SKÅNES FAGERHULT, Sweden, Jan 18, 2017 /PRNewswire/ --
Concentric AB ("Concentric" or "the company") today announces the impact of the restructuring plans initiated in 2016 to respond to the challenging market conditions it continues to face within both North and South America, and latterly within Europe. The principal steps taken may be summarised as follows:
- a global reduction in force ("RIF") programme which has removed approximately 70 employees (7%) across the Concentric group, with the principal locations affected being our operations based in Chivilcoy, Argentina and Hof, Germany;
- asset write-downs and exit costs associated with the lower activity levels and rationalisation of warehousing facilities used in both the USA and Europe; and
- the curtailment of certain retirement benefits provided to both existing and former employees of our operations in Rockford, Illinois USA and Hof, Germany.
The total cash out flow associated with these actions is expected to be MSEK 26, of which MSEK 9 has already been paid by the end of 2016, with the remainder payable during 2017. However, after also including the non-cash items relating to asset write-downs and pension related curtailment gains noted above, the net impact of these restructuring plans upon the company's reported operating income for Q4 2016 is expected to be MSEK 4 income.
The actions taken are a direct response to the sustained weak outlook of our end-markets within Europe, North and South America. The RIF programme has been agreed with the respective unions and individuals concerned, and delivered through a mix of voluntary and compulsory redundancies. The total impact of these restructuring plans is expected to generate annual cost savings estimated at MSEK 30.
Concentric is an innovator in flow control and fluid power, supplying proprietary systems and components to the world's truck, construction, mining and agricultural equipment industries. The company has manufacturing facilities in the UK, USA, Germany, Sweden, India, China and Argentina.
For further information, please contact:
CFO, Investor Relations
Tel: +44 121 445 6545
Corporate Communications Manager
Tel: +46 722 269 080
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Concentric announces impact of restructuring plans to align its resources to the lower activity levels
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SOURCE Concentric AB