STOCKHOLM, March 20, 2020 /PRNewswire/ -- Given the rapid
changes in the market caused by the effects of the coronavirus
outbreak, Veoneer Inc. (NYSE: VNE and SSE: VNE SDB), updates
indications of its first quarter 2020, current business situation
and short term response actions.
- Health and operational crisis management teams have been
activated since February, and are working continuously, taking the
appropriate actions. In this time of crisis and uncertainty health
and safety is our first priority.
- First quarter sales are expected to see limited negative impact
from the coronavirus outbreak, mainly from the second half of
March, and are expected to be in the range of $350 million to $370
million, including sales from VNBS Asia for January.
Underlying sales for January and February were stronger than
anticipated, despite negative effects from the initial coronavirus
outbreak in China.
- Cash balance at the end of February of around $970 million, up from $894
million at year-end 2019, following the previously-announced
completion of the sale of our Asian brake control business (VNBS
Asia) on February 3.
- New order intake through the end of February was around
$160 million average annual sales,
however due to the current situation we expect order intake
activity in March to be limited.
- OEM production downtime or lower production rates are expected
in Europe and North America for the next 2 to 4 weeks
commencing in mid-March. We are adjusting our production according
to customer demand and local government initiatives, and anticipate
that our production facilities in Europe and North
America will operate in the range of 20 to 30% of capacity
during this 2-4 week period, including potential temporary facility
closures. It is highly uncertain how long the production reductions
will last.
- Our Asian business is recovering and our manufacturing facility
and engineering center in China
are operating at increasingly high levels and general local
business activity is increasing.
- As an extension to the "Market Adjustment Initiatives" launched
during Q1'19, Veoneer intends to take further actions to preserve
cash and focus on its core product portfolio and customer launches,
including:
-
- Reductions in professional services,
- Adjusting to market conditions in direct labor and production
overheads,
- Reductions in SG&A,
- Focus on all actions that are not driving up-front cost,
- Cuts in discretionary spending,
- Capital expenditure reductions.
- Through these actions we expect to improve the current run rate
of cash flow before financing activities during the remainder of
the year, achieved improvements could potentially not suffice to
offset the effects of the coronavirus outbreak.
- The strategic reviews of the priorities for Zenuity, our
software joint venture with Volvo Cars and our North American Brake
control business (VBS), have been accelerated and we expect to
reach a conclusion shortly.
- The major customer launches in year 2020 are mainly progressing
according to plan, however volumes and timing are currently
difficult to estimate due to the unpredictability caused by the
coronavirus outbreak. Veoneer sales growth is increasingly driven
by new vehicle launches and increasing content per vehicle, rather
than light vehicle production levels.
- It is too early to detail the negative effects from the
coronavirus outbreak to our full year 2020 outlook. We intend to
provide further updates to the full year expectations at the time
of our Q1'20 earnings release on April
24.
"This is in many ways an unprecedented situation, signified by
very rapid changes and everyone's health and safety is our first
priority", said Jan Carlson,
Chairman, President and CEO. "We are working in rapid response
mode, to meet customer demand while running effective operations,
reducing costs and preserving our core RD&E to build for the
future. With the support of our associates, customers, suppliers
and shareholders, Veoneer is determined to come through this crisis
as an even stronger company", added Carlson.
This report is information that Veoneer, Inc. is obliged to make
public pursuant to the EU Market Abuse Regulation. The information
was submitted for publication, through the agency of the EVP
Communications and IR set out above, at 13.00 CET on March 20, 2020. Inquiries - Company Corporate
website www.veoneer.com.
For more information please contact:
Thomas Jönsson
EVP Communications & IR
tel +46 (0)8-527-762-27
Ray Pekar
Investor
Relations
tel +1(248)794-4537
Veoneer designs and manufactures
products and solutions for active safety, autonomous driving,
occupant protection and brake control. Our purpose is to create
trust in mobility. Founded in 2018, Veoneer builds on a heritage of
close to 70 years of automotive safety development. Headquartered
in Stockholm, Sweden, Veoneer has
8,900 employees in 13 countries. In 2019, sales amounted to
$1.9 billion. Veoneer is listed on
the New York Stock Exchange and on the Nasdaq Stockholm.
Safe Harbor Statement: This
release contains statements that are not historical facts but
rather forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements include those that address activities, events or
developments that Veoneer, Inc. or its management believes or
anticipates may occur in the future. All forward-looking statements
are based upon our current expectations, various assumptions and/or
data available from third parties. Our expectations and assumptions
are expressed in good faith and we believe there is a reasonable
basis for them. However, there can be no assurance that such
forward-looking statements will materialize or prove to be correct
as forward-looking statements are inherently subject to known and
unknown risks, uncertainties and other factors which may cause
actual future results, performance or achievements to differ
materially from the future results, performance or achievements
expressed in or implied by such forward-looking statements.
Numerous risks, uncertainties and other factors may cause actual
results to differ materially from those set out in the
forward-looking statements, including general economic conditions
and fluctuations in the global automotive market, the impacts of
the coronavirus (COVID-19) on the Company's financial condition and
business operations; the cyclical nature of automotive sales and
production; changes in general industry and market conditions or
regional growth or decline; changes in customer and consumer
preferences for end products; market acceptance of our new
products; dependence on and relationships with customers and
suppliers; unfavorable fluctuations in currencies or interest rates
among the various jurisdictions in which we operate; work stoppages
or other labor issues; legislative or regulatory changes impacting
or limiting our business; political conditions; and other risks and
uncertainties contained in the Company's quarterly reports and
Annual Report on Form 10-K. For any forward-looking statements
contained in this or any other document, we claim the protection of
the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and we assume no
obligation to update publicly or revise any forward-looking
statements in light of new information or future events, except as
required by law.
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