Suspension of 2020 targets for the main CAC 40 companies

  •   23/03/2020 - 14h55
  •   HARMANT Adeline

Several major French companies warned in a press release issued on Monday that they would not be able to meet their 2020 targets or that they would significantly reduce their investments in order to cope with the coronavirus crisis.

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Suspension of 2020 targets for the main CAC 40 companies

The announcements are more and more numerous this morning:

The Airbus Group has thus announced that it is cancelling its forecasts for 2020 in view of the volatility of the current situation and has also decided not to pay a dividend to its shareholders for 2019. Following this initial announcement, other CAC 40 companies have also expressed their views in this regard, which raises fears about the worst effects of the current health crisis on the French economy.

In particular, the Vinci group has announced that it will not record any increase in its revenues and profits this year and contrary to previous years. Indeed, the group is suffering the full impact of the coronavirus epidemic on its operating sites and airports around the world.

 

Reduced investment and cost reduction :

Other companies, in addition to anticipating a drop in revenues, also anticipate a drastic reduction in their investments. This is the case of Saint-Gobain, which has cancelled its forecasts for 2020 and is postponing its possible projects planned for the coming months.

It is also the case for the Vinci group which is going to limit its expenditure in the airports or for the Total group which also foresees, according to the press release published this morning, a reduction in the order of more than 20% of its investments. The latter, in addition to being impacted by the coronavirus, is also suffering the effects of the drop in the price of oil and should thus reduce its investments by nearly three billion euros and freeze most of its recruitments.

 

The other major groups are revising or suspending their forecasts :

The Schneider Electric group is also highly exposed to the crisis and has also warned that its forecasts were suspended for 2020, considering that its objectives were no longer relevant and after having already expressed reservations in its forecasts published in February.

It should be noted, however, that most of the groups that communicated in this way this morning also took care to reassure the markets of their financial solidity, and some of them have announced having made large-scale borrowings such as Airbus, which has obtained a new credit line and which now has 30 billion euros of liquidity compared to 20 billion previously.

Following these various announcements, the CAC 40 fell again after a slight recovery over the weekend. The CAC 40 lost 4% of its value during the first hour of Monday's session. Airbus lost more than 10%, Vinci more than 5%, Saint-Gobain more than 6%, Total nearly 3% and Schneider nearly 7%.