Cloetta considers closing factories in Gävle, Aura and Alingsås, as well as streamlining the warehouse network

Cloetta considers closing factories in Gävle, Aura and Alingsås, as well as
streamlining the warehouse network

The merger between Cloetta and LEAF, combined with an overcapacity in the
Group’s production structure, makes it possible to further improve the Groups
efficiency. Also, Cloetta is active on a highly competitive and mature market,
and must therefore constantly reduce costs. Cloetta has evaluated how the Group
can achieve savings by closing factories and transfer production to other
factories in Cloetta. The evaluation results in a proposal that would incur a
total non-recurring cost of SEK 320 million to SEK 370 million and generate
annual savings of approximately SEK 100 million on EBITDA-level.

It is Cloettas intention to close the factories in Aura, Finland, Gävle and
Alingsås, Sweden and move the majority of the production to Levice, Slovakia and
Ljungsbro, Sweden. The intention is to close the factories in Aura and Alingsås
early 2013 and in Gävle early 2014. In addition, the warehouses in Malmö, Sweden
and Slagelse, Denmark are planned to be outsourced and consolidated into a new
warehouse in southern Sweden.

“The merger between Cloetta and LEAF allows an even more cost efficient
production and distribution structure. In addition, we have overcapacity in our
production which makes it necessary to reduce the number of factories”, says
Bengt Baron, President and CEO of Cloetta.

The intention is to move the production of Ahlgrens bilar from Gävle to
Ljungsbro, and the remaining products from Gävle to Levice, Slovakia. The plan
is also to transfer production from Aura and Alingsås to other factories in
Europe. In total, approximately 345 employees may be made redundant by the
proposed measures, whereof approximately 150 in Gävle, maximum 140 in Aura, 30
in Alingsås, and 25 employees in the warehouse operation.

“It is always sad to propose the closure of factories. However, fierce
competition require us to continue producing products with high quality at a low
cost”, says Bengt Baron.

The proposed closure of the factories and move of production would incur a total
cost including potential impairments of SEK 320 million to SEK 370 million, of
which a substantial part would be charged to operating profit in 2012 and
recognized as items affecting comparability. The proposed production relocations
are expected to generate annual cost savings of approximately SEK 100 million on
EBITDA-level with a gradual effect in 2013 and with full effect from sometime
during the second half of 2014.

Against this background, Cloetta will initiate consultations with the local
unions and the European Works Council.

Please refer inquiries to:
Jacob Broberg, Senior Vice President Corporate Communications and Investor
Relations, +46 70 190 00 33.

The information contained in this press release is such that Cloetta is required
to disclose pursuant to the Swedish Financial Instruments Trading Act and/or the
Swedish Securities Markets Act. The information was submitted for publication on
March 8, 2012 at 08.30 a.m. CET.

About Cloetta
Cloetta, founded in 1862, is a leading confectionary company in the Nordic
region, the Netherlands, and Italy. In total, Cloetta products are sold in more
than 50 countries worldwide. Cloetta owns some of the strongest brands on the
market, e.g. Läkerol, Cloetta, Jenkki, Kexchoklad, Malaco, Sportlife, Saila, Red
Band and Sperlari. Cloetta has 12 production units in six countries. Cloetta’s
B-shares are traded on NASDAQ OMX Stockholm.

More information about Cloetta is available on www.cloetta.com