At its meeting yesterday, the supervisory board of HOMAG Group AG approved the management board’s proposal to expand the restructuring measures already planned without prejudice to the rights of the co-determination bodies. As a consequence of this decision, the production and administration activities of the subsidiary FRIZ Kaschiertechnik GmbH, Weinsberg, are to be discontinued. A development and service unit of FRIZ specialized in surfacing technology, which employs 15 workers, is to be kept. The Löhne site is to be closed down completely with operations at the subsidiary TORWEGGE Holzbearbeitungsmaschinen GmbH and the service branch of WEEKE Bohrsysteme GmbH located there. The restructuring of BÜTFERING Schleiftechnik GmbH, Beckum, which is to be linked to WEEKE Bohrsysteme GmbH, is progressing as planned. About 180 jobs are expected to be lost as a result of all these measures.
HOMAG Group AG’s CEO, Dr. Markus Flik, regrets the measures, but believes they are necessary: “the companies FRIZ and TORWEGGE have been making losses for several years now. We have intensively examined other avenues, but have been unable to find a feasible alternative. In collaboration with the works’ councils, we are looking to find the best possible solutions for the employees concerned. With this logical step, we are maneuvering the HOMAG Group into a sustainable position, improving our competitiveness and strengthening our earning power.” Once the full restructuring program is completed, the management board expects to generate a sustained improvement in operative EBITDA (before expenses from employee participation and before extraordinary expenses) ranging between EUR 6 million and EUR 8 million each year from 2013 onwards. Backed by this long-term improvement in earnings, the HOMAG Group will be able to make further investments in growth through innovation and expansion into new markets.
The newly developed products of BÜTFERING Schleiftechnik GmbH have proven successful on the market and thereby lend a solid foundation to the HOMAG Group’s continued expansion strategy in the field of surfacing technology. The strategically important product segments of the companies FRIZ and TORWEGGE are to be expanded at HOMAG Holzbearbeitungssysteme GmbH in the future. Flik explains: “the machines and production lines that FRIZ and TORWEGGE have been manufacturing until now are subject to massive fluctuations in demand, which means that it is only possible to produce them viably within a larger portfolio of products. The overarching aim of our future group structure, is to further improve the efficiency of our development and production by concentrating our operations at fewer sites, a move that will allow us to safeguard jobs and the Group’s future in general.”
Owing to the expansion of restructuring measures, the HOMAG Group’s extraordinary expenses are now expected to total about EUR 20 million in 2011. Of these, about EUR 16 million will affect liquidity. The largest part of this amount shall be effective 2012. In light of this and the anticipated very high effective tax rate, the HOMAG Group expects to incur a small loss after taxes for 2011. By contrast, the forecast operative EBITDA remains unchanged, and is still expected to match the prior-year level in 2011 (EUR 65.1 million).
This press release contains certain statements relating to the future. Future-oriented statements are all those statements that do not pertain to historical facts and events or expressions pertaining to the future such as “believes”, “estimates”, “assumes”, “forecasts”, “intend”, “may”, “will”, “should” or similar expressions. Such future-oriented statements are subject to risks and uncertainty since they relate to future events and are based on current assumptions of the company, which may not occur in the future or may not occur in the anticipated form. The company points out that such future-oriented statements do not guarantee the future; actual results including the financial position and the profitability of the HOMAG Group as well as the development of economic and regulatory framework conditions may deviate significantly (and prove unfavorable) from what is expressly or implicitly assumed or described in these statements. Even if the actual results of the HOMAG Group including the financial position and profitability as well as the economic and regulatory framework conditions should coincide with the future-oriented statements in this press release, it cannot be guaranteed that the same will hold true in the future.