HOMAG Group optimizes its structure
Schopfloch, November 6, 2019. HOMAG Group AG, the world's leading supplier of integrated solutions for production in the woodworking industry and woodworking shops, is positioning itself for the future. On November 6, 2019, the Supervisory Board approved several measures to this end, including the shutting down of production at the Hemmoor site with effect from December 31, 2020. At the same time, the company is continuing to invest consistently in digitization, innovative products, advanced IT systems, and efficient production.
- Shutdown of production at the Hemmoor site (Lower Saxony)
- Planned reduction of headcount in Germany by 350
- Additional investment in digitization and innovative products
“It is a matter of deep regret that it is not possible to secure a long-term positive economic outlook for production in Hemmoor, despite the great dedication of our employees,” explained Chair of the Management Board Pekka Paasivaara. “The company takes its responsibility seriously in this matter. It is important to us to do everything we can to minimize the resulting impact on affected colleagues, and we will act in close coordination with the employee representatives.” HOMAG has a workforce of around 200 employees at Hemmoor, around 150 jobs are to be reduced there.
The products currently manufactured in the Hemmoor plant will in future be taken over by other plants in the HOMAG Group production network in Germany and Poland. This means that the entire product portfolio will be kept.
HOMAG Group is taking these measures to proactively counter the structural capacity surplus within Germany, and to take into account the expansion of capacity in growth markets. Around 83% of the company’s sales are made outside Germany. Paasivaara: “Since mid-2018 we have been seeing a decline in incoming orders as a result of a weaker economic situation, and this is expected to continue into 2020. To ensure that HOMAG Group remains competitive and fit for the future, we are now consistently taking steps to counteract the resulting cost pressure.”
The already-initiated consolidation of the Automation and Systems Business Units also forms part of these measures. Additional plans include the centralization of Spare Parts Logistics as well as early retirement in indirect areas. Overall, HOMAG Group will cut back around 350 positions in Germany. The measures involve one-off expenditure in the amount of €40 million, of which around €37 million will be incurred in 2019. Nonetheless, HOMAG Group will record positive earnings in 2019.
The savings made will enable HOMAG to invest more heavily in future technologies and the efficiency of its sites, by means including investment in digitization, a further improved IT/software structure, and innovations in the product portfolio. HOMAG Group will continue to invest in existing sites, along with the introduction of the efficient production system that is already underway.
Disclaimer
This press release contains certain statements relating to the future. Futureoriented 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.