Investments in the future and cost cutting: Loewe steps up restructuring

– Sales of approximately EUR 250 million in 2012
– Preliminary EBIT loss of approximately EUR -29 million
– Investments in new markets and products
– Marketing activities stepped up
– Reduction in overheads and staff costs
– Target for 2013: modest growth in sales and operating break-even point 

Kronach, 22-2-2013 — /europawire.eu/ —  On a preliminary basis, sales of the Loewe Group in fiscal year 2012 at approximately EUR 250 million were 9% lower than the 2011 figure of EUR 274.3 million. Particularly the reduced sales volume, and non-recurring expenses for restructuring, including provisions for severance payments to Loewe employees, caused the Company to generate a preliminary EBIT loss of approximately EUR 29 million in fiscal 2012 (previous year: EBIT loss of EUR 10.5 million), thus surpassing the EBIT loss of about EUR 20 million predicted in early December 2012. This is mainly accounted for by provisions for the staff reduction that has already been initiated at the Kronach location. “In other words, in accordance with accounting standards, we reported expenditures in the 2012 financial statements that will not be effected until 2013. This will reduce expenditures in 2013 and give us added momentum,” said Loewe’s designated CEO Matthias Harsch.

To regain the Company’s profitability, the costs are currently being systematically adjusted to the lower business volume. As already announced in December 2012, the measures were taken to reduce overhead and staff costs across all divisions. In this regard, Loewe is currently engaged in constructive discussions with the works council and the IG Metall labor union. It is planned to conclude the staff reduction in the first quarter of 2013. To make the job cuts as socially responsible as possible, the creation of a transfer company is planned.

By taking these sustainable actions, Loewe has made good preparations for the future. As part of the strategic realignment, the Company is especially investing in new markets and products. The focus is on the Loewe product line in the premium segment. In line with this focus, the new home entertainment system “Loewe Individual” was successfully introduced into the market a few weeks ago. The “Loewe Reference ID” was also presented to retailers for the first time as a new high-end TV family. Moreover, the strategically important product group Loewe Audiodesign will be expanded in 2013 to include numerous new sets of great appeal.

“To present Loewe’s new products everywhere in the market at the beginning of the year, we set up events at more than 150 retail stores,” said Matthias Harsch. “In addition to highly customizable home entertainment systems, we put the technological competence of our product line as evidenced by many benchmark tests at the center of extensive communication activities.” Generally, Loewe will recapture market share in sales in Germany in close collaboration with its retail partners. In the export markets, framework agreements were signed with retail cooperative partnerships and country-specific marketing concepts were devised.

Based on the actions taken, the Executive Board’s continued objective in the current fiscal year 2013 is to again achieve a break-even operating result and a slight increase in sales. However, the overall result will still be burdened by restructuring charges in 2013.

Contact:
Loewe AG
Industriestrasse 11
D-96317 Kronach, Germany
Phone: +49 (0)9261 99-217
Fax: +49 (0)9261 99-444
http://www.loewe.de
presse@loewe.de