Zumtobel Group AG (ZAG) Earnings Call Transcript & Summary

In the first half of our '21, '22 financial year, the Zumtobel Group has continued its growth path with a clear revenue stabilization and a sound earnings development. We were able to increase our revenues by 10% to EUR 567 million, a positive development, which is largely affected by our earnings. We improved our operating earnings by more than 50% year-on-year, and reached a group EBIT of EUR 35 million, nearly matching the precrisis level of '19, '20. With a significant increase of 72% and a net profit of EUR 23 million, we can leave the crisis year 2020 behind us. However, the situation on the global raw material markets remains challenging, not only for us but for the whole industry, thus resulting in longer lead times for our customers and partners. Steel and aluminum capacities are significantly limited and we are faced with rising prices. Nevertheless, we have been able to effectively deal with the situation due to the good long-standing relationship with our suppliers. To counteract the shortage of key components, we are also working to reduce the dependence on individual suppliers through adaptations in the product development. Against this backdrop, we are confident that we will meet our forecast for revenue growth of 4% to 7% and EBIT margin of 4% to 5% for the entire fiscal year '21, '22. Furthermore, we are very pleased with the development regarding our sustainability activities, which make our process even more environmental friendly and gradually move us closer to the goal of climate neutrality by 2025. Our current measures were recently recognized with our first gold metal in EcoVadis sustainability rating, which places us among the top 3% of over 75,000 rated companies. As presented in detail at our Capital Markets Day in October, we are targeting an annual revenue growth of 4% to 5% for the 4 financial years, from '21, '22 to '24, '25. Our revenues should, therefore, total more than EUR 1.2 billion in 24 '25. On the earnings side, we expect an EBIT margin of 6% to 8% in '24, '25 based on planned organic growth and further efficiency improvements. On behalf of the entire Executive Board, I would like to thank you for your trust in its Zumtobel Group, and we are looking forward to successful second half of our financial year '21-'22.