Basler Faces Challenges and Implements Restructuring Program
Shares in Basler dropped as the company announces a restructuring program to reduce workforce and revise sales outlook. Weak demand and market challenges contribute to these changes.
Shares in Basler, the German manufacturer of image-processing components, dropped on Monday following the announcement of a restructuring program. The company plans to reduce its workforce by approximately 20% and has revised its 2023 guidance due to weak demand.
At 1049 GMT, Basler's shares were down 2.6% at EUR15.50, having previously fallen over 12%. This decline reflects concerns about the company's future performance.
Basler will eliminate around 200 full-time positions in Germany and abroad as part of its restructuring program. The company had approximately 1,047 full-time employees at the end of last year.
The implementation of the restructuring program will commence without delay, according to Basler.
The company cited continued weak demand in Asian and American markets, as well as signs of an impending recession in Europe, as a reason for not anticipating a demand recovery before the beginning of 2024.
As a result of these challenges, Basler has adjusted its sales outlook for 2023. It now expects sales to range between 200 million and 215 million euros, compared to the previous forecast of between EUR235 million and EUR265 million. Additionally, Basler foresees a pretax loss between EUR12 million and EUR20 million. The majority of restructuring charges are expected to be incurred during the third quarter.
Furthermore, Basler recognizes that its previous goal of reaching sales of EUR400 million by 2025 is likely unattainable and will need to be revised.
In the first half of this year, Basler experienced a decline in sales to EUR116.1 million euros from EUR130.8 million in the same period last year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) more than halved to EUR10.7 million from EUR23 million in the previous year.
These changes underscore the challenges Basler is currently facing in the market.