Hexagon Ab Class B · OMXSTO:HEXA_B
Hexagon Ab Class B — Q3 2006 Earnings Presentation
32 slides from Hexagon Ab Class B's earnings presentation, Oct 25, 2006
Slide 1: Interim Report January - September 2006
Interim Report January - September 2006
Slide 2: Agenda
Agenda 25 October 2006 • Summary Q3 and Q1-Q3 2006 • Market Outlook • Business Areas • Events in the third quarter • Outlook 2006 2
Slide 3: Summary Q3 and Q1-Q3 2006
Summary Q3 and Q1-Q3 2006 O) HEXAGON
Slide 4: Summary Q3 2006
Summary Q3 2006 Q3 Q3 Change MSEK 2006 2005 % Order intake 3 151 1 690 11* Net sales 3 196 1 624 14* Operating earnings (EBIT1) 408 154 165 EBIT1 margin, % 12.8 9.5 3.3 Non-recurring items, net - 348 n.a.** Earnings before tax 362 477 n.a.** Earnings after tax 271 472 n.a.** Earnings per share excl.
Slide 5: Summary Q1-Q3 2006
Summary Q1-Q3 2006 Q1-Q3 Q1-Q3 Change MSEK 2006 2005 % Order intake 10 132 6 597 13* Net sales 9 908 6 372 12* Operating earnings (EBIT1) 1 281 567 126 EBIT1 margin, % 12.9 8.9 4.0 Non-recurring items, net 13 348 n.a.** Earnings before tax 1 118 832 n.a.** Earnings after tax 862 728 n.a.** Earnings
Slide 6: Cash flow Q1–Q3 2006
Cash flow Q1–Q3 2006 Q1-Q3 Q1-Q3 Change MSEK 2006 2005 % Cash flow from operations 1 232 567 117 Change in working capital -652 -254 -59 Net cash flow from operations 580 313 85 Net investments in fixed assets -588 -271 -117 Operating cash flow -8 42 -119 6
Slide 7: Order Intake and Invoiced Sales
Order Intake and Invoiced Sales MSEK 14 000 Order Intake 6 month trend 13 000 3 month trend 12 000 11 000 12 month rolling average 10 000 9 000 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S 14 000 Invoiced Sales 6 month trend 13 000 3 month trend 12 000 11
Slide 8: Market Outlook
¥ \ | am Market Outlook O) HEXAGON
Slide 9: Sales latest 12 months
Sales latest 12 months Hexagon Engineering Asia EMEA 12% 15% Hexagon 69% 60% Polymers 19% 25% Americas Hexagon Measurement Technologies 9
Slide 10: EMEA market trends
EMEA market trends  EU made industrial goods gain market shares u Upturn in CMM sales u Upturn in Hexagon Polymers sales  Growth in residential housing u More light construction work ? more TPS  Civil engineering gearing up ? more large projects u More GPS, Machine Automation Q3 Growth  Eastern
Slide 11: Americas market trends
Americas market trends  US made cars lose market share u Less polymers sales in Canada u More polymers sales in the US u Less CMM sales in Detroit u More aftermarket services  US Industry outside Detroit is doing fine  Residential housing down 20 % in Q3 u Less light construction work ? less TPS
Slide 12: Asia market trends
Asia market trends  Strong growth in China continues u Good for Hexagon Measurement Technologies u No impact on Hexagon Polymers until 2007  Good growth in Rest of Asia u Good for Hexagon Measurement Technologies u No impact on rest of Hexagon  Japanese recovery Q3 Growth u Moderate impact on Hex
Slide 13: Recorded and adjusted growth in sales
Recorded growth in sales % 2005 Q1 Q2 Q3 EMEA 3 17 10 85 Americas 64 134 87 77 Asia 60 204 150 213 Total 17 49 35 97 Adjusted growth in sales % 2005 Q1 Q2 Q3 EMEA 9 11 11 15 Americas 17 20 3 3 Asia 26 19 15 33 Total 12 15 7 14 13
Slide 14: Hexagon Measurement Technologies
Hexagon Measurement Technologies 14
Slide 15: Hexagon Measurement Technologies
Hexagon Measurement Technologies Q3 Q3 Change Q1-Q3 Q1-Q3 Change MSEK 2006 2005 % 2006 2005 % Order intake 2 104 784 9* 6 866 2 355 14* Net sales 2 208 736 16* 6 794 2 285 13* Operating earnings (EBIT1) 350 80 338 1 081 258 319 Margin, % 15.9 10.9 15.9 11.3 Employees at end of period 5 127 2 201 * A
Slide 16: Measurement Technologies in Q3
Hexagon Measurement Technologies in Q3 Â Operating margin of 16 % Â Organic growth of 16 % Â Substantial growth in certain geographical markets u EMEA: 9 % in order intake and 15 % in net sales u Americas: 3 % in order intake and 4 % in net sales u Asia: 18 % in order intake and 35 % in net sales Â
Slide 17: Measurement Technologies going forward
Hexagon Measurement Technologies going forward Range Macro Micro Nano Civil Sheet General Prismatic Engineering Construction Surveying Metal Purpose Parts < 10 Meters < 100 µm < 0,3 µm Accuracy 17
Slide 18: Hexagon Polymers
Hexagon Polymers \ O) HEXAGON
Slide 19: Hexagon Polymers
Hexagon Polymers Q3 Q3 Change Q1-Q3 Q1-Q3 Change MSEK 2006 2005 % 2006 2005 % Order intake 605 538 7* 1 908 1 628 10* Net sales 607 539 6* 1 876 1 616 9* Operating earnings (EBIT1) 50 66 -24 171 206 -17 Margin, % 8.2 12.2 9.1 12.7 Employees at end of period 2 045 1 803 * Adjusted for currency fluctu
Slide 20: Polymers in Q3
Hexagon Polymers in Q3 Â Continued increase in raw material prices u Substantial negative impact on operating margin u Carbon black manufacturers continued to increase their prices in the quarter u Indicating a price increases in Q1 -07 as well u Operating margin 2006 anticipated to be in level with
Slide 21: Polymers going forward
Hexagon Polymers going forward Customers with 80% Customers inhouse mixing with 10% inhouse mixing Germany Belgium Czech Republic Canada USA Mexico China 21
Slide 22: Polymers going forward
Hexagon Polymers going forward  Establishment of production facility in Qingdao, China u Will start operations Q1 2007  Establishment of production facility in Mexico u Will start operations second half-year 2007 22
Slide 23: Hexagon Engineering
Hexagon Engineering | O) HEXAGON
Slide 24: Hexagon Engineering
Hexagon Engineering Q3 Q3 Change Q1-Q3 Q1-Q3 Change MSEK 2006 2005 % 2006 2005 % Order intake 442 368 25* 1 358 1 252 16* Net sales 381 351 16* 1 240 1 240 7* Operating earnings (EBIT1) 21 15 40 64 60 7 Margin, % 5.5 4.3 5.2 4.8 Employees at end of period 1 039 1 175 * Adjusted for currency fluctuat
Slide 25: Engineering going forward
Hexagon Engineering going forward  Gradual disposal to be completed by the end of 2008  Ongoing negotiations  Chase volumes for EBP u Improve productivity in new press line u Continue successful market penetration u Time plan: 12 months 25
Slide 26: Events in the third quarter
Events in the third quarter 26
Slide 27: Acquisition Thaimach Sales & Service Co., Ltd.
Acquisition Thaimach Sales & Service Co., Ltd.  Distributor of coordinate measuring machines in Thailand  Hexagon Measurement Technologies Thailand established 1 September 2006  Based in Bangkok  A step in strengthening geographical presence in Rest of Asia 27
Slide 28: Acquisition Mikrofyn A/S
Acquisition Mikrofyn A/S  Machine automation and laser levelling and alignment equipment for construction and agricultural industries  Turnover about 100 MSEK  Annual growth about 30%  65 employees  Consolidated from 1 September 2006  A further step in Hexagon’s dynamic growth intentions in ma
Slide 29: Opening of Hexagon Metrology North American headquarters
Opening of Hexagon Metrology North American headquarters  North Kingstown, Rhode Island head offices officially opened on 14 September  Nationwide showcase for Hexagon Metrology’s products and technology  More than 80 software training classes each year  Production of Coordinate Measurement Mach
Slide 30: Outlook 2006
o Outlook 2006 O) HEXAGON
Slide 31: Outlook 2006
Outlook 2006  Enable further growth in sales and earnings by strengthening: u Market position u Product portfolio u Structure  The result for 2006 will exceed our long-term financial target: increase in earnings per share by at least 15 % 31
Slide 32: Hexagon - precision in everything
O) HEXAGON precision in everything O) HEXAGON