Slide 1: Q2 Interim Report 2023
Q2 Interim Report 2023 26 July 2023 1
Slide 2: Agenda
Financial Geographic and highlights business review Closing remarks Appendix and Q&A 2
Slide 3: I. Overview and key figures
l. Overview and key figures 4, HEXAGON
Slide 4: Highlights Q2 2023
Highlights Q2 2023 • Strong organic growth of 8% • Resilient demand across most divisions 84% 29% Cash Adj. operating • Good momentum for new conversion margin solutions and recent acquisitions • • Cash conversion within target Well received innovation and 8% 66% Organic Adj. gross partnership annou
Slide 5: Income Statement – Q2 2023
Income Statement – Q2 2023 MEUR Q2 2023 Q2 2022 Change % Sales bridge Operating net sales 1,366.0 1,288.7 81) 2022, MEUR 1,288.7 Revenue adjustments -1.0 -6.4 n.a. Structure, %* 2% Net sales 1,365.0 1,282.3 81) Currency, % -4% Adjusted operating earnings (EBITDA) 489.3 465.9 5 Adjusted operating mar
Slide 6: Profitability bridge
Profitability bridge MEUR Q2 2022 Organic Currency Structure Q2 2023 (Volume/price/mix) Operating net sales 1,288.7 102 -45 20 1,366.0 Adjusted operating earnings 378.5 46 -37 6 394.1 (EBIT1) Adjusted operating margin, % 29.4 28.9 6
Slide 7: Cash flow
Cash flow MEUR Q2 2023 Q2 2022 Cash flow from operations before changes in working capital excl. taxes and interest 471.5 450.4 Taxes paid -84.3 -94.0 Interest received and paid, net -33.4 -6.4 Cash flow from operations before changes in working capital 353.8 350.0 Change in working capital 10.4 8.5
Slide 8: Strong organic growth in IES, standout performance in A&P
Strong organic growth in IES, standout performance in A&P 31% 11% 11% 11% 6% 7% IES Manufacturing Asset Lifecycle GES Geosystems SIG A&P Intelligence Intelligence -9% IES: Industrial Enterprise Solutions GES: Geospatial Enterprise Solutions SIG: Safety, Infrastructure & Government A&P: Autonomy & Po
Slide 9: HxGN LIVE major tech launches
3,500 attendees across 4 days Customers / partners Sessions / keynotes On demand Including guests from: Including guest speakers from: replays of keynotes NASA Amazon Web Services Fujitsu Microsoft YouTube playlist Google NVIDIA General Motors hexagon.com Innovation launches Partnerships & collabora
Slide 10: Industrial metaverse connected platforms
Machine & product digital twins Industrial metaverse connected platforms Reality capture Digital twin Real Data Virtual Data Shopfloor & Quality Design & Simulation Customer outcomes Greater efficiency Factory & city digital twins Ability to upload all Capture data to the Cloud devices & content Aut
Slide 11: II. Geographic & business review
II. Geographic & business review 11 | HEXAGON INTERIM REPORT 1 JANUARY – 30 JUNE 2023
Slide 12: Analysis of organic growth per geographic region and by industry
Analysis of organic growth per geographic region and by industry Share of W EU EMEA2) NA SA CN ASIA3) sales1) 27% (27) 7% (7) 34% (34) 4% (4) 15% (15) 13% (13) Surveying 19% Power, Energy & Mining4) 21% Electronics & Manufacturing 17% Infrastructure & Construction 13% Automotive 8% Aerospace & Defen
Slide 13: Geospatial Enterprise Solutions – Q2 2023 overview
Geospatial Enterprise Solutions – Q2 2023 overview Sales and EBIT1 Sales of 679.4 MEUR EBIT1 of 208.6 MEUR (205.6) (650.4) – organic growth and operating margin of 30.7 of 6 per cent per cent (31.6) Negatively impacted by FX Geosystems SIG A&P +7% organic growth -9% organic growth +31% organic growt
Slide 14: Mortenson
Mortenson Customer background Customer Challenge Major developer and One of its customers, the CitizenM hotel engineering services provider chain, wanted to disrupt the hospitality in the commercial, institutional industry by introducing prefabricated and energy sectors. (modular) construction. How
Slide 15: Asia Air Survey (AAS)
Asia Air Survey (AAS) Customer background Customer Challenge One of the largest and leading The Japanese government’s Digital geospatial firms in Japan. Twin Program faces complex urban mapping challenges. How Hexagon is helping By leveraging Leica CityMapper technology, Asia Air Survey can create 3
Slide 16: HxDR Reality Cloud Studio
HxDR Reality Cloud Studio All-in-one, simple-to-use, powerful SaaS cloud application Reality capture data storage, visualisation and collaboration Visualisation Immersive sensor-captured imagery, virtual tours, annotations, and measurements visualized in 3D space. Collaboration Direct, data-based co
Slide 17: Mineral Resources Ltd. (MinRes)
Mineral Resources Ltd. (MinRes) Customer background Customer Challenge Leading diversified resources MinRes needed to automate 120 road company, with mining operations trains, in order to overcome labour across Western Australia. shortages and safety concerns. How Hexagon is helping Our autonomous r
Slide 18: Reinforcing our autonomous capabilities
Reinforcing our autonomous capabilities HARD-LINE is a global leader in mine automation, remote-control technology and mine production optimisation. Key technology capabilities • Radio Remote control (RRC) • Remote Operational Control Room (TeleOp) • Complements existing offer (HxGN Underground Mini
Slide 19: Industrial Enterprise Solutions – Q2 2023 overview
Industrial Enterprise Solutions – Q2 2023 overview Sales and EBIT1 Sales of 686.6 MEUR EBIT1 of 191.6 MEUR (177.9) (638.3) – organic growth and operating margin of 27.9 of 11 per cent per cent (27.9) negatively impacted by currency movements, but positively Manufacturing Intelligence Asset Lifecycle
Slide 20: Major electric vehicle manufacturer
Major electric vehicle manufacturer Customer background Customer challenge A leading global EV They needed to improve their manufacturer in China – one of manufacturing process and required our largest existing customers. state-of-the-art metrology solutions. How Hexagon is helping Our portable meas
Slide 21: Global semiconductor manufacturer
Global semiconductor manufacturer Customer background Customer challenge A global leader in semiconductor As part of its digital transformation, it needed a manufacturing with over 100,000 better enterprise project performance software employees and 50,000 external platform to manage strategy and co
Slide 22: Multinational biopharmaceutical company
Multinational biopharmaceutical company Customer background Customer Challenge Develops and produces medicines and How to meet the global demand for vaccines on a global scale. Covid vaccines (up c 30%) with the same level of assets. How Hexagon is helping Customer aims to cut unplanned maintenance
Slide 23: III. Closing remarks & Q&A
Ill. Closing remarks & QA 4, HEXAGON
Slide 24: Launching an operational efficiency programme
Launching an operational efficiency programme Targeting annualised savings of 160-170 MEUR from 2025 Programme summary Synergies Footprint rationalisation • 200 MEUR investment during Q3 • Cross divisional cost savings via • Reduce offices and facilities by ~25% • Cash impact across implementation s
Slide 25: Closing remarks
Continued Cash Drive efficiency Successful Capital strong growth conversion to deliver on margin HxGN LIVE markets day despite slowdown in now back within target and fund growth Global scheduled for construction & target range event 7 December 2023 infrastructure 25
Slide 26: V. Q&A
V. Q&A 26 | HEXAGON INTERIM REPORT 1 JANUARY – 30 JUNE 2023
Slide 27: VI. Appendix
VI. Appendix 27 | HEXAGON INTERIM REPORT 1 JANUARY – 30 JUNE 2023
Slide 28: Save the date
Save the date 7th December 2023 12:00 – 5:00 PM GMT London Webcast to also be made available 28
Slide 29: Seasonality in profit
Seasonality in profit Seasonal pattern: Q2 & Q4 tend to be the strongest quarters MEUR 35.0% 1 400 Adjusted EBIT Margin % 30.0% 1 200 25.0% 1 000 20.0% 800 Net Sales 15.0% 600 EBIT1 10.0% 400 200 5.0% 0 0.0% 29
Slide 30: Working capital to sales
Working capital to sales 25% 20% 15% 10% 5% 0% 30
Slide 31: Gross margin – R12M
Gross margin – R12M % 70 R12M 66% (65) 65 60 55 50 45 40 35 30 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 From Q3 2021 the gross margin excludes adjustments 31
Slide 32: Adjusted operating margin – R12M
Adjusted operating margin – R12M % 35 Target 2026: >30% 30 R12M adjusted 29.2% (29.4) 25 20 15 10 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 The 2026 target of reaching an adjusted operating margin of >30% is based on an older definition of EBIT1 where amortisation of surplus values
Slide 33: Global leader in digital reality solutions
Global leader in digital reality solutions that are empowering an autonomous, sustainable future by putting data to work