KMT adapts cost base in KMT Precision Grinding business area

KMT adapts cost base in KMT Precision Grinding business area

KMT has initiated codetermination talks regarding a reduction of the workforce
by 80 persons, out of a total of 380 employees, in the KMT Precision Grinding
business area, which will mainly affect employees of the subsidiaries KMT
Lidköping and KMT UVA. The aim is for the codetermination talks to be concluded
during the first half of 2007.

The earnings trend for the KMT Precision Grinding business area was
unsatisfactory in 2006. Order bookings declined by 25 percent, while sales
remained largely unchanged. Operating profit declined by 76 percent. KMT earlier
announced that measures would be implemented to address the inadequate
profitability within the business area and to adapt the workforce to the
prevailing market situation.

The net effect on net profit for the year will be reported at a later date.

Lars Bergström, President and CEO, comments: "For a long time, the situation
within KMT Precision Grinding has been unsatisfactory, with both declining
profitability and reduced order bookings. We are now implementing these measures
to raise profitability within the business area and thereby secure KMT's future
competitiveness. At the same time, I want to emphasize that we increased the
workforce in the business area in both India and China in the past year and this
will continue in 2007 and 2008. We also have a distinct growth strategy within
KMT Precision Grinding.”

The KMT Precision Grinding business area is one of the leading global players in
machines, equipment and service of precision grinding for the bearing and
automotive industries. Five units at KMT work with precision grinding and
related activities. KMT Lidköping and KMT UVA are the largest operations.


For further information, please contact:
Lars Bergström, President and CEO, KMT Group AB
Tel: +46 (0)8-594 211 50 or e-mail: lars.bergstrom@kmtgroup.com