Handicare takes necessary and selective layoff measures to adjust operations to the effects of the Covid-19 pandemic
As a result of the Covid-19 pandemic, Handicare is taking a number of measures to adapt its operations to the currently assessed consequences and thus further ensure long-term financial stability. This entails, among other things, necessary capacity adjustments as well as general and substantial cost reductions. The pandemic has different impact on Handicare's various business units. On Group level there is a decline in sales from mid-March, but it is mainly Business Area Accessibility that is adversely affected by a decline in demand, while demand within Patient Handling is stable only with a slight delay of certain projects. The current development is expected to continue during the second quarter.
The infection prevention measures, in particular the isolation of elderly and other vulnerable people, primarily affect the Accessibility business area, which has noticed a slowdown since mid-March. Social distancing and isolation make it difficult to sell and install stair lifts. We work intensively to develop alternative sales and delivery models providing safe conditions for both employees and end customers.
For Patient Handling demand is stable with a slight delay of certain projects. Patient Handling North America has a large installation business with fixed lifting devices for hospitals and healthcare facilities. A number of these projects have been postponed. When it comes to mobile patient lifts and transfer products in North America, the demand situation is significantly better. For other operations within Patient Handling, we assess demand to remain stable regarding products for home health care, transfer and mobility in homes and institutions. Home health care is an important solution for keeping the elderly healthy and to ensure that those who can remain at home also do so. Home care helps to relieve the health care system in the current situation.
The long-term economic effects of Covid-19 are difficult to assess. The fast and sharp slowdown in the economy should be balanced against enormous stimulus measures from the world's central banks and governments. However, we expect the demographically driven demand for Handicare's products to remain strong and that the current crisis creates some pent-up demand.
In the short term, some business units’ sales will be negatively impacted and Handicare has already taken a number of cost-cutting measures. In addition, we have today decided to implement selective lay-off measures to adapt staffing to the market situation prevailing in the respective business units. We look at various government support available for each market and in doing so we may for a period reduce our running costs without losing competent employees and partners. These measures are necessary but will be implemented so we are able to quickly scale up operations when demand returns.
The financial impact of these measures is continuously evaluated, but Handicare has a strong financial position and liquidity. During the current and coming quarter, we expect lower sales and lower profitability compared to the corresponding periods last year.
For more information, contact:
Staffan Ternström, CEO, Tel: +46 725 490 029
Pernilla Lindén, CFO & IR, Tel: +46 708 775 832
About Handicare
Handicare offers solutions to increase the independence of disabled or elderly people, and to facilitate for their care providers and family. The offering encompasses a comprehensive range of curved and straight stairlifts, transfer, lifting and repositioning aids and vehicle adaptations. Handicare is a global company with sales in more than 20 countries and is one of the market leaders in this field. The head office is in Stockholm, Sweden and manufacturing and assembly is located at five sites distributed across North America, Asia and Europe. In the twelve-month period to December 2019, revenue amounted to MEUR 271 and the adjusted EBITA margin was 7.8%. Employees amounted to 1,040 and the share is listed on Nasdaq Stockholm. For more information, www.handicaregroup.com.