Bavaria – new owner outlines new strategy

Bavaria’s new owner CMP focuses on family boats and reduces the product range.

The new management of Bavaria Yachtbau wants to return to its former glory days as the world’s largest manufacturer of leisure boats in series production. “We will invest in the growth of the production capacity and the former strengths of Bavaria. This includes an excellent price-performance ratio, which Bavaria has stood for for many years”, Kai Brandes, managing partner of the new owner CMP, explained.

Berlin-based private equity CMP Capital Management became the new owner of Bavaria Yachtbau in September.

At Wednesday’s press conference in Giebelstadt, Brandes and the new management explained the planned strategic realignment of the shipyard. “Being a series production shipyard, Bavaria is a manufacturer of inexpensive boats, not luxury yachts”, said Brandes. The company’s focus is therefore on sailing and motorboats with hull lengths between 10 and 20 metres.

Planning perspective is for four-five years

The new shipyard owner CMP had bought Bavaria Yachtbau after the unexpected insolvency in April after a longer bidding process for “a double-digit million euro amount”. This sum was confirmed by interim CEO Tobias Brinkmann during the press conference on Wednesday. According to CMP’s managing director Kai Brandes, another two-digit million euro sum will be invested in the next few years. However, Brandes told floatmagazin.de that the total investment is not in the three-digit million euro range.

As a financial investor, CMP manages the funds of institutional investors such as insurance companies, foundations and pension funds. According to Mr Brandes, the purchase of Bavaria was financed from the capital of an investment fund launched in 2017. 25% of the fund’s capital sum of 260 million euros is invested by now. In addition to Bavaria, this includes three other companies. “We have no hurry with the resale. Our planning perspective is four to five years“, Brandes explained. “CMP’s task is to make companies competitive and then hand them over to a long-term owner.”

Product range to be reduced

As a first step of the reorientation, the product range will be greatly streamlined. The E series, to which the inland motoryachts Bavaria E40 and E34 belong, will be discontinued.

The largest sailing yacht, the Bavaria C65, which was presented as a world premiere at boot Düsseldorf 2018, was taken out of the portfolio a few weeks ago. It was taken over by the Croatian contract manufacturer. The recently introduced sailing yacht Bavaria C 50 has been taken out of series production. The yacht is currently being re-engineered and will go into series production again in December.

The model range will be consolidated going forward. “Now the models will be replaced step by step,” explained production manager and COO Erik Appel. Genuine new models are not expected until 2020. 2019 will be the year of consolidation – with the “launch of two or three smaller models”, according to COO Erik Appel.

The next half year will be needed to develop the new strategy, says Ralph Kudla, who is joining the management team on behalf of the new owner CMP. “Then we will see what the product range should look like. The emphasis is on boats with a length of 30 to 50 feet. The previous models were still selling very well,” says Kudla.

Internal problems caused production delays

The Bavaria management was open and self-critical at the press conference at the HQ in Giebelstadt today. Erik Appel, who joined the company a few months before the insolvency, explained the difficulties of the shipyard until this spring with management and planning problems: “One of the main reasons is that we developed boats that did not fit into the production and to the shipyard.”

There were also serious internal coordination problems: “The external developer spoke Italian, the internal engineering spoke English and the employees spoke German on the assembly line.” The result could be imagined as “filling gasoline into a diesel engine”.

This resulted in newly introduced models which caused problems in series production. This had cost the shipyard time and money, an insider explained. The new CEO Ralph Kudla confirms this indirectly: “We want to regain lost confidence, and meet quality and delivery deadlines.”

Internal competence strengthened

As a consequence of the problematic situation, the company wants to rely more on its internal expertise. “We also have fast in-house engineering in production”, says Erik Appel. Instead of commissioning external offices, the core workforce is to be expanded. “We are currently looking for up to 50 new employees.”

According to Mr Appel, the furniture construction of the shipyard’s own joinery is also one of Bavaria’s core competencies. Here the interiors for all boats of the group are manufactured, also for the catamarans manufactured in France.

The new managing director ruled out the possibility of contract manufacturing for other manufacturers: “We don’t manufacture for others, and we don’t want others to manufacture for us either,” Kai Brandes explained.

Comeback for the Nautitech brand

The multihull boats of the French subsidiary in Rochefort will be sold again under the brand name Nautitech with immediate effect. The ‘Bavaria Catamarans’ brand, introduced after the acquisition of the Multihull shipyard, will no longer be used. The multihull producer will remain part of the Bavaria Group. “Possible synergies in purchasing will be retained,” says Ralph Kudla.

100% of workforce taken over

All of the approximately 700 permanent jobs at the Giebelstadt and Rochefort sites will be retained. No redundancies are planned at present. The high proportion of temporary agency workers (up to 50%) will be permanently reduced.

Short-time work ends at the end of October and production will be restarted at the same time. According to an insider, almost all the declarations of intent to buy made in the past months of insolvency, have been successfully translated into orders. Managing Director Ralph Kudla: “In the next twelve months we want to produce 400 to 500 boats.”

Presence also at trade fairs

Bavaria Yachtbau will be present at the boot Düsseldorf 2019. The trade fair appearance for the 50th anniversary of the world’s largest boat show will be more humble than in 2018, when Bavaria occupied almost an entire exhibition hall. “We will be present with 15 or 16 boats, according to the current situatio”, explained managing director Ralph Kudla.

The restart of the once world’s largest series yacht manufacturer from the insolvency successfully concluded by Dr. Tobias Brinkmann begins with self-criticism and self-confidence. A good start.