MAN Energy Solutions Plans Restructuring Measures Amidst Covid-19 Scenario

The company said that extensive cost-cutting and restructuring measures are the necessary next steps on the way to it’s transformation into a solutions provider for sustainable energy supply.

July 23, 2020. By Manu Tayal

With an aim to ensure the future viability of the company amidst Covid-19 scenario, Germany-based MAN Energy Solutions said that its Executive Board is launching a comprehensive restructuring program including cost-cutting and other measures.

The company said that extensive cost-cutting and restructuring measures are the necessary next steps on the way to it’s transformation into a solutions provider for sustainable energy supply.

Moreover, it is also preparing for a prolonged period of stagnant sales as on the back of the Covid-19 pandemic. The company is also planning to lay off around 4,000 jobs as part of its restructuring plan. However, it said that this reduction in the workforce will be carried out in a socially responsible manner as far as possible, although compulsory redundancies cannot be completely ruled out.

Besides, the company is also planning to increase its operational flexibility and trim its costs by EUR 450 million, among other objectives. With the move it is mulling to achieve an operating margin of 9 per cent and improve it’s cash and liquidity position by 2023, even taking the global economic impact of COVID-19 into account.

Commenting on the development, Dr. Uwe Lauber, CEO of MAN Energy Solutions, said that “We need to prepare ourselves for a market environment that will remain difficult for a long period of time.”

“Some of the company’s key areas of business, such as the cruise ship business, have been directly affected by the economic impact of the COVID-19 pandemic and we do not expect to see a recovery to precrisis levels until 2023. The program is designed to address these negative market influences and make lasting improvements to MAN Energy Solutions’ ability to respond to market fluctuations,” Dr. Lauber added.

“We have already begun to combat negative market influences in recent years and, as a result of the measures we have introduced, we have achieved and even exceeded our revenue targets. In terms of earnings, however, we haven’t yet reached our goal. Therefore, increasing our profitability and improving our competitive ability are key to continue successfully implementing our strategy for the future,” Dr. Lauber further added.

Meanwhile, the company claimed that adapting and optimizing the production network with a focus on core value creation and greater flexibility is a key component of its program.

Earlier in 2018, the company had disclosed its new strategy, which indicated its transformation from a component supplier to provider of sustainable energy solutions. These new solutions likely to account for half of its business by 2030.

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