Hexagon Announces Half Year Financial Results
Hexagon Group operating net sales increased by 6 per cent to 1,366.0 MEUR (US$1,503M). Using fixed exchange rates and a comparable group structure (organic growth), net sales increased by 8 per cent. Regionally, organic growth was 14 per cent in Asia, 7 per cent in EMEA and 6 per cent in the Americas. In Asia, China recorded 11 per cent organic growth, driven by strong growth in general manufacturing, power and energy and a stabilization in certain infrastructure and construction markets. The rest of Asia recorded high double-digit organic growth, driven by strong growth across most industries. In EMEA, Western Europe recorded 3 per cent organic growth, driven by strong growth across manufacturing industries and power and energy, partially offset by a slowdown in construction markets. EMEA, excluding Western Europe, recorded strong double-digit organic growth. In the Americas, North America recorded 6 per cent organic growth, with strong performance in mining and positioning solutions, but partially offset by a slowdown in construction and the exit of some lower margin defence contracts. South America recorded single-digit organic growth, driven by strength in power and energy.
Adjusted operating earnings increased by 4 per cent to 394.1 MEUR (US$433.5M), which corresponds to an adjusted operating margin of 28.9 per cent. The adjusted operating margin was supported by strong organic growth but negatively impacted by currency movements.
Industrial Enterprise Solutions
Hexagon Industrial Enterprise Solutions (IES) operating net sales amounted to 686.6 MEUR (US$755.3M). Using fixed exchange rates and a comparable group structure (organic growth), net sales increased by 11 per cent. Regionally, organic growth was 13 per cent in EMEA, 12 per cent in Asia, and 8 per cent in the Americas.
In EMEA, Western Europe recorded 11 per cent organic growth, driven by strong demand across manufacturing industries, as well as power and energy. The rest of EMEA recorded double-digit organic growth. In Asia, China recorded 12 per cent organic growth, driven by strong growth in automotive, particularly in Electric Vehicles, manufacturing and power and energy markets. The rest of Asia recorded double-digit organic growth, driven by solid demand for solutions within power and energy and general manufacturing. In the Americas, North America recorded 7 per cent organic growth, driven by growth strong growth in automotive manufacturing and power and energy. South America recorded double-digit organic growth, driven by strong demand in power and energy.
Manufacturing Intelligence Division
The Manufacturing Intelligence division recorded 11 per cent organic growth, driven by increased demand across both hardware and software. The Asset Lifecycle Intelligence division recorded 11 per cent organic growth, driven by strong growth for both design and enterprise asset management software.
Hexagon’s 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.
Adjusted operating earningsincreased by 8 per cent to 191.6 MEUR (177.9), which corresponds to an adjusted operating margin of 27.9 per cent. The adjusted operating margin was negatively impacted by currency movements, but positively impacted by strong organic growth.
“I am very pleased to report a strong Q2 performance, and especially 8% organic growth, driven by the continued adoption of our innovative solutions in the A&P, ALI and MI portfolios, all growing at double-digit rates. Hexagon’s operating margin remained resilient at 28.9%, despite a significant negative impact on EBIT from currency. As we strive to reach our long-term operating margin targets and constantly reallocate investment to core activities and skillsets, we will invest 200 MEUR during the third quarter 2023, with a similar cash impact, in an operational efficiency program. The program is expected to generate annualised cost savings of 160-170 MEUR, reaching the full run-rate impact in early 2025. In June, we successfully hosted our annual event HxGN Live, announcing exciting innovative solutions and initiatives, from the Reality Cloud Studio built on HxDR, our cross-industry digital platform, to next generation scanning devices and a transformative collaboration with Nvidia around their AI and Omniverse simulation technologies” commented Paolo Guglielmini, President and CEO, Hexagon AB.
For more information: www.hexagon.com
