NSG Group reported a drop in revenue and operating profit for each of its segments in the first quarter (Q1) of fiscal year (FY) 2021 (April through June 2020) compared to FY2020 Q1. In total, the company reported $859.9 million* in revenue in Q1 of FY2021 compared to $1.4 billion in the same period of FY2020, a 40% year-over-year decline. NSG experienced an operating loss of $5.6 million in the first quarter of 2021; whereas in the same period in 2020 the company reported an operating profit of $82.3 million.
According to the company’s Q1 FY2021 financial report, the results were affected by a reduction in demand associated with the global COVID-19 pandemic and, to a lesser extent, the translational impact of foreign exchange. However, the company reports it experienced a rebound in June.
“In automotive markets, the Group’s customers closed their production facilities as demand collapsed. Automotive volumes, which in many cases had been at near-zero levels during April and early May, strengthened markedly in June, although were still significantly below normal levels,” a portion of the financial report reads.
Automotive Glass Segment
The Americas represented 31% of the company’s automotive sales. Revenues and profits declined there due to the impact of the COVID-19 pandemic. Vehicle production rebounded in North America towards the end of the quarter and was driven by low inventory levels and recovering vehicle sales, according to the financial report. Production in other areas such as South America continued to be below the company’s “normal levels” throughout the quarter.
Europe represented 43% of the company’s automotive sales, and there revenues and profits fell, due to a collapse in demand also associated with the COVID-19 pandemic. The Group suspended production at its European facilities in line with actions taken by its automotive customers. Facilities that were suspended during April reopened in May, and by the end of June NSG’s facilities were fully open, and operating at a reduced capacity.
Asia represented 26% of company’s automotive sales, revenues and profits were also below the previous year due to the COVID-19 pandemic.
In the original equipment business, demand reflected the closure of customers’ production facilities during the quarter. Meanwhile, in the auto glass replacement business, demand showed a significant reduction in vehicle miles being driven with lockdown measures in force across many regions.
|NSG Group Financial Results by Segment (in millions of U.S. dollars)|
|Revenue||Operating (Loss) and Profit|
|FY2020 Q1||FY2021 Q1||FY2020 Q1||FY2021 Q1|
|Auto Glass||$718.89 m||$362.05 m||$37.28 m||($26.79 m)|
|Source: NSG Group’s FY2021 1st Quarter Results|
FY 2021 Forecast
NSG Group expects total revenue of $4.3 billion in FY2021, compared to $5.2 billion in FY 2020. However, its FY2021 forecast shows an anticipated operating loss of $187.1 million compared to an operating profit of $177.8 million in FY2020.
The FY2021 forecast is based on the gradual demand recovery from the first quarter throughout the year and the execution of an urgent cost savings project, aimed at restoring business profitability.
*Editor’s Note: The financial results were converted from Japanese Yen to U.S. dollars on August 12, 2020.