Johnson Electric reports Business and Unaudited Financial Information for the First Quarter of Financial Year 2020/21

HONG KONG,
CHINA – Media OutReach – 14 July
2020 – This news release is made by Johnson Electric Holdings Limited (“Johnson
Electric” or the “Company” and together with its subsidiaries, the “Group”) for
the business operations and selected unaudited financial information of the
Company for the quarter ended 30 June 2020.

 

The Board
of Directors (the “Board”) of the Company considers the publication of quarterly
sales performance updates to be consistent with international corporate
disclosure best practice. The objective of this news release is to provide
transparency and to ensure that investors and potential investors receive equal
access to the same information at the same time.

 

The Group’s
sales for the quarter ended 30 June 2020 were US$517 million compared to US$767
million for the same quarter in 2019, a decrease of 33%. Excluding currency
movements, sales decreased by 31% to US$527 million. Sales were significantly
reduced in April and May due to the impact of the COVID-19 pandemic,
particularly on the automotive components industry in Europe and the Americas.
During the month of June, the Group experienced a significant recovery in
demand and by the end of the month sales volumes were approaching similar
levels to a year earlier.

Foreign
exchange rate movements had a negative effect of US$10 million on the Group’s
sales during the quarter. This was mainly due to the impact of the weaker
average exchange rates for the Chinese Renminbi and Euro against the US Dollar,
comparing the quarter ended 30 June 2020 to the same quarter last year.

Sales of Automotive
Products Group (“APG”)

Sales of
our Automotive Products Group in the first quarter of the financial year
decreased by US$249 million or 41% compared to the same quarter in 2019.  Excluding currency effects, APG’s sales
decreased by US$240 million or 39%, with the following sales changes by region:

• Asia
  decreased 2%

• Europe
  decreased 58%

• Americas
  decreased 60%

 

APG’s sales
in Asia decreased slightly. The impact of reduced volumes of light vehicle
production was partially offset by growth in some segments in China including
braking, closure, thermal management and transmission as well as oil pumps for
engine and transmission.

APG’s sales
in Europe and the Americas decreased markedly as automotive customers in these
regions shutdown assembly plants in April and May to contain the COVID-19
pandemic. Johnson Electric was also affected by these containment measures,
necessitating the temporary closure of several of our production facilities in
the affected regions.

Sales of Industry
Products Group (“IPG”)

IPG’s sales
were flat compared to the same quarter in 2019. Currency effects were
negligible. The sales changes by region, excluding currency effects, were as
follows:

 

• Asia
  increased 2%

• Europe
  decreased 2%

• Americas
  increased 1%

Although
IPG’s sales of products for some segments and customers decreased due to the
impact of the COVID-19 pandemic on end-market demand, this was offset by strong
growth in the medical devices segment due to new product launches and ramp-ups;
higher-than-usual demand for home appliances and personal care products as
consumers spent more time at home due to COVID-19 lockdowns; and market share
gains as a result of supply disruptions at some competitors.

 

Chairman’s Comments on Year-to-Date
Sales Performance and Outlook

Concerning
the first quarter’s sales performance, the Chairman and Chief Executive, Dr.
Patrick Shui-Chung Wang, said, “As previously projected, the unprecedented
effects of the COVID-19 global pandemic resulted in sales levels in the first
quarter of the current financial year being substantially weaker than in the
same period a year ago.  Although demand
in China displayed a gradual and consistent improvement during the quarter, it
was not until June that we began to experience a significant rebound in orders
from our automotive customers in North America and Europe.”

Dr. Wang
further commented: “Given the widespread and continuing uncertainties of the
pandemic, it is not feasible to provide a meaningful estimate of sales volumes
for the rest of the year.  However, with
the most recent weekly sales run-rate approaching the levels of a year ago,
there are no indications that underlying demand for Johnson Electric’s
innovative products and technology has been permanently reduced.  Our Industry Products Group performed very
satisfactorily in the first quarter with growing demand in some application
segments offsetting the negative impact of macro-economic contraction in
others. And in the automotive components sector, I am especially encouraged by
an increase in new orders for Johnson Electric’s products that improve fuel
economy, reduce emissions, and enable electrification — which together
represent the most critical technology imperatives of the industry for at least
the next decade.

Despite the
challenging and unpredictable trading conditions, the Company remains in sound
shape in terms of liquidity.  Geographically, Johnson Electric’s sales are
divided broadly equally between Asia, Europe and the Americas and this
diversified base of end-market demand continues to be a key source of strength
and stability for the Group. ”

 

Cautionary
Statement

Shareholders
and potential investors in the Company are reminded that the information
provided in this news release, including information related to the expected
outlook for the full year, is based on the Group’s unaudited internal records
and management accounts. This information has not been reviewed or audited by
the Company’s auditors.

Shareholders
and potential investors should exercise caution when dealing or investing in
the shares of the Company.

About Johnson Electric Group

The
Johnson Electric Group is a global leader in electric motors, actuators, motion
subsystems and related electro-mechanical components. It serves a broad range
of industries including Automotive, Smart Metering, Medical Devices, Business
Equipment, Home Automation, Ventilation, White Goods, Power Tools, and Lawn
& Garden Equipment. The Group is headquartered in Hong Kong and employs over
30,000 individuals in more than 23 countries worldwide. Johnson Electric
Holdings Limited is listed on The Stock Exchange of Hong Kong Limited (Stock
Code: 179). For further information, please visit: www.johnsonelectric.com.