HONKARAKENNE INITIATES CHANGE NEGOTIATIONS

HONKARAKENNE OYJ         Stock Exchange Release        Inside information        28 April 2023 at 12:00

HONKARAKENNE INITIATES CHANGE NEGOTIATIONS

Low construction activity in both the domestic and export markets has a negative impact on the company's operations and the development of the order book. The company's goal has been to compensate for the gap left by Russian export net sales in Finland and, in particular, in other export areas of the company. According to the company's view, due to the current economic situation in Finland and Europe, sales will increase more slowly than previously expected. As a result, the company must adapt its cost structure and number of personnel to reflect the current market and demand situation.

Honkarakenne Oyj initiates change negotiations, which concern the company's entire personnel, with the exception of the members of the Executive Group and the director of human resources.

The company is considering changes on economic, productional and operational reorganization grounds that may lead to redundancies, temporary lay-offs, part-time employment, or amending the terms of employment.

The estimated total reduction need is a maximum of 27 person-years. The estimated schedule by which the measures will be carried out is by the end of 2023. The estimates will be specified during the negotiations within the limits mentioned above. The aim of the change negotiations is to achieve annual cost savings of at least EUR 1.7 million.

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

HONKARAKENNE OYJ

Marko Saarelainen

President and CEO

Further information:

Marko Saarelainen, President and CEO, tel. 4, or

Maarit Jylhä, CFO, tel. 9,

DISTRIBUTION

Nasdaq Helsinki Ltd

Key media

Financial Supervisory Authority

Honkarakenne Oyj manufactures high-quality, healthy and ecological log homes, holiday homes and public buildings under its Honka® brand from Finnish solid wood. The company has delivered 85,000 buildings to over 50 countries. House kits are manufactured in Finland, the company's own factory is located in Karstula. In 2022, Honkarakenne Group's net sales were EUR 73.7 million, of which exports accounted for 26%.