Technogym recorded a contraction in consolidated revenues of 11.2 percent during the first three months of 2020 compared to the same period in 2019. At constant exchange rates, sales were down 11.9 percent.
Technogym said the results for the first quarter of the year were impacted by the global COVID-19 emergency health crisis triggered by the epidemic.
Sales in the first three months of 2020 stood at €116.8 million compared to 131.5 million in the same period of 2019.
With regards to the performance by sales channel, it should be noted that Inside Sales (+ 10.2 percent) and Retail (+ 72.1 percent) are the best in the period in consideration of the greater exposure to the Consumer market, which is benefiting from the Covid-19 lockdown scenario in multiple geographic areas. The two mainly Commercial distribution channels, on the other hand, were weaker, with Field Sales – main sales channel – down by 11.7 percent and WholeSales down by 21.3 percent
In a global scenario impacted by the COVID-19 outbreak, the first quarter ended with a contraction in sales except for Italy, up 15.9 percent. Sales were down 8.6 percent in Europe (ex Italy); 24.0 percent in MEIA; 17.2 percent in APAC; 17.2 percent in North America; and 34.5 percent in LATAM.
Beside COVID-19, in Europe, performance is impacted by the weakness of the UK, where the Brexit theme continues to represent uncertainty for economic operators, and Russia, which are not sufficiently compensated by the positive trend in France and Germany. In APAC, the trend is linked to the COVID-19 pandemic that mainly affected China. In North America, there was a postponement of orders by some customers mainly in the Club segment. The emerging geographies of MEIA and LATAM also fell, on whose performance the Group’s decision to implement an even more careful selection policy for the own clientele.
Nerio Alessandri, chairman and CEO, commented: “In the context of the COVID-19 pandemic, Technogym closes the first quarter with a contained decrease in revenues. The result for the quarter was affected by the lockdown in the business to the business sector but benefited from the growth in the home fitness segment, which will also bring a positive contribution to the performance of the rest of the year. The lockdown, experienced in recent months, has created problems for people’s health in terms of a sharp increase in a sedentary lifestyle, body weight, anxiety and stress and leads to the worsening of existing pathologies like diabetes and hypertension. Therefore consumers will show strong demand for exercise and wellness. As of May, the situation for fitness clubs is improving: in China, fitness centers are already operational and many other countries will follow shortly. People want to resume socialization and fitness clubs are ready to operate safely: precise health and prevention protocols are in place, the use of equipment guarantees social distancing and software systems allow to manage access and a maximum capacity of the different areas.
“Also in the fitness industry, the emergency that we have experience in the recent months has accelerated the digital revolution: fitness clubs equipped with our digital Mywellness cloud platform have been able to offer their training experience to customers at home. Our strategy to be “on the go” wellness provider – fitness, sport and health solutions accessible everywhere and anytime, both at home and at the gym – has been definitively consolidated.
“After the pandemic, health has risen within people’s and companies priority list and wellness is confirmed to be one of the dominant consumer trends. On these bases, Technogym has already activated several cost containment initiatives aimed at defending profitability and is confident of being able to return, as soon as possible, to performance in line with the opportunities in wellness.”
Over the past few months Governments in the various countries around the world have adopted different measures aimed at containing the spread of the pandemic from COVID-19. These measures have been adopted in a non-homogeneous way in consideration of the evolution of the epidemic locally and this has led to a different impact, market by market, on Technogym’s business.
Starting from the end of January, the Group has reduced its activities in the territories affected by the pandemic, starting with China, respecting the rules issued by the authorities in the different countries. Since the first news regarding the spread of COVID-19 Technogym has appointed a team dedicated to managing the emergency and to implement all the necessary measures to guarantee the health of employees.
Although it is difficult to provide indications on the impact of the pandemic, given the continuous evolution of the situation, Technogym is ready to benefit from the gradual easing of lockdown measures in different countries of the world as well as to serve the growing demand for wellness with part of professional operators and end-users all over the world.
Photo courtesy Technogym