Worrying that the more resilient Protection shows weakness
According to preliminary numbers from Polygiene, sales will likely be down 35% y-o-y, as it sees lower demand for its products in combination with unusually high inventory levels in the supply chain. The weakness is mostly explained by lower sales volume after the Chinese new year that ended 22 February and affected both business areas. EBIT will likely be negative in Q1 and the company will follow up its cost savings programme in Q4 with further deductions throughout the year. It seems that growth in March was far from satisfying, which casts further doubts on Q2. We also think it is worrying that the more resilient Protection business area has shown weakness, as the company has recently announced an expansion to India and bought Biomaster US to increase its efforts in the US market for the Protection business area.
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