We at Techstep have proactively taken steps to safeguard our employees, families, customers and partners following the outbreak of COVID-19. Right now, our thoughts go to all those making efforts to take care of people’s health and flatten the curve. These are tough times, but we will get through this by taking care of each other and collaborating as a team. Here at Techstep, we are contributing to minimise risk of business interruptions and is adhering to local public health advisory across our locations. In this letter, we want to provide an operational and financial update related to the ongoing situation.
Employees’ health and well-being are our highest priority
The health of our employees and their families is the foremost priority. To be well-prepared, we have established business continuity plans and a dedicated task force. We are following updated guidelines from the Norwegian and Swedish authorities to limit the spread of the virus and safeguard employees and operational capabilities. Since 12 March, we have run our core operations via decentralised locations and mobile home office solutions. Furthermore, all meetings are online and all travel between borders or within countries are restricted unless strictly necessary.
Impact on our operations
Our business is to enable enterprises and employees do their work across mobile devices and locations, with a high degree of security and operational stability. The nature of what we do means that we are fortunate and well equipped to deal with the current situation and maintain our own operations in a good way. When it comes to our customers and the market in general, we see higher activities in some areas, while the significant macroeconomic uncertainty and some hard-hit sectors obviously curb customer demand in other areas.
Looking ahead, the coronavirus outbreak is likely to result in an extraordinary impact on businesses and investments across several sectors, negatively affecting overall demand for our offerings. In addition, risk related to supply of hardware could increase.
We are already experiencing reduced demand for hardware. Demand for our mobility solutions and communication services, however, have been stable and in some cases increased. The establishment of the Norwegian national coronavirus hotline is an example of our latest deliveries within communication support. In the longer-term, it is too early to say whether the increased demand for solutions and services will make up for reduced hardware demand.
As the current outlook signals overall reduced activity, we have implemented a temporary reduction in workforce capacity by approximately 20%, effective in April. The temporary reductions are mainly within hardware sales and include both Norwegian and Swedish employees. Software, operational and communications services will continue as normal to serve our existing and potentially new customers’ mobility needs.
Cost and capex flexibility
At Techstep, we have operational, cost and capital expenditures flexibility and will continue to adapt as market conditions evolve. Once such adaption is the temporary workforce capacity reduction. We will continue software-related investments as planned, but other capital expenditures will be reduced going forward. Financially, a strong balance sheet and limited net interest-bearing debt helps reduce our longer-term risk.
Looking ahead, we remain positive that our mobility solutions will be even more relevant once the crisis abates. In addition, our Flow offering enables us to help companies get mobility solutions through our financing options, reducing the shorter-term liquidity need for our customers’ mobility and communication platforms. Fundamentally, making work mobile has never been more relevant.
Further information from:
Jens Haviken, CEO, Techstep ASA: +47 930 90 070
Marius Drefvelin, CFO, Techstep ASA: +47 958 95 690
About Techstep ASA
Techstep is positioning itself as a leading Nordic enabler of the digital workplace. Techstep supplies hardware, software, connectivity and mobile device management bundled as a managed service. This enables enterprises and their employees to do their work across mobile devices and locations, with a high degree of security and operational stability. Techstep has 211 employees based in Norway and Sweden, serving close to 4,000 customers and 201,000 recurring revenue end-users across various industries in the private and public sectors. The company is listed on the Oslo Stock Exchange. For more information, see www.techstepasa.no