Indesit Company SpA : Indesit Company plans to safeguard and rationalize its organization in Italy

PRESS RELEASE

Indesit Company plans to safeguard and rationalize its organization in Italy

70 million euros of investments,

an efficiency drive and streamlining in central management departments and rationalization of production

Fabriano, 4 June 2013 - A plan to safeguard and rationalize Indesit Company's organization in Italy was presented to the trade unions in Rome today. The Plan endorses Italy as the Company's strategic centre and provides for action to boost the efficiency of its governance structures and the consolidation of its Italian operations as the powerhouse of Group training and research & development. The Plan also provides for a rationalization of production and the central role of Italy in the development and production of models with high levels of innovation and technological content for the middle and top end of the market.

Such re-organization is the necessary response to the current competitive scenario in Europe, where the market is still below the volumes recorded in 2007 (Western Europe -10%, Italy -25%) and new producers from lower cost countries are continuing to expand thanks to their aggressive pricing and product policies, thus pushing down prices and margins and worsening what is by this stage a structural overcapacity of production.
In the last few years, and especially so in 2012 and 1st quarter 2013, the market situation has seriously affected Indesit's Italian manufacturing, with a resulting recourse to the government's redundancy fund (ordinary) for the factories (25% of days worked) and, since April 2013, the central offices as well (20% of days worked).
The strategic mission of the Group's three Italian industrial centres will be redesigned on the basis of a re- organization of production to be implemented over the period 2013-2016. The production facility in Fabriano (Ancona) will be the innovation driver for built-in ovens, while the Comunanza plant (Ascoli Piceno) will be the innovation driver for front-loading washing machines and the Caserta plant will concentrate on built-in fridges and gas hobs, mainly for thigh value added markets like Italy and other Western European countries. Fabriano, which becomes the Group's only oven manufacturing centre, will also take over the production of the oven models currently made in Poland, while production operations no longer sustainable in Italy (mainly those exported to Eastern European countries) will be moved to countries with more favourable costs. This will lead to saturation of Indesit's production capacity in Poland and new capacity in Turkey (also to exploit opportunities in rapidly expanding markets in the Middle East and North Africa).
Further investments of €70m are planned in Italy over the period 2014-2016: they will be channelled into product and process innovation, with a strong focus on containing water and energy consumption and on recyclability and digital technologies.
The Plan will also involve a streamlining of the central management departments to make processes faster, more effective and with costs geared to this new and more competitive phase.
Re-organization of the Group's Italian operations, which currently employ around 4,300 people, will affect over 1,400 people (25 executives, 150 central office staff and 1,250 blue and white collars in factories). In line with Indesit's traditionally transparent approach to industrial relations and socially responsible management of all re-organizations, talks have been opened with the trade unions to identify all possible and sustainable solutions to keep the employees involved in occupation through suitable use of welfare support.

For further information:

Federico Ziller, tel. [phone] cell. [phone], e-mail:[e-mail]

Indesit Company is one of Europe's leading manufacturers and distributors of large home appliances. It is the undisputed leader in markets such as Italy, the UK and Russia. Founded in 1975 and listed on the Milan stock exchange since 1987, the Company posted sales of €2.9 billion in 2012. Indesit Company has 8 production clusters (3 in Italy, 2 in Poland and 1 in the UK, Russia and Turkey) and 16,000 employees, of whom over 4,300 in Italy. The Group's main brands are Indesit, Hotpoint- Ariston and Scholtès.