High profitability in extreme quarter
The second quarter was exceptional in many respects for
I am therefore very satisfied that, despite a decline of 11.6 percent in sales, we were again able to demonstrate our ability to manage major production fluctuations while maintaining high margins. In Q2 we delivered an EBIT margin of 21.0 percent (24.1).
In April sales nearly halved year-on-year due to lock-downs, while in May a number of countries began to permit active leisure activities. This meant that we in June regained some of the lost sales from the spring period and sales in June therefore grew strongly. The differences between countries and categories remained extreme, ranging from highly favorable growth to sales that were more than halved.
The large fluctuations between categories, countries and months naturally gave rise to major operational challenges. Nonetheless, we achieved operating income of
Region
During the quarter, sales in the region declined by 12 percent after currency adjustment. Similar to the situation at the end of the first quarter, performance was weak in countries with extreme pandemic measures, such as
During the quarter, it was positive to note that the countries where the social restrictions were successively eased, immediately displayed a high level of growth and that some of the sales normally made during the spring were instead realized during the early summer period. This confirms that consumers want to continue living active lives and appreciate our products.
Our large and growing portfolio of products in the bike category (bike racks, bicycle trailers and child bike seats) stood out and performed strongly in the end of the quarter.
Region
In Region Americas, sales declined by 12 percent in the quarter after currency adjustment. As in
Sales in
Focus on rapid adjustments and a long-term approach in a continued uncertain market
We have focused on the health and safety of our employees since the outbreak of corona. At the same time, during the extreme fluctuations of the recent period, we were able to benefit from our production set-up, with flexible assembly plants and logistics flows. However, we were unable to fully meet the significant rise in demand for certain products at the end of June and beginning of July.
We foresee good opportunities to offset some of the lost sales from the spring season during the third quarter and to also continue to ride the wave of a generally strong bike sector in the countries that have opened up for travel and leisure activities.
However, we expect to see continued low demand in other categories, such as bags. We will also be challenged by the fact that some major markets still have extensive restrictions in stores and on the possibilities to carry out group activities. The consequences of the covid-pandemic creates much uncertainty, but we believe in our long-term approach with great products for active people.
We continue to push an agressive product development agenda to drive future growth. During the atumn, we are going to present many new products to our retailers and we will do so virtually, using new digital tools. The products will be launched to consumers in stores during the spring of 2021.
I want to finish by thanking all my colleagues at
CEO and President
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