Thule Group has adjusted its 2020 plans to adapt to the developing coronavirus pandemic, as the group prepares for an expected tough Q2.
Thule Group had already withdrawn its dividend proposal in mid-March. Since then, Covid-19 countermeasures have got stricter and seen some retail shops closed as well as stamping out cross-border transit, resulting in a sharp decrease in demand and, to some extent, the “possibility to produce products”.
While the financial impact of the pandemic was minor in Q1, Thule expects a “significantly larger” effect starting Q2 – usually peak season for the company. With uncertainties ahead, Thule is implementing further significant actions to mitigate risk to cash flow and earnings. Some employees are being furloughed due to reduced activity and discretionary spending is being reduced. Likewise, capital expenditure is being reprioritised. Thule Group will temporarily close impacted factories as necessary or mandated by authorities.
Magnus Welander, CEO and President of Thule Group, said: “Thule Group has a strong financial base, with good liquidity and a long-term confirmed financing in place. We will continue to drive the business with a long-term sustainable strategy and mindset, but we must at the same time act in the extreme market situation.
“We are in close dialogues with our supplier and customers. It is a priority for Thule Group 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.”