Maintaining Disciplined Focus and Consistent Strategy During Times of Crisis
In the midst of the unprecedented public health and economic crisis caused by the COVID-19 pandemic, the company has taken a strategic approach to maintain financial stability, ensure business continuity, and support long-term investments.
Financial Stability
The company has conducted thorough reviews of expenses and cash flow forecasts, identifying essential costs and cutting non-essential expenditures to strengthen cash flow. This disciplined approach to cost management, coupled with measures such as payroll maintenance, payment schedules to vendors, and accelerating payments from customers, ensures sufficient liquidity for the short and medium term (one to three months) during the crisis.
Business Continuity
To adapt operations, the firm has revisited sales forecasts, explored new revenue opportunities, and shifted business models where necessary. This flexibility helps maintain ongoing operations despite disruptions. For instance, the company launched its Integrated Front-Office in Japan in Q1 and plans further roll-outs in France and Spain in Q2, demonstrating a commitment to growth even in challenging times.
Long-term Investments and Risk Management
The company employs proactive risk assessments and scenario planning to identify vulnerabilities unique to its operations and build detailed response plans. A comprehensive crisis management team with clear roles across departments ensures coordinated action. They also emphasize continuous learning from the crisis to improve future readiness, balancing quick response with strategic thinking to protect the organization's future.
Amazon's pandemic strategy provides a pertinent example. The tech giant prioritized essential goods by adjusting supply chains and logistics, simultaneously hiring additional staff while freezing certain non-essential operations to manage cash flow and continuity amidst changing demand.
Financial Performance
Despite the challenging circumstances, the company entered the crisis with a strong balance sheet, good liquidity, and robust IT infrastructure. However, April revenues were down approximately 40% year-on-year. The company's EBITA measure includes one-offs of EUR 18 million in Q1 2020, compared to EUR 5 million in Q1 2019.
Net debt comprises short-term and long-term debt less cash and cash equivalents and short-term investments. Net debt to EBITDA is a non-US GAAP measure calculated as net debt at period end divided by last 4 quarters of EBITA excluding one-offs plus depreciation.
Leadership and Gratitude
Alain Dehaze, Group Chief Executive Officer of the company, expresses gratitude to colleagues around the world for their continued work and dedication during exceptionally challenging circumstances. The company remains committed to investing 30 bps of margin into the Ventures in 2020 and continues to build its digital products pipeline.
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The company is investing in its digital products pipeline, committing 30 basis points of margin toward this endeavor, demonstrating a continuous focus on career transition and growth even amidst the pandemic. To maintain financial stability during these uncertain times, the company has aggressively managed expenses, improved cash flow, and prioritized essential investments.
