MUNICH -- German supplier Webasto reported an operating loss during the first quarter and declined to provide a full-year forecast after being hit hard by the coronavirus pandemic. That means it's doubtful the company will reach its goal of increasing global sales to 5 billion euros ($5.5 billion) in 2020.
Revenue at the roof systems specialist fell 18 percent to 708 million euros during the quarter compared with the same period last year, resulting in an operating loss of 40 million euros ($44 million).
By comparison, Webasto reported an operating profit of a 24 million euros during the first quarter of 2019.
“Global production has been substantially affected, and the peak of the crisis has not yet been reached," Webasto Chairman Holger Engelmann said in a statement Tuesday. "This all has severe impacts on our business figures in the year at a minimum -- but most likely also in the coming year.”
Webasto said that its European plants are running again, but at a low level. Meanwhile, production in North America is slowly ramping up and its factories in China are "well utilized again, but not yet stable," the supplier said.
When asked during a video conference Tuesday whether he expected Webasto to report a full-year loss, Engelmann said the supplier would do everything possible to avoid that.
The company outlined a number of cost-saving steps Tuesday that included being more conservative about spending on customer projects and new investments, halting external expenditures and filling vacancies exclusively by tapping internal candidates. In addition, the owners of Webasto will not take their annual dividend payment in 2020.
On a more positive note, Webasto said that it has more than 22 billion euros in orders for the next 10 years. The company, which in 2019 generated 84 percent of its revenue from roof systems such as the folding softtop on the new Volkswagen T-Roc Cabriolet, also remains bullish about its push into solutions for electromobility, which account for 11 percent of its future orders.
Said Engelmann: “As soon as the economy picks up again, we will continue our course of growth."
For 2019, Webasto reported that its global sales rose 9.2 percent to 3.7 billion euros, which means it would have needed to boost revenue by 35 percent this year to reach its 5 billion euro target.
The company attributed the 2019 revenue increase to its takeover of the remaining shares in its South Korean joint venture, Webasto Donghee, last spring.
The acquisition, combined with investments in new technology and pressures from automakers to reduce costs, shrank the supplier's profit margin to 2.9 percent last year from 5.9 percent in 2018.
Separately, Webasto has been dealing with fallout from the coronavirus since early January when it was shaken by an outbreak that infected a number of employees early in the pandemic. All of the workers made a full recovery.