Dear Colleagues
The economic environment for EMC and PM is deteriorating worldwide and competition intense (Automotive on the other hand continues to perform very well). To counteract in this adverse environment our focus must be to do everything possible to drive up order intake and sales: advancing new projects, pushing new products with high intensity into our channels and OEM customers, converting business from competitors to Schaffner. This cannot be achieved by Sales alone, they need strong support from FAE, Development Centers and Production. Please support our division and BU management to achieve the sales-up goals.
Until we experience the success of increasing sales, we need to be extremely careful with spending. Therefore the Executive Board has decided to implement the following contingency measures with the aim to lower our cost:
• Strategy 2020: Continues to be a priority, with actions in the coming months focused on those that are leading to additional business or increasing our margins and have a good ratio of benefit to effort. These actions must however not lead to a project overload jeopardizing either the success of the project or of the ongoing business. The mentor of each project will be discussing the milestone plan and objectives with each project manager.
• Hiring stop: No new hires are allowed (including replacements), with very few exceptions to be approved by the CEO.
• Travel Restrictions: Business travel is limited to such occasions that increase order intake and sales or that are essential to realize defined EBIT improvement measures. Schaffner internal meetings are to be conducted by video conference. Exceptions are to be approved by the CEO, CFO, COO or the relevant Division Manager.
• Discretionary spending: Limited to items that are essential to running the daily business, to winning orders short-term and to realize defined EBIT improvement measures. All other discretionary spending is to be avoided.
• CAPEX: Limited to items that are required to fulfill customer orders, to improve productivity (with a payback below 2 years), or to safeguard business continuity.
• Other ways to save cost: We are spending money in many ways where we can generate savings when we are smart. One example is to use Skype instead of international calls, especially when traveling internationally.
These actions are taking effect immediately and will be valid until 31 March 2016. During March we will analyze the order intake situation and decide on extending the plan or defining additional measures.
Alexander Hagemann, CEO Kurt Ledermann, CFO