LEMMINKÄINEN CORPORATION STOCK EXCHANGE RELEASE 28 APRIL 2014 AT 12.30 P.M
LEMMINKÄINEN TO LIGHTEN ITS OPERATING MODEL AND INITIATE NEGOTIATIONS TO REDUCE PERSONNEL
Lemminkäinen is proceeding with its Deliver 2014 programme to improve competitiveness and achieve its financial targets. The company estimates that improving profitability and competitiveness in this challenging market situation will require lighter organisational structures and less layers as well as the development of its working methods both on Group and business segment level. Through a lighter operating model, Lemminkäinen aims to save approximately EUR 30 million in fixed costs annually. For 2014, the savings target is EUR 10 million. According to its initial estimates, the personnel impact of the planned measures will be up to 500 full-time equivalents. About one-half of the estimated reduction need will be in Finland.
"During the last few years, we have carried out two large-scale efficiency improvement programmes according to plans. However, their impact has not been sufficient, and the programmes have not adequately addressed Lemminkäinen's organisational structures. Although our operating result is developing into the right direction, our January-March 2014 result is still negative, which is not acceptable," says Berndt Brunow, interim President & CEO of Lemminkäinen. "In addition to weak result development, we have been burdened by the November 2013 decision of approximately EUR 60 million in damages related to the asphalt cartel; we paid these in January 2014."
Brunow notes that the market situation is especially difficult in Finland: "The total volumes in building construction and the paving business have significantly decreased, and the big projects concentrate on the Helsinki metropolitan area. We have to adjust our operations to this market."
The personnel negotiations in Finland will start on 5 May 2014 and concern the whole Group and all its personnel groups. The Technical Building Services business segment is excluded from the negotiations, as similar changes were already made during winter 2013-2014. In Russia, Norway, Sweden, Denmark, Estonia, Lithuania and Latvia, the negotiations will concern all personnel and will be initiated in accordance with the local laws and regulations.
The company employs approximately 7,800 people, about 4,900 of them work in Finland.
Lemminkäinen will publish its Interim Report for January-March 2014 on Wednesday, 30 April 2014. The company has no need to change its profit guidance, which was announced in connection with Lemminkäinen's financial statements bulletin 2013: Lemminkäinen estimates that its 2014 net sales will be slightly lower than in 2013 but its operating profit will improve clearly on 2013. In this guidance, the costs related to the damages in the asphalt cartel case (EUR 65.6 million) and non-recurring items (EUR 20.1 million) are excluded from the 2013 operating profit.
Berndt Brunow, Chairman of the Board of Directors, interim President & CEO
Tel. +358 2071 54524 or +358 2071 54518
Tiina Mellas, Executive Vice President, HR
Tel.+358 2071 54524 or +358 2071 54518
NASDAQ OMX Helsinki
Together with our customers we create conditions that make living, working and travelling functional, safe and healthy. We operate in northern Europe and employ about 7,800 experts. In 2013, our net sales were about EUR 2.2 billion. Lemminkäinen Corporation's share is quoted on NASDAQ OMX Nordic Exchange Helsinki. www.lemminkainen.com