STOCK EXCHANGE RELEASE 24 Apr 2009
Pöyry accelerates adaptation measures and enhances the Forest Industry business group's operating model
PÖYRY PLC Company Announcement 24 April 2009 at 9.00 a.m.
In response to the changed market situation, Pöyry will continue and accelerate adaptation measures across the Group. As part of these actions, the company will change the Forest Industry business group's organisation and operating model. Further capacity reductions will also be implemented.
Pöyry accelerates its group-wide efficiency improvement measures, which were launched to maintain the Group's profitability at as good a level as possible and to adapt the capacity to prevailing market conditions. The aim of these measures is to concentrate competences, improve the efficiency of operations and to cut costs. The cost saving target for fixed expenses is about EUR 30 million compared with the 2008 cost base. The cost saving target related to project activities will be defined in line with changes in the demand situation. The current target for capacity cuts and cost savings is estimated at about 12 per cent excluding one-off restructuring expenses.
Investment demand, especially for new pulp and paper projects in the Forest Industry business group, has remained weak in the first quarter. Chemical industry projects are also on hold. Investment decisions are being postponed or cancelled, and the implementation of approved projects remains uncertain. Investment activity is not expected to recover during 2009.
The operations of the Forest Industry business group will be improved by consolidating the core competences in the Vantaa office in Finland. Process, technology, project management, basic engineering and quality assurance will serve the forest industry and chemical process industries worldwide out of Vantaa. The core competence centre will be strengthened with the key account management function for the forest industry. In order to improve its cost-competitiveness the business group's detail engineering services will be gradually consolidated in the offices at Kouvola in Finland, Sao Paulo in Brazil, Lodz in Poland and Jinan in China. The objective of the new operating model is to offer clients effective integrated services, combining technology and process know-how with cost-efficient project implementation. By refocusing its operations, Pöyry will strengthen its position as the world's leading expert in pulp and paper technology, while improving its position as a provider of expert services to the chemical process industry.
The new operating model requires reorganisation and adaptation of capacity in the Forest Industry business group. The objective is to achieve a significant reduction in the business group's cost base. In order to implement the restructuring and adaptation of capacity, Pöyry will launch new statutory negotiations. The negotiations will cover all of the business group's units and employees in Finland. They concern temporary and permanent layoffs, and other adaptation measures. The adaptation measures will be determined in detail, taking changes in the demand situation into account, as the negotiations proceed. In addition to the previously announced adaptation measures in Brazil and Finland, measures will also be taken in Russia and Sweden.
The Forest Industry business group's operating profit in 2009 is estimated to be slightly negative including non-recurring costs. The non-recurring costs related to the capacity reduction in Finland will be defined in detail as negotiations proceed.
Pöyry is a global expert in consulting and engineering. We offer our clients in-depth industry expertise, innovative solutions and lifecycle engagement. Our knowledge extends across hydropower, oil and gas, power and heat, renewable energy, pulp and paper industry, chemical process industry, transportation, water and environment, and construction services. We have about 7500 experts at our service in 49 countries.
President and CEO
Deputy to President and CEO
Additional information by:
Heikki Malinen, President and CEO, Pöyry PLC
Tel. +358 10 33 21307
Esa Ikäheimonen, CFO, Pöyry PLC
Tel. +358 10 33 21586
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