Once again sales up, profits down at Glamox. But with a twist.

Nov. 27, 2023
Interest rates and weak currency take a bite out of EBITDA. Meanwhile, Europe’s fluorescent ban is stimulating sales on land. Offshore orders remain strong, but implementations slip.

Third-quarter financial results at Norway’s Glamox AS had a “same but different” look. Sales and EBITDA increased, but high interest rates and weak currency led to a net loss, echoing the performance of three months ago. This time, though, growth came mostly by land rather than sea.

Revenue rose to NOK (Norwegian kroner) 1.04 billion ($96.6 million) in the quarter ending Sept. 30, up 12.7% from NOK 923 million ($85.7 million) in the same quarter a year ago. After-tax losses totalled NOK 11.4 million ($1.1 million), compared to an NOK 6.2 million ($576,000) profit in the third quarter of 2022. 

Although adjusted EBITDA strengthened by 6.5% to NOK 162 million, several factors pulled the net figure into a loss. Those included high interest rates, inflation, and a relatively weak Norwegian krone, which in turn impacted the cost of goods.

On the sales side, the growth in the Oslo-based company’s larger Professional Building Solutions (PBS) division outpaced its Marine, Offshore & Wind (MOW) division, reversing a trend in which the smaller MOW had been growing faster.

PBS sells LED lighting to commercial buildings, hospitals, and the like, and accounts for about 75% of the revenue pie. In the quarter, sales jumped 19.7% to NOK 786 million from NOK 659 million a year ago. The company said that Europe’s phase-out of fluorescent lighting is driving strong PBS sales as companies retrofit existing lighting. Renewed energy efficiency campaigns have also been a factor amid high energy prices. LEDs Magazine will report separately on some recent wins in these areas.

Glamox hopes that the lively PBS market opens opportunities to sell more internet-connected lighting. The company is creating an all-new post of “chief data and technology officer” and is expected to soon announce a new executive to fill that role.

While MOW order intake continues to be strong, delays in project implementations meant that sales for the quarter showed only a small gain of 1.6% to NOK 255 million from NOK 250 million.

With PBS growth outweighing MOW, adjusted EBITDA margins dipped to 15.5%, from 16.7% a year ago because PBS operates with lower margins than does MOW — although PBS adjusted EBITDA margin edged up in the quarter to 13.3% from 13.1% last year. It didn’t help that MOW margins dropped to 15.8% from 19.8% a year ago.

The overall 6.5% EBITDA increase reflected a number of cost control and productivity measures, as well as price increases. In cost controls, Glamox has slowed its pace of hiring, and has trimmed its headcount to around 2,000, from roughly 2,150 a year ago. It has also cut back on travel. Productivity improvements include the implementation of more digital business processes such as customer ordering portals.

“As in previous quarters, our view on the long-term outlook for the markets we serve is positive,” said CEO Astrid Simonsen-Joos. “However, continued high inflation, increasing interest rates, and growing construction costs lead to increased uncertainty. Nevertheless, we continue
to see strong demand for our energy-efficient lighting solutions due to high energy prices and environmental regulations.

“We enjoy diverse revenue streams that deliver robust financial performances during different cycles," Simonsen-Joos continued. "Combined with our strong customer relationships, we remain confident and well-positioned to address attractive growth segments, including wireless connected lighting, offshore wind, and human-centric lighting.”

Human-centric lighting, in which tunable lighting fosters health and wellbeing, will be part of the responsibilities for the new chief data and technology officer.

MARK HALPER is a contributing editor for LEDs Magazine, and an energy, technology, and business journalist ([email protected]).

Follow our LinkedIn page for our latest news updates, contributed articles, and commentary, and our Facebook page for events announcements and more. You can also find us on the X platform.

About the Author

Mark Halper | Contributing Editor, LEDs Magazine, and Business/Energy/Technology Journalist

Mark Halper is a freelance business, technology, and science journalist who covers everything from media moguls to subatomic particles. Halper has written from locations around the world for TIME Magazine, Fortune, Forbes, the New York Times, the Financial Times, the Guardian, CBS, Wired, and many others. A US citizen living in Britain, he cut his journalism teeth cutting and pasting copy for an English-language daily newspaper in Mexico City. Halper has a BA in history from Cornell University.