DGAP-News: Gigaset AG

DGAP-News: Focus: Gigaset's Executive Board presents three-point plan

DGAP-News: Gigaset AG / Key word(s): Preliminary Results Focus: Gigaset's Executive Board presents three-point plan

23.02.2016 / 10:13 The issuer is solely responsible for the content of this announcement.

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Focus: Gigaset's Executive Board presents three-point plan

- The goal is to achieve a sustainable return to profitable growth

- The key cornerstones are strengthening core business and extensive structural and cost adjustments

- Presentation of the detailed concept with presentation of the Annual Report in April 2016

After around eight weeks in office, the new Gigaset AG CEO Klaus Weßing and CFO Hans-Henning Doerr, who was also newly appointed to the position just before Christmas, have completed the first phase of the systematic analysis and corporate planning. The new management team is now presenting a three-point plan outlining the cornerstones of the future alignment of the communications technology specialist.

"We want to give Gigaset clear prospects," states Klaus Weßing, CEO of Gigaset AG. "We know the challenges, but in the past weeks have identified much that we can build on." Our three-point plan summarizes the measures which will allow Gigaset to enjoy healthy growth again over the long term."

The company is relying on

(1) Strengthening core business

(2) Adjusting production and administrative capacities and

(3) Improving transparency

Strengthening core business Gigaset will strengthen its three business segments of Private Customers, Business Customers and Home Networks in a targeted way and thus further develop its core business. Growth levers have been identified in all segments and will be Gigaset's focus. In the Private Customers segment, they include the new Gigaset GO series, which benefits from the change in technology to IP telephony, and the likewise new Gigaset HX series, which offers a premium alternative in the growing handset market and should help the company win market share in future.

In the Business Customers segment, Gigaset is likewise relying on IP technology and the success of its premium business phone Maxwell 10. Expansion of the Maxwell product line and a broader range of telecommunications systems for enterprises are intended to further boost the company's revenue, which has been growing recently at a double-digit rate.

In the Home Networks segments, the number of customers is to be grown mainly through an intensified and focused marketing strategy. Home Networks offers security solutions for the home that can be customized quickly and easily. Apart from high-quality sensors, cameras and sirens from Gigaset, third-party devices and lights can also be controlled from the smartphone using the solutions - even from on the road.

Adjusting production and administrative capacities Gigaset's new Executive Board will simplify administration of the company, remove out-of-date administrative structures, restructure research efforts and adjust production capacities to reflect the market's needs. "Gigaset GO and Gigaset HX prove that our products are state-of-the-art in terms of technology. With focused research and development activities, we will further increase our technology and quality leadership and thus create growth," states CEO Klaus Weßing. In addition, the Executive Board of Gigaset will speak with the employee representatives about concrete implementation of the restructuring measures announced in December 2015. "We are working together intensively to find a socially equitable solution. Everyone is aware that these measures are necessary," adds CEO Klaus Weßing.

Improving transparency The aim in future is to present the company's prospects clearly and transparently to shareholders, analysts, journalists and employees. "When I took over at Gigaset, I declared I would ensure greater transparency at the company. Transparency creates trust - trust that we need from our investors, customers and employees. In future, we will clearly demonstrate how our business model works, and where there are risks and, of course, opportunities for us," says CFO Hans-Henning Doerr.

Following a good fourth quarter and anticipated consolidate revenue of EUR305 million, Gigaset AG expects a positive operating result before depreciation and amortization, special effects and expenses for restructuring of EUR10 to EUR13 million for fiscal 2015. Due to the restructuring provision that has to be set up and revaluation of the sale of the trademark and domain rights that was carried in the report for Q3 2015, the company expects negative income for the year before taxes in the low double-digit million range. At the closing date the company has liquidity of around EUR41 million.

Goldin Brand Ltd. has not yet exercised its rights from the agreement to acquire trademark and domain rights that was concluded in 2015 and has not yet paid the purchase price. The trademark and domain rights are the property of Gigaset Communications GmbH, a wholly owned subsidiary of Gigaset AG, until payment of the purchase price. Since the rights have not yet been transferred to the seller, Gigaset is not reporting any income from the transaction for the fiscal year 2015. However, the Gigaset Group is still entitled to use the trademark without restriction in its core business of telephony and the smart home even after the possible transfer of the rights.

The newly established smartphone business is driven by Gigaset Mobile, in which Gigaset AG has an indirect 15-percent stake. CEO Klaus Weßing states in this regard: "The Gigaset ME is a competitive smartphone, praised by the trade press, which meets the generally high standard of Gigaset products in terms of quality and technology. We continue to see major growth potential for our associated company Gigaset Mobile, if production and marketing pick up speed. We are working on that together with our Chinese joint venture partner and the majority shareholder of Gigaset Mobile, Goldin Fund Pte. Ltd." Chief Financial Officer Hans-Henning Doerr adds: "Potential income from Gigaset Mobile or sales of the Gigaset trademark to Goldin Brand Ltd. are not currently part of our planning." At the moment and until further notice, Gigaset Mobile will pay a license fee of three percent of the revenue from each smartphone sold.

The aim of the Executive Board is to further elaborate the three-point plan before the presentation of the annual results. CEO Klaus Weßing: "We have a lot of work ahead of us. However, the good talks, initial partial successes, coherent planning and a good operating result make us very optimistic that we will achieve our objectives together with our employees."

Gigaset AG will present its audited Annual Report for fiscal 2015 on April 15, 2016.

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).

Company homepage: http://www.gigaset.com

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23.02.2016 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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