Organic sales for Trelleborg for the first quarter 2020 have been negatively impacted by the pandemic, particularly during the latter part of the quarter. The Group has continuously initiated measures to offset the development, entailing that the earnings trend and cash flow have been relatively stable despite the downturn in sales. The measures implemented address both costs and cash flow, and comprise focused cost-savings in the form of, for example, shortened working hours, lay-off notices and redundancies, temporary facility closures and reduced investments, and an intensified focus on working capital. All units have initiated local actions that address their unique situation.
Trelleborg has a strong financial base, with good liquidity and a long-term confirmed financing in place. The only financial covenant in the syndicated loan facilities is based on the net debt/equity ratio, excluding the impact of IFRS 16 and pension liabilities, which must not exceed 150 percent. The Group’s net debt/equity ratio, by this definition, amounted to 41 percent at the year-end.
“Uncertainty regarding the demand trend for the next quarter is considerable. It is currently impossible to estimate the level of income loss or other direct and indirect effects on the business. Trelleborg has implemented measures and continues to initiate new measures to manage the unfolding events for all of the operations in all areas of the Group,” says Peter Nilsson, President and CEO of Trelleborg.
“We are in close dialogs with our customers. It is a priority for Trelleborg to be a reliable and stable partner even in difficult situations. Similarly, the well-being and safety of our employees are in focus and comprehensive procedures and measures have been activated to prevent the spread of infection,” concludes Peter Nilsson.
Questions & answers
Refer to the attached Q&As document for frequently asked questions and answers regarding the Group's impact of the Coronavirus.
Analysts, investors and media are invited to participate in a telephone conference at 3:00 p.m. CET on March 31 for further information about the current situation. Please refer to the separate invitation for details.