Basler AG has reported increased sales and orders for the 2019 fiscal year but has forecasted a potential global recession due to the coronavirus pandemic.
Despite a stagnating market environment throughout 2019, the global industrial vision components manufacturer announced the group’s sales were €12m higher than the previous year as the company posted €162m (2018: €150m).
Incoming orders totaled €166.5m an increase of €12.5m on the previous year’s level of €154m.
The earnings before taxes decreased by 31 per cent to €16.9 million (2018: €24.5million) due to planned strategic investments in raising the number of employees.
The pre-tax margin was down to 10.4 per cent (2018: 16.3 per cent). With these results, Basler has achieved the forecast communicated to the capital markets.
The free cash flow calculated from the cash flows from operations and investments dropped to -€9.7 million (2018: €1.3 million), which was significantly impacted by the acquisition of MVLZ Sanbao Xingye in 2019.
Current Situation and Forecast
After a phase of a market decline of around 10 per cent in 2019, the Basler Group assumed, until March, a structural stabilisation for the 2020 financial year with low single-digit growth in the market.
However, the outbreak of the coronavirus at the turn of the year and the pandemic spread are currently leading to a major change in the economic outlook and a high risk of a global recession.
Even if the sales and procurement market situation of the Basler Group has so far been relatively stable, the management is assuming noticeable effects over the coming quarters. The impact cannot currently be quantified due to the uncertainty of the events.
Because of these uncertainties, the management board of Basler AG has decided to initially provide a forecast for the first half of the year. The outlook for the entire financial year follows when the semi-annual report is published.
For the first half of 2020, the group expects a sales corridor of €70-78 million with a pre-tax return between six to 10 per cent. This forecast assumes that the situation in China will continue to improve gradually over the course of the second quarter and that demand in the regions of Europe and North America will weaken significantly in the second quarter.
The full annual report can be found on the company’s website (www.baslerweb.com).