STOCKHOLM (Reuters) - Industrial technology group Hexagon (HEXAb.ST) on Wednesday said it had initiated a company-wide cost savings programme due to the COVID-19 pandemic, as it reported quarterly core earnings in line with market expectations.
The maker of measurement and positioning systems and software said organic sales had dropped 7% in the first quarter, citing customer disruptions due to lock downs and government restrictions as the main factor.
“In the light of the COVID-19 pandemic, Hexagon has initiated measures to accelerate operational efficiencies to support its long-term financial objectives,” the company said in a statement.
It said it had taken short-term actions including reduced work weeks and furloughs, and had also started long-term measures such as reallocating resources to new business opportunities and staff cuts, reflecting “more enduring changes in market demand and revenue mix”.
Hexagon said it would take a one-off charge of around 135 million euros during the second quarter, with the cost-cutting measures seen resulting in annualised savings of around
125-150 million by the end of 2020.
Hexagon shares rose after the news and were up 2.9% by 1149 GMT.
First-quarter operating earnings at the Swedish group fell to 192 million euros($208 million), down from 221 million in the year-earlier quarter, and in line with the 191 million mean analyst forecast in a Refinitiv poll.
Hexagon’s sensors and software are used for measurement and quality inspection in manufacturing processes and engineering plant design, and also in areas such as infrastructure planning, construction, mining, agriculture and energy.
Reporting by Johannes Hellstrom; editing by Johan Ahlander