Dürr is reducing annual targets and wants to cut jobs: financial experts are analyzing the effects

Dürr is reducing annual targets and wants to cut jobs: financial experts are analyzing the effects

According to a report by www.finanzen.net, the mechanical engineering company Dürr has cut its annual targets due to sluggish demand for woodworking machines and announced the reduction of hundreds of jobs. The group's operating margin is expected to be only 4.5 to 5.5 percent in 2023, and the after-tax result will also be significantly lower than previously predicted.

The impact on the market and the financial industry is significant. With the planned reduction of almost 600 jobs worldwide at the subsidiary Homag, which bundles the woodworking business, Dürr hopes to achieve cost reductions of 25 million euros in the coming year and annual savings of around 50 million euros from 2025. However, costs of 35 to 50 million euros will be incurred for cutting the jobs.

The slump in demand in the wood industry means that Dürr expects the subsidiary's sales to fall by up to 15 percent. In order to limit the impact on earnings, Homag is planning to reduce the number of working hours and short-time work in addition to job cuts. The goal is to achieve an operating margin (EBIT) before special items of 2.0 to 4.0 percent in the business next year.

Dürr shares were temporarily 0.98 percent higher, but the stock has lost more than a third of its value since the turn of the year. After the preliminary quarterly figures and a profit warning, UBS left Dürr at “neutral” with a price target of 33 euros.

Overall, the situation remains challenging for Dürr, as business in other areas is developing better, but the problems in the woodworking business bring with them further costs and uncertainty. The mechanical engineering company must adapt its business strategies to ensure long-term stability and profitability.