"Despite traditionally weaker summer months, net sales were clearly higher than the previous quarter when national COVID-19 restrictions had a strong negative impact on the economy. After net sales in the second quarter dropped by 36.6 per cent, in the third quarter they remained 13.3 per cent below previous year. Net operating income (EBIT) was also significantly higher than in the previous quarter. Due to the strong specialty position and timely taken measures, the EBIT margin could be maintained," the Switzerland-headquartered company said in its report for the quarter.
"Demand for consumer and investment goods, which had dropped to historic low levels in the first half year of 2020 with closure of car plants worldwide, recovered in the third quarter. Easing of COVID-19 restrictions and announced state support programmes created trust and confidence among consumers and companies. While in China, domestic demand mainly returned to the pre-crisis levels, other countries have not yet been able to catch up completely. Meanwhile, although all car manufacturers have reopened their plants worldwide, production numbers still remain below the previous year's level," the company said.
EMS said it prepared particularly early for a slowing of the economy. Comprehensive efficiency programmes and rapidly implemented measures at all locations made it possible to immediately adjust costs to the lower sales volumes.
EMS was able to realise innovative new business and to show pleasing growth with profitable specialty products in all regions. "Due to the strong specialty position and early and decisive actions with regard to costs, EMS was able to maintain high a net operating income margin and high liquidity levels," the release added.
Based on the extremely strong market slump due to COVID-19, EMS continues to expect a net operating income (EBIT) for 2020 below that of the previous year. Given the result-oriented distribution policy, ordinary dividends are also expected to be lower than in the previous year, the company said.
Fibre2Fashion News Desk (RKS)