Zumtobel consolidates manufacturing

One major focus for the company in 2014/15 will be the consolidation of the two formerly separate sales organisations of Zumtobel and Thorn. In all seven sales regions, sales activities will be structured transparently in line with four distribution channels: project business, end customers, wholesalers and outdoor public lighting. The company aims to make significant cost savings by merging administrative functions, consolidating infrastructure such as showrooms and offices, and introducing leaner management structures. On the cost side, the aim is to reduce selling, general and administrative expenditures (SG&A) across the Group from the current level of approx. 29% of revenues by two to three percentage points by 2016/17. In terms of plant organisation, the former Zumtobel and Thorn plants will be merged into a single global production network in 2014/15. In the process, the plants will be organised in such a way that they can exploit their regional and technological strengths to optimum effect for the benefit of the entire Group. Within the network, there will be increased cooperation and more product relocations – to Asia in particular. To improve capacity utilisation and cut costs, projects have been defined for the Group’s 18 plants targeting the marked downsizing, shutdown or sale of the respective location. Four to six locations will ultimately be affected by this initiative. These measures will lead to additional restructuring expenditures in the fourth quarter of the current financial year in the amount of approx. EUR 15 - 20 million. For 2014/15, the managing board expects restructuring costs in about the same amount. Through these measures, the headcount in Sales will be reduced by some 150 employees and in the plants by up to 450 employees.