Glaston launches efficiency programme to improve profitability

On 26 September, Glaston announced that it was initiating an efficiency programme to improve profitability. The objective of the programme is to improve the profitability of Glaston, and of its Pre-Processing business area in particular, as well as to adjust the company's operations to the market situation.
 
A maximum of 360 people - mainly in Italy, Finland and North America - are within the efficiency programme. Most of the efficiency programme will be implemented through temporary lay-offs. In addition, the plan also includes reducing contract labour and possible redundancies. The final level of the programme will be determined in negotiations with personnel representatives.
 
The plan is estimated to generate approximately EUR 5 million in cost savings on an annual basis. These will be realised in full from the beginning of 2010. Upon implementation the efficiency programme will incur an estimated EUR 6 million in non-recurring costs. In addition, the company will recognise EUR 6 million in non-recurring costs for agreements and for doubtful receivables made in previous years.
 
As the overall effect of the above-mentioned measures, Glaston will recognise non-recurring expenses of EUR 12 million in the final quarter of 2008. The cash-flow impact of these measures in 2008 and 2009 will total EUR 9 million, when implemented in full.
 
Owing to uncertainty in the operating environment and a slowdown in the market, Glaston now believes that it will achieve its financial targets in 2012 instead of 2010.

Glaston's financial targets are:
- Net sales annual growth over  8%
- Operating profit EBIT at least 10%
- Return on capital employed (ROCE) at least 20%