BUEDELSDORF (dpa-AFX) - Ceconomy AG (MTAGF.PK, MTTRY.PK) said that it approved a reorganization and efficiency program, aiming to reduce costs and create foundation for profitable growth. The program, which particularly focuses on central functions and administrative units in Germany, includes reviewing the business activities of smaller portfolio companies.
The reorganisation and efficiency programme is expected to be implemented in the next 18 months and to be concluded by the end of 2020.
Ceconomy said that Dieter Haag Molkenteller, currently responsible for Legal Affairs, Compliance and Risk Management, will leave the Board as of 31 May. The Ceconomy Management Board will then consist of Jörn Werner (CEO) and Karin Sonnenmoser (CFO) as of 1 June.
Ceconomy said its management board and supervisory board as well as the Management Board and Advisory Board of Media-Saturn-Holding GmbH, a majority shareholding of Ceconomy, approved the reorganization and efficiency program.
The company expects expenses of around 150 million euros to 170 million euros in financial year 2018/19, as a result of the reorganization program.
In addition, the company expects around 20 million euros of non-cash expenses in financial year 2018/19, which relate to the write-down of assets due to portfolio measures.
It is expected that sustainable annual savings run-rate will be between 110 million euros and 130 million euros, the majority of which shall already become effective from financial year 2019/20.
The expenses for top management changes in the amount of 34 million euros, which were already booked in the first quarter of 2018/19, are not included in the expenses of the aforementioned reorganization and efficiency program.
The company reaffirmed its outlook for financial year 2018/19, which is adjusted for portfolio changes as well as expenses for management changes and restructuring.
Ceconomy noted that Dieter Haag Molkenteller will continue to advise its management board. Peter Küpfer is leaving the Supervisory Board of Ceconomy on 30 April at his own request. The Nomination Committee and the Supervisory Board have expressed their support for Christoph Vilanek, chief executive officer of freenet AG, as successor to Küpfer. This is, however, subject to the decision of the competent register court.
Ceconomy noted that strategic options for individual operating units of the company and MediaMarktSaturn will be reviewed. It will include the live shopping platform iBood and MediaMarktSaturn's stake in the re-commerce platform Flip4New. The Retail Media Group's customer data marketing business and the activities of the streaming service Juke are being discontinued.
Ceconomy and MediaMarktSaturn plan to continue investing in business areas such as digital entertainment or the resale of used electronics products, the company said in a statement.
Copyright RTT News/dpa-AFX
© 2019 AFX News
