HeidelbergCement streamlines administrative functions in Europe

• Integrated organisation for the Group and the countries
• Strengthening of the Group’s headquarters at Heidelberg
• Reduction of 1,100 administrative jobs in Europe
• Annual savings of EUR 50 million

In an effort to lower costs and increase efficiency, HeidelbergCement will significantly streamline its organisation in Europe. The company has about 42,000 employees worldwide, 25,000 of them in Europe. The up to now extremely decentralized Group organisation will be replaced by an integrated organisation model. This will lead to lean structures, transparency, faster decisions and a significantly higher implementation speed. The aim of the reorganisation is to strengthen the international competitiveness of HeidelbergCement and to significantly reduce costs. The annual savings will amount to about EUR 50 million.

The measures, which will be implemented over the next two to three years, will lead to a reduction of about 1,100 jobs in 13 European countries. The works councils will be involved in the process according to the regulations of the respective countries. The project affects administrative functions on Group, regional and country level. Starting from a systematic and detailed analysis performed by HeidelbergCement managers, the following proposals for the optimisation of the organisational processes have been developed in the “win” project with the support of Boston Consulting:

Increase in efficiency by further developing the organisation

• Transfer Group functions to Heidelberg
  The staff functions Strategy and Development, Treasury/Corporate Finance and Group Internal Audit, which are very important for the Group management, will be transferred to Heidelberg. At the same time the headquarters at Malmö will be closed and at Brussels significantly reduced.
  
• Introduce a Shared Service Center concept
  It is planned to establish one Shared Service Centre in each country for the business fields cement, ready-mixed concrete and aggregates, which will assume functions from Human Resources and Accounting. Pooling and standardising services that so far have been provided at numerous locations will allow for significantly increased efficiency of these processes. At the same time the competence in this central facility will increase.
  
• Centralise the IT infrastructure
  The clearly reduced complexity of the IT structure and the use of a standardised business information system will increase the efficiency of corporate reporting. The possibility of outsourcing was abandoned in favour of an internal efficiency increase.
  
• Centralise technical services
  The Heidelberg Technology Center (HTC), our technical competence center, will be integrated more heavily into line management in the future. At the same time the managing director of the HTC will have the overall technical responsibility for the European cement plants. This will enable more efficient support of the plants, for example through the transfer of best practise solutions across the Group. Key performance indicators (KPI) that are standardised throughout the Group will effectively contribute to this process.
  
• Establish a Group purchasing organisation
  Worldwide purchasing will be optimised through strict specialisation in product groups. In light of a purchase volume totalling EUR 4.9 billion, additional savings can be achieved by utilising economies of scale to a greater extent.

Strengthen our basis for growth

The challenges of international competition require a consistent and continuous optimisation in all areas. The planned enhancement of our organisation in the framework of the “win” project is an important step in achieving integral efficiency and long-term, result-oriented growth.