Efficiency enhancement and structural measures, revised projection at HOMAG Group
Schopfloch, November 6, 2019. The board of directors of HOMAG Group AG, with the consent of the supervisory board, decided today to initiate major efficiency improvements with a set of measures to be implemented.
This set of measures involves one-time expenses in the amount of EUR 40 million, of which around EUR 37 million will be incurred in 2019. The measures are supposed to generate annual savings of about EUR 15 million starting in 2021, at the latest. Among other things, HOMAG Group will shut down production at its plant in Hemmoor (Lower Saxony) as of December 31, 2020, and will make additional workforce adjustments at other locations in Germany. Overall, the company plans to reduce around 350 of a total of 4,100 jobs in Germany by the end of 2020. This is HOMAG's approach to actively addressing the structural overcapacities in Germany, and it takes into account the expansion of capacities in the growth markets. The company was able to fully use its capacities in Germany in the previous years because the demand from the furniture industry was exceptionally strong. Currently, however, HOMAG Group faces a much smaller demand from the market, and that is likely to continue in 2020. Consequently, the Group will implement the set of measures, which also includes merging the business segments Systems and Automation. Currently, 63% of the workforce are located in Germany, while 80% of the sales volume is generated abroad.
Due to the measures described, the expected profit of HOMAG Group AG after tax and before the profit transfer for 2019 is in the single-digit million euros range. HOMAG Group AG had previously projected earnings after tax, and before the profit transfer, of between 42 and 46 million €.
This notification contains certain forward-looking statements. Forward-looking statements are all statements not relating to historical facts or events, as well as forward-looking wording, such as “believes”, estimates”, “anticipates”, “expects”, “assumes”, “projects”, “intends”, “might”, “will”, “should” or similar wording. Such forward-looking statements are subject to risks and uncertainties because they relate to future events and are based on current assumptions of the company; and these events may not occur at all or not as anticipated. The company notes that such forward-looking statements are not a guarantee for future performance; the actual results, including the financial position and profitability of HOMAG Group, as well as the development of the economic and regulatory framework conditions, may be very different from (and, in particular, may not be as good as) those which are explicitly or implicitly assumed or described in these statements. Even if the actual results of HOMAG Group, including the financial position and profitability of HOMAG Group, as well as the development of the economic and regulatory framework conditions, match the forward-looking statements made in this notification, there is no guarantee that this will continue to apply in the future.Back to List