Evonik to reduce size of Executive Board and streamline administrative structures
Executive Board to be reduced from six to four members / By year-end 2016: Group-wide administrative costs to be cut by up to €250 million a year / No dismissals for operational reasons up to year-end 2018
Dr. Werner Müller, Chairman of the Supervisory Board of Evonik Industries AG, said: "The reorganization of Evonik as a listed specialty chemicals company would not have been possible without the full commitment of Dr. Haeberle and Dr. Yu. They contributed many years' experience of the operational side of Evonik's chemical business to the Executive Board and played a key role in shaping the successful repositioning of the Group. On behalf of the entire Supervisory Board, I would like to take this opportunity to thank Dr. Haeberle and Dr. Yu for their outstanding achievements."
Further, Evonik's Supervisory Board unanimously welcomed the Executive Board's decision to undertake extensive streamlining of Group-wide administrative structures. In many respects, the present administrative functions still reflect the needs of Evonik's former structure as a conglomerate. Moreover, administrative expenses are now approximately 26 percent higher than they were in 2008. Evonik therefore intends to extend the progress made in the operating units through the On Track and On Track 2.0 efficiency enhancement programs to its administrative organization. The goal is to make cost savings of up to €250 million a year by the end of 2016. Dr. Klaus Engel, Chairman of Evonik's Executive Board, explained: "We want to create an administrative organization that has a common stamp worldwide, without duplication of responsibilities on the one hand and unacceptable additional workloads on the other. To achieve this, we will be reviewing all administrative workflows and systematically identifying scope for improvement. Creating a more efficient Group-wide administrative organization will also make us faster and more agile in the marketplace."
The planned restructuring of the administrative functions will result in savings in material and personnel expenses. The related job cuts will be achieved in a socially compatible manner in close collaboration with representatives of the workforce and the German Mining, Chemical and Energy Industrial Union (IG BCE). The scope and nature of the necessary measures will be examined in the coming months. Existing framework agreements, including the agreement to refrain from dismissals for operational reasons, will be extended for two years to the end of 2018.
Ralf Hermann, Chairman of Evonik's Central Works Council, commented: "We will be keeping a critical eye on the administrative restructuring announced by the company, particularly to ensure that good administration is not misunderstood as meaning minimizing costs and maximizing workloads. Restructuring the administrative organization in collaboration with us will only be possible if good working conditions are provided for our colleagues." Dr. Klaus Engel stressed: "Throughout the process, we will work as in the past: with decency and respect for people, and in close collaboration with representatives of the workforce."
In so far as forecasts or expectations are expressed in this press release or where our statements concern the future, these forecasts, expectations or statements may involve known or unknown risks and uncertainties. Actual results or developments may vary, depending on changes in the operating environment. Neither Evonik Industries AG nor its group companies assume an obligation to update the forecasts, expectations or statements contained in this release.
Evonik Industries AG
Evonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals. Profitable growth and a sustained increase in the value of the company form the heart of Evonik's corporate strategy. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik benefits specifically from its innovative prowess and integrated technology platforms.
Evonik is active in over 100 countries around the world. In fiscal 2012 more than 33,000 employees generated sales of around €13.4 billion and an operating Profit (adjusted EBITDA) of about €2.4 billion (excluding Real Estate in both cases).