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Restructuring of flooring manufacturer nora

Case Study

Challenge

The Freudenberg group of 14 independent business groups decided to sell subsidiary nora systems GmbH, as it no longer fitted the group's long-term strategic portfolio. A comprehensive restructuring had to be initiated to lead the company out of downward earnings trend of many years’ standing and to a predefined EBIT. 

Success

Atreus restructured the sales organization, optimized the cost structure and realized significant savings. The Atreus manager succeeded in combating the staff’s feeling of insecurity during the difficult restructuring phase, with open communication. 

Interview with Heinz Futscher, Managing Director of nora systems GmbH

What was the situation at your company when you called on the services of an Atreus manager?

The company’s result had been getting worse and worse for many years, so the restructuring task was correspondingly extensive. The production, manufacturing and sales processes all had to be made more efficient. However, the decisive factor was motivating the management team and 1,000 employees again and integrating them into the project. 

 

"The staff had to be motivated and entirely new paths trod in the restructuring plan. In doing so, we achieved high product quality and improved service under a new brand."

You want to know what Atreus can do for you in a similar situation?
Contact Dr. Christian Frank, Partner and Head of Mechanical and Plant Engineering.

+49 89 452249-180 Christian.Frank(at)atreus.de

Initially, nora staff protested against the Freudenberg Group management’s plans to sell it. What happened and how did you react?

One potential buyer wanted to replace part of the production with its own products, which would have led to production losses at the Weinheim site. I immediately spoke to the entire staff and published a concept on the internet, making the ideal buyer structure visible for the staff. 

What were the main levers of the restructuring?

After very quickly analyzing the situation in the space of one week, I presented the results to the staff council. Once I had won them over for the restructuring plan, I informed staff about the changes in two meetings. With the actions in production and sales, I then succeeded in exceeding the profit objective within six months before almost doubling it after twelve.

 

"I showed all the employees the company’s chances for the future, thus forming an environment in which they could again work creatively."

Immediate measures at nora

  • Intense discussions with the staff council
  • Holding a staff meeting
  • Negotiating with potential buyers
  • Setting up a new sales process
“To successfully restructure nora, I set up clear structures very quickly and installed an open communication policy in the company.”

Heinz Futscher

“To successfully restructure nora, I set up clear structures very quickly and installed an open communication policy in the company.”

"During the difficult restructuring phase, very open communication with the staff council and employees facilitated the processes."

What improvement potential did you see in the company and how did you exploit it?

The main thing was to make the global sales structure more efficient. We restructured the sales organization and ordered responsibilities clearly within the company, so that ultimately the right person had the right position within the structure. Another key success factor was keeping the allegiance of the external sales team. 

Freudenberg Bausysteme KG became nora systems GmbH. When did the rebranding take place?

The brand issue was an important aspect. The products already all bore the name nora, but the marketing was done by Freudenberg Bausysteme. The company was renamed when the merger was completed. But as the product was already being sold under the nora brand, it was very easy to convince customers to remain loyal to the company. During the year and a half of the restructuring, the customers had noticed that nora products were being delivered faster, more reliably and in excellent quality – and that the service had improved significantly.

How did the carve-out proceed?

The new owners wanted the transfer of operations to take place with as little noise as possible. They didn’t want anything to change for the employees, not even the voluntary social benefits. We had begun separating and making the company independent even before the agreements were signed. For example, various lease and service agreements needed to be concluded so that nora could continue to use the Freudenberg facility. To avoid later conflicts, the terms were negotiated before signing the contracts.

What was the most important part of the carve-out in your opinion?

The most important component was securing the funding, in particular the equity share, because nora was being removed from the Freudenberg Group’s cash pool. That is why the new owners had taken nora’s growth and investment plans into account in the financing from the outset, and why they placed such great value on forward-looking controlling.

"At the end of the 15-month project, the company’s value had risen by about 60 percent."

Atreus is the leading interim management provider in Germany and one of the largest in its field in Europe. We solve difficult operational management and transformation problems quickly and reliably. Contact us and find out how we can help you master your situation with management expertise that is available at short notice and that is the perfect fit for you.

Atreus is a co-founder of Globalise – the market’s leading and largest provider of international interim management. Accelerating change and delivering success. Worldwide. Structured as a global group of leading interim management firms, Globalise has the reach to support you in solving your company’s most important issues around the world.