Bong has during the last year completely restructured the company and reduced the number of sites and personnel drastically in order to have a more lean and effective organization to be competitive in the tough envelope market. The rapid increase in paper prices from suppliers during the last year has successfully been passed on to the market to restore our margins. The turnaround is already seen in the figures and our goal to make profit on bottom line for 2016 is still valid
Bong has successfully implemented its ambitious restructuring plan. Fixed costs have been drastically reduced and our factories are now running at full capacity. Despite increased inventories during the restructuring program, Bong’s service was in some cases not at the expected level; It is now restored. The recent closures of many envelope grade paper mills have resulted in continuous price increases from our suppliers. Bong is successfully passing them on to the market. In the new packaging organisation, the gift bag is performing well and we see a promising growth.
The majority of Bong’s large restructuring program was launched during 2014 and is proceeding according to plan. The remaining part will be implemented before end of second quarter 2015 and we expect full effect of all initiatives in 2016. Despite high costs for restructuring, we achieved a positive cash flow in 2014 which secures the financing of the remaining restructuring costs and other extraordinary costs. With fewer and more efficient factories we expect further reductions in our working capital in the coming years. Our goal is to return to profit on bottom line latest 2016.
The rights issue last summer helped to substantially strengthen the Group’s financial position,” says Bong’s President and CEO Anders Davidsson. ”The first positive effects from launched cost-cutting measures were visible already in the fourth quarter, in which operating expenses were clearly lower than previous year. We are now continuing to roll out our new comprehensive restructuring programme at a rapid pace.