Cavotec SA will initiate a restructuring programme in order to achieve
annual savings of approximately EUR 10 million by 2021. Through this
programme, Cavotec will free up resources to underpin its growth
strategy. The programme follows the implementation of the efficiency
project called A New Day, which is progressing well with two thirds of
the projects completed or almost completed.
In the fourth quarter of 2017, Cavotec initiated an internal
transformation project, called A New Day, to increase the company's
efficiency and capability, after years of stagnant growth and
unsatisfactory profitability. Furthermore, it was decided to streamline
and simplify decision-making by creating three business divisions with
clear profit and loss ownership, from product development through to
sales and delivery. This new organizational structure became effective 1
January 2018.
In addition to the above measures, management and the Board of Directors
of Cavotec have concluded that there is a need to further streamline the
company structure to build a foundation for profitable growth.
Today, Cavotec therefore announces the second phase in the
transformation with the goal of further improving profitability and cost
competitiveness in its markets. The programme will focus on reducing
SG&A and other inefficiencies caused by the Group's historically
fragmented organization.
The majority of the changes are expected to be implemented in 2018,
leading to significant run-rate savings already in 2019, and full annual
savings of about EUR 10 million to be achieved in 2021. The
restructuring costs are expected to amount to EUR 7 million; a majority
of which will be accounted for in 2018. The reduction in headcount is
estimated to be around 100 people spread across multiple locations.
"We see strong demand from our customers and we are starting to see
tangible results from A New Day. We have decreased our permanent
headcount by five per cent during the past year, leading to savings of
EUR 1 million. In the first six months of 2018, we saw the strongest
half-year order intake in Cavotec's history, and our research shows that
our addressable markets grow by more than five per cent per year. In
short, we have good reasons to believe we can grow profitably,"
commented Mikael Norin, CEO of Cavotec. He continued: "However, we need
to address our structural issues. We need to organize ourselves in an
efficient way and operate with scale to achieve sustainable
profitability and cost competitiveness. With these new changes, we can
take full advantage of our strong position."
ENDS
For further details please contact:
Johan Hähnel
Investor Relations Manager
Telephone: +46 70 605 63 34 - Email: investor@cavotec.com
The information in this release is subject to the disclosure
requirements of Cavotec SA under the Swedish Securities Market Act
and/or the Swedish Financial Instruments Trading Act. This information
was publicly communicated on 2 October 2018, 08:00 CEST.
Attachment
-- Press Release_Oct 2nd
https://prlibrary-eu.nasdaq.com/Resource/Download/7dc9e78e-94fc-45af-ab87-a3bbe811a563
(END) Dow Jones Newswires
October 02, 2018 02:00 ET (06:00 GMT)
© 2018 Dow Jones News
