Huhtamaki announces further restructuring plans
Huhtamaki announces the second phase of its two-year restructuring program, which was originally launched in December 2004. The program targets targets at optimizing the company's global manufacturing footprint in order to achieve a major improvement in cost efficiency and to build a foundation for future growth.
Huhtamaki will now carry out a series of new measures resulting in estimated annual cost savings of EUR 30 million and a reduction of close to 700 employees in the concerned units. The majority of the corresponding restructuring charges, currently estimated at EUR 80 million will be recorded during 2005, of which EUR 50 million in the second quarter of 2005. Additionally, Huhtamaki will book a goodwill write-down of EUR 33 million in the second quarter, mostly related to the operations in North America.
The second phase of restructuring includes:
- Closure of rigid packaging operations in Göttingen, Germany by mid-2006 as separately announced in June 2005. The production of plastic and paperboard packaging will be partly relocated to Siemianowice, Poland and partly to Nules, Spain. Göttingen's remaining release paper operations will be transferred to Forchheim, Germany, by mid-2007.
- Closure of a rigid packaging unit in Skelmersdale, UK by the end of 2005. Consultations with employee representatives will be initiated immediately.
- The program provides for the further closure and relocation of up to four manufacturing sites by the end of 2007.
According to Huhtamaki's CEO Heikki Takanen, the company's restructuring is progressing on track. "The measures announced today will by and large complete our restructuring program with execution following local timetables," Takanen says. "Taken as a whole, the restructuring program will result in estimated annual cost savings of EUR 40 million, reaching full run-rate by the end of 2007. Close to 1,000 employees will be directly affected, but the net impact will be less due to the capacity expansion in other locations."
"Parallel to restructuring, we have launched a group wide continuous improvement program and a follow-up tool to monitor and analyze the progress of the transformation projects," Takanen adds.
Huhtamaki Group is a leading manufacturer of consumer and specialty packaging with 70 manufacturing and sales units in 36 countries worldwide. In 2004 the net sales of the group amounted to EUR 2.1 billion and the number of employees exceeded 15,500. The parent company, Huhtamäki Oyj, has its Head Office in Espoo, Finland. Its shares are listed on the Helsinki Stock Exchange.
For further information, please contact:
Taina Erkkilä, Group Vice President, Communications
Mobile: +358-50-577 4059
Kia Aejmelaeus, Manager, Investor Relations
Mobile: +358-40-765 4616
Invitation to analyst and media conference on July 4, 2005
Huhtamaki organizes an analyst and media conference today at 2:00 p.m. at the company headquarters in Länsituulentie 7, Espoo.
In addition, an international telephone conference for investors and analysts will be held at 4:00 p.m. The call-in number is +44 (0) 20 7162 0080 and the reference is Huhtamaki.
The materials will be available at the company website www.huhtamaki.com.