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SCHMOLZ + BICKENBACH Q2 2020 Results Impacted by COVID19

Steel News - Published on Thu, 13 Aug 2020

Image Source: SCHMOLZ BICKENBACH COVID19
The financial figures for the second quarter of 2020 were severely affected by the COVID-19 crisis. The drop in demand caused by production stoppages translated into reduced sales volumes and revenue. SCHMOLZ +BICKENBACH, a world leader in special long steel, reported a 38.1% decline in sales volume of 301 kilotons, compared with 486 kilotons in the second quarter of 2019. Revenue decreased by 41.8% from EUR 808 million to EUR 470 million. Adjusted EBITDA, the Group result and free cash flow were negative. Net debt was EUR 172.7 million or 21.7% lower than the end of 2019 thanks to the capital increase and strict liquidity management at EUR 624.9 million.

CEO Clemens Iller said "The second quarter of 2020 fell firmly in the grip of the COVID-19 crisis, resulting in a dramatic slump in sales and consolidated earnings. The biggest impact came from the extensive shutdowns of major European automobile manufacturers and their suppliers. From April, a negative trend materialized in the mechanical and plant engineering industry. We had no other option but to carry out extensive and prolonged shutdowns in our plants. Despite the slight increase in customer activity from May, demand is returning extremely slowly. A cautious, very limited recovery will not emerge until the fourth quarter of 2020. However, it is becoming clear that the negative adjusted EBITDA will not be effectively offset until the end of 2020 due to seasonal and market-related factors. Given the many uncertainties, particularly as a result of the COVID-19 crisis, it is still difficult to make reliable forecasts for fiscal year 2020. It is therefore impossible at the present time to produce a reliable estimate of adjusted EBITDA due to current uncertainty. To further strengthen our transformation organization, we have appointed restructuring expert Josef Schultheis as CRO on the Executive Board."

Key financial figures
SCHMOLZ + BICKENBACH GroupUnitH1'20H1'19YoYQ2'20Q2'19YoY
Sales volumekilotons7581,037-27%301486-38%
Revenuemillion EUR1,174.501,691.70-31%469.9807.6-42%
Average sales priceEUR/t1,549.501,631.30-5%1,561.101,661.70-6%
Adjusted EBITDAmillion EUR-52.082.8--45.840.5-
EBITDAmillion EUR-61.366.8--53.728-
 


Outlook for fiscal year 2020 - In 2020, SCHMOLZ+BICKENBACH will ramp up its continued focus on short-term liquidity protection measures in order to safely navigate the COVID-19 crisis and the resulting slump in demand in the automotive industry, mechanical and plant engineering and the oil and gas industries. As part of the structural improvements, it will concentrate on systematically executing and implementing the transformation plan. Temporary and structural personnel measures will increasingly take center stage.

Source :

Posted By : Yogender Pancholi on Thu, 13 Aug 2020
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