Schneider Electric saw its first quarter revenues drop due to Covid-19 lockdowns, and warned investors that it expected continued difficulties in the second quarter.
But the French electrical equipment manufacturer pointed to its digital and services businesses, which it thinks will perform well despite the pandemic.
Across all of its divisions, first-quarter revenue was €5.83 billion (US$6.3bn), down 7.6 percent year-on-year (down 6.4 percent organically).
"We started Q1 on a positive note across the world, with the exception of China that was impacted by the crisis," Jean-Pascal Tricoire, Schneider chairman and CEO, said.
"As we end the quarter, large parts of the world are in some form of lockdown while China starts its recovery path. As we navigate through the multiple lockdowns and put in place the necessary measures to weather the crisis, we also plan for the times ahead remaining very mindful of our mission and larger purpose with a view to prepare the future post crisis.”
Despite the overall revenue drop, the company's software and services business revenue grew 3.4 percent. “Digital will be big, people will want more digital; resilience has become huge on the agenda,” Tricoire said. “There will be industrial relocation in all geographies that will serve our automation and industrial business.”
Demand for data center products were hit by the virus, the company's financial statements show, but specifics were not disclosed. The company has a strong war chest to weather an extended downturn, with liquidity of around €9bn ($9.7bn), including cash & cash equivalents and available committed credit lines.
"Post-crisis, Schneider Electric is expected to be able to capture an acceleration in megatrends driven by government initiatives (all electric, all digital, renewables), a step up in investment in some of its core end-markets (data center, infrastructure, smart buildings, software/industry IIOT)," Schneider Electric said.