Konecranes cuts costs in Europe10 January 2012
Its actions on the plan began in the fourth quarter of 2011 and will compete by the end of the first quarter of 2012.
Konecranes plans to restructure its business area service in a number of European countries by closing down unprofitable units, merging operations, streamlining administration and reducing personnel.
Konecranes said it would reduce personnel numbers by 100 in operations attached to those in Austria, Belgium, Denmark, Finland, France, Germany, the Netherlands, Norway, Spain, Sweden, the UK and Ukraine.
In Austria and Germany, it will make changes to the business area equipment departments of operations and production.
It will combine assembly of air balancers in Thalgau, Austria, with Konecranes’ overall crane component supply chain.
Konecranes said it plans to consolidate its Industrial Cranes business unit in Germany.
The company said it plans to begin statutory negotiations on personnel reductions in Finland. As in other parts of Europe, it will remove 9 employees at most within business area service, and in Konecranes IT. It will restructure Konecranes IT service delivery organization which will impact the responsibilities of employees in it.
With the restructuring of its business area service departments, the company anticipates restructuring costs of approximately €6m will impact the firm’s books in the fourth quarter of 2011. Of this amount, it estimates asset write-downs will total approximately €2m.
Konecranes said, “All the above-mentioned actions are estimated to affect approximately 125 employees in total within the Konecranes Group. With these planned actions, Konecranes targets annual cost savings of approximately €9m in total. Konecranes expects to incur restructuring costs of approximately €10m in total due to these actions in the fourth quarter of 2011 of which asset write-downs are estimated to amount to approximately €4m in total.”
In its 2011 financial guidance, Konecranes emphasized that operating profits in 2011 are nonetheless expected to remain stable and that sales outlook is good: “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. Business area service operating profit in 2011 is expected to fall short of 2010 level. The 2011 operating profit of the business area equipment is forecasted to increase from 2010.”