Evoqua initiates cost-saving restructure
Evoqua has initiated a restructuring which will create two operating divisions to replace its existing three-unit structure.
The new divisions are Integrated Solutions and Services, which combines municipal services and industrial services, and will focus on direct-to-end-user business, and Applied Product Technologies, which brings together products and municipal products, and will develop product to be sold primarily through third-party channels.
“This two-segment structure will enable divisions with similar business models to align, and in some instances, to combine. We expect that by aligning complementary go-to-market strategies, we will improve technology deployment, provide more comprehensive customer solutions, and lower our cost structure,” said Evoqua chief executive Ron Keating,
The restructuring and “related footprint rationalisation”, is expected to cost between $17 million and $22 million during the two years ending 30 September 2020, Keating added. “The cost savings associated with our action should begin in Q3 2019, with the anticipated benefit in the range of $15 million to $20 million on an annualised basis, once fully implemented. We remain committed to the industrial, municipal, and aquatics markets, and believe that this new structure will position us for improved long-term growth and profitability.”
The news came as Evoqua unveiled preliminary financial results for the full-year 2018, which pegged growth in adjusted earnings before interest, tax, depreciation, and amortisation, in the range 2.6 to 4.5 per cent, to between $213 million and $217 million, on revenue growth in the range 7 to 7.4 per cent, to between $1.33 billion and $1.34 billion.