Steps have been taken to make the automation activity profitable again: loss-making activities and products have been relinquished, staff level adjusted and stricter project acceptance procedures introduced. The estimated 3m cost of restructuring was charged in full in the fourth quarter of 2004 in addition to the operating loss.
As managing director Huub Baren said, “Since the IPO, our strategy has always been to expand IPTE’s Factory Automation division into a market leader. The company has developed from a pure test-automation firm to a supplier of complete factory automation solutions. In recent years, we have invested primarily in extending our product range, and have launched several new products on the market. Several large and complex projects have enabled us to successfully extend our knowledge in several expert fields, …. but have negatively affected the earnings of the automation division to a significant degree
.“ Recent years have demonstrated the fundamentally unhealthy state of the global automation market. Our assumption has been that a revival was just round the corner, and we have sought in past years to maintain our competence at maximum level and gain market share. We have succeeded, but at a cost of heavy losses within our automation activity. We have decided to adjust the strategy and to refrain from further competence extensions. We will be concentrating on the areas of expertise we are familiar with in order to improve profitability. We therefore do not expect any growth in our automation activity in 2005”.
EPP EUROPE 415
