DGAP-News: Steinhoff International Holdings N.V. / Key word(s):
Miscellaneous
Steinhoff International Holdings N.V.: MARKET UPDATE
2020-06-09 / 09:00
The issuer is solely responsible for the content of this announcement.
*STEINHOFF - MARKET UPDATE*
Steinhoff International Holdings N.V. (the "*Company*") (together with its
subsidiaries, the "*Group*")
*Introduction*
Steinhoff is today providing a further update on the impact of COVID-19 on
the Group, together with details of related changes to its reporting
timetable, and an update on its regulatory engagement activities.
*COVID-19 - Trading Update*
As we face the COVID-19 challenge, the health and safety of our colleagues
has been our top priority and we are continuing to adopt all specific public
health protocols in our stores, online sales processes and in our office and
warehouse facilities.
In its announcements of 20 March 2020 and 20 April 2020, the Group provided
detailed updates on the impact of COVID-19 on its trading activities. In
common with businesses around the world, we have seen a material impact from
COVID-19, as government measures to control the pandemic required stores to
close, restricted much economic activity and had a significant effect on
customer behaviour and movement.
More recently, lock-down measures have begun to be relaxed in most of the
countries in which we operate, allowing a phased process of store
re-openings to commence, in line with local circumstances and government
guidance. While initial trading has been significantly better across the
Group than what was expected during the early stages of the pandemic and
related lock-down, as stores benefited from pent-up demand at reopening, the
sustainability of this demand is uncertain. The Group's main trading
subsidiaries, with their more resilient and defensive discount and value
positioning, are, however, confident that they are well positioned to gain
market share in the post-COVID-19 'new economy'.
The Group expects the broad-based steps implemented to contain the spread of
the virus, particularly those limiting movement and public gatherings, as
well as the effect of COVID-19 on consumer confidence and economic
conditions, to continue to have a negative impact on operations during the
rest of the 2020 financial year.
As previously announced, management are taking an active approach,
implementing a range of mitigating initiatives, including the redesign of
various business processes, and utilisation of selected business support
initiatives made available by the respective governments of the countries in
which the Group operates, to protect cashflow and profitability. Immediate
and significant actions have also been taken to reduce costs and optimise
liquidity. While the Group is confident that the actions it is taking to
address the impacts of COVID-19 are appropriate and timely, the situation
remains fast moving and uncertain and these are being kept under constant
review.
The extent and duration of the impact on trade remains uncertain and it is
still too early to determine the exact impact of the pandemic on the
performance of the Group for the 2020 financial year. However, we expect
COVID-19 to have a material negative impact on overall turnover and the
underlying business performance during this period.
Each of the Group's large operating subsidiaries is independently funded and
is not dependent on the Group for financial support. Currently all
subsidiaries, excluding Conforama France as described below, are producing
stronger cash flows than originally anticipated and have sufficient
liquidity arrangements to support their current management forecast.
*Conforama*
In its trading update for the three months ended 31 December 2019, the Group
announced that an agreement had been reached for the disposal of the
Conforama Iberia business. While an agreement of sale was signed in February
2020, completion was disrupted by the significant uncertainties created by
the subsequent onset of the COVID-19 pandemic and the transaction
subsequently lapsed.
The position of Conforama's business in France has remained uncertain in the
period following the COVID-19 outbreak and to date, the Group has been
unable to secure the state-guaranteed loan, for which it was eligible, to
support the business through this difficult period. Discussions are
continuing and the Group is exploring all possible options.
*Regulatory engagement*
Steinhoff is co-operating with the various prosecution authorities and
regulators in South Africa and other jurisdictions as they continue their
investigations into individuals and entities implicated in relation to the
events uncovered in December 2017.
The South African authorities have approached PwC, which completed the
independent forensic report commissioned by Steinhoff, and engaged them to
perform additional expert forensic work to assist in the criminal
investigation. Steinhoff supports this initiative and has agreed to
contribute funds to cover a substantial portion of the costs of the PwC
work, due to the size and complexity of the investigation required.
Steinhoff's role is limited to co-operation and providing a portion of the
funding for the project only. The funding is to be provided on an
arms-length basis, with Steinhoff having no involvement in the
investigation, the extent thereof and the report-back process.
The Group remains committed to co-operating, and maintaining open
communication lines, with all regulators and this approach forms an integral
part of the Group's Remediation Plan.
*Litigation*
Various legal proceedings have been instituted against the Group and
litigation remains a significant challenge. In parallel with these various
court processes, the Management Board, assisted by the Company's Litigation
Working Group and the Group's legal advisors, continue to work towards a
resolution of the outstanding claims against the Group.
*Steinhoff International Holdings N.V. 2019 Annual Report*
In its announcement of 20 April 2020, the Group noted that operational
restrictions relating to COVID-19 were having an impact on the timetable for
the publication of the 2019 Annual Report and audited Consolidated Financial
Statements. The essential actions to reduce costs and optimise liquidity in
response to COVID-19 are also placing additional demands on the various
finance teams across the Group and this has also had a direct impact on the
financial reporting timelines.
The Group had previously estimated that it would publish its 2019 Annual
Report, including the audited Consolidated Financial Statements, on 30 June
2020 but stated that this date was provisional and subject to change as the
impacts arising from COVID-19 remained fluid and uncertain.
Good progress has been made and the Group is still aiming to meet the 30
June 2020 publication date.
*Steinhoff Investment Holdings Limited 2019 Annual Financial Statements*
The audited 2019 Annual Financial Statements for Steinhoff Investment
Holdings Limited were released on Friday, 29 May 2020. These are available
on the Company's website.
*Steinhoff International Holdings N.V. 2020 Half-year Results *
In light of the additional demands on the financial reporting teams as a
result of COVID-19, the 2020 Half-year results have been delayed, with
publication now planned to be prior to the end of July 2020.
*AGM*
As previously announced, the delay in the release of the 2019 Annual Report
has also impacted the timing of the forthcoming Annual General Meeting. This
meeting is now scheduled for 28 August 2020.
In light of the current extraordinary circumstances, all of the above dates
are being kept under review and the Group will inform shareholders should it
become clear that a further change is necessary.
Stellenbosch, 9 June 2020
2020-06-09 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Steinhoff International Holdings N.V.
cnr Adam Tas and Devon Valley Road
7600 Stellenbosch
South Africa
Phone: +27218080700
Fax: +27218080800
E-mail: investors@steinhoffinternational.com
Internet: www.steinhoffinternational.com
ISIN: NL0011375019
WKN: A14XB9
Indices: SDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover,
Munich, Stuttgart, Tradegate Exchange
EQS News ID: 1065687
End of News DGAP News Service
1065687 2020-06-09
(END) Dow Jones Newswires
June 09, 2020 03:00 ET (07:00 GMT)
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