It’s all in the genes

31 May 2011

It was a surprise last year when the Zumtobel Group replaced long-time CEO Andreas Ludwig with Harald Sommerer, vice-chairman of its supervisory board. One year on, he thinks the company has seen off the worst of the recession

Zumtobel CEO, Harald Sommerer

When you took over as CEO, the Zumtobel Group had just announced that profits were down by a third. How is the situation looking one year on?

The situation was still impacted by the financial crisis when I took over. This year we’ve seen a slow start followed by good growth in the components business. Tridonic has benefited from market share gains and a shift in the product portfolio towards electronic ballasts. The component market used to be all about ballasts, but now, with the emergence of LED technology, the product portfolio is getting bigger.

The luminaire part of the business was still in negative growth when I took over. That part of the business is beginning to pick up now. This is not so much being driven by new construction, but more by retrofit and renovation of existing buildings.

There are a lot of changes taking place in the lighting industry. Do you think the Zumtobel Group is geared towards dealing with the new landscape?

The latest developments in lighting are in line with our traditional approach. We have always tried to target luminaires to specialist applications. Our ethos revolves around asking what is the best kind of light and what are the challenges. That’s the reason we exist. The fashionable word ‘solution’ is deeply ingrained in our genes. New technology simply provides us with new opportunities.

You’re very big in workplace lighting. What will offices of the future look like?

LEDs today are particularly competitive as point light sources. In the office, they’re not yet the most competitive solution – the T5 is still the most cost-effective solution.

We’re working with LG Innotek to come up with wide area lighting solutions using LEDs. They have experience in this field from their television business. At the moment we sell LED in those areas where customers want to make a statement about energy efficiency rather than because it is the most cost-effective solution.

What is your position on Siemens’ Osram spin off?

I realise there is a lot of change going on in the lighting market at the moment. Osram is doing what Philips has been doing for a while. The big change started when Philips moved into the luminaire business, but we have been doing this broad supply of the lighting business for 50 years now.

Others are beginning to realise that with LEDs the boundaries between components and luminaires are becoming blurred. Those with smaller resources will struggle to keep up with a company with the resources of the Zumtobel Group.

So what is your message to lighting designers?

I see continued growth opportunities in technology and energy efficiency. You only have to look at the nuclear incidents in Japan to realise that we have to look at saving energy rather than producing more. Lighting accounts for 19 per cent of energy use, so I think we can continue to see new lighting technology as an engine of growth.

Any new technology also opens up new design opportunities. You can come up with completely new form factors. So far, with LED, you see more traditional form factors being used, but I think the designers who create new luminaires around these technologies will do well. I don’t want to comment on anybody’s design in particular, but so far I haven’t seen any decent luminaire designs for OLED.

Your medium term planning statement says you plan to invest more in research and development because innovation cycles are shorter. Which technologies does this refer to and what type of research, in particular, are you investing in?

We will need more R&D spending because we must parallel invest in conventional lighting technology and LEDs. The focus will certainly be on further developing our LED portfolio as well as on controls and systems.

The statement says you also plan to invest in extra sales personnel to increase revenues. Is this also the plan for the UK market?

Yes, we are also planning to increase our sales force in the UK, both for the Zumtobel team and the Thorn team. We have built good relations with UK designers, consultants and architects over the past years. However, building relationships is an ongoing process that is best supported by excellent products and services as well as outstanding know-how about the different applications. It is our goal to earn these relationships by top performance.