Bloomberg News

Logitech LifeSize CEO Forecasts Rebound in Revenue Growth

February 01, 2012

(Updates with stock price in last paragraph.)

Jan. 31 (Bloomberg) -- Logitech International SA’s LifeSize Communications Inc. expects sales growth to accelerate in coming months after introducing a new videoconferencing offering, according to the division’s chief.

Lower sales growth in the last quarter of 2011 “was a moment in time, a transition, not a trend,” Colin Buechler, the unit’s chief executive officer, said in a phone interview. “The platform we’re unveiling today will help us back to the expected growth rates.”

LifeSize’s new universal video collaboration, or UVC, system provides a “simpler, cost-effective” option for companies, Buechler said. Logitech, the world’s biggest maker of computer mice, bought LifeSize for $405 million in 2009. Logitech is seeking new sources of revenue as the proliferation of tablet computers, which aren’t controlled by mice, are eroding its traditional desktop and notebook business.

Logitech, based in Morges, Switzerland, last week cut full- year forecasts for the third time, citing the weaker euro and declining sales. Revenue at LifeSize climbed 5.8 percent in the last three months of 2011 to $38.2 million, down from 19 percent growth in the previous quarter.

“The LifeSize miss was unexpected,” John F. Bright, an analyst at Avondale Partners LLC, wrote in a note.

Russia and India

The UVC platform is an “integrated, virtualized software platform for video infrastructure,” consolidating multiple products and making them available from a common interface, LifeSize said in a statement today. It is available worldwide with infrastructure applications starting at $3,999.

LifeSize is expanding in countries such as Russia and India where “demand is robust,” said Buechler, who was appointed CEO of the Austin, Texas-based division on Jan. 10.

Demand will also be boosted by “thousands and thousands” of small and medium-size companies, which will be able to afford videoconferencing services as the cost of a video-communication system drops to about $1,000, Buechler predicted.

Trends driving the adoption of videoconferencing include mobility, led by the surge of smartphones and tablets; the increase of remote workers connected from home; and companies seeking to cut travel costs by relying on virtual communications. Industries such as education, health care and financial services are increasingly resorting to video communications, Buechler said.

Logitech’s total revenue fell 5 percent to $714.6 million in the last three months of 2011.

Logitech shares rose as much as 1.4 percent to 6.99 Swiss francs and was up 0.9 percent as of 10:24 a.m. in Zurich. The company has a market value of 1.33 billion francs ($1.46 billion).

--Editors: Robert Valpuesta, Thomas Mulier

To contact the reporter on this story: Chiara Remondini in Milan at cremondini@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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