DGAP-News: Gigaset AG

DGAP-News: Gigaset AG: Gigaset enters next phase of its transformation

DGAP-News: Gigaset AG / Key word(s): Strategic Company Decision Gigaset AG: Gigaset enters next phase of its transformation

30.11.2015 / 14:32 The issuer is solely responsible for the content of this announcement.

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Corporate News Munich, November 30, 2015

Gigaset enters next phase of its transformation

Back in 2012, Gigaset's CEO Charles Fränkl spelled out as part of the "Strategy 2015" that the company was moving toward a medium-sized organization. Changing markets make it necessary to abandon the established (cost) structures of a big business concern and to address new growth areas with a more dynamic setup. As the next step in this process, Gigaset today announced plans to transform the company in the business segment of cordless phones for private customers.

Adapting the company to the realities of the market means that Gigaset needs a new setup in Germany and internationally: As part of the "Strategy 2015," the Executive Board began back in 2012 to realign Gigaset toward growth areas such as the smart home and state-of-the-art business telephony solutions. The partnership concluded with Goldin Fund Pte. Ltd, Singapore, in 2013 and the associated entry of the company into smartphone business marked a further milestone in the move toward a more diversified Gigaset Group.

Nevertheless, the new growth areas will not yet be able to compensate fully for the continuing decline in the market for cordless phones and the related fall in revenue from them. As part of its transformation, Gigaset is therefore announcing plans to cut around 550 jobs worldwide in the business segment for cordless phones by the end of 2018. The company currently has around 1,250 employees.

New focus within the Group

The Gigaset Group's new growth areas are performing positively. Revenue in the Business Customers segment increased in the third quarter of 2015 by around 40% year on year. Home Networks is also developing positively. The product range focuses on a security solution in the Smart Home segment and optional services for which a charge is payable. In particular, launch of the new smartphone line Gigaset ME to coincide with this year's IFA marked a new chapter in the company's history. The products met with keen interest among the press and public. All these new business segments, whose production operations are in some cases mainly outside Germany, contrast with the company's core business, with has being declining for years. Pressing ahead with restructuring ultimately entails adjusting capacities in declining business and returning to profitability.

The goal is to return to profitability

"Adjustments in the business segment for cordless phones are necessary for us to remain a relevant partner for international retail who continues to set trends with attractive and innovative products - even in a market that's declining overall," says Fränkl. "We don't see transforming the company and adjusting our cost structures as a withdrawal from, but rather as a means of adapting better to the market."

Gigaset will implement extensive measures at all national and international locations and divisions in order to adjust its cost structures to market developments in the business segment of cordless phones and eliminate traditional group structures. Gigaset AG's Executive Board has already commenced talks with the employee representatives, including the Works Councils. The workforce was informed of the planned steps at a company meeting today.

Management is aware that this means not only structural adjustments at the company, but also a significant reduction in the headcount in Germany and worldwide. However, that is necessary to return the company to profitability and enable restructuring that is a lasting success.

Gigaset AG, Munich, is an internationally operating company in the area of communications technology. The company is Europe's market leader in DECT telephones. The premium supplier is likewise the leader worldwide with around 1,250 employees and sales activities in around 70 countries. Under the name Gigaset pro, the company continues to develop and market innovative business telephony solutions for small and medium-sized enterprises. The company also operates in the smart home arena. Cutting-edge, cloud-based products and solutions for the smart home are developed and marketed under the name Gigaset elements. In addition, together with the Singapore-based Goldin Fund Pte. Ltd., the company runs Gigaset Mobile, which operates in the mobile phone, smartphone, and accessory segments. Gigaset AG is listed in the Prime Standard of Deutsche Börse and is therefore subject to the highest transparency requirements. Its shares are traded on the Frankfurt Stock Exchange under the symbol GGS (ISIN: DE0005156004).

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30.11.2015 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement.

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Language: English Company: Gigaset AG Seidlstraße 23 80335 München Germany Phone: +89444456866 Fax: +89444456930 E-mail: info@gigaset.com Internet: www.gigaset.com ISIN: DE0005156004 WKN: 515600 Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart End of News DGAP News Service ---------------------------------------------------------------------------

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