Alimak takes action to improve Facade profits

Alimak Group takes action to significantly improve profitability in its Facade Access division.

As part of the program in the Facade Access division to increase margins, Alimak says it is considersing the option of consolidating assembly activity in Mammendorf, Germany, to the manufacturing facility in Madrid, Spain. Discussions around this option will now commence with the German works council.

(Photo: Alimak)

The expected annual cost savings generated by the consolidation is estimated to be SEK 60 million ($5.72 million) from 2025 onwards. “The total one-off costs implied by such a project are estimated to be SEK 95 million and include termination, consolidation and some temporary impacts on operations,” added Alimak. 

Those one-off costs could be partially offset by the capital gain resulting from the divestment of the company’s Mammendorf real estate portolio, added the company, amounting to a SEK 30 million (£2.86 million) capital gain out of an estimated potential sales value of SEK 60 million ($7.72 milion).

The consolidation only targets the assembly workshop in Mammendorf, while R&D, engineering functions and service would be maintained in Germany.

One of the most significant projects involving the Mammendorf facility is Australia’s Sydney Harbour Bridge, awarded in 2017, which includes design, manufacturing, installation and service of several maintenance units.

As part of the ongoing project review, a decision has been made to adjust down the project margin, with a negative revenue and EBITA effect of SEK 45 million ($4.2 milion) in the fourth quarter. The project is still estimated to continue for at least another 2-3 years, and to be profitable, said Alimak.

In total, the effects of the plans will cause an operating profit drop of SEK 110 million ($10.5 million), of which SEK 85 million ($8.11 million) will be in the fourth quarter of 2023, added the company. 

Alimak exceeds financial goals early and sets new ones Higher revenue targets ‘reflect the potential we see for accelerated profitable growth’, says CEO
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