German production outfit Road Movies is to relocate from Berlin to London from 2002 as part of a restructure by the Das Werk Group in order to generate savings of around Euros 5m next year.
Das Werk spokesman Wolfgang Borgfeld stressed that the move did not mean the closure of the Berlin office, "but rather that the co-ordination of international projects can be handled better from a base in the UK". The relocation will result in savings of around Euros 0.5m in this area. In addition, the rights held by the Road Movies group of companies will be marketed centrally by Promark Entertainmment from next year.
Cost-cutting measures will also see Das Werk aiming from January 2002 to reduce its personnel costs in its European postproduction facilities by 20% - introducing a four-day week and not filling vacated positions. In addition, Euros 1m in personnel and other costs will be saved in the Das Werk holding each year from 2002.
Further details of the restructuring programme came as Das Werk announced that it does not expect to reach its revenue target of Euros 160m for 2001 and is now aiming for Euros 130m, with Euros 90m coming from the postproduction sector and Euros 40m from feature film production and rights trading.
The first nine months of this year saw sales of Euros 83.1m , with the companies in the German-speaking territories contributing Euros 39.5m (47.5%), UK-based Glassworks and Spain's En Efecto Euros 25.8m (31.1%), and the Stateside companies Promark and CFX Euros 17.8m (21.4%) in total.
The EBITDA of Euros 8.6m, however, was significantly below last year's Euros 20.8m due to the weaker advertising market and general economic depression, with the Das Werk Group reporting a Euros 8.1m loss..
Das Werk's executive board stated that it did not see any significant improvement next year in the market situation of the German postproduction sector - which had fallen by 40% since the first quarter of 2001 -, declaring that "the goal is to reach the return projected at the IPO through intensified acquisition of new clients in advertising and the processing of large-scale feature films as well in the reduction of costs".