CARGOTEC CORPORATION, STOCK EXCHANGE RELEASE, 15 MAY 2017 AT 3:00 PM EEST
Cargotec targets EUR 50 million savings by reducing indirect purchasing spend, streamlining processes and planning Cargotec Business Services operations
Cargotec plans to reduce indirect purchasing spend, streamline common transactional business support processes and consolidate Finance, HR, Information Management and Indirect Procurement related support services under a planned new Cargotec Business Services operations. Planned actions target annual cost savings of EUR 50 million from 2020 and onwards.
Investments enable higher efficiency Cargotec has invested almost EUR 100 million in modern tools to have more efficient processing of transactions as well as better transparency and controls for operations. By streamlining processes and consolidating services and operations, efficiency and controls of functions can be improved to drive economies of scale and visibility.
Cost savings of EUR 50 million from 2020 onwards Cargotec is targeting EUR 50 million annual cost savings from 2020 onwards. Approximately 2/3 of the savings would come from reductions in global indirect purchasing spend like logistics, external services and facilities. The remaining part of the savings would come from applying new technologies, like automation, in support processes and from the planned new Cargotec Business Services operations that would start its activities in Sofia, Bulgaria.
The Cargotec Business Services operations is planned to start by serving businesses in Finland. According to initial estimates, the proposed measures and changes could result in the reduction need of approximately 60 employees in Finland. The employee cooperation negotiations about the planned measures will start immediately. The planned restructuring measures with possible personnel implications would start during this year and would be completed the first half of 2018, at the latest.
Further information will be communicated at the Cargotec Capital Markets Day 12 September 2017 in London.
For further information, please contact: Mikko Puolakka, Executive Vice President and CFO, tel. +358 20 777 4105 Hanna-Maria Heikkinen, Vice President, Investor Relations, tel. +358 20 777 4084
Cargotec (Nasdaq Helsinki: CGCBV) enables smarter cargo flow for a better everyday with its leading cargo handling solutions and services. Cargotec's business areas Kalmar, Hiab and MacGregor are pioneers in their fields. Through their unique position in ports, at sea and on roads, they optimise global cargo flows and create sustainable customer value. Cargotec's sales in 2016 totalled approximately EUR 3.5 billion and it employs over 11,000 people. www.cargotec.com
