Enedo Covid-19 Q&A – Updated June 1st, 2020
Which are your company locations and what is the overall covid-19 impact to you and your customers?
• Enedo has operations in Tunis (factory), Italy (R&D, S&M), Finland (Headquarter, R&D, S&M) and US (S&M). We are following local government and health authorities’ instructions and guidance in all these countries.
• Tunis factory was closed for the last week of March and first week of April due to general business lock down in the country. After this we received special permission from the government authorities to re-open the factory with limited workforce. In early May we got permission from Tunisian authorities to increase the headcount working in the factory but due to curfew we were not able to return to use night shift yet. After Ramadan was finished late May the limitations have been further released and from early June onwards, we are able to have all the normal shifts working even if with slightly reduced level of people in the plant due too social distances still in place.
• As our Italy business also includes delivering power supplies to the medical equipment industry, we have been able to stay operational despite the general business lock down in Italy. Enedo Italy sells and delivers products made in Enedo Tunis factory and in 3rd party factories in Asia and Eastern Europe. 3rd party factories production is already back to almost normal with slightly longer delivery times than usual.
• In Finland Enedo business continues close to normal. Our supply chain delivery capability from production in Finland and Estonia has remained close to normal.
• Many of our US customers are located in states which have suffered less from the COVID-19 than New York or California.
How do all of the different exceptional arrangements and restrictions affect your business in short and/or long term?
• Tunis factory limited short term delivery capability has had short term impact to our Italy sales for products coming from Tunis factory. Our target is to get production missed due to covid-19 limitations done and delivered to customers by mid-August.
• For Systems and other products delivered from Finland we have not had any major delivery or demand issues, thanks to our prompt proactive mitigation actions. Some customers located in the most impacted countries did ask for delays to their shipments or wanted us to confirm each delivery separately before sending. Also these customers business operations and deliveries to them has returned or is returning to normal.
• Due to many of our key customers working in very different industries, covid-19 impact to their business is very diverse. Some of the customers working closer to enterprise related industries have indicated somewhat slower demand for their devices, while at the same time, those working in the medical or health care industry have seen rapid demand increase.
Enedo has recently received significant orders for medical power supplies. How do you think this will affect Enedo’s business in short and/or long term?
• We have been delivering power supplies for the healthcare and medical industries for 20 years and it has always been a strong focus in our product portfolio and strategy. Currently the demand for these products has increased, at least short term, and all parties are working on fastest possible delivery. These orders will help to mitigate the potential softening in demand in other parts of our business.
What activities have you done to minimize the financial impact to your company?
• To mitigate the short-term impacts from COVID-19 we started temporary layoffs both in Italy and Finland and decided to cut the management team salaries for the same period. Temporary layoffs and all cost saving activities have been targeted so that they don’t have impact to our delivery capability.
• We have also applied and received 100.000EUR grant from Business Finland to further develop our supply and delivery chain. This will ensure our delivery capability for especially Systems products which are delivered to e.g. hospitals as energy back-up systems.
Is the communicated financial guidance for 2020 still valid?
• Our estimate for the full year 2020 has been that continuing operations net sales, operating profit (adjusted for items affecting comparability) and EBITDA (adjusted for items affecting comparability) will improve from 2019. Operating profit is estimated to be still negative in 2020.
• Any change to this annual guidance will be communicated to the stock market based on the normal rules and regulations.
How are you securing your employee’s health?
• We have taken and continue to take proactive internal measures to secure our employees’ health and business continuation by introducing instructions, guidance and restrictions in our company activities following local government instructions, guidance and practices.
• Our management team is following the Covid-19 development in weekly taskforce calls and if needed will react to changes immediately.