OUTOTEC OYJ STOCK EXCHANGE RELEASE OCTOBER 30, 2014 at 9.05 AM
Outotec initiates further measures targeting EUR 45 million cost structure improvement
To be prepared for possibly continuing market slowness and uncertainty, Outotec proceeds with measures to enhance profitability and launches a new program targeting approximately EUR 45 million savings in operating costs during 2015, compared to 2014 full year cost level. The savings are expected to contribute in full to 2015 profitability. Year 2014 operational gross fixed costs (including delivery, sales and marketing, R&D and administrative functions) are estimated to be approximately EUR 530 million. The estimated one-time costs from the program for 2014 and 2015 will be at maximum EUR 40 million. Up to 400 full time equivalent employees or contractors are expected to be reduced as part of the program.
The planned profitability enhancement measures include restructuring of Outotec's operations in sales, delivery and global functions, as well as closing of some offices. To streamline the way of operating and improve efficiency, Outotec plans to centralize engineering work into engineering hubs, consolidate project implementation capabilities into fewer locations, centralize purchasing into supply hubs, as well as establish service centers and resource pools for administrative functions. Outotec has been investing in building and deploying common business processes and information technology platforms since 2011 reaching a sufficient capability during 2014 to enable the company to take the next steps in integrating its operations globally.
Most of the effects of the considered restructuring on different personnel groups and locations will be determined on country basis by the end of 2014. The planned measures may include redundancies, early retirements and discontinuing fixed-term agreements in late 2014 and during the first half of 2015. In addition, temporary lay-offs may be used to achieve the targeted savings, depending on capacity utilization. At the end of September 2014, Outotec employed 4,948 persons.
Further information will be provided during the course of the profitability improvement program and the savings will be reported as part of quarterly results reporting.
For further information please contact:
Mikko Puolakka, CFO
Tel. +358 20 529 2002
Eila Paatela, Director - Corporate Communications
Tel. +358 20 529 2004, mobile +358 400 817198
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