(Reuters) - Swiss industrial group OC Oerlikon (OERL.S) on Tuesday withdrew its full-year outlook and slashed 800 jobs, citing a high degree of market uncertainty triggered by the coronavirus crisis.
The group had previously expected full-year 2020 order intake and sales of between 2.5 billion and 2.6 billion Swiss francs ($2.6 billion to $2.7 billion) and earnings before interest, taxes, amortisation and depreciation (EBITDA) margin before exceptional items to improve to 15% to 15.5%.
In the first quarter, Oerlikon reported a 38% drop in EBITDA at 58 million francs, which came above estimates of a company-compiled consensus of 51 million francs.
“China has shown signs of overcoming the virus, in particular in our man-made fibers business, while we faced increasing challenges from the global impact in our surface solutions segment toward the end of the first quarter in Europe and in the U.S.,” Chief Executive Roland Fischer said.
The Swiss company’s largest segment, surface solutions, whose products include coatings for automotive components and surfaces of electric car brake discs, reported an EBITDA decline of 36%.
Automakers at plants across Europe had to halt production for several weeks as they have been grappling with the coronavirus crisis and diving demand.
The company said its previously announced productivity programme, aimed at reducing structural costs in the surface solutions segment, would now result in a total headcount cut of around 800 employees in the segment.
Oerlikon said it remained committed to its mid-term target for the EBITDA margin of 16%-18%.
In the first quarter, Oerlikon reported a 36% EBITDA slump at 39 million francs, which came in lower than the expectations in a company-compiled consensus of 51 million francs.
Reporting by Bartosz Dabrowski in Gdansk; Editing by Clarence Fernandez and Sherry Jacob-Phillips