Bietigheim-Bissingen, November 6, 2019 – The Dürr Group has adopted a package of measures aimed at achieving substantial efficiency gains in the Woodworking Machinery and Systems division (HOMAG Group). The package entails non-recurring expenses of € 40 million, of which around € 37 million will be arising in 2019. These measures are to generate annual savings of around € 15 million by 2021 at the latest.
Among other things, the HOMAG Group will be discontinuing production at its Hemmoor site in the German state of Lower Saxony and making further personal adjustments at other German facilities. All in all, roughly 350 out of 4,100 jobs in Germany are to be cut at HOMAG by 2020. In this way, HOMAG is actively addressing the structural overcapacities in Germany and responding to capacity additions in growth markets. In the previous years, HOMAG was able to fully utilize its domestic German capacities due to the extraordinarily strong demand in the furniture industry. However, demand for HOMAG is currently lower, a situation which is also likely to continue in 2020. It is in response to this that the package of measures, which also includes the merger of the Systems and Automation business units, is now being implemented. Currently, 63% of the workforce is based in Germany, whereas HOMAG generates 80% of its sales outside Germany.
In addition to the extraordinary expense for the package of measures at HOMAG (expenses of € 37 million in 2019), the Dürr Group faces an impairment of a further € 6 million in connection with a pending legal dispute in 2019.
At 6.0 to 6.5% for 2019, the Dürr Group’s forecast for its EBIT margin before extraordinary effects is unchanged. Similarly, there are no changes to the full-year targets for order intake (€ 3.8 to 4.1 billion) and sales (€ 3.9 to 4.1 billion). Business with the automotive industry is persistently stable and still in line with expectations.
The forecast for EBIT after extraordinary effects has been adjusted for 2019 to allow for the extraordinary effects arising from the measures outlined above. The EBIT margin is now expected to be in a range of 4.4 to 4.9% instead of the previously projected figure of 5.5 to 6.0%. Earnings after tax should now reach € 115 to 130 million, down from the previous forecast of € 145 to 160 million.