Stock exchange release
October 24, 2013 10:00 AM EEST
Metso targeting annual savings of around EUR 100 million through its global efficiency program
Metso Corporation's stock exchange release on October 24, 2013 at 10:00 a.m.
Metso has started a global efficiency program covering its continuing operations
following the demerger. The program is designed to improve Metso's cost
structure and operational efficiency and is expected to yield annual savings of
around EUR 100 million in operational costs by the end of 2015. The majority of
this total is expected to be achieved during 2014.
According to Metso's President and CEO Matti Kähkönen, efficiency improvements
are needed to secure Metso's competitiveness going forward.
"This program is part of our continuous efforts to improve Metso's productivity
and maintain the competitiveness of our businesses in today's volatile market
environment," says Kähkönen. "Procurement, for example, has been a focus area
for us for a while, and work in this area will continue after we have achieved
the savings currently being targeted. We began to see a slow-down in investment
activity in the mining sector back in summer 2012 and have been addressing this
issue in a number of ways, and the results of this work have been reflected in
the profitability of our Mining business from early 2013. Our Automation
business has also been reacting to changes in the pulp and paper industry, and
the results of the measures that have been taken can be seen in the business'
current performance. In addition, in preparation for the demerger, we are
reviewing our overall cost structure to ensure its viability in helping Metso
succeed even better in the future."
The actions taken under the program are expected to affect personnel and
locations worldwide and target cost savings of around EUR 60-80 million.
Measures that have already been announced, together with new ones, include:
Mining and Construction:
* Divestment of parts of industrial conveyor belt manufacturing and related
sales and services operations in Northern Europe (press release on September
3, 2013). A total of 340 employees to be transferred to the buyers of these
operations after closing.
* Restructuring of metal recycling operations in Düsseldorf, Germany.
Negotiations are under way and could affect about half of the location's
personnel of 310.
* Employee negotiations to study the future of the foundry operations and
machining workshop in Tampere, Finland (press release on October 21, 2013).
The final measures (temporary lay-offs, permanent reductions, transfers,
divestments, etc.) will be decided in the negotiations, which cover a total
of 240 employees.
* Restructuring of the EMEA (Europe, Middle East, Africa) organization.
* Transfers or closures of small local operations and streamlining of
* Streamlining and adapting the Process Automation Systems business and
Automation's European organization to the structural changes affecting the
pulp and paper industry. These measures could lead to a reduction of 100
jobs globally, of which 40 are in Finland (press release on October
Support functions and Head Office:
* Metso's new strategy calls for a more integrated Group and, as a result, all
support functions have been reorganized to match this strategic goal. The
target is to both improve the efficiency of the support functions while
simplifying processes and cutting costs. Results from these are expected to
be visible in 2014. As part of support function integration a number of
tasks from the segments will be incorporated into Metso Group. At the same
time, however, the Head Office will be resized to match needs of Metso
following the demerger.
* A program to improve the efficiency of Metso's global procurement activities
is under way, targeting annual savings of around EUR 30-50 million. Between
EUR 20-30 million is expected to be achieved in 2013.
Metso will monitor the progress of the efficiency program regularly.
Metso is a global supplier of technology and services to customers in the
process industries, including mining, construction, pulp and paper, power, and
oil and gas. Our 30,000 professionals based in over 50 countries contribute to
sustainability and deliver profitability to customers worldwide. Metso's shares
are listed on the NASDAQ OMX Helsinki Ltd.
Further information, please contact:
Harri Nikunen, CFO, Metso Corporation, tel +358 20 484 3010
VP, Investor Relations
NASDAQ OMX Helsinki Ltd