Konecranes Oyj - Company Announcement

KONECRANES EXPANDS ACTIONS TO IMPROVE EFFICIENCY AND REDUCE COSTS

KONECRANES PLC  STOCK EXCHANGE RELEASE  July 24, 2013 at 08.55 a.m.

As preliminarily communicated in the stock exchange release on June 19, 2013,
Konecranes' profitability development has been unsatisfactory amid the current
challenging business environment. In addition, the economic environment remains
uncertain, and Konecranes will prepare accordingly. We are planning new
measures to reduce our annual cost base by EUR 30 million by the end of 2014 of
which roughly two-thirds relates to the Business Area Equipment and one-third
to the Business Area Service. Furthermore, Konecranes is planning new actions
to reach savings in variable costs. 

The considered key actions are:

- consolidation and transfer of production between sites
- optimization and productivity improvements in the manufacturing processes
- consolidation of and efficiency improvements in administration and support
functions 
- consolidation of sales units to cover larger areas
- improving productivity and restructuring of underperforming operations

The total cash-based restructuring costs are estimated at maximum EUR 20
million for the years 2013 to 2014. In addition, we expect to book non
cash-based restructuring costs not exceeding EUR 20 million. The considered
actions are estimated to impact maximum 600 people through redundancies,
temporary lay-offs and early retirement. Konecranes employs approximately
12,000 persons currently. 

“The world is changing rapidly and we cannot expect the world economy to
provide a lot help to our growth. We also expect the tough pricing environment
to continue. Our overall cost is too high for our volume outlook, and, we plan
to adjust our cost base and the size of our organization to market realities.
In addition to fixed cost reduction, we are preparing several initiatives to
rationalize our supply chain, to push down our variable costs. There is
potential for savings in our non-personnel related spending as well, but,
unfortunately, effects to personnel cannot be avoided,” says Pekka Lundmark,
President and CEO. 

“We will improve our cost efficiency, but we also continue our three major
initiatives for future competitiveness. First, we are introducing new
technologies that enable real-time visibility to the condition and performance
of the lifting devices and machine tools that we service. Second, we develop a
totally new product family mainly for emerging markets. Third, we rebuild our
fragmented IT systems to create real-time visibility to customer demand, field
service, supply chain, and financials. All of these three strategic initiatives
require new skills. Our competence development will therefore be of key
importance in all of them,” he continues. 

Further information will be provided during the course of the cost savings
program. 


KONECRANES PLC


Miikka Kinnunen
Director, Investor Relations


FURTHER INFORMATION
Analysts and Investors:
Miikka Kinnunen, Director, Investor Relations, Konecranes Plc,
tel. +358 20 427 2050

Press:
Mikael Wegmüller, Vice President, Marketing and Communications, Konecranes Plc,
tel. +358 20 427 2008 



DISTRIBUTION
NASDAQ OMX Helsinki
Media
www.konecranes.com



Konecranes is a world-leading group of Lifting Businesses™, serving a broad
range of customers, including manufacturing and process industries, shipyards,
ports and terminals. Konecranes provides productivity-enhancing lifting
solutions as well as services for lifting equipment and machine tools of all
makes. In 2012, Group sales totaled EUR 2,170 million. The Group has 12,100
employees at 626 locations in 48 countries. Konecranes is listed on the NASDAQ
OMX Helsinki (symbol: KCR1V).