VEJLE, DENMARK – EMS firm GPV reported first quarter revenue was €91 million (US$98.3 million), down 6% year-over-year.

A slight improvement in EBITDA to €6.1 million brought earnings to the highest first quarter mark ever.

“We knew from the beginning of the new year that 2020 would be different from the last few years,” said CEO Bo Lybæk. “The global economy had been expanding for quite a number of years, and there were several indications the trend was about to break. It certainly did just that, but for reasons that we didn’t realize the scope of in early January.

“After the end of the first quarter, we now know a great deal more about the extent and depth of the crisis, and so far, we’ve managed to get through the first stage of the crisis fairly well. We’ve lost a bit of revenue, but thanks to good cost management, we’ve managed to keep the bottom line stable and our cash flow high.”

GPV increased free cash flow by €12.1 million over the first quarter of 2019, in part by reducing its working capital from €114.8 million to €96.5 million over the past 12 months.

GPV currently operates 13 factories, including in Denmark, Switzerland, China, Thailand, Sri Lanka, Slovakia, Austria, Germany and Mexico. All sites have implemented safeguards that meet European standards, for example enabling people to observe the two-meter social distancing rule. The factory in China was closed due to coronavirus during much of February and in early March, while the Swiss factory, which is located close to the border to Italy, was also briefly affected. The Sri Lanka site was closed during March and April, but now all thirteen sites are open.

GPV has operated a crisis response since February, monitoring the situation at all sites three times a week. No staff members have contracted the virus to date.

“We’ve monitored the situation very closely, making sure to provide detailed information both in-house and externally. We’ve provided a weekly status to our customers on all thirteen sites, and during some periods, the factories in China, Switzerland and Sri Lanka did light up either yellow or red. However, during the last couple of weeks, it’s been green lights across the board.”

GPV has good visibility for the second and third quarters, but the situation could easily change, the CEO says. Previous guidance for the fourth quarter and full year has been suspended for the time being.

“We believe we have a reasonable understanding of how our company will be affected by the coronavirus crisis, but it’s still too early to quantify the demand crisis that will follow at some point. It goes without saying we will monitor the situation closely, and we’re ready to respond promptly and effectively.”

Ed.: €1 = US$1.08