Targetti Sankey SpA

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Targetti Sankey SpA

Via Pratese 164
Florence,
Italy
Telephone: (39 055) 37 91 1
Fax: (39 055) 37 91 26 6
Web site: http://www.targetti.it

Public Company
Incorporated: 1928
Employees: 1,243
Sales: EUR 176.2 million ($201.5 million) (2006)
Stock Exchanges: Milan
Ticker Symbol: TS
NAIC: 335122 Commercial, Industrial, and Institutional Electric Lighting Fixture Manufacturing; 335121 Residential Electric Lighting Fixture Manufacturing; 335129 Other Lighting Equipment Manufacturing

Targetti Sankey SpA is one of Europe’s leading producers of lighting fixtures and systems. The Florence-based company, which has traditionally focused on the interior architectural market, has built up a range of prominent clients, including Mercedes, McDonald’s, Levi’s, Benetton, Bang & Olufson, Ferrari, Guess, Bulgari, Diesel, and Peugeot, among others. The company is also responsible for lighting such prestigious monuments as Michelangelo’s David, Leonardo da Vinci’s Last Supper, Venice’s Piazzo San Marco, Notre Dame cathedral, and the Singapore Opera House.

Principal subsidiary Targetti Sankey designs and manufactures lighting systems, which are marketed under the Targetti brand, and focuses on the interior architectural lighting market. This market remains the company’s largest area of operation, accounting for 55 percent of sales. The company also serves as the holding company for a number of specialized subsidiaries and their brands. These include Neri, a leading producer of cast iron lighting and street furniture in Italy; Modus, which focuses on artistic lighting for the residential market; Exterieur Vert, an outdoor lighting specialist; France-Italian subsidiary Victoria-MLE, which develops lighting and decorative lighting systems for hotels and cruise ships; Duralamp and Duratel, focused on the industrial and telecommunications sectors; and A2, which develops fluorescent lighting systems for offices and hospitals.

Targetti’s international operations include Tivoli, a leading producer of theater and entertainment lighting, based in the United States. The company also operates sales and marketing subsidiaries in a number of markets, including China, Spain, Germany, the Netherlands, Austria, and France, with sales to more than 90 countries. Targetti’s foreign sales account for approximately 40 percent of the group’s total sales, which topped EUR 176 million ($201 million) in 2006. Targetti Sankey is a public company listed on the Milan Stock Exchange; the founding Targetti family remains its largest shareholder. Giampaolo Targetti serves as company chairman.

LIGHTING UP FLORENCE IN THE THIRTIES

Targetti Sankey was founded by Sankey Targetti in 1928 as a small lighting store in the center of Florence. Targetti initially sold lamps, then developed a business as an electrical installer as well. Into the next decade, however, Targetti’s interest increasingly turned toward creating his own lighting fixtures and lighting systems. This led Targetti into manufacturing, and by 1937 the company had established a facility with more than 100 workers and technicians. The company’s initial product line consisted of chandeliers. Targetti soon turned his focus to the commercial market and in 1939 introduced its first indirect luminaire, the industry term for lighting systems.

The post–World War II reconstruction of Italy and the country’s economic boom in the 1950s provided new opportunities for Targetti Sankey. The company built up a strong technological basis, while also expanding its manufacturing capacity. These efforts led to the launch of the company’s first ceiling luminaire in 1953. By 1968, the company had developed its own downlight systems, lighting systems usually set into ceilings that projected light downward. Another innovation came in 1974, when the company introduced the first metal halide projector system for the professional market. Targetti’s reputation for technological prowess and artistic design helped earn the company a number of prestige projects. These included the lighting of Michelangelo’s David in Florence, as well as the lighting of Leonardo da Vinci’s Last Supper in Milan.

The company’s growing prestige provided its with a launchpad for its international development. In the early 1970s, Targetti began expanding into new market, focusing especially on the European market. In support of this effort, the company opened a number of sales and marketing offices. By the end of the century, Targetti had established a direct presence in the Netherlands, Spain, Germany, France, and Austria. At the same time, the company expanded into the South American market, largely by building a network of local distributors.

Targetti backed up its international expansion with a continued commitment to its technological development. The company debuted a new breakthrough in 1979, launching a self-supporting lighting system, called Structura. This was later followed by the introduction of Structurella in 1988, an open low-voltage luminaire. These innovations came in part through the company’s research and development investment, conducted through its Targetti Optic Division. In 1985, this division led the company deeper into the research area, forming a partnership with the University of Florence to found the Photogoniometric Laboratory at the university’s Department of Electronics.

PUBLIC OFFERING IN 1998

Into the early 1990s, however, Targetti remained a relatively small company with a broad shareholder base spread out among the extended Targetti family, many of whom also held management positions. The company had also diversified its holdings into a variety of areas outside of its core lighting systems operations. This situation changed, however, in 1993, when Giampaolo Targetti bought out most of the other family shareholders, giving him control of 64 percent of the company. This control allowed Targetti to push through a restructuring of the company’s operations, shedding its noncore holdings, and streamlining its production operations. At the same time, Targetti replaced much of the company’s family-based management with a younger team of experienced professional managers.

COMPANY PERSPECTIVES

The company produces and markets over 3,000 products: lighting fixtures and systems which are the perfect synthesis of technology and design. Technologically advanced lighting fixtures backed by top level research meet with the pure shapes and essential lines of consistently up-to-date designs, suitable for any architectural context. These features make Targetti the ideal partner for professionals, specialist distributors and corporate clients such as Ferrari, Mercedes, Peugeot, Max Mara, Levi’s, Benetton, McDonald’s … as well as bodies and institutions who have chosen the Group’s companies to illuminate authentic pieces of mankind’s heritage.

Into the mid-1990s, Targetti had expanded its range of brands and subsidiaries targeting specific market areas. While the Targetti brand itself, which focused on the technical architectural market, accounted for nearly 80 percent of the group’s sales, a growing percentage came from its extension into other areas. These included home lighting, through subsidiary Victoria SpA; and a 50 percent stake in lightbulb producer Duralamp. The company’s international sales, in the meantime, had grown to account for more than 50 percent of the company’s revenues, which reached ITL 79 billion in 1995. By then, Targetti was among the major players in the European market, which remained dominated by strong design and technology advantage enjoyed by Italian companies.

Targetti moved into the South American market directly, acquiring a controlling stake in Brazil’s Altena Ltd., a lighting specialist that developed and distributed its own lighting systems, as well as Targetti’s, for the Mercosur market. At mid-decade, the company launched a restructuring of its sales and production operations, shifting from a production model that focused on technology to one that focused on product line. As part of the restructuring process, the company opened sales, production, and assembly subsidiaries in Hong Kong, Poland, and the Philippines starting in 1995. Another new market for the company was the hotel and cruise ship lighting market, which it entered through subsidiary Litehotel Srl in 1996. This operation was then boosted in 1998 with the acquisition of a 50 percent stake in France’s MRE, a purchase that added ITL 5 billion to the group’s revenues.

Targetti went public in 1998, listing its shares on the Milan Stock Exchange. The public offering enabled the company to begin building a larger position for itself in the still heavily fragmented lighting market. The company’s first target came in 1999, when it purchased Autographe, a well-known French company that focused on the high-end indoor architectural lighting sector.

While the Autographe purchase helped raise the company’s profile in its core market, Targetti also sought expansion into new lighting sectors. The company’s 1999 acquisition of Exterieur Vert, for example, added specialist production of exterior architectural lighting systems. In that year, Targetti also established a foothold in the United States, buying theater and entertainment lighting specialist Tivoli, based in California. These two companies had already collaborated together, through the joint venture Targetti USA formed a year earlier. The company followed up the Tivoli purchase by a move into the public sector lighting and furniture market with the purchase of the Neri Group. That company, established in the 1970s, had developed a particular specialty as a developer of cast iron lighting systems and street furniture.

LIGHTING LEADER IN THE NEW CENTURY

Targetti retained its tradition as an innovator in the lighting market as well. The company debuted a number of new products and technologies at the turn of the century, including the launch of the CCT-Flash, a downlight with a fully protected reflector, in 1998. This was followed by the launch of the Smarthead projector in 2000, as well as the CCT Arc, developed specifically for the architectural market. In the next year, Targetti added its industry-leading Trail indoor lighting system; this was followed in 2002 by the debut of the FOHO Pro projector line.

Targetti launched a new restructuring of its manufacturing operations in the early 2000s, with the launch of the construction of a new and larger facility in Florence. Completed by mid-decade, the new plant enabled the company to consolidate production at its three existing Targetti plants, while also combining the production capacity at its Duralamp, Victoria, and Duratel subsidiaries. The company later transferred the French production of its Exterieur Vert subsidiary to the site, which also became the company’s headquarters.

The consolidation of the group’s Italian operations was coupled with further development of the company’s international network. Targetti opened a number of new offices through 2005, including in Switzerland, Ireland, and Greece. In 2006, the company added offices in Austria and Norway, then targeted the Eastern European and Middle East regions with offices in Moscow and Dubai.

KEY DATES

1928:: Sankey Targetti founds a small shop selling lamps in Florence.
1937:: The company launches production of chandeliers.
1939:: The first luminaires (lighting systems) are introduced.
1973:: International expansion efforts are launched.
1985:: Company cofounds the Photogoniometric Laboratory at the University of Florence.
1998:: Sankey Targetti goes public on Milan Stock Exchange, then enters U.S. market through purchase of Tivoli in California.
2005:: Company enters mainland China market with a factory in Guangzhuo and production joint venture in Canton.

In the meantime, Targetti entered the vast Chinese market, building a factory in Guangzhuo in 2005. The company also formed a joint venture with that country’s Nee Neon to establish Heshan Targetti. That company laid plans to develop a manufacturing complex in Canton in order to produce Targetti-branded systems for the Asian markets.

Back in Italy, the company acquired a 75 percent stake in fluorescent lighting specialist A2, which focused especially on the hospital and industrial markets. The A2 acquisition, completed in 2005, also gave the company a new large-scale production facility in Migliarino Pisano. At the same time, Targetti had begun plans to expand its domestic production capacity with the development of a new factory, which the company hoped to build in Campi as early as 2007. After nearly 80 years in the position, Targetti Sankey expected to remain a leader in the international lighting systems market.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

A2 S.r.l.; Dura Lamp SpA; Duratel SpA; Esedra SpA; Hangzhou Duralamp Electronics Co. Ltd. (China); Heshan Targetti Co. Ltd. (China); Modus S.A.; Neri SpA; Targetti B.V. (Netherlands); Targetti Iluminacion S.A. (Spain); Targetti Licht GmbH (Germany); Targetti North America Inc. (United States); Targetti Polska Sp. z o.o. (Poland); Targetti UK Ltd.; Targetti-MLE S.A. (France); Tivoli LLC; Victoria–MLE S.r.l.

PRINCIPAL COMPETITORS

Siemens AG; Philips France; Hella KGaA Hueck and Co.; Philips Electronics UK Ltd.; Brest Electric Lamp Plant; Robert Bosch France S.A.S.; Schouw and Company A/S; TridonicAtco GmbH and Company KG.