CSIL has recently released the 2018 edition of the report 'The European Market for Lighting Fixtures'. This article focuses on the financial analysis included in the study. Whereas the financial analysis focuses on the period 2012- 2016, the report provides data and market share up to 2017.
OUTLINING THE SAMPLE
The financial analysis is based on a sample of 510 European companies active in the lighting sector, which presented consistent financial data for the period 2012-2016. The sample includes consolidated, unconsolidated and subsidiary data. The total turnover of this sample was about Eur 9.2 billion in 2016, which is, according to CSIL’s estimates, around 82% of the total lighting fixtures production in the 17 Western European countries considered in the study. Such a high representativeness is due to the fact, that the sample includes many of the largest group operating in the business.
PROFITABILITY IS ON THE RISE
Between 2012 and 2016, the industry has experienced an increase in profitability, as EBIT margin, ROI and ROA have increased on average by more than 5% per year, despite the deterioration registered in 2016. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) is used as a quick tool to analyse and compare profitability of the companies, since it eliminates the effects of financing and accounting decisions. It is worth pointing out that, due to the fact, that it ignores financial figures and facts, a positive EBITDA does not necessarily imply a profit-generating business. Average EBITDA margin for our lighting fixtures sample (510 companies) is around 9% in 2016, down by 5.8% compared to 2015 and almost stable compared to 2012. The companies (with a turnover higher than Eur 10 million) that in 2016 reported the best EBITDA were: Dextra Group (UK), Antares (ES), F.W. Thorpe (UK), Lival (FI), Normagrup (ES), Foscarini (IT), Delta Light (BE), Whitecroft Lighting (UK), Sg Armaturen (NO), and Leds C4 (ES). Return on investments (ROI), which measures the profitability of employed capital, reached an average value of 6.8% in 2016. The companies that top the ranking in term of ROI were: Dextra Group (UK), Antares (ES, Flos Group), Foscarini (IT), Whitecroft Lighting (UK, Fagerhult group), Disano (IT), Malmbergs Elektriska (SE), Collingwood Lighting (UK), Glamox (NO), Proton Lighting (SE), and Dialight (UK).
The same sample of 510 companies engaged in the lighting business was analyses also in term of employment. The total number of employees reached 36,848 in 2016, mainly stable compared with 2015 (-0.4%). Over the last five years, the level of employment has increased by an average of 1% per year. In 2016 the average number of employees per company was 97, while the median company employed 29 people. Between 2012 and 2016, companies’ revenues have grown slightly faster than the number of employees, so the turnover per employee ratio has increase (up by 3% on average per year). As the average cost of employee has increased at a slower rate, the cost of employees on turnover ratio has declined passing from 18% in 2012 to 17% in 2016. In 2016, the largest companies in term of employment, were: Philips (NL), Osram (DE), Dialight (UK), Schreder (BE), R. Stahl (DE), Gewiss (IT), Beghelli (IT), Iguzzini (IT), Zumtobel (AT), and Lumileds (DE). The highest growth was registered by Electro-Cirkel (NL), Mueller-Licht (DE), L&L Luce&Light (IT), Ares (IT), Luxonic (UK), Slv Holding (DE), Dar Lighting (UK), Clay Paky (IT), Leds C4 (ES), and Tridonic (UK). In the middle run (between 2012 and 2016), consistent growth was reported by Lival (FI), Mueller-Licht (DE), L&L Luce&Light (IT), Leds C4 (ES), Electro-Cirkel (NL), Slv Holding (DE), Poole Lighting (GB), Osvaldo Matos (PT), Clay Paky (IT), and Ares (IT). Targetti Sankey (IT), Sg Produktion (DK), Etap (BE), Siteco (DE), Harman Professional (DK), Odel Lux (ES), Ledvance (GB), Beghelli (IT), Lamp (ES), Cooper Controls (GB), among others, saw their workforce diminished.
The 2018 edition of the CSIL report 'The European Market for Lighting Fixtures' is available for purchase and download at: www.lighting.csilmilano.com