icon
icon
icon
icon
🏷️$300 Off
🏷️$300 Off

News /

Articles /

Lindab's Strategic Shift: Cost Reductions and Profitability Boost

Eli GrantThursday, Nov 28, 2024 3:29 am ET
4min read
Lindab, a leading European ventilation company, recently announced a series of structural measures and cost reductions to strengthen profitability and adjust fixed costs amidst weak demand. The company aims to reduce annual fixed costs by 120 MSEK on an annualised basis, with 105 MSEK linked to business area Ventilation Systems. By January 2025, Lindab expects an annual savings effect of 90 MSEK, with the full effect realised by July 2025. These measures entail one-time costs of 70 MSEK, recognised in the fourth quarter of 2024.

One of the key aspects of Lindab's strategic shift is the reduction of 180 full-time positions, primarily within the ventilation business. Approximately two-thirds of these employees are white-collar workers, with the remaining one-third being blue-collar. The personnel cut is expected to yield one-time costs of 45 MSEK, all recognised in Q4 2024. Upon realization, the annual savings effect is anticipated to reach 90 MSEK by July 2025.

In addition to the personnel reduction, Lindab is implementing structural measures involving the closure of 10 sites for warehousing, stores, and local production. These sites will be consolidated into neighbouring Lindab units, with customers served from these alternative locations. The measures entail one-time costs of 25 MSEK, all recognised in the fourth quarter of 2024.

Lindab's President and CEO, Ola Ringdahl, stated, "These measures are important to reduce Lindab's fixed costs and increase profitability at a time of weak demand." The company is committed to minimizing the impact on customers and maintaining its strong market position while reinvesting these savings into competitive products, acquisitions, and digitalization.



The closure of Lindab's building products production in the Czech Republic is another strategic move to streamline operations and reduce fixed costs. This decision, affecting around 30 employees, is part of a broader structural transformation focusing on Eastern Europe. Despite the initial impact, this measure is expected to have a positive effect on Lindab's margins in 2025, with an annual savings effect of 90 MSEK realised by July 2025.

ACHR, AMBA, APLT, ARWR, ASPI...Market Cap, Turnover Rate...


In conclusion, Lindab's recent announcements indicate a strategic shift towards cost reductions and profitability enhancement. The company's plans to reduce fixed costs, consolidate operations, and minimise customer impact set the stage for a more resilient and efficient Lindab in the face of weak demand. By reinvesting savings into competitive products, acquisitions, and digitalization, Lindab is positioning itself for long-term growth and success.
Comments

Add a public comment...
Post
User avatar and name identifying the post author
oakleystreetchi
11/28
Weak demand, but Lindab's adapting. Holding long-term.
0
Reply
User avatar and name identifying the post author
krogerCoffee
11/28
Streamlining ops, strong move. Ventilation game getting tighter.
0
Reply
User avatar and name identifying the post author
uncensored_84
11/28
Cutting costs, not people skills. Smart or rough cut?
0
Reply
User avatar and name identifying the post author
greyenlightenment
11/28
Lindab's playing chess while others play checkers. Cost cuts now, stronger margins later. Long-term play in a volatile market. 📈
0
Reply
User avatar and name identifying the post author
Ok-Afternoon-2113
11/28
Lindab's cost cuts might boost margins, bullish on $LINDAB
0
Reply
User avatar and name identifying the post author
Wonderful_Touch5652
11/28
$LINDAB reinvesting savings in digitalization, future-proofing.
0
Reply
User avatar and name identifying the post author
SeriousTsuki
11/28
90 MSEK savings by '25, Lindab's playing chess.
0
Reply
User avatar and name identifying the post author
SuperRedHulk1
11/28
Looks like Lindab's playing the long game. Streamlining ops, boosting margins. 🚀
0
Reply
User avatar and name identifying the post author
Just_Fox_5450
11/28
120 MSEK in cost cuts? That's some serious pruning. Wonder how it'll impact their next earnings call.
0
Reply
Disclaimer: The news articles available on this platform are generated in whole or in part by artificial intelligence and may not have been reviewed or fact checked by human editors. While we make reasonable efforts to ensure the quality and accuracy of the content, we make no representations or warranties, express or implied, as to the truthfulness, reliability, completeness, or timeliness of any information provided. It is your sole responsibility to independently verify any facts, statements, or claims prior to acting upon them. Ainvest Fintech Inc expressly disclaims all liability for any loss, damage, or harm arising from the use of or reliance on AI-generated content, including but not limited to direct, indirect, incidental, or consequential damages.
You Can Understand News Better with AI.
Whats the News impact on stock market?
Its impact is
fork
logo
AInvest
Aime Coplilot
Invest Smarter With AI Power.
Open App