Alfen provides progress update on strategy validation and cost reduction measures
Key points:
- Alfen has progressed its strategy validation with an external consultant.
- Strategy validation confirms Alfen’s continued focus on its three product lines Smart Grid Solutions, Energy Storage Systems and EV Charging.
- Alfen aims for a high single-digit EBITDA margin in 2025.
- Limited revenue growth is projected from 2024 to 2025 due to current softness in EV market and volatility in the Energy Storage Systems market.
- Cost-saving program in place to reduce labour costs and other operating costs.
- Alfen anticipates up to 15% reduction in jobs and has started discussions with its Works Council and the Labour Unions in the Netherlands.
ALMERE, THE NETHERLANDS – Alfen N.V. (AEX: ALFEN), a specialist in energy solutions for the future, today provides an update on its structural improvement measures to further focus its strategy and reduce costs. Measures include prioritisation of markets and product portfolio, an intended simplification of organisational structure, a reduction in other operating costs, including discretionary spend and a delay of investments. The measures are designed to achieve sustainable profitable growth for Alfen, while making sure the company remains well-positioned and highly competitive in its markets.
Marco Roeleveld, CEO of Alfen:
“We are in the final stages of the assessment of our business strategy and organisation. While we still have some work to do, we do know that we will continue our strategy built on all three of our product lines (Smart Grid Solutions, Energy Storage Systems and EV Charging), albeit with an increased focus on specific markets and products within our portfolio.
We have taken a balanced approach between improving profitability for 2025 towards high-single digit EBITDA margins and having the right resources and capabilities to capture growth as our markets bounce back. To reduce our overall costs, we have taken a diverse set of measures across all parts of the organisation. We are also looking at labour costs, and we anticipate up to 15% reduction in jobs. As such, we have started discussions with the Works Council and the Labour Unions in the Netherlands. We are committed to protecting, growing and developing our people as much as possible so we don’t take any decisions we may have to make lightly.
Together, these measures will enable Alfen to remain well-positioned and highly competitive as well as long-term profitable in our markets.”
Cost reduction measures
Alfen’s cost reduction initiative is making progress to see impact structurally in 2025. Efforts span multiple areas, including supplier contracts, cost engineering, investments and discretionary spend.
Discussions with Works Council and Labour Unions have started
Alfen anticipates up to 15% reduction in jobs. This includes natural attrition and limiting the number of contractors and temporary workforce where possible, as well as forced dismissals. The company has started discussions with the Works Council and the Labour Unions in the Netherlands and expects to complete them by the end of November 2024.
Bank covenant
The strategy validation and updated financials are input for the conversations with the bank on a new bank covenant. These conversations progress as planned.
Further communication
Full details about Alfen’s strategy validation, right-sizing programme, 2024 financial one-off impact and renewed medium-term objectives will be provided at the 2024 FY Results on February 13, 2025.
About Alfen
Netherlands-based Alfen is operating internationally in the heart of the energy transition, as a specialist in energy solutions for the future. With 85+ years history, Alfen has a unique combination of activities. Alfen designs, develops and produces smart grids, energy storage systems, and electric vehicle charging equipment and combines these in integrated solutions to address the electricity challenges of its clients. Alfen has a market leading position in the Netherlands and experiences fast international growth benefitting from its first mover advantage. For further information see Alfen’s website at: www.alfen.com.