On March 17, the board of directors of Fenix Outdoor proposed to the general meeting of shareholders that no dividend be paid this year. The board justified this proposal by saying that the market situation will remain turbulent in view of the global situation. The coronavirus and the measures taken in Europe and the USA imply that Fenix Outdoor must take strong precautions both in the short and long term, the board of directors continued. Furthermore, the financial consequences are difficult to predict, given the current uncertain situation. The group has decided to close its branded retail stores in the USA temporarily, and stores in Europe and other countries have now also been closed voluntarily or due to government regulations. Fenix Outdoor also stated that the measures would require significant concessions from the group’s employees. In this situation, despite the company’s good liquidity situation, the distribution of funds to the owners would send the wrong signal.
The group said sales had increased so far in 2020, despite the virus’s effects on the Asian markets, and that the preorders for the rest of the year are good and show healthy growth. South Korea is currently showing recovery toward a more normal business operation. However, due to the developments in Europe and the U.S., there is a risk that the direct orders for the summer season will be adversely affected. The group’s brands division includes Brunton, Fjallräven, Hanwag, Primus, Royal Robbins and Tierra.
As for the “Frilufts” retail division – the group runs the retail chains Globetrotter (Germany), Naturkompaniet (Sweden), Partioaitta (Finland) and Friluftsland (Denmark) – Fenix reported that it had a challenging start into the year, with a continued mild winter and a decline in sales since the Covid-19 situation escalated in Europe. The increased anxiety and the measures taken in Europe and the USA will, at least in the short term, hurt all major markets, not at least at retail level.
In 2019, Fenix Outdoor’s total revenues advanced by 5.8 percent to €616.5 million. The group’s Ebitda for the full year gained 24.6 percent to €128.0 million (due to the adoption of the IFRS 16 accounting standards), but the operating margin (Ebit) contracted by 1.4 percentage points to 14.0 percent. Net profit declined by 9.0 percent to €61.3 million (see here).
