March 17, 2020 / 5:52 PM / 13 days ago

BRIEF-Elis Updates On Impact Of Covid-19 Sanitary Crisis

March 17 (Reuters) - ELIS SA:

* UPDATE CONCERNING IMPACT OF COVID-19 SANITARY CRISIS

* IN FRANCE AND IN SPAIN, ACTIVITY OF OUR HOSPITALITY CLIENTS HAS NEARLY STOPPED

* FURTHERMORE, GOVERNMENT ANNOUNCEMENTS MADE OVER LAST FEW DAYS IN THESE COUNTRIES THAT “NON-ESSENTIAL” RETAIL ACTIVITIES, SUCH AS RESTAURANTS AND CAFÉS, SHOULD CLOSE IMPLIES ADDITIONAL VOLUME DECREASE TO COME

* IN ALL OTHER EUROPEAN COUNTRIES, VOLUMES ARE ALSO SIGNIFICANTLY DOWN IN HOSPITALITY, NOTABLY IN UK AND IN GERMANY

* IN INDUSTRY, OUR ACTIVITY IS MORE RESILIENT FOR NOW, AND WE HAVE RECORDED A GOOD LEVEL OF ACTIVITY FROM OUR PHARMACEUTICAL AND FOOD-PROCESSING CLIENTS

* HOWEVER, WE OBSERVE AN INCREASING NUMBER OF PLANT SHUTDOWNS BY CLIENTS IN OTHER SUB-SECTORS

* IN HEALTHCARE, CLIENT ACTIVITY IS SOLID

* FINALLY, IN BRAZIL, ACTIVITY HAS NOT BEEN IMPACTED, AND SIGNIFICANT SHARE OF CLIENTS IN HEALTHCARE SECTOR SHOULD CONTRIBUTE TO 2020 BEING A NORMAL YEAR

* IT IS WORTH NOTING THAT NO ELIS PLANT HAS BEEN ORDERED TO SHUT DOWN AND GROUP CAN CONTINUE ITS ACTIVITY NORMALLY IN ALL ITS COUNTRIES

* IN THIS UNCERTAIN ENVIRONMENT, GROUP HAS VERY GOOD LIQUIDITY AND HAS NO MAJOR DEBT MATURITY BEFORE 2023. ELIS HAS TWO CONFIRMED AND FULLY UNDRAWN REVOLVING LINES OF CREDIT, FOR A TOTAL AMOUNT OF EUR 900 MILLION

* THIS CONTEXT OF AN UNPRECEDENTED SANITARY CRISIS WILL HAVE AN IMPACT ON H1 2020 FINANCIAL RESULTS AND 2020 FULL-YEAR OBJECTIVES THAT WERE PROVIDED ON MARCH 4 WILL BE REVIEWED AND COMMUNICATED TO MARKET AS SOON AS SITUATION OFFERS SUFFICIENT VISIBILITY

* ELIS HAS IMMEDIATELY IMPLEMENTED DRASTIC MEASURES IN ORDER TO PRESERVE ITS MARGINS AND CASH GENERATION :

* A TEMPORARY SHUTDOWN OF C. 30 PLANTS, INCLUDING 16 IN FRANCE AND 10 IN SPAIN, MOST OF TIME BY TRANSFERRING VOLUMES BETWEEN PLANTS OF SAME REGION, IN ORDER TO OPTIMIZE CAPACITY AND CONTROL COSTS;

* A WORKFORCE ADJUSTMENT IN ALL GROUP’S PLANTS THAT ARE IMPACTED BY A DECREASE IN OUR CLIENTS’ ACTIVITY;

* RECOURSE TO PARTIAL UNEMPLOYMENT FOR MORE THAN 80% OF HEAD OFFICE EMPLOYEES, IN FRANCE AND IN ALL OUR EUROPEAN COUNTRIES

* A REVIEW OF 2020 INDUSTRIAL CAPEX PLAN, WITH CANCELLATION OF ALL NON-URGENT PROJECTS, AND A SIGNIFICANT DECREASE IN LINEN CAPEX FOR YEAR

* WITH THESE MEASURES, WHILE IT IS TOO EARLY TO GIVE A NEW SET OF PRECISE OBJECTIVES FOR 2020, GROUP HAS STRONG CONVICTION THAT IT CAN LIMIT IMPACT ON EBITDA AND REDUCE INVESTMENTS

* FOR EACH EURO OF LOST REVENUE, IMPACT ON EBITDA WOULD BE ABOUT 50 CENTS, AND 20 CENTS WOULD BE SAVED ON INVESTMENTS Source text for Eikon: Further company coverage: (Gdansk Newsroom)

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