Progress-Werk Oberkirch AG / Key word(s): Change in Forecast
Ad hoc announcement
PWO: Impact of the corona pandemic
Oberkirch, March 20, 2020 - The outbreak of the corona pandemic has resulted in massive economic disruptions worldwide, a collapse of automotive production and a threat to global supply chains. All of the automotive manufacturers that we supply directly have temporarily suspended their production. As a consequence, we will scale back our production in Oberkirch significantly and adjust the capacity at our subsidiaries to the respective local market conditions.
In light of this situation, the Management Board of Progress-Werk Oberkirch AG ("Company") today decided to withdraw the forecast for the 2020 fiscal year published on February 25, 2020. Previously, the PWO Group had expected revenues of around EUR 450 million, EBIT before currency effects in the range of EUR 19 to 20 million and clearly positive free cash flow that would have resulted in a further improvement in the equity ratio and the dynamic leverage ratio compared to 2019.
Because the further course of the pandemic is not foreseeable, it is impossible to adequately assess and reliably quantify the effects on the PWO Group. For now, the Management Board refrains from providing a new forecast for the 2020 fiscal year. The Board is continuously and comprehensively monitoring the situation and will specify the impact of the corona pandemic on the business development and outlook as soon as possible, and will inform the capital market thereon in accordance with legal requirements.
In addition, the Management Board resolved on its proposal for the appropriation of retained earnings, according to which no dividend shall be distributed to shareholders for the 2019 fiscal year. In contrast to the Company's prior dividend policy, the unappropriated retained earnings for the 2019 fiscal year shall be carried forward. This step is intended to contribute to improving the liquidity position. The Management Board will also contribute by waiving 10 percent of its fixed remuneration for the 2020 fiscal year.
Based on the developments over the next weeks, the Management Board will review the dividend proposal and may submit an updated proposal to the Annual General Meeting.
As a result of the corona pandemic, the Company also decided to postpone the date for the ordinary Annual General Meeting previously planned for May 27, 2020. The health of our employees, shareholders and service providers involved takes precedence. The government of Baden-Württemberg has banned all events with more than 100 participants until (for now) June 15, 2020. Depending on the further spread of the disease and the measures imposed by the relevant authorities, the Company aims to hold the Annual General Meeting within the statutory 8-month period until the end of August 2020. The Company will inform on the new date for the Annual General Meeting as soon as possible.
Disclaimer: EBIT before currency effects, free cash flow and dynamic leverage ratio are non-IFRS performance measures. Information about their calculation can be found in the 2018 Annual Report from page 39, which is available at https://www.progress-werk.de/en/investors-press/news-publications/reports/annual-report-2018/.
Progress-Werk Oberkirch AG
|Company:||Progress-Werk Oberkirch AG|
|Phone:||+49 (0)7802 84-347|
|Fax:||+49 (0)7802 84-789|
|Listed:||Regulated Market in Frankfurt (Prime Standard), Stuttgart; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Tradegate Exchange|
|EQS News ID:||1003535|
|End of Announcement||DGAP News Service|