Customer demand, production volumes, supply chains, and employment are all significantly affected by the pandemic. To successfully meet these challenges, Hella put in a comprehensive set of measures in mid-March, included (inter alia) a significant reduction of staff and material costs as well as already-planned investments.
Based on current information and circumstances, Hella are forecasting for fiscal year 2019-20 (June 2019 to May 2020), group sales of abou €5.7bn and an adjusted operating profit margin of about four per cent.
In the fourth quarter of FY 2019-20, Hella will recognise non-cash impairments of about €500m. The expected impairments mainly result from the considerably reduced market volume due to the COVID-19 pandemic and the assumption that the worldwide production volume of passenger cars and light commercial vehicles will remain significantly below the planning assumptions and market expectations made prior to the crisis. The impairments will affect certain financial performance indicators such as the reported EBIT, the group net income attributable to shareholders and the equity ratio but will have no impact on the adjusted EBIT margin.