interim report q1 2015 - zonebourse.com · 7 hexagon interm report 1 january – 31 march 2015 meur...

Interim report Q1 2015

6 May 2015

HEXAGON INTERM REPORT 1 JANUARY – 31 MARCH 2015 2

1. NET SALES AND EARNINGS

2. MARKET DEVELOPMENT

3. SEGMENTS

4. M&A, ORDERS AND PRODUCT

RELEASES

5. SUMMARY

Net sales and earnings


Overview Q1 2015

Organic growth of 5 per cent & recorded growth of 19 per cent

• The growth was primarily driven by IES where both Metrology and

PP&M showed strength

• All regions showed mid-single digit growth with an acceleration in

Western Europe compared to previous quarter, but a slowdown in

Asia

Improved profitability and cash flow

• Group gross margin of 60 per cent and EBIT margin of 21 per cent

• Cost savings programme initiated and running according to time

table

• Operating cash flow improved by 40 per cent


0%

5%

10%

15%

20%

25%

0

100

200

300

400

500

600

700

800

Seasonality in profit

Seasonal pattern: Q1 weakest, Q3 second weakest, Q2 & Q4 strong

EBIT Margin %

EBIT1

MEUR

Net Sales


Key figures Q1 2015

1) Adjusted to fixed exchange rates and a comparable group structure

2) Non-recurring items in Q1 2015 relate to the implementation of a cost savings programme

MEUR Q1 2015 Q1 2014 Change %

Net sales 705.1 594.8 51)

Operating earnings (EBITDA) 198.6 160.4 24

Operating margin, (EBITDA) % 28.2 27.0 1.2

Operating earnings (EBIT1) 149.8 123.4 21

Operating margin, % 21.2 20.7 0.5

Earnings before taxes, excl. non-recurring items 142.2 115.2 23

Non-recurring items 2) -36.6 -17.4 n.a.

Earnings before taxes 105.6 97.8 8

Net earnings 84.0 78.1 8

Net earnings, excl. non-recurring items 113.8 92.2 23

Earnings per share, EUR 0.23 0.22 5

Earnings per share, excl. non-recurring items 0.31 0.26 19


MEUR Q1 2015 Q1 2014

Cash flow from operations before changes in working

capital excluding taxes and interest

191.9 160.5

Taxes paid -28.9 -17.6

Interest received and paid, net -5.2 -6.5

Cash flow from operations before changes in working

capital

157.8 136.4

Change in working capital -33.0 -35.0

Cash flow from operations 124.8 101.4

Investments tangible assets -7.9 -14.4

Investments intangible assets -47.3 -36.8

Operating cash flow 69.6 50.2

Non-recurring cash flow -4.5 -3.7

Operating cash flow after non-recurring items 65.1 46.2

• Operating cash flow in Q1 2015 improved by 40 per cent to 65.1 MEUR (46.2)

Cash flow


Working capital to sales (rolling)

0%

5%

10%

15%

20%

25%

30%

35%

Full impact from

recurring revenue

Q1

seasonally

weak

Consolidation

of Intergraph


Effects and actions related to FX movements

MEUR

Q1 15 as

reported

Impact from FX

movements

Q1 15 adjusted

for FX

Net sales 705.1 66.4 638.7

Operating earnings

(EBIT1) 149.8 14.1 135.7

Operating margin, % 21.2 0.0 21.2

• Currency movements had a neutral impact on our EBIT1 margin. However, the currency

movements had a negative impact on Geosystems and PP&M, but a positive impact on

other units

• The cost savings programme announced on March 31 will affect approximately 400

employees and is expected to drive cash cost savings of approximately 35 MEUR per

annum with full effect as of 2016

Market development


Western Europe

7%

(9)

EMEA (excluding Western Europe)

Sales mix Hexagon Q1 2015 (Q1 2014)

30%

(31)

31%

(27)

North America

South America

Asia Pacific (excluding China)

13%

(13)

15%

(15)

China

4%

(4)


CONTRIBUTORS TO GROWTH1) (descending order)

Q1 2014 2) 581.8

Western Europe

North America

Asia excl. China, Australia

China

Eastern Europe, Middle East & Africa

South America

Australia

Russia

Q1 2015 705.1

1) Adjusted to fixed exchange rates and a comparable group structure (organic growth)

2) Numbers pro forma after the divestment of Other Operations

>8%

0 to 8%

Negative

Analysis of organic growth1) per geographic region


Share

of sales 1)

W EU

30%

MEA

7%

NA

31%

SA

4%

CN

15%

ASIA 2)

13%

Surveying 23%

Power & Energy 20%

Electronics & Manufacturing 12%

Infrastructure & Construction 11%

Safety & Security 10%

Automotive 10%

Aerospace & Defence 8%

Other 6%

TOTAL

1) Sales per customer segment as of 31 December 2014 and sales by region as of Q1 2015

2) Asia, excluding China

x

Analysis of organic growth1) per geographic region

>8%

0 to 8%

Negative


0

20

40

60

80

100

120

140

160

180

Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015

Organic growth1) per geographic region

1) Adjusted to fixed exchange rates and a comparable group structure (organic growth)

Index Q1 2008 = 100

Asia

29% EMEA

37%

Americas

34%

Americas

EMEA

Asia

Total

Share of sales

Q1 15


• Western Europe recorded 9 per cent

organic growth; the positives were UK,

Italy and Spain as well as the Nordic

region; France recorded negative growth

rates

• Segments such as surveying, automotive

and power & energy drove the broad-

based organic growth in Western Europe

• Middle East, Africa and Eastern Europe all

grew but Russia recorded -55 per cent

organic growth and hampered overall

growth rates Q1 Share of sales, % 37

Q1 Organic growth, % 6

- Organic growth, GES % 5

- Organic growth, IES % 6

EMEA market trends, Q1


Q1 Share of sales, % 34


- Organic growth, GES % 1


• The demand in NAFTA remained strong,

driven by Mexico and USA

• In USA, segments such as automotive,

electronics and surveying were the primary

drivers. Public safety had a negative

impact, but the backlog has improved to

record levels in recent months

• South America recorded growth despite

negative development in Brazil as markets

such as Argentina and Colombia showed

strong growth rates

Americas market trends, Q1


Q1 Share of sales, % 29


- Organic growth, GES % -6


• 4 per cent organic growth in China as all

businesses slowed down; the IES segment

continued to show solid growth, while GES

declined due to impact from lower activity

in construction

• Markets such as India, Malaysia, Vietnam,

Singapore and New Zealand all grew at

double digit growth rates

• Australia reported a weak quarter due to

the downturn in mining, which also affects

the wider surveying business

ASIA market trends, Q1

Segments


46%

36%

18%

Sales per geography

EMEA

Americas

Asia

45%

20%

11%

12%

5% 7%

Sales per segment

Surveying

Infrastructure & Construction

Public Safety

Natural Resources

Defence

Transportion & utilities

Software & services Recurring revenues Direct sales Emerging markets

%

Surveying Machine Control

Mapping 3D scanning Public safety

Positioning

Geospatial Enterprise Solutions – Q1 15 overview

Organic growth of 2 per cent

• Geosystems – Organic growth of 1 per cent;

surveying saw strength in North America and

Europe, but overall growth hampered by Russia,

China and mining

• SG&I – 0 per cent organic growth; order backlog

has improved in recent months

• Positioning – Organic growth of 6 per cent

EBIT1 growth of 20 per cent

• EBIT1 increased by 19 per cent to 66.3 MEUR

(55.5). Margin of 18.7 per cent (18.0)

• Continued transition to a more solution-centric

business model


30%

33%

37%

Sales per geography

Americas

EMEA

Asia

Industrial Enterprise Solutions – Q1 15 overview

53% of sales

Software & services Recurring revenues Direct sales Emerging markets

%

25%

15%

25%

35%

Sales per segment Automotive

Aerospace

Electronics &Manufacturing

Power and Energy

CAD CAM Stationary Sensors

Portable Sensors Asset Management Services

Organic growth of 8 per cent

• Metrology – 8 per cent organic growth driven by strong development for the portable sensor business. Broadened customer base in electronics

• PP&M – 7 per cent organic growth; broad based strength (no one-off deals) fuelled by continued user conversion to 3D-based software

EBIT1 growth of 24 per cent

• EBIT1 increased by 24 per cent to 89.7 MEUR (72.1). Margin of 25.6 per cent (26.3)

• The margin was negatively impacted by business mix and currency


Gross margin

%

45

50

55

60

2009 2010 2011 2012 2013 2014 Q1 2015

GM %

Trend %

Q1 2015 60% (56)


2016 Target

Operating margin – R12M quarterly data

EBIT1, %

%

R12M 22% (2014: 21%)

10

15

20

25

2008 2009 2010 2011 2012 2013 2014 2015

M&A, orders and product releases


Hexagon acquires industrial software company Q-DAS

Q-DAS specialises in statistical process control

solutions for industrial manufacturing

• Solutions widely used in sectors where high production

volumes and dimensional quality needs require statistical

analysis (such as automotive, where Q-DAS is the

de-facto standard)

• Strengthens Hexagon’s Metrology Management System

(MMS), designed to provide easy, one-stop access to

measurement data from any source or supplier

• Turnover for 2014: approximately 15 MEUR


HxIP releases 2014 airborne imagery content

The Hexagon Imagery Programme (HxIP)

streams geospatial content and delivers

professional-grade airborne images captured

with Leica Geosystems airborne sensors

• Provided airborne imagery from the 2014 flying

season for 11 U.S. states and portions of Canada

and Europe

• Content is now available as a Service (CaaS)

through the cloud via multiple content service

providers:

• Esri ArcGIS Marketplace

• Hexagon Geospatial Power Portfolio

• Valtus


Enabling enterprise asset information across Colombia

EPM is the largest multi-utility in Colombia,

providing all services including power, gas, water

and telecom to more than 5.2 million customers

• Hexagon’s solution helps fulfill the need to

continuously update enterprise asset information in

the field to reflect real-world status

• Mobile MapWorks, integrated with G/Technology

and GeoMedia, enables more customers to have

the right utility information at the right time


Hexagon making an impact worldwide in the agroindustry

Brazil: Usina Cerradão & Usina Ipiranga sugarcane mills

• Using hardware and software from Hexagon to automate the

planting process, reduce waste and increase crop yield

India: Water Resources Investigation and Development

• Using Hexagon remote sensing technology to conduct land-

use and land-cover analysis to improve the production of

small farms

USA: Quantum Spatial

• Using airborne sensors from Hexagon to supply airborne

imagery to the National Agriculture Imagery Program (NAIP),

which makes digital ortho photography available to the

government and the public


Hexagon technology aids real-time survellience

Italy-based Selex ES built a custom solution using

components of Hexagon Geospatial’s Power

Portfolio to provide real-time surveillance of

sensitive areas of the world

• A motion video exploitation solution, driven by

Hexagon technology, helps facilitate situational

awareness:

• Movements of groups can be easily monitored

• Analysts are able to handle large amounts of multi-

intelligence data

• Commanders are able to take decisive action based on a

greater understanding of the what’s happening, providing

better civilian protection


Hexagon and Esri collaborate for public safety and security

Hexagon and Esri are collaborating to align

Intergraph’s Computer-Aided Dispatch system,

I/CAD, and Esri’s ArcGIS Platform

• Collaboration to drive improvements for users of

both systems – from productivity and workflow

efficiencies to enabling the most up-to-date

geospatial data possible within their first responder

systems

• Initial steps include launch of Intergraph’s I/Map

Editor™ for ArcGIS® for map production in I/CAD

• Product available in Q2 2015


NYC Police Department expands relationship with Hexagon

The New York Police Department (NYPD)

awarded Intergraph a five-year contract to

offer 24x7 on-site support of the system to

ensure optimal reliability and service

• Hexagon employees will integrate onsite with

the NYPD team, providing full, end-to-end

system support for the agency

• The New York Police Department (NYPD)

implemented Intergraph’s computer-aided

dispatch system in May 2013


Helping automate emergency services in Para State, Brazil

Bélem do Para, the capital of Para State in

northern Brazil, is the largest urban city in the

region, with a daily population of more than

two million people

• Hexagon technologies are helping to automate

Para’s multi-agency center, enhancing emergency

public service to the capital

• Solutions implemented:

• I/CAD (call takers + dispatchers)

• S/MapPortal (GWMap + Geospatial Portal)

• S/PSIM (camera integration w/EdgeFrontier)

• Automatic Vehicle Location (AVL) integration


Improved fleet operation with Smart Asset Control

Samarco is using Hexagon’s Smart Asset

Control solution to manage its port assets at

Brazil’s Port of Ubu

• Samarco is using Smart Asset Control to manage a

variety of equipment including trucks, wheel

loaders and flatbeds

• Samarco is expected to reduce its contract with a

third-party logistics company by 10 per cent


General Motors selects Hexagon’s 360º SIMS for Rosario plant

Hexagon’s unique in-line inspection solution 360º

SIMS continue to enjoy market traction

• General Motors has ordered its first 360º SIMS

• 360º SIMS will be used at GM’s Rosario plant in Argentina

• GM will benchmark 360º SIMS using the Rosario plant


DSME selects Smart 3D for INPEX project

Daewoo Shipbuilding & Marine Engineering (DSME)

of South Korea is widely considered to be one of the

world’s premium shipbuilding and offshore

contractors

• DSME recently awarded a 2bn USD contract to build an

FPSO vessel used on an LNG mega-project offshore

Western Australia

• Purchased Smart 3D to deliver the project – all

engineering data from Smart 3D will be integrated into

SmartPlant Foundation at handover


Absolute Tracker AT960 gaining attention and momentum

Recently launched laser tracker with high-speed dynamics

and six degrees of freedom (6DoF) capabilities well-received

by the market

U.S.-based Electroimpact

• Designs and builds large tooling for aerospace including the

actuators that bring aircraft sections together during assembly

• Using AT960 to measure more with greater speed by reducing the

number of required setups

U.S.-based Triumph

• Supplies tail sections, wings, cabin structures and other

components to large aerospace companies such as Bombardier,

Gulf Stream and Embraer

• Using AT960s on an existing Gulfstream wing assembly project

and a new Embraer tail section build


Hexagon launches next-gen land-based corrections services

Hexagon launched the new GNSS correction

service level TERRASTAR-C, a global GPS and

GLONASS dataset delivered by satellite

• Following the acquisition of Veripos, the land-based

correction service is now number 1 in terms of

position accuracy

• Solution is not reliant on proximity to a local reference

station or terrestrial communications link


ScanStation P30/P40 and P16 launched

ScanStation P30/P40

• Adds more detail and natural colour perception to 3D

point clouds, enabling users to better understand and

interpret project deliverables

• ScanStation P40 – offers the highest versatility including

long-range capabilities, delivering outstanding range, speed

and data quality

• ScanStation P30 – high-versatility scanner with an optimal

mix of speed, range and accuracy paired with unmatched

robustness

ScanStation P16

• Combines high performance and environmental

robustness

• Price-performance ratio and user friendly interface make

it attractive for all short-range applications up to 40m

Summary


Summary Q1 2015

• 5 per cent organic growth driven by Industrial

Enterprise Solutions

• Improvement in operating margins despite negative

impact from CHF

• Savings programme will more than compensate for

negative CHF impact on our margins

• Strong cash flow underlines potential for M&A


Disclaimer

This presentation contains forward-looking statements. These

forward-looking statements reflect the views of Hexagon's

management as of the date of this presentation. The forward

looking statements may involve risks and uncertainties, including

technological advances in the measurement field, product

demand and market acceptance, the effect of economic

conditions, the impact of competitive products and pricing, foreign

currency exchange rates and other risks. Please read our

earnings reports and our most recent annual report for a better

understanding of these risks and uncertainties. All of these

forward-looking statements are based on estimates and

assumptions made by Hexagon's management and are believed

to be reasonable, but are inherently uncertain and difficult to

predict. Actual results or experience could differ materially from

the forward-looking statements. Hexagon disclaims any intention

or obligation to update these forward-looking statements. It should

also be noted that past performance is not a guide to future

performance and that interim results are not necessarily indicative

of the full year results.

THIS COMMUNICATION DOES NOT CONTAIN AN OFFER OF

SECURITIES IN THE UNITED STATES OR ANY OTHER

JURISDICTION; SECURITIES MAY NOT BE OFFERED OR

SOLD IN THE UNITED STATES ABSENT REGISTRATION OR

EXEMPTION FROM REGISTRATION, AND ANY PUBLIC

OFFERING OF SECURITIES TO BE MADE IN THE UNITED

STATES OR ANY OTHER JURISDICTION WILL BE MADE BY

MEANS OF FORMALLY DRAWN UP AND APPROVED

PROSPECTUS.

interim report q1 2015 - zonebourse.com · 7 hexagon interm report 1 january – 31 march 2015 meur...

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