Cost Saving Measures Announced By Hexagon

In the light of the COVID-19 pandemic, Hexagon has announced that it has initiated measures to accelerate operational efficiencies to support its long-term financial objectives.

In the short-term, Hexagon has implemented various actions that include shorter work weeks, furloughs and reductions in discretionary spending. As a long-term measure, a company-wide cost savings programme has been initiated which includes structural changes – from reallocating resources to new business opportunities to optimizing office locations worldwide – and work force reductions that reflect more enduring changes in market demand and revenue mix.

Overall, Hexagon will take a one-off charge of approximately -135 MEUR during the second quarter 2020, with the majority impacting cash flow, which is expected to result in annualized cost savings of approximately 125-150 MEUR by the end of 2020.

Industrial Enterprise Solutions  – Q1 2020 Financial Results

Hexagon Industrial Enterprise Solutions includes metrology systems that incorporate the latest in sensor technology for fast and accurate measurements, as well as CAD (computer-aided design), CAM (computer-aided manufacturing) and CAE (computer-aided engineering) software. These solutions optimize design, processes and throughput in manufacturing facilities and create and leverage asset management information critical to the planning, construction and operation of plants and process facilities in a number of industries, such as automotive, aerospace and oil and gas. Industrial Enterprise Solutions consists of Manufacturing Intelligence and PPM.

Net sales
Industrial Enterprise Solutions (IES) net sales amounted to 436.1 MEUR (467.8). Using fixed exchange rates and a comparable group structure (organic growth), net sales decreased by -9 per cent. Regionally, organic growth was 5 per cent in Americas, -6 per cent in EMEA and -22 per cent in Asia. In Americas, North America recorded mid-single digit organic growth, supported by a solid development in all segments. South America recorded low-single digit organic growth. In EMEA, Western Europe recorded a mid-single digit decline, due to the impact of government restrictions affecting customer demand. The power and energy segment however, recorded strong growth. Eastern Europe and Russia declined but the Middle East and Africa recorded solid growth. In Asia, China recorded a -39 per cent organic revenue decline, significantly impacted by government restrictions following the COVID-19 pandemic. Japan and India recorded favorable organic growth. Regarding the divisions within IES, Manufacturing Intelligence recorded -14 per cent organic growth, largely driven by the significant decline in China following the COVID-19 pandemic. North America, however, recorded solid organic growth, supported by a positive development within the aerospace market. The software portfolios were resilient and remained stable.

Operating earnings decreased by -19 per cent to 92.8 MEUR (113.9), which corresponds to an operating margin of 21.3 per cent (24.3). The operating margin was hampered by the organic revenue decline and currency effects.

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