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Konecranes is restructuring to lower its European cost base

Konecranes is restructuring to lower its European cost base

Within its Service business area, the company has targeted annual cost savings of approximately Euro 7m by these actions, while booking restructuring costs of approximately Euro 6m in Q4, 2011 of which asset write-downs are estimated at around Euro 2m. Restructuring is slated for completion by the end of Q1, 2012.

Within the Equipment business area, action has been initiated to restructure some of the operations and production in Austria and Germany. Assembly of air balancers in Thalgau, Austria, is planned to be combined with Konecranes’ overall crane component supply chain. In addition, Konecranes’ Industrial Cranes business unit is planning to consolidate its operations in Germany.

Estimated to affect approximately 20 employees in Germany, Konecranes hopes to achieve annual cost savings of approximately Euro 2m. The company expects to incur restructuring costs of approximately Euro 4m in Q4, 2011 of which asset write-downs will amount to around Euro 2m. Restructuring is expected to be implemented by the end of 2012.

Konecranes is due to start statutory negotiations regarding possible personnel reductions in Finland with a total of nine permanent personnel at most being affected within the Service business area and in Konecranes IT where Konecranes IT intends to rebuild its service delivery organisation, which may have an impact on the current IT-related business structures and responsibilities.

All the above-mentioned actions are estimated to affect approximately 125 employees in total within the Konecranes Group. With these planned actions, Konecranes aims to achieve annual cost savings of approximately Euro 9m. Restructuring costs of approximately Euro 10m are anticipated Q4, 2011 of which Euro 4m will be for asset write-downs.

A Konecranes statement said, “We forecast the 2011 operating profit excluding possible restructuring costs, to be approximately on the same level as in 2010. Sales are expected to be higher than in 2010. The Service business area operating profit in 2011 is expected to fall short of 2010 level while Equipment business area is forecast to increase from 2010.”