Q3 2024 Hexagon AB Earnings Call Transcript
Key Points
- Hexagon AB (HXGBF) is evaluating the potential separation of its Asset Life Cycle Intelligence division into a new company, NewCo, which could create additional value for stakeholders.
- The company reported strong recurring revenue growth of 7% in Q3 2024, reaching EUR 565 million.
- Hexagon AB (HXGBF) maintained a solid operating margin of 29% despite challenging market conditions.
- The company achieved a gross margin improvement to 67% from 65.5% in the prior year, driven by innovation and operational improvements.
- Hexagon AB (HXGBF) is well-positioned for growth into 2025, with strong product launches and a focus on innovation and customer engagement.
- Hexagon AB (HXGBF) experienced a 2% organic decline in sales in Q3 2024, with total sales of EUR 1.3 billion.
- The construction market remains weak globally, particularly in Europe and China, impacting demand.
- The Geosystems division saw a 5% decline in sales, affected by cautious customer investment due to interest rate concerns.
- The Autonomous Solutions division experienced a sales drop due to exceptional performance in the previous year and delays in the agriculture market.
- Hexagon AB (HXGBF) faces ongoing challenges in the automotive sector, particularly in Europe, with a noticeable slowdown in activity.
Thank you, everyone, for joining our Q3 2024 earnings call. Before discussing the group's performance in the last three months, I want to refer back to the press release that's been published earlier this morning in slide 4. The Board of Directors of Hexagon has authorized management to evaluate the potential separation of the Asset Life Cycle Intelligence division, ALI, into a NewCo.
NewCo will also include businesses with strong customer, technology and operational synergies with ALI and namely ETQ, the enterprise quality management software platform that currently resides into manufacturing intelligence; Bricsys, a provider of CAD and BIM software currently in Geosystems; as well as utilities and infrastructure, a business currently in the SIG division providing network engineering software.
So what are we setting out to do with the strategy? Well, the ambition is to create two public companies at scale with distinctive strategies and financial profiles and to create additional value for all the stakeholders involved.
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