German turbine manufacturer Senvion is planning to scale back its market focus to about 20 countries and also reduce its product range, according to an internal communication to staff from chief executive Yves Rannou seen by reNEWS.
Senvion is analysing each of the markets it is active in Europe, Latin America, Australia and India and is likely to concentrate on around 20, the communication said.
“At the same time, we will withdraw and de-focus in around 30 other countries,” the document added, without providing any further details.
Senvion also plans to simplify its turbine product range.
“We aim to reduce the complexity in our current portfolio and make it sharper and more focused by dropping few turbine variants and product families during this year,” Rannou said in the communication.
No details on the turbine models that would be impacted were given.
Rannou added that the company’s “most imminent problem is that we have not translated valuable orders into cash via excellence in execution in some countries”.
He said Senvion had not shown enough discipline and had also been hit by surprises, such as a live WW2 bomb at one of its sites.
The company also had “incorrect processes, an overly complex organisation that had spread itself too thinly across new markets and a lack of customer focus”, but these issues could be fixed quickly, the document said.
The changes would have a “significant positive impact” on working capital, fixed costs and the overall cost structure.
Rannou said the company aims to have implemented a “fair amount of measures that will improve profitability and cash flow” by the second quarter of the year.
The changes are part of a transformation plan announced “as a matter of urgency” in February, when the company also said it was postponing the release of its annual financial statements for fiscal year 2018.
The results should have been released on 14 March.