Strengthening production as a core competence
Divisions to be controlled by new management holding company
Measures defined to improve EBITDA by around EUR 230 million
Review of strategic options for Distribution Germany
As part of a strategy review supported by Roland Berger Strategy Consultants, the SCHMOLZ+ BICKENBACH Group has decided to focus its future business model more strongly on its production units (DEW, Finkl, Sorel, Ugitech, Swiss Steel, Steeltec and Blankstahl) in order to strengthen its leading position in the core tool steel, corrosion, acid and heat-resistant steels and engineering steel markets. Production is supported by the Sales & Services unit, which underpins this strategy with a strong focus on selling the company’s own products. Sales & Services brings together under central management the activities that were previously located in the Germany, Europe and International Distribution units. The group will in future be managed as an integrated entity by a management holding company in order to realize synergies between the units.
The aim of the SCHMOLZ+BICKENBACH Group’s repositioning is to bring the company’s core production competencies further to the fore, and to exploit the advantages of an integrated business model in a more targeted fashion. In particular, the company wants to realize synergies in sales, market/product segmentation, research & development and knowledge transfer.
This focus on the new strategy will also involve an evaluation of the SCHMOLZ+BICKENBACH Group’s various activities. From the current perspective, the strategic options for Distribution Germany need further precision and examination.
In order to improve operational earnings power and the capital structure, the new Executive Board has drawn up a comprehensive growth and results improvement programme that covers all areas of the business. The total impact on the operating result (EBITDA) comes to around EUR 230 million, based on 2012 results and subject to future cost price increases. EUR 100 million will come from cost reductions and efficiency gains.
The defined measures confirm the medium-term targets announced by the new Executive Board and by 2016 will improve the SCHMOLZ+BICKENBACH Group’s EBITDA to more than EUR 300 million, while taking its leverage (EBITDA / net debt) down to 2.5.
With its clear focus on production and stronger distribution of its own products by Sales & Services, the SCHMOLZ+BICKENBACH Group is concentrating on its strengths and taking full advantage of its integrated business model. The measures defined to improve results will help us secure our leading market position, which we intend to build on from this basis.
About SCHMOLZ+BICKENBACH
SCHMOLZ+BICKENBACH was established in 1919 in Dusseldorf by Arthur Schmolz and Oswald Bickenbach. Since 1937 the company bearing their names has been a synonym for tradition in steel. Since the acquisition of the former Swiss Steel AG in 2003, SCHMOLZ+BICKENBACH has been listed on the SIX Swiss Exchange (STLN). Today, the SCHMOLZ+BICKENBACH Group is one of the world’s largest manufacturers, processors and distributors of special-steel long products. The Group has a total of approximately 10 000 employees. SCHMOLZ+BICKENBACH is one of the leading producers of stainless long steels as well as tool steels, and is one of the ten largest companies for alloy and high-alloy special and engineering steels.