The Group uncompromisingly continues alignment of its structure to the future market of the “Internet of Things”
euromicron AG, a leading vendor of complete infrastructure solutions for communications, transmission, security and data networks with a comprehensive network of branch offices in Germany and at diverse European locations, is to discontinue the business operations of its wholly-owned subsidiary Avalan GmbH effective December 31, 2015. With this move, the Group is purposefully pursuing the reorganization measures it has initiated and continuing uncompromisingly to align its business activities to the strategic future market of the “Internet of Things” (IoT). A particular focus is on smart buildings and critical infrastructures.
The main business of Avalan GmbH, which is based in Spiesen-Elversberg, is assembly and installation activity in the field of low-margin copper and fiber-optic cabling. That means Avalan GmbH no longer fits with euromicron’s new strategic focus. In addition, the loss-making enterprise is not consistent with the company’s prime goal of returning to profitable growth through its alignment toward end-to-end solutions in the Internet of Things arena. All Avalan GmbH’s current projects will be completed in accordance with the agreements and in the customary orderly manner. The company itself will be liquidated.
Following the merger of two euromicron system house companies to create euromicron Deutschland GmbH, the closure of Avalan GmbH underscores the resolve with which the new strategy is being implemented. Bettina Meyer, Spokeswoman of the Executive Board, says: “We’re pursuing a clear alignment toward profitability and improving our cash flow from operating activities. We have identified innovation and efficiency as crucial success factors – throughout our value chain. The operational units also have to be guided by that. The closure of Avalan is the next logical step to counteract the continuous pressure to cut costs in pure cable assembly as a result of declining margins.” The Executive Board and management regret the consequences for the affected employees.
When the new strategic orientation of euromicron was published in May 2015, the Executive Board announced that it would review the existing portfolio of euromicron AG and shed enterprises that were loss-making or not strategically relevant.
Jürgen Hansjosten from euromicron’s Executive Board assesses the reorganization measures as a logical step in the Group’s realignment: “Our objective long term is a profitable growth model in a dynamic market. That means we have to gear our companies even more closely to market needs and improve our ability to control them. Shedding divisions that are no longer strategically relevant or profitable is therefore unavoidable if we want to succeed on our path to making the euromicron Group an innovative technology provider. The focus on our bread-and-butter business will create the foundations for our future development.”
The Executive Board feels certain that the adopted strategy will return euromicron to profitable growth. After the structural measures have been completed, the Executive Board expects a significant improvement in euromicron AG’s profitability as of 2016, resulting in an EBITDA margin of between 8% and 11% in the medium term.
About euromicron
euromicron AG (www.euromicron.de) is an all-round solution provider for communications, transport, data and security networks. euromicron’s network infrastructures integrate voice, video and data transport wirelessly, via copper cable and by means of fiber-optic technologies. euromicron builds leading applications, such as security, control, healthcare or surveillance systems, on the basis of these cutting-edge network infrastructures. Founded on its expertise as a developer and producer of fiber-optic components, euromicron AG is a strongly growing, highly profitable group that is listed on the stock market, has a medium-sized character and focuses on operational growth, integration and further market penetration, internationalization and expansion.