- Further efficiency gains in direct marketing through relocation of production from Sweden to Germany
- Customer service in Scandinavia to be enhanced by expanding local sales team
- Costs associated with changes expected to remain within parameters of planned budget
Freudenstadt, October 17 2006. As already announced on previous occasions, schlott gruppe has decided to implement a far-reaching realignment of its direct marketing division in Scandinavia. In future, production for the Scandinavian market will be performed more profitably thanks to the efficient deployment of personnel at the German plant in Schwandorf, while all manufacturing operations in Landskrona, Sweden, are to be discontinued. At the same time, however, the customer service department will remain in Sweden and is to be expanded to create a unit comprising seven members of staff.
Within this context, two of the three production lines will be transferred from Sweden to Germany, while the third line is to be sold. Operational downsizing planned as part of this corporate realignment will affect forty jobs at the Swedish plant. The costs associated with these measures will remain within the planned parameters of €2.6 million; the total charges relating to the operating losses and restructuring measures associated with direct marketing activities in Scandinavia are expected to be around €4.6 million, as already announced. These charges will be fully accounted for in the 2005/6 financial year which ended September 30, 2006, and have been included in the forecast of operational earnings before taxes (EBT) in the amount of €20 million as well as reported EBT of €22 million in FY 2005/6.
As announced, consolidated EBT for the current 2006/7 financial year will not be encumbered by Scandinavian direct marketing activities. For 2006/7 EBT is expected to rise from €22 million to more than €25 million.
