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Hanza Holding AB: HANZA initiates action program due to covid-19

11:04 / 20 April 2020 Hanza Press release

HANZA Holding AB (publ) takes actions to face uncertain demand within some customer segments. The actions involve initiating trade union negotiations regarding moving the company's electronics production in Åtvidaberg and consolidate it with HANZA's electronics factory in Årjäng. Additionally, employees in Estonia are given notice due to technologies being relocated and merged.  

Demand from some customer segments has decreased as an effect of the coronavirus and HANZA has therefore decided to initiate an action program which will affect up to 90 people out of the Group's total of approximately 1,800 employees.

HANZA has two electronics factories in its manufacturing cluster in Sweden, a smaller unit in Åtvidaberg and a larger unit in Årjäng. As covid-19 has decreased and delayed some volumes and demand is expected to be lower going forward, the company today initiates union negotiations to relocate the company's operations in Åtvidaberg to Årjäng. The negotiations concern approx. 30 employees.

In HANZA's manufacturing cluster in Estonia the company has a total of four factories. Here too, demand from certain customer groups have been negatively affected by covid-19 and is expected to remain low going forward. HANZA therefore streamlines the technologies sheet metal mechanics, heavy mechanics and machining to specific production plants and as a consequence gives notice of redundancy affecting approximately 60 employees.

The action program may result in the sale of some redundant machinery. Stock provisions and adjustments of asset values may be needed. Expenses for redundancies and adjusted values in the balance sheet are estimated to amount to a maximum of SEK 25 million. The majority of these costs do not affect cash flow.

"This is an extremely unfortunate development that we have not been able to influence", says Erik Stenfors, CEO, HANZA. "The order volume from some segments is lower than previous forecasts and future developments are uncertain, which is why we must take action. We do, however, have a good financial position and good local management that will implement the necessary measures in the best possible way."

The information in this press release is such that HANZA must disclose it in accordance with the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 11.00 am (CET), April 20, 2020.

Important information This press release may contain certain forward-looking statements that reflect HANZA's current views of future events and financial and operational performance. Words such as "intends", "anticipates", "expects", "may", "plan ", "anticipate" or similar expressions regarding indications or predictions of future developments or trends, and are not based on historical facts, constitute forward-looking information. Forward-looking information is inherently associated with both known and unknown risks and uncertainties because it is dependent on future events and circumstances. Forward-looking statements are not guarantees regarding future results or developments and actual results may differ materially from those set forth in forward-looking information.

About HANZA:
HANZA is a global knowledge-based manufacturing company that modernizes and streamlines the manufacturing industry. Through production facilities with various manufacturing technologies grouped into local clusters as well as advisory services, we create shorter lead times, more environmentally friendly processes and increased profitability for our customers. This means we are contributing to a better and more sustainable future. The company was founded in 2008 and today has sales exceeding SEK 2 billion, with operations in Sweden, Germany, Finland, Estonia, Poland, the Czech Republic and China. Among our clients you find leading companies such as ABB, Epiroc, Getinge, Oerlikon, Saab and Siemens.

HANZA is listed on Nasdaq Stockholm's main list.

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