The transformation process measures implemented earlier this year are showing a clear, positive impact on the Group's half-year results. The recently announced new production site in Russe, Bulgaria will be operational sooner than expected. The future order situation requires an additional expansion of the existing production capacities in San Juan del Río, Mexico.
Experiencing strong headwinds from the markets, GG has proactively initiated a group-wide transformation process in early 2023. Since that time a comprehensive set of over 400 individual measures, all of them targeted to increasing efficiency and lowering costs have been implemented. The concrete activities linked to these measures are largely on track and show incremental success. The evaluation of the current fiscal year’s mid term results still demonstrates a deviation in comparison to the forecasted revenues, but predominantly show remarkable increase of the operative result after 6 months of the current business year compared to the year before by factor 4. Moreover all cost positions and also working capital could be improved, which suggests the continuation of an overall positive financial development with a high level of confidence.
“In view of the current interim results, I am positive that we will be able to achieve also our ambitious annual targets and hence set the basis for a prosperous future for GG. In the meantime it will be key to keep the momentum and further realize all potentials identified at high pace.” Arno Haselhorst, CEO and COO/CRO of GG Group states. “The volume growth ahead of us requires a financially and organizationally strong setting to meet the demands of the market and sustainably benefit from its dynamics. I see GG gaining pace in the right direction” he adds.
The establishment of an additional production facility in Russe, Bulgaria, already communicated in summer, could be further accelerated beyond plan by acquiring existing premises, thus avoiding time-consuming construction work. The new plant will have a clear product focus on HV harnesses for e-mobility for renowned European car manufacturers. In the first expansion stage the acquired premises are offering an increased surface of 18,000m2 instead of the originally planned 13,000m2, allowing even more flexibility for faster growth without additional cost. As a result of the accelerated project timing, pre-series production can be prepared already in May 2024 and regular series production as early as summer 2025.
As further consequence of the expected volume growth of the automotive cable business, both in data cables and battery cables, GG will expand its existing production capacities in San Juan del Río, Mexico, by establishing an additional production building. Construction works will be started beginning of next year. Regular series production will be operative already in early summer 2024. In a first development stage the premises will offer a production area of around 5,000m² and associated 600m² social and office areas. As the first nominated projects will fully utilize the newly created capacities, it will be necessary to increase the local workforce by an additional 100 employees.
“The project teams involved are working at full steam to meet - or, in the case of our plant in Russe, even exceed - the project timings set. We are looking forward to ramping up production at both new sites in just a few months and supplying our customers with innovative and high-tech products shaping the mobility of tomorrow.” says Holger Fastabend, CSO/CTO of GG Group.
