Covid-19

The Path to Recovery

The coronavirus is currently spreading rapidly throughout the world. Based on what is known at present, it can’t be foreseen how things will progress going forward. However, the measures that have been implemented so far appear to be effective in slowing the virus’ exponential spread.

 

In addition to the human factor, the economic consequences are also becoming increasingly visible. Markets are collapsing and entire companies have come to a halt. The numerous stimulus programs that have been rolled out can only reduce, but not fully compensate for these losses.

Three Main Scenarios Are Currently Being Discussed

  • V-shaped scenario: brief shutdown and rapid recovery

  • U-shaped scenario: longer shutdown with subsequent rapid recovery

  • L-shaped scenario: extremely long shutdown with recovery not foreseeable over the long term

 

The effects across different industries vary, but the majority of companies are financially either heavily or very heavily affected. We believe that the effects of the coronavirus crisis will fall somewhere between the V-shaped and U-shaped scenario for most companies.

 

Regardless of exactlywhich scenario occurs, the mechanisms for guiding a company through the crisis will be the same. The only difference will be the timing of the phases and the intensity of the measures.

Assessment of the situation in the following industries:

The Path to Recovery Will Pass through Four Main Phases

We are currently in the shutdown phase and assume that, due to control mechanisms and measures in place to protect the population, business operations will be able to resume starting on May 4.

 

We need to use the time and prepare for this ramp-up today so that activities can be resumed in a coordinated manner with as little friction as possible.

During this volatile stage, resources must be deployed in a target oriented and extremely cost-conscious manner.

 

If the public health measures take effect, we expect the markets to calm down and the supply chains to stabilize from September onwards during the stabilization and cost performance phase. During this period, the company will continue to make only the most necessary investments and rigorously cut costs in order to achieve the best possible result for the year.

 

Not before January 2021 we expect the economy to begin growing moderately. In this environment, the company will once again invest in the future and initiate the performance improvement phase. The focus here will be on programs with an ROI within the fiscal year.

The way through the Covid-19 crisis

Every day new information reaches us, every day brings us new insights and every day new decisions have to be made.

 

For our customers we have developed a guide and a roadmap for dealing with the crisis.

 

Our program to guide you through the crisis!

Andreas Grundnig

Andreas Grundnig

Ingenics

Partner, Director
Phone: +49 731 93680 226

Alexander Gottwald

Alexander Gottwald

Ingenics

Associate Partner, Director
Phone: +49 731 93680 226