Deterioration in market conditions requires revision of sales and profit outlook

Due to the rapid decline in market conditions since mid-November, Haldex will not achieve its earlier communicated targets for sales and operating profit* for 2008.

Haldex’s interim report, published on October 24, included an assessment that sales and operating profit* would rise in 2008 compared with 2007.

Haldex’s assessment is now that sales for the current year will amount to SEK 8.3 billion, and that operating profit* will be significantly lower due to reduced sales, primarily during the latter part of the fourth quarter.

The demand trend weakened gradually during the year as the autumn’s international financial crisis was followed by an increasingly rapid global economic decline. The swiftly accelerating events of November and December are forcing Haldex, as well as many of Haldex’s client companies, to reduce or completely cease production for a number of weeks during the November/January period.

Haldex has responded to the rapidly bleaker market outlook by increasing the pace of the cost-cutting program presented in October. A part of the program includes the need to reduce the workforce. The figure stated in the interim report on October 24 was a reduction by 700 employees up to mid-2009. The extended cost cutting program has been revised to include a larger number of employees.

In January, Haldex announced that it was assessing various strategic possibilities for the Garphyttan Wire division, including a potential divestment of the operations. A process aimed at divesting the division started some time ago.


*excl restructuring cost and purchase price allocation