KOBLENZ (dpa-AFX) - Automotive supplier Stabilus is wielding the red pen and cutting 450 jobs. The cost-cutting program is aimed at safeguarding the company's long-term competitiveness, the specialist for trunk gas springs announced Thursday evening in Koblenz. While the costs of the restructuring will significantly weigh on group profits this year, Stabilus CEO Michael Büchsner is sticking to his forecasts for the company's day-to-day business. The news was poorly received on the stock market Friday morning.
Shortly after trading opened, Stabilus shares dropped around three percent to €24.25, making it the biggest loser on the small-cap SDax index. Since the start of the year, the stock has lost about a fifth of its value.
Management cited a challenging market environment as the reason for the planned cuts. Weak global growth, persistently rising costs, and structural changes in key target markets have all taken their toll. The management board now plans to streamline the company's organization, reduce personnel and operating costs, and consolidate locations.
The restructuring costs are expected to total €18 million. Due to the corresponding provisions, group earnings for the current fiscal year through the end of September are likely to reach just €25 million. Analysts had recently forecast an average of €47.1 million. Revenue, however, is still expected to come in at around €1.3 billion as planned, with about 11 percent of that remaining as earnings before interest, taxes, and special items.
The cost-cutting program is set to be implemented primarily in the next fiscal year, ending September 2026. In the following fiscal year, 2027, the management board expects savings of approximately €19 million. "The costs of the transformation program will have paid off after just one year, according to plan," the company emphasized. From fiscal year 2028 onwards, management expects annual cost savings of around €32 million.
The reduction of 450 jobs will primarily affect the EMEA (Europe, Middle East, and Africa) and Americas regions, according to the company. Stabilus intends to relocate and consolidate office and production space in Germany, the USA, Singapore, and Thailand.
In the third fiscal quarter, ending in June, the company reported declines in both revenue and earnings. Stabilus has long been suffering from weaker demand among major automakers. Many manufacturers are grappling with a sharp drop in sales - partly due to weak demand in the crucial Chinese market. In addition, U.S. trade policy is proving a significant challenge for automotive companies./stw/err/jha/
