In close coordination with stakeholders and consultants and without involving an external insolvency administrator, the Devolo AG draw up a restructuring plan in order to be better protected against payment defaults in the future. The currently initiated restructuring of the company under personal responsibility (Protective Shield Proceedings) should be completed “in a few months”. During this period, the company renders all services, and the salaries of Devolo employees continue to be paid.
Devolo sees the ongoing corona crisis as the main cause of the financial difficulties. After a successfully completed first pandemic year 2020, a positive sales development was initially assumed in 2021 as well. However, pandemic-related closures in retail and a change in buyer behavior, especially on the German market, led to a drop in demand from the second quarter of 2021, according to the network manufacturer’s analysis.
In addition, in view of the ongoing delivery problems, a large number of goods were ordered in good time, but this led to very high inventories at the beginning of 2022 and thus to a liquidity bottleneck due to the reduced demand, reports Devolo. On the other hand, the manufacturer lost sales with network operators abroad in 2021, and some large projects were not implemented due to the lack of chips.
In the medium to long term, however, Devolo is expecting business prospects to be positive again soon, as Heiko Harbers, CEO of Devolo AG, emphasizes: “We all make video calls in the home office, we stream series in HD, play online. High-speed Internet is for that indispensable and home networking therefore remains a growth market.” Harbers hopes to be able to participate in this growth in the smart home again soon.
More about Devolo:
Devolo Magic 2 LAN DINrail-Powerline-Adapter
Germany’s most channel-friendly network manufacturer