1.5% and 2%. This remains or remained at the same level as in previous year.

And just a follow-up, do you believe this pricing pressure in components will stay at 4% on the current financial year? Or do you think in this crisis, it will move back to 5% to 6%?

It's a rather difficult question to answer. As you might know, on the market environment, changes are happening. There was an acquisition by private equity of [indiscernible], one of the competitors who is now somehow in U.S., we would say, Chapter 11 stage. Then there are the rumors not ending that Osram is selling its components business, which might have an impact. And that's one thing. And on the other hand, if this is the case, then you don't have this oversupply anymore, so that is an easing out of the cost. On the other hand, obviously, there will be less business out in the market and a lot of suppliers on the luminaire side. The pressure might increase again if the volume does not come back. So also here, currently, due to the fact that the prices have been able to increase by 3.5% due to the logistics challenges, what we have what are still intact. We have been able to lease this out. But the second half, the price pressure will be again higher. But I believe, generally, the trend is towards a lower price pressure in the range of the 4%.

[Operator Instructions] The next question is from the line of Charlotte Friedrichs with Berenberg.

I have 2 sort of follow-up questions. The first one is on the Components Segment. You mentioned that there was, to some extent, prebuying here in the last quarter. Can you maybe quantify, if possible, how big that impact was?

Can you repeat? It was acoustically difficult to understand. What impact?

I'm sorry. Can you hear me better now?

Yes.

On the components, on the prebuying, how big was the impact there roughly?

The pre? Say it again.

The stocking.

Okay, the stocking. You mean in the last fiscal year?

Yes. Yes.

Yes. I see, quarter 4. Yes, basically, we -- in the Components Segment, the stock level was depleted quite significantly, and we have increased the stock level in quarter 4, and we are continuing to do so. But I don't know if this is the answer to your question.

Is the line any better now? Hello?

Yes. Say it again, please.

Sorry. I think my line is quite bad. Otherwise, I'll go back in the queue. If you can't hear me, that's fine. I'll just go back.

This is all right. We can hear you. Please repeat your question.

Yes, please.

Okay. So maybe moving on to the second one then. You gave the overview here about the nonresidential construction for Europe. Based on your regional exposure, would you say that sort of the high single-digit revenue decline in fiscal year 2020, 2021 is a reasonable assumption? Or would you say that you should be sort of having a higher decline or a lower decline here?

Well, the biggest uncertainty, of course, comes for us in the U.K. because it's the biggest market. And we are hit already since years on the Brexit, and now this comes in addition. There are a couple of trends, especially in the U.K., what are beneficial. You might know when it comes to logistics centers and when it comes to these big data centers, where the big IT giants also from U.S. are opening their European headquarters. That's quite a significant activity, single activity what -- where we are in, where I think we can mitigate a little bit this big drop. We are expecting to do better than this one in the U.K., and we are also expecting that we are doing better in certain DACH countries, especially in Switzerland. We have currently extreme limited visibility how this will end up in France and especially in Italy because in those countries, you have -- not only have a deterioration, a higher double-digit deterioration of the construction index, but you also have less economic powers. So there might be customers who are still willing to do and complete the projects but are not having the financial creditors that we are able to do the business. So I think that's another concern what especially those 2 countries comes up.

Maybe to add another -- another point to take into account is that in the -- in our 2019/'20 financial year, we already took a quite strong hit in March and April. So this hit already amounts to at least roughly EUR 40 million. This Euroconstruct, they're talking calendar years. They are talking on an overall level about this minus 13%. Then -- and then, they see a growth in calendar year '21. And so partly, they already took the hit in the previous year. This is roughly, I would say, at least [ EUR 50 million ], yes? And so this is quite difficult as we -- on top of -- because on top of that, we have this low visibility. So there might be -- compared to previous financial year, I think we will have some decline already from today's perspective, but that mainly is difficult to predict because already we had some lower base from last financial year.

Understood. And one follow-up here. How much in revenues are you still doing in the U.K. roughly right now?

One second. In U.K., we have roughly 100 -- EUR 160 million.

EUR 160 million. Okay.

There are no further questions at this time. I hand back to Alfred Felder for closing comments.

Yes. Then thank you very much for your questions, for listening. That brings us then to the end of our call today. Wish you, all in all, a good day. What we see normally right now in these times, stay healthy. A good day to you all. Thank you very much.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.