HONKARAKENNE PLANS TO REORGANISE ITS PRODUCTION AND COMMENCE CO-OPERATION NEGOTIATIONS IN ACCORDANCE WITH CHAPTER 8 OF THE FINNISH ACT ON CO-OPERATION WITHIN UNDERTAKINGS

HONKARAKENNE OYJ                                  Inside information, 20 October 2020, 9:00 a.m.

HONKARAKENNE PLANS TO REORGANISE ITS PRODUCTION AND COMMENCE CO-OPERATION NEGOTIATIONS IN ACCORDANCE WITH CHAPTER 8 OF THE FINNISH ACT ON CO-OPERATION WITHIN UNDERTAKINGS

Honkarakenne Oyj intends to reorganise its production and will commence co-operation negotiations, in accordance with Chapter 8 of the Finnish Act on Co-operation within Undertakings, concerning the reduction in the use of personnel at the company’s factory in Karstula, Finland. The planned reorganisation is estimated to have a significant impact on the company’s personnel roster. The co-operation negotiations will cover the company’s production employees, excluding its production managers. The negotiations will also not apply to the company’s clerical and managerial employees.

The aim of the planned reorganisation is to increase the efficiency of the company’s production processes and improve its competitiveness. According to the company, the reorganisation process under consideration would help it increase the efficiency in which it will be able to manufacture products that meet both consumer demands and modern construction standards.

According to the company’s preliminary assessment, the planned measures would lead to a maximum of 25 employees being dismissed or shifted to a part-time position. In addition, 40 employees could be subjected to significant, redundancy-based provisional amendments.

If implemented, the plans may result in adjustments being recorded in the company’s income statement. Any potential adjustments will be specified after the end of the co-operation negotiations.

HONKARAKENNE OYJ

Marko Saarelainen

President & CEO

For further information, please contact:

Marko Saarelainen, President and CEO, tel. +358 (0)40 542 0254, or

Leena Aalto, Vice President - Finance, CFO, tel. +358 (0)40 769 4590,

DISTRIBUTION

Nasdaq Helsinki Ltd

Key media

Financial Supervisory Authority

Under its Honka® brand, Honkarakenne manufactures high-quality, healthy and ecological detached houses, holiday homes and public buildings using Finnish solid wood. The company has delivered 85,000 buildings to more than 50 countries. House packages are made in Finland, the companys’s own factory is located in Karstula, Finland. In 2019, the Honkarakenne Group had revenue (net sales) of MEUR 47.5, of which exports accounted for 34%.