Garo: COVID-19 putting a dent in Q2’20e growth – Introduce
Slowing demand and uncertainty in E-mobilityGARO is largely exposed to the Nordic building sector for both new builds and renovations, a sector that appears relatively stable for the moment. Given the current uncertainties, however, demand appears to be slowing somewhat. This exposure represents around 80% of the company’s revenues. We expect that the remaining E-mobility segment is likely to face difficulties.
Over the last couple of years, E-mobility has been the main source of group growth as it has ridden the structural growth trend for electric vehicles. Now, however, we find ourselves in a situation were difficult comps and demand uncertainties are likely to weigh on growth. We also estimate higher transportation and logistics costs.
In H2’20, however, we expect to see reduced costs on the reduction of 25 white-collar employees in both Sweden and Poland.
