Lemminkäinen - Company Announcement

Lemminkäinen to lighten its operating model and initiate negotiations to reduce personnel

LEMMINKÄINEN CORPORATION   STOCK EXCHANGE RELEASE  28 APRIL 2014 AT 12.30 P.M

LEMMINKÄINEN TO LIGHTEN ITS OPERATING MODEL AND INITIATE NEGOTIATIONS TO REDUCE
PERSONNEL 

Lemminkäinen is proceeding with its Deliver 2014 programme to improve
competitiveness and achieve its financial targets. The company estimates that
improving profitability and competitiveness in this challenging market
situation will require lighter organisational structures and less layers as
well as the development of its working methods both on Group and business
segment level. Through a lighter operating model, Lemminkäinen aims to save
approximately EUR 30 million in fixed costs annually. For 2014, the savings
target is EUR 10 million. According to its initial estimates, the personnel
impact of the planned measures will be up to 500 full-time equivalents. About
one-half of the estimated reduction need will be in Finland. "During the last few years, we have carried out two large-scale efficiency
improvement programmes according to plans. However, their impact has not been
sufficient, and the programmes have not adequately addressed Lemminkäinen's
organisational structures. Although our operating result is developing into the
right direction, our January-March 2014 result is still negative, which is not
acceptable," says Berndt Brunow, interim President & CEO of Lemminkäinen. "In
addition to weak result development, we have been burdened by the November 2013
decision of approximately EUR 60 million in damages related to the asphalt
cartel; we paid these in January 2014."

Brunow notes that the market situation is especially difficult in Finland: "The
total volumes in building construction and the paving business have
significantly decreased, and the big projects concentrate on the Helsinki
metropolitan area. We have to adjust our operations to this market."

The personnel negotiations in Finland will start on 5 May 2014 and concern the
whole Group and all its personnel groups. The Technical Building Services
business segment is excluded from the negotiations, as similar changes were
already made during winter 2013-2014. In Russia, Norway, Sweden, Denmark,
Estonia, Lithuania and Latvia, the negotiations will concern all personnel and
will be initiated in accordance with the local laws and regulations. 

The company employs approximately 7,800 people, about 4,900 of them work in
Finland. 

Lemminkäinen will publish its Interim Report for January-March 2014 on
Wednesday, 30 April 2014. The company has no need to change its profit
guidance, which was announced in connection with Lemminkäinen's financial
statements bulletin 2013: Lemminkäinen estimates that its 2014 net sales will
be slightly lower than in 2013 but its operating profit will improve clearly on
2013. In this guidance, the costs related to the damages in the asphalt cartel
case (EUR 65.6 million) and non-recurring items (EUR 20.1 million) are excluded
from the 2013 operating profit. 

LEMMINKÄINEN CORPORATION
Corporate Communications


ADDITIONAL INFORMATION:
Berndt Brunow, Chairman of the Board of Directors, interim President & CEO
Tel. +358 2071 54524 or +358 2071 54518
berndt.brunow@lemminkainen.com

Tiina Mellas, Executive Vice President, HR
Tel.+358 2071 54524  or +358 2071 54518
tiina.mellas@lemminkainen.com


DISTRIBUTION:
NASDAQ OMX Helsinki
Key media
www.lemminkainen.com

Together with our customers we create conditions that make living, working and
travelling functional, safe and healthy. We operate in northern Europe and
employ about 7,800 experts. In 2013, our net sales were about EUR 2.2 billion.
Lemminkäinen Corporation's share is quoted on NASDAQ OMX Nordic Exchange
Helsinki. www.lemminkainen.com