Business update with regards to COVID-19
March 23, 2020
(Oslo, Norway, 23 March 2020) StrongPoint ASA (StrongPoint, OSE: STRONG) today provides a business update for the COVID-19 implications on the company’s operations. StrongPoint experiences a strong and accelerated interest for its e-commerce solutions, but sees a negative effect on non-grocery offerings due to the governmental restrictions on travelling and social distancing. StrongPoint has a solid financial position and reiterates the long-term outlook.
“In our work to manage the COVID-19 situation we keep the well-being of our employees, customers and business partners as our priority number one. Both to secure our day-to-day operations, and to contribute to the pan-national efforts to protect vulnerable groups. We are monitoring the situation 24/7 and follow current provisions, restrictions and recommendations closely. StrongPoint plays a vital role in providing safe and efficient solutions for the grocery retailers and we will continue to implement mitigating measures to serve our customers in this unprecedented situation,” says Jacob Tveraabak, CEO of StrongPoint.
StrongPoint has implemented several internal measures, including travel restrictions, work-from-home policy, hygienic measures at company and customer facilities and digital arrangements for meetings with colleagues, customers and business partners. StrongPoint’s team and management is fully operational and is working at full pace to manage the situation and limit the implications on operations.
“As many other companies in the markets we operate, we are affected by the necessary provisions and regulations national authorities have implemented. The travel restrictions and social distancing measures make it difficult to maintain all of our service offering in the way we normally do. Demand for our offerings seem to be close to maintained in the grocery and labels market, but we obviously experience a lower demand from non-grocery customers. Our focus is to maintain order intake and sales, and to make sure our balance sheet and liquidity remains healthy. Currency fluctuation will influence cost and margins in various ways in different parts of our business. The total impact of all the different effects is too early to say, but we expect some short term negative impact on the financial performance. Consequently, we are implementing measures in the various markets across our operations to reflect and minimize the effect of the travel restrictions and social distancing measures, whilst maintaining our solid momentum when the situation normalizes” says Tveraabak, and continues;
“In parallel, the COVID-19 situation has emphasized the many advantages of online shopping and flexible delivery solutions. As a result, we are experiencing an increased interest for our Click & Collect Locker solutions from major players in our key markets. We have historically rolled out more than 200 Click & Collect lockers in 10 countries in Europe, and we expect this number to increase significantly in the months and years to come. We are working intensively to secure deliveries from among others our supplier in China to accommodate this strong interest. The factory suffered from a six week close during the first quarter due to the pandemic, but has been up and running since primo March and delivery of the earlier announced Click & Collect lockers will be in Q2 if today’s transport situation is maintained”.
StrongPoint has a strong financial position with the necessary credit facilities to cover short-term changes in working capital. StrongPoint has postponed its wage increases for employees and deferred accrued bonuses for the top management for 2019 as part of the short-term process of mitigating the uncertainties stemming from the COVID-19 situation. On 19 March 2020, the Board of Directors announced the decision to postpone the dividend decision for 2019. The Board of Directors will consider to call for an extraordinary general meeting to pay dividend in line with the dividend policy later in 2020.
“The previously announced dividend policy of a stable increase in dividends remains unchanged, but in light of the ongoing situation concerning COVID-19, the board has decided not to make a proposal that the annual general meeting resolves the payment of the dividend for 2019. The decision was made after a thorough assessment by the board given the uncertainty that now prevails following the spread of COVID-19,” Morthen Johannessen, Chairman of the Board of Directors, commented.
For additional information, please contact:
CEO, StrongPoint ASA
Phone +47 90 82 13 70
Hilde Horn Gilen
CFO, StrongPoint ASA
Phone +47 920 60 158