DGAP-Adhoc

Progress-Werk Oberkirch AG: PWO restructures the Oberkirch location and gives an outlook for future business development

Progress-Werk Oberkirch AG / Key word(s): Change in Forecast

09.12.2014 14:45

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Oberkirch, December 9, 2014 - In today's meeting, the Management and
Supervisory Boards of Progress-Werk Oberkirch AG discussed the mid-term
outlook for the Group's locations and adopted the business plan.

The Boards have come to the conclusion that the Oberkirch location is in
need of measures to strengthen profitability since customers are
increasingly transferring portions of their vehicles production to foreign
plants. This limits the German location's growth perspectives. Therefore,
the Management Board has recently decided not to extend the existing
supplemental agreement, which excludes redundancies until the end of 2014,
and runs until the end of 2016.

A program for strengthening the profitability of this location is currently
being developed and will be promptly implemented. All processes will be
critically reviewed. Furthermore, staff costs - particularly those in the
indirect areas - will be significantly reduced. Provisions of EUR 4 million
will still be recognized in the current fiscal year for socially compatible
personnel adjustments of around 100 employees.

The aim is to stabilize the profitability of the Oberkirch location even in
the case of stable revenues and to compensate for the additional burdens
incurred annually - particularly those from tariff increases and expenses
related to the expiry of the supplemental agreement. The annual savings in
staff and operating costs are expected to reach a total of at least EUR 4
million. Due to the in some cases long notice periods, this volume of
savings will become fully earnings-relevant starting in fiscal year 2016.

For fiscal year 2014, the Group expects revenues of nearly EUR 380 million
and, especially as a result of extraordinary charges from personnel
adjustments, expects EBIT to be lower at EUR 15 million to EUR 16 million.
Previously, an EBIT at the lower end of the target range of 20 to 21
million EUR was forecasted. In fiscal year 2015, the savings effects will
largely compensate for the estimated rise in costs in the personnel area.
With revenues of around EUR 400 million, we come to an EBIT of around EUR
19 million. In subsequent years, the measures presented as well as the
expected rise in revenues should lead to significant gains in annual
earnings.

Progress-Werk Oberkirch AG
The Management Board

End of announcement


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Language: English
Company: Progress-Werk Oberkirch AG
Industriestraße 8
77704 Oberkirch
Germany
Phone: [phone]
Fax: [phone]
E-mail: [e-mail]
Internet: www.progress-werk.de
ISIN: DE0006968001
WKN: 696800
Listed: Regulierter Markt in Frankfurt (Prime Standard), Stuttgart;
Freiverkehr in Berlin, Düsseldorf, Hamburg, München

End of Announcement DGAP News-Service

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