VARNAMO, Sweden, Aug. 8, 2002 (PRIMEZONE) -- Finnveden's Board of Directors has approved a new strategic direction for the Group that involves a strengthended focus on automotive-related operations and a streamlining of the Group. Finnveden's core business will consist of the Fasteners, Powertrain Components and Sheet Metal Components business areas, all of which have good market positions and prospects for expanding as suppliers to the international automotive industry. The General Industry operations within the Fasteners business area will be conducted and developed as a separate operation under the Bufab name, while the operations in Other companies will be divested.
The Board of Directors has established that the Group is to be directed toward the following objectives:
-- Return on capital employed of 15 percent -- Debt/equity ratio of 1.0 -- Equity/assets ratio of 35 percent -- Cash flow from operations of 10 percent of sales
The strategy adopted may be summarized as follows:
-- Expansion and distribution of risk - continued internationalization and a broadened customer base -- Increased efficiency - continuing structural measures and improvements in productivity -- Increased competitiveness - technical development and strengthened expertise in materials and process know-how.
"After the strong expansion of Finnveden's business in recent years, the focus on the automotive industry is a natural step in the development of the Group," said Tommy Boork, Finnveden's President and Chief Executive Officer. "We will now concentrate on utilizing and strengthening the three business areas' common knowledge of applications and requirements in the automotive industry, as well as our cutting-edge expertise in materials and production technology."
With its new structure, Finnveden is better able to meet the increasing requirements of the automotive industry and create a common corporate culture. The structure also offers better opportunities to utilize the industrial and general knowledge, as well as the common competencies, available in the three business areas. The opportunities to take advantage of market synergies are also improved.
Bufab, which supplies fasteners to a number of industrial segments and which was formerly part of the Fasteners business area, will be operated and developed as an independent unit within the Group. The company constitutes an important asset for Finnveden, which can be realized in the future to permit further expansion of the Group's core business.
In order to streamline the Group's activities, the Board of Directors has decided to divest the operations in the Other companies sector. These companies are the Gjutal, Finnveden Engineering and Finnveden Precision subsidiaries, as well as the operations of the Fasteners unit in China.
Automotive operations with strong market positions The Group's three automotive-related business areas all have strong positions in their respective markets, while there are good opportunities for continuing expansion, both organically and, in the future, through acquisitions.
The basic objective for each business area is to achieve the following within a three-year period.
-- Fasteners shall be one of the three largest suppliers of fasteners to the automotive industry in Europe. -- Powertrain Components shall have a global focus and be one of the two largest manufacturers in the world of valve actuation components and connecting rods for heavy diesel engines. -- Sheet Metal Components shall be an established quality supplier of customized special sheet-metal products to the automotive industry in Europe.
"Finnveden's three business areas have good positions in their respective markets," Tommy Boork said. "The past year's structural measures and rationalization programs have also strengthened our competitiveness. Based on this platform, we are now focusing on developing Finnveden and establishing the company as an obvious partner for the international automotive industry."
Finnveden AB (publ)
Additional information will be provided at a meeting for financial analysts and the media at Operaterassen in Stockholm on August 8. at 2:00 p.m. Notice of intention to attend should be addressed to www.financialhearings.com or by e-mail to hearing@financialhearings.com
For additional information, please call: Tommy Boork, CEO of Finnveden.Mobile: +46 (0)705 11 21 13
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