Nobia to close two additional plants in Nordic region

As previously announced, a plant in Finland is being closed entailing that Nobia's three Finnish brands will be produced in a single plant by the summer. The cost of these structural measures amounts to approximately SEK 40 million, of which SEK 8 million was charged to earnings in the 2008 annual accounts and the remainder will be charged to earnings for the first quarter of 2009. The change is expected to generate savings of approximately SEK 15 million on a full-year basis from the fourth quarter of 2009.

 

Negotiations have been held with employee representatives to discuss personnel reductions ay Norema's production unit in Norway and the relocation of kitchen production in Denmark. The aim is primarily to reduce costs by enhancing the efficiency of the supply chain and by adjusting capacity to prevailing weak demand levels.

 

The negotiations have now been completed and for the plant in Jevnaker in Norway, resulted in a decision to close the plant and relocate production to Nobia's factory in Tidaholm, Sweden. The plant in Jevnaker will be divested after the summer of 2009, meaning that 120 people have been issued with notice of termination of employment. The change not only involves efficiency enhancements but also opportunities for Norema to strengthen its brand and offer Nordic eco-labelled kitchens in Norway. Norema's sales organisation will not be affected by the changes to the supply chain. The total cost of these structural measures in Norway amount to approximately SEK 75 million. These costs will be charged to Nobia in the first quarter of 2009. This transaction will not have an impact on cash flow. The changes are anticipated to lead to annual savings of approximately SEK 35 million once the measures have been fully implemented, which is expected to take place in the fourth quarter of 2009.

 

Furthermore, the decision to close Invita's plant in Bording and relocate production to the plant in Ølgod in Denmark has been finalised. The change-over will take place in the third quarter of 2009 and means that 200 people in Bording have been issued with notice of termination of employment. Some 30 workers and the same number of salaried employees will be offered the possibility of a transfer from Bording to Ølgod. Structural costs in Denmark are expected to amount to about SEK 135 million, which will be charged to the first quarter of 2009. Of this amount, SEK 75 million does not affect cash flow. Annual savings of SEK 80 million are expected to be attained once the measures have been implemented, which are scheduled for completion in the fourth quarter of 2009.

 

"We are endeavouring to produce more brands in the same plant at a high level of capacity utilisation. Larger business units will simplify efficiency-enhancements to the supply chain and weaker demand enables the rapid implementation of structural measures. We are adjusting our cost structure, while ensuring that we do not lose focus on making complete deliveries on time to our customers," said Preben Bager, President and CEO.

 

Nobia AB

23 March 2009

 

 

 

 

Nobia is the company behind several strong European kitchen brands, such as Magnet in the UK, Hygena in France, HTH in the Nordic countries and Poggenpohl internationally. The Group manufactures and sells complete kitchen solutions and generates value by utilising economies of scale. Nobia has approximately 8,500 employees and net sales of about SEK 16 billion. The Nobia share is listed on NASDAQ OMX in Stockholm under the short name NOBI. For more information, visit www.nobia.com.