Austria's Zumtobel to cut costs to offset weak markets
VIENNA Dec 5 (Reuters) - Zumtobel is to cut costs to cope with a tough business environment after the Austrian lighting group reported lower second quarter sales and profits.
In June, the company abandoned its mid-term forecast for 10 percent annual revenue growth due to a deteriorating economic climate and slashed its dividend after profits plunged.
But Zumtobel said on Wednesday it would keep its outlook for higher sales and underlying operating margin for its current financial year.
Chief Executive Harald Sommerer said the company aimed to adapt its costs "rapidly" to the level of demand. He said this would include adjusting "personnel capacity" and cutting selling and administrative costs.
The Dornbirn-based company is the European market leader in luminaire lighting units and the global number four in the components business, which makes lamp control gear, lighting management systems and LED modules.
The group's shares were up 0.6 percent in early trade.
Zumtobel, which dropped out of Austria's blue-chip ATX index in September, said its second-quarter margin fell to 5.9 percent from 7.5 percent a year earlier as sales dipped 1.7 percent to 335 million euros ($438 million).
Analysts polled by Reuters had on average expected sales of 339 million euros and earnings before interest and tax of 19.7 million in the quarter to October.
Its lighting segment boosted first-half sales and market share while its struggling components segment saw sales fall 9 percent despite a slight increase in the second quarter versus the prior three months, it said.
"Visible progress has also been made in developing a new generation of competitive LED converters and LED modules, and the first products will be brought to market before the end of the 2012 calendar year," the company said.
The group generated 1.28 billion euros in sales and an adjusted core profit margin of 2.7 percent in its 2011/12 year.
($1 = 0.7642 euros) (Reporting by Michael Shields. Editing by Jane Merriman)
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