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GARDENA announces earnings and market share growth
EBIT rises to EUR 37.5 million and return on sales increases to 8.9 percent (previous year: EUR 29.8 million and 6.8 percent, respectively) / Overall market compared to previous year weaker due to poorer weather
Frankfurt/Main and Ulm, Germany, 23 February 2005. GARDENA AG, Europe’s leading manufacturer of gardening tools and equipment, today announced an increase in earnings for the 2003/04 fiscal year and yet another growth in market share. Earnings before interest and taxes adjusted for one-off effects (EBIT) improved by 26 percent to EUR 37.5 million over the previous year and return on sales rose from 6.8 percent to 8.9 percent. At EUR 421.7 million, the revenue of GARDENA AG was about 4.2 percent below the previous year’s high level of EUR 440.0 million due to a difficult year for gardening as a result of poor weather. Approximately EUR 10 million of this decline, however, were due to the sale of the company’s U.S. subsidiary Melnor in June 2004 and of the adlus brand in September 2003. New and innovative products helped GARDENA post double-digit gains in market share in particular product segments.
"This positive result is an excellent starting point for the current year," says Martin Bertinchamp, chief executive officer of GARDENA. According to Bertinchamp, the company’s positive performance was due mainly to the successful completion of the 5-point program aimed at a long-term improvement of profitability.
The company increased its investments in research & development (R&D) by some 17 percent over the past three years. In the 2003/04 fiscal year, R&D expenses amounted to EUR 21.5 million. This year's R&D expenses are on par with the previous year.
Ongoing investments in the GARDENA brand, which has already achieved a level of recognition of more than 90 percent in Germany, are an essential pillar in the company's strategy. In 2004, GARDENA's advertising expenses in Germany accounted for about 40 percent of total advertising expenses for gardening tools.
GARDENA plans to expand its leadership in innovation and on the European market
"Our goal is to continue to strengthen our position as a leader in innovation," Bertinchamp explains. "In the 2003/04 fiscal year, new products accounted for roughly 20 percent of GARDENA's sales revenue." This year, the company is focusing on its electric lawnmower with a patented steering system, a unique product worldwide. Additional innovations, for instance in automated garden watering using watering computers or domestic water systems designed for ecologically and economically sound use of service water, round out the company's range of new products for the 2005 fiscal year.
Bertinchamp says that innovation is essential to expanding the company's market leadership in Germany and Europe, and to boosting the company's growth profitably.
The internationalization of the company with a focus on growth markets in Southern and Eastern Europe is yet another critical element.
GARDENA has been posting annual growth rates of about 7 percent since the middle of the 1980s.
For the 2004/05 fiscal year, GARDENA is expecting single-digit revenue growth and another significant increase in earnings, due especially to the company's high level of innovation.
GARDENA was acquired by Industri Kapital, a private equity firm, in May 2002. GARDENA is the leading European manufacturer of high-quality gardening tools and equipment. It is represented in more than 80 countries. With around 2,900 employees, GARDENA AG achieved sales of EUR 421.7 million in fiscal year 2003/2004. For more information, see   www.gardena.com.
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