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The WHO’s president made a statement today that “3.4% of reported COVID-19 cases have died”. This may seem premature given how difficult it is to estimate a mortality rate at a nascent stage of a disease. He went on to compare it to flu which “generally kills far fewer than 1% of those infected”. Clearly his intention is to highlight the severity of the disease to governments and to focus minds on containment, if that is still possible.

Headlines
• Italy – To close all schools for two weeks.
• Italy – Has highest number of new cases, 446.
• Hong Kong – Cuts its interest rate by 28bps to 2%.
• Elis (textile, hygiene and facility services) – Decrease in orders in France since last week.
• US – Cases now in 12 states.
• China – February car sales down 80%.
• Poland – First case reported.
• Australia – Has increased its forecast economic impact of the virus.


Company news
Abercrombie and Fitch (fashion retailer) – Revises down Q1 outlook, with the adverse impact on revenue of COVID-19 expected to be in the range of $60 million to $80 million and gross margin reducing by 50-70 basis points.
Attraqt (online shopping experience) – “To date the company has not experienced a direct impact from the coronavirus outbreak and it is difficult, at this time, to make accurate predictions regarding the spread of the virus or its impact on the company's customer base. It is likely that some travel restrictions will be put in place in the coming weeks.”
Biffa – ‘here has not been any meaningful impact on the Group to date.’
Chemring (advanced technology products) – “The COVID-19 outbreak is not currently having any material impact on our businesses or their supply chains.”
Cranswick – Grocer article on UK cold stores being full due to lack of distribution to China. Jim Brisby, commercial director at Cranswick, confirmed there have been difficulties. “There has been disruption and it is continuing, with containers quite hard to get and boats piling up outside Shanghai,” he said. “We’ve been stocking product now since the new year in anticipation of the trade returning.” Brisby stressed recent signs of recovery in China meant exports could soon return to normal. “The underlying demand in China is still very strong, and we understand their stocks are low. People [in China] tend to eat a lot of pork at home, so if anything demand has risen through this period. Once people go back to work this week we expect product to start moving again.”
De Beers – Diamond sales -36% at its second sale of 2020.
Devro (sausage casings) – “We are closely monitoring the current and potential impacts of the COVID-19 on our manufacturing and commercial operations and global supply chain. At this point in time our manufacturing location in Nantong, China, is operating at normal capacity and is not facing labour or supply shortages.”
Elementis (chemicals) – “Our production sites and sales offices in China have reopened and all Elementis staff are safe and well. China represents approximately 15% of our group sales, is home to three out of our 22 manufacturing plants and is a limited part of our global supply chain. However, there is potential for some disruption to customer demand and we will continue to monitor the impact as appropriate. In the short term, given the challenging market back drop, and the uncertainty around the wider impact of COVID-19, we remain cautious on the 2020 outlook with stable performance expected, supported by the delivery of cost savings and new business opportunities.”
Elis (textile, hygiene and facility services) - ‘After a very good start of the year, we have been observing since last week the first impacts of the outbreak of the Covid-19 epidemic on our activity, with a decrease in orders from Hospitality clients in Paris and in the South East of France.’
Ethiopian Air – Passenger numbers -20%.
Evonik (German chemicals) – Revised down adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for the first quarter by €30m to account for the coronavirus impact.
GE – “For the first quarter of 2020, GE anticipates a negative impact to GE Industrial free cash flow* of approximately $300 million to $500 million, as well as a negative impact to operating profit of approximately $200 million to $300 million, from COVID-19, based on information to date. This is incorporated in GE’s full-year 2020 outlook. Further impact beyond the first quarter is not incorporated. GE also shared that it expects to generate approximately $0.10 in adjusted earnings per share*, as well as approximately negative $2 billion of GE Industrial free cash flow*, in the first quarter of 2020. This incorporates the above expected impact of COVID-19.”
Hill & Smith (construction products) – “Presently we have seen no material impact on our business.”
Hostelworld (travel agent) – “Trading since late-January has been challenged by the outbreak of the COVID-19 virus which is having a significant impact on global travel demand, within Asian markets and more recently within the European market. As the coronavirus has spread from region to region, we have observed a material reduction in bookings and an increase in marketing cost as a percentage of net revenue. This has been driven by a significant reduction of bookings from free channels, an increase in longer lead time cancellations across all channels and an increase in investment in paid channels to partially offset the bookings decline in free channels. Given that the depth and duration of the virus outbreak is impossible to forecast at this time, we are unable to calibrate its effect for the balance of the year; however, if near-term trends were to persist to the end of March we estimate the impact to EBITDA to be in the range €3m to €4m for Q1 20. With continued tight cost control and our strong cash generative characteristics, the group remains resilient in volatile market conditions.”
IG Design (packaging) – “With the current known scale of the outbreak, it is not expected that there will be a material impact to the group's current forecasts. The group's factory in China is operating, with production volumes expected to increase over the coming weeks. We continue to work with our suppliers in China to ensure deliveries of our customers’ orders are managed through this period, including as necessary, mitigating strategies such as alternative sourcing arrangements and using existing inventory reserves.’
Kion (materials handling) – “Our almost 4,000 Chinese employees are all back at their factories and offices, and there’s not a single coronavirus case among them”. The company expects to make up for most of the work lost to suspension of its four Chinese plant by year-end.
Lufthansa – Is to ground 150 aircraft due to reduced demand as a result of the virus outbreak.
Pandora (jewellery) – CEO has said 30 of 240 shops in China remain closed and 30 shops in Italy have now been shut.
Pershing Square Holdings (Bill Ackman fund) – Has announced it is taking steps to hedge the downside risk as it believes that efforts to contain the coronavirus are likely to have a substantial negative impact on the US and global economies, and on equity and credit markets. Pershing Square Holdings is a $3.8bn market cap US equity portfolio.
Triumph (aviation supplier) – ‘To date, there has been no material impact to Triumph's backlog or revenue as a result of coronavirus and the Company currently anticipates no material impact to results for fiscal year 2020 which ends March 31, 2020. All of Triumph's factories remain operational and the Company has business continuity plans at all sites should the need arise to implement them. Triumph has operations in 38 locations, none of which are in countries currently designated as CDC-designated Level 2 or 3 risk areas. No supply chain interruptions have occurred and Triumph remains in close coordination with customers on potential risks and mitigations. Only twenty of Triumph's approximately 5,000 active suppliers are located in China or Korea and all 20 remain operational.’
TT Electronics (electronic manufacturer) – “TT operates two manufacturing facilities in China. One in Suzhou with circa 650 employees and one in Dongguan with circa 200 employees. In addition, we have two small support facilities in Shenzhen and Hong Kong. In 2019, these facilities accounted for 25 per cent of the group's revenues. Both of our facilities closed for the lunar new year holiday as normal and were mostly closed for normal production until 10 February, as directed by the Chinese authorities. During this period, our global business continuity and crisis management plans operated very effectively, and we responded daily to local authority guidance. Our Suzhou facility was given special permission to continue production throughout the extended lunar holiday to supply some critically needed medical diagnostic products for use in combating the virus. At this time, under strict government control, we operated at circa 20 per cent capacity instead of being shut completely. The Suzhou and Dongguan facilities re-opened on 10 February and have experienced a slower than normal capacity ramp-up but are now operating at circa 95 per cent capacity. We continue to prioritise actions and precautions to ensure the safety and well-being of our employees returning to work in the facilities. We are carefully monitoring our supply chain of around 900 suppliers in China. At this time, to the best of our knowledge, 99 per cent of our suppliers have recommenced operations but with varying degrees of capacity. The duration and impact of this issue on our business is uncertain, however based on slower than normal capacity ramp-up in both our own operations and the supply chain, lost or delayed sales and cost base inefficiencies we currently anticipate that it could impact underlying operating profit by up to £3 million. The possible impact of an extended supply chain disruption is uncertain. We currently expect the impact of these events to be restricted to 2020.”
Volvo – Says sales in China were impacted in February as many retail outlets were closed due to the virus outbreak.

Wizz Air – “Subject to further impact on demand from COVID-19, we are considering further adjusting network capacity in the magnitude of 10% in Q1 F21. At this point in time it is difficult to predict the extent and the duration of the outbreak and the impact on the next financial year.”
Woolworths (Australia's largest supermarket chain) – Has limited the number of toilet rolls customers can purchase after coronavirus fears prompted a surge in buying.

Events
• Fox News has cancelled its upcoming Upfront Event in New York based on public health concerns.
• German Industrial Fair in Hannover has been postponed until July.
• This year's London Book Fair, one of the UK's largest book events, has been cancelled due to concerns over the coronavirus outbreak.
• Google has cancelled its I/O 2020, its annual developer conference held in Mountain View, California. Its largest event of the year.
Other
• WHO – COVID-19 has a mortality rate of 3.4%, much higher than flu.
• French finance minister le Maire has said that the negative impact of coronavirus on French growth will be 0.1% for 2020.
• France has closed about 120 schools in areas with the largest numbers of coronavirus infection.
• WeChat – China's most popular messaging app has been censoring key words about the coronavirus outbreak from as early as 1 January.
• The UK government has said it will declare COVID-19 as a “notifiable disease”, a formal classification required by insurance policies.
• Industrial companies in Hungary are already facing shortages in various components due to the coronavirus impact on the supply chain, according to the leader of the Industry Confederation.
• Hong Kong cuts interest rate by 28bps to 2%.
• UBS has banned non-essential travel.
• Louvre has reopened after introducing measures to protect against coronavirus.
• Australia – Expecting virus to impact GDP by 0.5% in Q1 vs the forecast of 0.2% on 7 Feb.
• China Academy of Science – Research published saying there are two types of the virus, with one (L type responsible for c70% of cases) more aggressive and the other (S type). The L type was far more prevalent in Wuhan. The report can be found here.
• Italy to close all schools, colleges and universities for two weeks.
• Cofidis and Groupama-FDJ riders and staff who were on UAE Tour 2020 cycling will continue to be held in quarantine in the United Arab Emirates until 14 March.
• Saudi Arabia has announced the temporary suspension of the lesser Muslim pilgrimage, or Umra, for Saudi citizens and residents of the Gulf Kingdom.