WAVESTONE Following its press release of March 23, 2020, Wavestone is now publishing a further update on the effects of the Covid-19 epidemic on its operations.
A noticeable impact on activity levels
The Covid-19 epidemic, and the lockdown measures in force in most countries where the company operates, are having a noticeable impact on Wavestone's levels of business activity.
While some initially suspended projects have resumed in recent days, this has not been enough to offset new postponements or cancellations requested by the firm's clients.
To date, business activity has reduced by about 15 to 20%, compared with the situation before lockdown measures were introduced. Wavestone does not foresee any improvement in this situation during April.
2019/20 annual growth slightly below target
As envisaged in the press release of March 23, against this backdrop, annual growth for 2019/20 will be approximately one percentage point lower than the target of 8%, at constant forex basis, announced on December 3, 2019.
Measures to dampen the impact of the crisis
While it is difficult to make forecasts at present, Wavestone is preparing to operate within a significantly degraded economic environment in the coming months.
In addition to the recruitment freeze implemented in mid-March, a comprehensive overheads review has begun – with the aim of reducing spending and lowering the company's break-even point.
Wavestone has also taken the decision to resort to paid leave, and use furlough and short-time-working measures in several countries where such arrangements are an option, subject to the agreement of the relevant authorities.
These arrangements should partially offset the costs of the under-activity of Wavestone's teams.
In parallel, the firm intends to rapidly restore a normal pace of business development, after the slowdown due to the implementation of widespread lockdown measures. The resources dedicated to this activity will be further reinforced, and priorities adjusted, as the landscape of the reshaped business environment becomes clearer.
Suspension of the dividend
Due to the uncertain operating environment the company will face during 2020, at meetings held today, Wavestone's management and supervisory boards took the decision that no proposal to pay a dividend for the 2019/20 fiscal year will be submitted to the annual general shareholders' meeting to be held on 28 July.
A strengthened financial position at March 31, 2020
In terms of cash flow management, the company has not for the time being experienced any increase in client settlement periods. Wavestone also considers the risks of clients defaulting on payments to be limited, as a result of them being largely major accounts.
Also, at the end of March 2020, Wavestone signed a new financing contract with its banking partners, which replaces the previous arrangements. This new contract has enabled the firm to refinance its existing debt and acquire additional lines of credit.
At March 31, 2020, Wavestone's net debt was about €30m, compared with €61.7m six months earlier. At the same date, the firm had gross cash and cash equivalents of about €65.0m.
Next event: The publication of Q4 2019/20 revenue on Tuesday, April 28, 2020, after Euronext market closing. A videoconference will be held at this point.
About Wavestone
In a world where knowing how to drive transformation is the key to success, Wavestone's mission is to inform and guide large companies and organizations in their most critical transformations, with the ambition of a positive outcome for all stakeholders. That's what we call "The Positive Way.”
Wavestone draws on over 3,000 employees across 8 countries. It is a leading independent player in European consulting.
Wavestone is listed on Euronext Paris and recognized as a Great Place to Work®.
| Wavestone Pascal Imbert CEO Tel.: +33 (0)1 49 03 20 00 Sarah Lamigeon Communications Director Tel.: +33 (0)1 49 03 20 00 | Actus Mathieu Omnes Investor and Analyst Relations Tel.: +33 (0)1 53 67 36 92 Nicolas Bouchez Press relations Tel.: +33 (0)1 53 67 36 74 |
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Full and original press release in PDF: https://www.actusnews.com/news/62849-wavestone-communique-covid-19-06042020-en.pdf
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