HighCo

Q1 2020 Gross Profit - Seite 3

MORE PRONOUNCED DECLINE EXPECTED IN Q2 2020 THAN IN Q1

As anticipated at the end of March and following the extension of lockdown restrictions, Q2 2020 is expected to be impacted even harder by government measures and to show a significant decline both in and outside France.
All business activities will be impacted due to the following factors:

• Q2 is a period of high seasonal activity (Easter, Mother’s Day and Father’s Day) for the Group;
• Numerous sports events featuring as a basis for special event campaigns launched by large retail chains have been postponed (rescheduling of the UEFA’s Euro 2020 football championship and Summer Olympic Games for 2021 and of the Tour de France for August 2020, etc.).

COVID-19: UPDATE OF MEASURES TAKEN BY THE GROUP

Employees

HighCo has taken all necessary measures to limit the effects of the pandemic on its employees:

• Dissemination/reminder of “social distancing” on various communication media and stricter health protection measures as of the first announcements from the authorities;
• Closure of Group sites and rollout of measures to ensure business continuity (teleworking);
• Group cohesion maintained with the implementation of various collaborative tools.

Cash position and action plan

At end-March, gross cash (excluding operating working capital) totalled €7.8 M (€10.56 M at 31 December 2019).

The Group has taken the following measures in response to the drop in business activity and to protect its cash position:

• Use of programmes implemented by the government to reduce the impact of the situation (postponed payment of taxes and social security charges, partial unemployment for approximately 35% of payroll, etc.), and, especially, the request granted by its long-standing banking pool for a €30 M government-backed loan, with the aim of rapid repayment;
• Syndicated loan agreement signed in 2015: payment of the January 2020 instalment (€2.25 M€) and request granted to postpone repayment of the principal initially scheduled for July 2020 (€2.25 M) and January 2021 (€2.25 M) by six months;
• Savings plan for previously provisioned overhead charges (spending on sales and communication, etc.);
• Suspension of the share buyback programme;
• Suspension of non-priority investments (CAPEX);
• Proposal to allocate all 2019 earnings to reserves, to be put forward at the next Annual General Meeting.

2019 ANNUAL FINANCIAL REPORT AND 2020 ANNUAL GENERAL MEETING