Given the rapid changes in the market caused by the effects of the coronavirus outbreak, Veoneer Inc. (NYSE: VNE and SSE: VNE SDB), updates indications of its first quarter 2020, current business situation and short term response actions.
Health and operational crisis management teams have been activated since February, and are working continuously, taking the appropriate actions. In this time of crisis and uncertainty health and safety is our first priority.
First quarter sales are expected to see limited negative impact from the coronavirus outbreak, mainly from the second half of March, and are expected to be in the range of $350 million to $370 million, including sales from VNBS Asia for January. Underlying sales for January and February were stronger than anticipated, despite negative effects from the initial coronavirus outbreak in China.
Cash balance at the end of February of around $970 million, up from $894 million at year-end 2019, following the previously-announced completion of the sale of our Asian brake control business (VNBS Asia) on February 3.
New order intake through the end of February was around $160 million average annual sales, however due to the current situation we expect order intake activity in March to be limited.
OEM production downtime or lower production rates are expected in Europe and North America for the next 2 to 4 weeks commencing in mid-March. We are adjusting our production according to customer demand and local government initiatives, and anticipate that our production facilities in Europe and North America will operate in the range of 20 to 30% of capacity during this 2-4 week period, including potential temporary facility closures. It is highly uncertain how long the production reductions will last.
Our Asian business is recovering and our manufacturing facility and engineering center in China are operating at increasingly high levels and general local business activity is increasing.
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SOURCE: Veoneer
