Efore continues efficiency measures with a target to EUR 7 million annual savings

Espoo, Finland, 2016-10-19 07:30 CEST (GLOBE NEWSWIRE) -- EFORE PLC  Stock Exchange Release    October 19, 2016 at 8.30 a.m.


Efore Plc continues its group-wide efficiency improvement measures, in order to improve the Group's profitability. As a part of the measures the Company has closed the master supply and asset agreements with Wuxi Hodgen Technology related to the outsourcing of manufacturing and manufacturing support functions at the Suzhou plant in China, as disclosed on October 10. 2016. Efore will remain responsible for the quality of the delivered products as well as for the NPI (New Product Introduction) process. This outsourcing arrangement will give the Company better opportunities to focus on power technology, R&D and customer collaboration. Furthermore, the new financing agreement closed this autumn enables execution of planned actions.

The outsourcing of the production in China creates a possibility for Efore Group to renew its operating model and to initiate a substantial cost savings program. The target is to simplify Efore’s operating model. The new planned operating model requires structural changes that enable permanent reductions in the level of the fixed costs in Efore. Further planned streamlining actions will also be implemented in order to improve profitability.

Efore’s intention is to initiate cost savings program immediately. The implementation period for the program is estimated to continue at the end of 2016. Substantial one-time costs related to the actions from the planned cost savings program and the outsourcing of the production are estimated to be approximately EUR 5-6 million which have an effect on the capital structure of the Company. The Company is planning measures to strengthen its equity at the end of 2016.

With the planned cost savings program, the structural changes and the outsourcing of the manufacturing in China Efore is targeting up to EUR 7 million annual savings in fixed costs.  

EFORE PLC

Jorma Wiitakorpi
President and CEO

For further information please contact Mr. Jorma Wiitakorpi, President and CEO, on October 19, 2016 at 10.30 – 11.30 a.m. tel. +358 40 175 8510

DISTRIBUTION

Nasdaq Helsinki Oy
Principal media

Efore Group is an international company which develops and produces demanding power products. Efore's head office is based in Finland and its R&D functions are located in Finland, Sweden, Italy and China. Sales and marketing operations are located in Europe, United States and China. In the fiscal year ending in December 2015, consolidated net sales totalled EUR 89,9 million and the Group's personnel averaged 887. The company's share is quoted on the Nasdaq Helsinki Ltd.www.efore.com