Huhtamaki restructures plastics operations, mainly in Europe Rigid

Huhtamaki will book non-cash goodwill and tangible asset impairment losses of EUR 103 million in the fourth quarter of 2007, mostly related to the Rigid plastics production in Europe.

The goodwill impairment charges of EUR 46 million and tangible asset impairment charges of EUR 57 million result from the adjustment of book values to lower future cash flow expectations - mainly in Europe Rigid plastics operations. The geographical distribution of the charges is following: Europe EUR 77 million, Americas EUR 16 million and Asia-Oceania-Africa EUR 10 million.

The tangible asset impairment charges will lead to a reduction of EUR 6 million in annual depreciations.

Huhtamaki concluded a sale agreement of the production facility in Portadown, UK on December 20, 2007. A lease agreement was made with the buyer and production continues in Portadown. Earlier announced consideration of different strategic options regarding the UK Consumer Goods business continues.

Europe Rigid takes performance improvement measures which will lead to reduction of some 100 persons. The non-recurring charge for these measures, recorded in the fourth quarter of 2007, will be covered by the gain realized in the sale of the Portadown plant. The measures will lead to a cost base improvement by EUR 2 million on an annual basis.

Regarding the outlook for the year 2007, the operational result is expected to be around the level of 2006 (EUR 138.1 million). The impairment losses of EUR 103 million will have a negative impact on the reported earnings.