HONKARAKENNE REORGANISES ITS PRODUCTION

HONKARAKENNE OYJ                                  Inside information 29 December 2020 at 9:00 a.m.

HONKARAKENNE REORGANISES ITS PRODUCTION

Honkarakenne Oyj has concluded the cooperation negotiations, begun in October, regarding the reorganisation of its production. Honkarakenne's Executive Group has taken the decision to reorganise the company's production, its content and scope. As a result of the reorganisation, the company will dismiss 11 employees from production, and a further 15 employment contracts will be subject to redundancy-based provisional amendments. Most of the measures decided upon will be implemented before the end of 2020, but some of them can still be implemented in early 2021.

The reorganisation will make the company's production processes more efficient and improve its competitiveness in the market. Furthermore, the reorganisation will improve the company’s efficiency to make products that meet the demand and modern construction standards. The company estimates that the efficiency measures will take full effect in the second half of 2021.

As a result, the company will recognise the costs of the reorganisation, EUR 0.3 million, in its income statement for 2020. The reorganisation costs consist of the wages and other personnel costs related to the notice period for the redundancies. The company will define the reorganisation costs as adjustment items that do not affect its adjusted profit.

The company reiterates its earnings guidance issued in August: Honkarakenne’s view is that revenue (net sales) in 2020 will be on par with previous year. Adjusted profit before taxes is however weaker than previous year.

HONKARAKENNE OYJ

Marko Saarelainen

President and CEO

For more information:

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

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

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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%.