Landis+Gyr Holds Capital Markets Day and Announces Mid-Term Financial Year 2025 Targets
Landis+Gyr Group AG / Key word(s): Miscellaneous
Cham, Switzerland – January 31, 2023 – Landis+Gyr Group AG (SIX: LAND) today holds its Capital Markets Day at Google in Zürich, Switzerland, and virtually, with Executive Management providing an update on the financial targets, industry, strategy and technology roadmaps. Highlights include:
Werner Lieberherr, Landis+Gyr`s Chief Executive Officer, said: “The urgent need for global decarbonization along with the current energy crisis are key drivers for the increased demand of intelligent power grids, driving energy efficiency and ensuring stability of critical infrastructure. Our solutions to solve these challenges position us in the sweet spot of the energy transition as an ESG-centric industry leader, driving sustainable impact by empowering utilities and end consumers to manage energy better.
At our last Capital Markets Day in 2021, we announced various initiatives to transform Landis+Gyr for future long-term profitable growth. Since then, and despite various challenges associated with the global pandemic and supply chain constraints, we have invested heavily to expand Grid Edge Intelligence and Smart Infrastructure by making five acquisitions and investing an additional 2% or revenues in R&D. Our transformational efforts, also as part of our seven-year strategic partnership with Google, are now delivering additional tangible benefits for our customers and end consumers.
Going forward, we continue to build on our strong Smart Metering base with leading innovation, while driving profitable growth in the additional two strategic pillars Grid Edge Intelligence and Smart Infrastructure by computing intelligence at the edge, guarding critical infrastructure and empowering cloud-based insights. We are excited about the opportunities ahead as our portfolio expansion empowers people around the globe to manage energy, water and gas more efficiently and drive sustainable efforts forward.”
Enabled by its large installed base of smart devices, Landis+Gyr continuously expands its software and services offering, including cloud-based data analytics solutions. As part of their seven-year strategic partnership, Landis+Gyr and Google utilize state-of-the-art artificial intelligence and machine learning capabilities to co-innovate solutions providing actionable insights that empower customers and end consumers to manage resources in a more informed and sustainable way. Through global platform design in the Cloud and the expansion of its Electric Vehicle (EV) software and hardware offering, Landis+Gyr is well equipped to support customers with demand flexibility solutions that enable the orchestration of DERs and as a result ensure a balance of power generation and consumption. This becomes increasingly more important as additional volatile renewable energy sources are used for power generation and as energy consumption increases as a result of the electrification of transportation and heating.
Over the course of the last two years, Landis+Gyr has temporarily increased its R&D investments by 2% of revenues, from 9% to 11%, to facilitate the Company’s transformation. As a result, said investments have been focused on Grid Edge Intelligence and Smart Infrastructure to strengthen the portfolio offering with a strong focus on recurring revenues, namely software, services and solutions designed to support the energy transition and improve efficiency.
A solid balance sheet and cashflow enable Landis+Gyr to invest in strategic growth areas, positioning the business well to benefit from the global megatrends driving the industry. In addition, the Company returns profits to its shareholders and is committed to distribute a progressive dividend going forward. Being paid out of capital reserves, in Switzerland, the dividend payments are exempt from withholding tax.
As part of continuous optimization evaluations, the Company has taken the decision to transfer the production of its smart water and heat meters from Nuremberg, Germany, to Izmir, Turkey, to further improve its position in an increasingly competitive environment, as well as strengthen the production utilization of the acquired manufacturing facility in Turkey.
FY 2022 and FY 2023 Guidance Update
In light of the now foreseeable delay of the normalization of the supply chain situation, the Company expects these impacts to be carried into FY 2023. Net revenues for FY 2023 are expected to grow low double digit growth compared to FY 2022 and the Adjusted EBITDA margin is expected to come in between 9% and 11% of net revenues. Free Cash Flow (excl. M&A) is forecasted at between USD 60 million to USD 90 million and reflects the strategic inventory investments to fulfill customer orders of recently won large contracts, which are now entering the deployment phase.
Mid-term Financial Targets for FY 2025 & Dividend Policy
Elodie Cingari, Landis+Gyr`s Chief Financial Officer, commented: “Our record-high order backlog provides great visibility for the coming years and allows us to lift the guidance for net revenue growth for FY 2025. With the cost measures initiated and the expected normalization of the supply chain situation, we aim to strengthen profitability levels with a strong focus on converting EBITDA into sustainable cash flows.”
As the share of renewable energy increases and consumer awareness grows, Landis+Gyr's solutions are a critical building block in communities' journeys to a more sustainable world. In FY 2021, the Company's global base of smart meters helped avoid over 9 million tons of CO2 emissions – a figure which is captured in the Company's Scope 4 emissions. Landis+Gyr is proud that its efforts in addressing challenges in the areas environment, social and governance have led to the Company recently being awarded with a Prime rating by ISS ESG, representing the top 10% within its industry.
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Landis+Gyr Group AG
Alte Steinhauserstrasse 18
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