Hexatronic revises its outlook and looks to cut costs
Swedish Hexatronic Group is downgrading its short-term outlook and expects that the EBITA margin, excluding restructuring costs, will amount to 12-14% for the second half of 2023. Furthermore, the Company is initiating a cost-saving program expected to result in annual savings of approximately SEK 90 million (EUR 7.8 million).
Hexatronic is downgrading its short-term outlook due to a continued weakening of the market for fibre optic telecommunications infrastructure during the fourth quarter. The company therefore expects a deterioration in organic sales growth in the fourth quarter of 2023 compared to the third quarter of 2023. The EBITA margin, excluding restructuring costs, is now expected to amount to 12-14% for the second half of 2023 – compared to the previous expectation of 15-17%.
As a result of this weaker market, Hexatronic is initiating a cost-saving program involving an estimated 160 full and part-time positions. The company states that the program mainly relates to a reduction of production staff but also white-collar workers in Fiber Solutions in several of its geographical markets.
Starting from the end of the first quarter of 2024, the program is expected to generate annual cost savings of approximately SEK 90 million (EUR 7.8 million). Restructuring costs are expected to amount to approximately SEK 30 million (2.6 million) which will impact the fourth quarter of 2023.
“The market within Fiber Solutions has continued to weaken during the fourth quarter, particularly the German market and the US duct market, leading us to downgrade our short-term outlook. We are therefore today announcing measures to adapt our organization to current market conditions”, says Henrik Larsson Lyon, CEO of Hexatronic in a press release.
