Dillinger & Saarstahl Anticipate Recovery in 2021
The Dillinger Group and the Saarstahl Group experienced another very difficult financial year in 2020 & both companies found themselves in challenging
The Dillinger Group and the Saarstahl Group experienced another very difficult financial year in 2020 & both companies found themselves in challenging structural and economic conditions in 2019 and early 2020 due to, among other things, global protectionism and related tariffs, high overcapacity, and declines in demand in core customer segments such as the automotive, energy, and mechanical engineering industries while the coronavirus pandemic has dramatically intensified the existing crisis. Saarstahl and Dillinger Chairman & CFO Dr Karl-Ulrich Köhler said “The coronavirus pandemic further exacerbated the already strained situation during the course of the year and led to a collapse in demand over the year, first at Saarstahl and, somewhat later, at Dillinger. For many months, we operated our production based on current conditions, sometimes at the lowest technically possible limits of the operating modes. Due to the high losses at both companies in the 2020 financial year, pressure to implement the recession-related cost-cutting program has intensified even further: we need to accelerate implementation of the program and accomplish the turnaround quickly, effectively and permanently.”
Outlook for 2021 - Dillinger and Saarstahl started 2021 with a considerably improved order situation and the companies anticipate an overall recovery in business activity and an improved earnings situation. Forecasts are cautiously optimistic and fraught with uncertainty, particularly regarding the duration of the recovery and the further consequences of the on going coronavirus pandemic. Improvement in the earnings figures will require consistent implementation of the on going cost cutting program. Dillinger and Saarstahl therefore remain fully committed to the targeted cost savings of EUR 250 million. With respect to savings in material costs, 90% of the defined EUR 150 million targets have now been backed by concrete measures achieved in the cost of materials and external services. The personnel measures to fulfil the intergenerational contract amount to EUR 100 million. Implementation began in 2020, but the coronavirus has delayed implementation here.