Elektrobit Group Oyj - EB, ELEKTROBIT CORPORATION, LAUNCHES ADDITIONAL COST SAVING MEASURES RESULTING TO A MAXIMUM OF 5 MEUR NON-RECURRING RESTRUCTURING COSTS FOR THE SECOND HALF OF 2008
November 20, 2008
EB, ELEKTROBIT CORPORATION, LAUNCHES ADDITIONAL COST SAVING MEASURES RESULTING TO A MAXIMUM OF 5 MEUR NON-RECURRING RESTRUCTURING COSTS FOR THE SECOND HALF OF 2008
STOCK EXCHANGE RELEASE
Available for publication on November 20th 2008 at 9 am. (CET+1)
EB, ELEKTROBIT CORPORATION, LAUNCHES ADDITIONAL COST SAVING MEASURES RESULTING TO A MAXIMUM OF 5 MEUR NON-RECURRING RESTRUCTURING COSTS FOR THE SECOND HALF OF 2008
EB launches additional measures targeting to approximately EUR 10 million annual cost savings in addition to the EUR 30 million cost savings announced in October 2008. With these additional measures EB will further adjust its cost structure and improve profitability in the current rapidly changing and turbulent business environment. The target of the above mentioned cost saving measures is to achieve approximately EUR 40 million annual cost savings in comparison to the cost level of the first half of 2008.
The above mentioned additional measures are estimated to result to a maximum EUR 5 million non-recurring restructuring costs and write-offs for the second half of 2008. Due to the non-recurring costs the operating loss for the second half of 2008 will be worse than the operating loss for the first half of 2008. Without the above mentioned non-recurring items EB expects, in accordance with its guidance given on October 21st 2008, the operating loss from business operations for the second half of 2008 (without the non-recurring items) to be approximately at the level of the operating loss from the first half of 2008 (EUR -15.1 million without the non-recurring costs). Respectively EB expects, according to the guidance given on October 21st, 2008, the net sales for the second half of 2008 to be lower than in the first half of 2008 (EUR 88.3 million).
In order to achieve the additional EUR 10 million savings, EB plans to make a reduction of approximately 170 employees globally by the end of the first half of 2009. EB will start these reductions by initiating personnel negotiations in wireless business in Finland with the goal of reducing 80 people due to financial and production related reasons. Additionally EB will continue pruning its project-portfolio, reducing high-cost subcontracting and further sharpening its business portfolio.
Earlier announced cost saving actions of EUR 30 million are being implemented and will gain their full impact from the beginning of 2009. The key measures targeting to achieve EUR 30 million euro cost savings include adjustment of R&D investments (including the change of EB's business model in Mobile WiMAX), streamlining of the support functions, improvements of resource utilization and reduction of subcontracting.
November 20, 2008
Elektrobit Corporation
Board of Directors
Further information:
Pertti Korhonen
CEO
Tel. +358 40 344 5466
Outi Torniainen
Director, Communications and Marketing
Tel. +358 40 512 1375
DISTRIBUTION:
NASDAQ OMX Helsinki Ltd.
Main media
EB, Elektrobit Corporation
EB develops advanced technology and transforms it into enriching end user experiences. EB specializes in demanding embedded software and hardware solutions for the automotive industry and wireless technologies. The company's net sales for the year 2007 totaled EUR 144.3 million. Elektrobit Corporation is listed on NASDAQ OMX Helsinki Ltd.
www.elektrobit.com
