European Restructuring Update
26 January 2009
At the time of its interim results in August 2008, Fiberweb announced proposals to reduce its twelve European spunbond lines by about a third as new and more competitive capacity is commissioned at Fiberweb’s site at Trezzano Rosa, Italy. This new Italian line is progressing as scheduled and is expected to come on stream during the first half of 2009. As a result, the company therefore announces the following restructuring programme, subject to consultation with employee representatives.
At Norrköping, Sweden, Line 1 will cease production at the end of May 2009. At Peine, Germany and Biesheim, France, spunbond production volumes will be reduced by around 50% by the end of the first half of 2009.
As previously announced, overall, Fiberweb’s spunbond capacity in Europe will remain broadly constant and average capacity per line will increase by around 50% compared to first half 2008, with a significant improvement in competitiveness.
In addition, Fiberweb today announces the closure of its loss-making airlaid plant at Peregallo di Lesmo, Italy. Alongside laminate production, an airlaid production line at the site was installed in 2006. However, over the past year it has suffered from significantly higher operating costs than anticipated, as well as technical problems that have prevented it from reaching planned levels of output. As a result, this plant is unviable and will be closed with immediate effect. Fiberweb’s primary airlaid business in China is unaffected by this decision.
It is anticipated that around 150 employees will be affected by these closures, which are essential to the continuing improvement of Fiberweb’s overall competitive position.
As a result of these initiatives, Fiberweb now expects to incur cash restructuring costs in 2009 of £12 million with anticipated savings from 2010 onwards of at least £7.5 million p.a. from 2010. Non-cash restructuring charges associated with these closures are estimated to be £24 million and have been taken during the second-half of 2008.
Fiberweb’s 2008 full-year results will be announced on 25 February 2009 and are expected to be in-line with management expectations. In line with these expectations, Fiberweb was compliant with its banking covenants as at 31 December 2008.
Fiberweb 020 8439 8594
Daniel Dayan Chief Executive
Dan Abrams Chief Financial Officer
RBS Hoare Govett Limited 020 7678 8000
Neil Collingridge
John Fishley
Weber Shandwick Financial 020 7067 0700
Terry Garrett
Nick Dibden
James White