Group sales rose by 4% to 74.0 million euro in Q2 2010 (vs 2009), but a multi-million euro Q1/2 EBIT loss has prompted the resignation of CEO Frieder C. Löhrer. In the Q1 and Q2 combined, group sales increased moderately by 3% from 143.8 to 147.4 million euro, while first-half sales in Germany equalled those of the previous year and export sales grew by 5% to 63.4 million euro.
Despite these results, Loewe recorded an EBIT (earnings before interest and taxes) loss of 4.9 million euro in Q2/2010 compared to positive EBIT of 0.7 million euro in the same period of 2009, while the combined Q1/2 period saw an EBIT loss of 4.1 million euro (down from +1.4 million euro in 2009). Price adjustments in the entry-level TV segment and higher procurement costs (especially for the LCD panels highly in demand) enabled Loewe to achieve a gross margin of 22.9% in the first six months of 2010. Furthermore, problems with suppliers prevented Loewe from launching the new Individual TV family in the key European markets until the FIFA World Cup had already started.
"We did not accomplish everything we had planned in recent months. In particular, the business associated with the FIFA World Cup in South Africa fell short of our expectations. I accept personal responsibility for this and have requested the Supervisory Board to accept my resignation with immediate effect," said departing Loewe CEO Frieder C. Löhrer.
Chief financial officer Oliver Seidl (pictured) will now assume responsibility for the complete restructuring as CEO and will provisionally be responsible for marketing and sales.
"Loewe will continue in the future to systematically pursue the course of combining exceptional product design with the most innovative technology to create individual solutions. However, in this area we must become more effective in the product development process already and capitalise on our known strengths of speediness, flexibility and innovative uniqueness," said Seidl.
Among other measures, the company will use "increased bundling of volume" to key suppliers and restructure its central divisions of development, market and sales in order to ensure more rapid product availability and marketing. The company will also intensify the LED "product offensive" initiated with the Individual 55 and 32 LCD TVs, as well as presenting 3D-capable TVs and what is billed as the first Blu-ray player for 3D TV at next month's IFA trade show.
"The market acceptance of our current new Loewe Individual line of sets is outstanding. It recently received the coveted IFA PreView Award from more than 250 journalists," said Seidl. "In recent years, Loewe has built up a strong brand position in the premium segment in the European consumer electronics market and is the market leader for LCD TVs priced 2,000 euro or higher."
Loewe expects sales to continue to grow moderately in fiscal year 2010, but says that it is impossible to rule out negative EBIT for 2010 as a whole.