Restructuring, Turnaround, and Implementation of a Growth Strategy at an Automotive Supplier

Client

Shareholders (owners: 50% German and 50% Indian families)

Company

Tier 1 serial manufacturer of crash- and safety-relevant structural components
2,400 employees with headquarters in Germany and 19 production sites in 8 countries across Europe, the USA, Asia, and South Africa
Revenue: Approx. €640 million

Contact Persons

Michael Hengstmann, Dr. Wend von Wietersheim, Martin Nussbaumer

Rolle of EIP-Partners

Interim Chief Executive Officer / Chief Restructuring Officer
Interim Chief Financial Officer
Interim Chief Procurement Officer
Interim HR Director

Challenges

Dramatic decline in orders and revenues (minus 50%)
Negative results (EBIT of minus €29 million)
Production disruptions due to the COVID-19 pandemic and semiconductor crisis
Liquidity crisis and lack of financing commitments from banks after covenant breach
Conflicts among and trust issues with stakeholders (management, banks, shareholders, employee representatives, unions)

Approach

Appointment of an interim Chief Restructuring Officer, Program Officers, and strategic procurement leader
Development of a restructuring concept and immediate implementation of liquidity safeguarding measures
Negotiations with the banking pool and shareholders for refinancing the company
Establishment of a program office in sales, organization, procurement/SCM, manufacturing, and liquidity management
Restructuring and implementation of cost reduction and liquidity-enhancing measures
Transformation of the business model and rightsizing of German sites while expanding and building operations in the USA, Mexico, Hungary, and the Czech Republic
Strategic realignment of the corporate group
Initiation of a sales offensive
Preparation and implementation support for the sale of the company

Selected Results

Development and implementation of a restructuring plan and creation of an IDWS 6 restructuring report
Successful refinancing of the company with banks and shareholders (€85 million)
Closure of a German site with a social agreement and implementation of extensive staff reductions at the headquarters
Appointment of new leadership positions (e.g., CEO, CFO, CHRO)
Introduction and implementation of a new corporate and sales strategy, increasing the order book to €5 billion after 3.5 years without new orders
Revenue growth from approx. €390 million to €640 million (plus 63%)
Successful negotiation of price increases (MTZ), better payment terms, and early payments of claims with OEM customers
Profitability turnaround and increase of EBITDA by more than 300% to over €50 million and improvement of the negative operating result by more than €50 million
Acquisition of profitable new orders after 3.5 years without new orders and increase of the order book to €5 billion
Development of a sustainable refinancing concept and initiation of the M&A process with an investment bank