Slide 1: Q4 2023 report
Q4 2023 report 1 February 2024 1
Slide 2: Q4 & FY 2023 agenda
Q4 & FY 2023 Financial Notable new products Highlights review & customer wins Closing remarks & QA 2 | hexagon.com
Slide 3: I. Q4 & FY2023 highlights
Q4 & FY2023 highlights ty HEXAGON
Slide 4: Highlights Q4 & FY 2023
Highlights Q4 & FY 2023 • Good growth momentum driven by Category Achievement Category Achievement automation and software solutions • Margin expansion underlines good execution and strength of the Organic growth 5% Organic growth 7% business model • Strong cash conversion Adj. gross margin 67% Adj.
Slide 5: Several important commitments
Several important commitments • Average organic growth of 5-7% • Formalised annual cash conversion between 2022-26 target within the 80-90% range • Average growth from structure of 3-5% • Target 95% reduction in scope 1 & 2 between 2022-26 emissions by 2030 and net zero by 2050 • Operating margin (i
Slide 6: Rationalisation programme
Rationalisation programme Synergies Performance Footprint Automation • Simplification of the org • Higher priority, low-margin • 52 facilities closed in 2023, with • Investment in automation for structure and related savings activities successfully addressed an additional 65 targeted in assembly and
Slide 7: Analysis of organic growth per geographic region and by industry
Analysis of organic growth per geographic region and by industry Share of W EU EEMEA2) NA SA China ASIA3) sales1) 29% (29) 8% (7) 34% (34) 4% (5) 12% (13) 13% (12) Surveying & Reality Capture 18% Power, Energy & Mining 22% Electronics & Manufacturing 17% Infrastructure & Construction 12% Automotive
Slide 8: Geospatial Enterprise Solutions – Q4 2023 overview
Geospatial Enterprise Solutions – Q4 2023 overview Sales and EBIT1 Sales of 675.5 MEUR EBIT1 of 208.6 MEUR (208.3) (662.0) – organic growth and operating margin of 30.9 of 2 per cent per cent (31.5) Negatively impacted by FX Geosystems** SIG Autonomy & Positioning* +3% organic growth -4% organic gro
Slide 9: Industrial Enterprise Solutions – Q4 2023 overview
Industrial Enterprise Solutions – Q4 2023 overview Sales and EBIT1 Sales of 759.8 MEUR EBIT1 of 237.3 MEUR (213.4) (741.2) – organic growth and operating margin of 31.2 of 7 per cent per cent (28.8) Negatively impacted by FX, positively impacted by a strong Manufacturing Intelligence Asset Lifecycle
Slide 10: Our new divisional structure (from Q1 2024)
Our new divisional structure (from Q1 2024) Manufacturing Asset Lifecycle Autonomous Safety Infrastructure Intelligence Intelligence Geosystems Solutions & Geospatial Automotive Energy and power Machine control Mining Utilities Aerospace Petrochemical Surveying Agriculture Communication Electro
Slide 11: New divisional structure – historic performance summary
New divisional structure – historic performance summary Division Category FY 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Revenue 5,175.5 1,286.6 1,366.0 1,352.1 1,435.3 5,440.0 Organic growth in revenue 8% 8% 8% 5% 7% Hexagon* EBIT1 1,517.8 371.2 394.1 393.0 438.4 1,596.7 EBIT1 margin % 29.3% 28.9%
Slide 12: II. Financial review
ll. Financial review 4“ HEXAGON
Slide 13: Income Statement – Q4 2023
Income Statement – Q4 2023 MEUR Q4 2023 Q4 2022 Change % Sales bridge Operating net sales 1,435.3 1,403.2 51) 2022, MEUR 1,403.2 Revenue adjustments - -1.3 n.a. Structure, %* 1% Net sales 1,435.3 1,401.9 51) Adjusted gross earnings 955.2 928.9 3 Currency, % - 4% Adjusted gross margin, % 66.5 66.2 0.
Slide 14: Q4 Profitability bridge
Q4 Profitability bridge Growth - 4% 1% 5% 2% MEUR Q4 2022 Currency Structure Organic Q4 2023 Operating Net Sales 1,403.2 -55 19 68 1,435.3 Adjusted Operating Earnings (EBIT1) 418.0 -15 8 27 438.4 Adjusted Operating Margin 29.8% 27% 41% 40% 30.5% Accretion / (Dilution) on margin 0.1% 0.1% 0.5% 14 | h
Slide 15: Income Statement – FY 2023
Income Statement – FY 2023 MEUR 2023 2022 Change % Sales bridge Operating net sales 5,440.0 5,175.5 71) 2022, MEUR 5,175.5 Revenue adjustments -4.8 -15.0 n.a. Structure, %* 2% Net sales 5,435.2 5,160.5 71) Adjusted gross earnings 3,593.4 3,384.7 6 Currency, % - 4% Adjusted gross margin, % 66.1 65.4
Slide 16: 2023 Profitability bridge
2023 Profitability bridge Growth - 4% 2% 7% 5% MEUR 2022 Currency Structure Organic 2023 Operating Net Sales 5,175.5 -180 88 357 5,440.0 Adjusted Operating Earnings (EBIT1) 1,517.8 -101 29 151 1,596.7 Adjusted Operating Margin 29.3% 56% 33% 42% 29.4% Accretion / (Dilution) on margin -0.9% 0.1% 0.9%
Slide 17: Gross margin – R12M
Gross margin – R12M % R12M 66% (65) 70% 65% • Richer software mix in portfolio through innovation 60% and M&A • Innovation drives higher GM% 55% for next generation devices • Q4 adjusted gross margin of 50% 66.5% (66.2) 45% 40% Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4
Slide 18: Cash flow analysis
Cash flow analysis Cash Flow Statement Reported Reported Change % MEUR Q4 2023 Q4 2022 Adjusted operating earnings (EBIT1) 438.4 418.0 5 • Improved operational cash Cash flow from operations before change in working generation 539.3 497.6 8 capital excluding taxes and interest Investments (Intangibl
Slide 19: Working capital to sales
Working capital to sales WC/Sales, % 25% WC Bridge Q4 2023 20% Receivables & 33.0 Prepaid expenses Inventories -18.5 Q4 2023 15% 7.9% Liabilities -9.1 Deferred revenue -55.7 10% Accrued expenses -18.7 Change in WC -69.0 5% 0% Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Q1
Slide 20: Planned disclosure changes
Planned disclosure changes 1 Reporting 5 Segments, Sales and EBIT1 4 Recurring revenue Absolute numbers, growth rate 2 Organic and M&A impact Absolute numbers, EBIT1 impact 5 R&D investments Capitalisation will be disclosed 3 6 Software revenue Working capital Cash impact of inventory, receivables A
Slide 21: III. Notable new products & customer wins
III. Notable new products & customer wins 21
Slide 22: Product launch: HxDR Apps
Product launch: HxDR Apps LocLab Cloud and GeoCloud Drive are secure, cloud-native platforms that offer innovative ways to use, update, manage and share 3D digital twins and survey data. The apps are designed to meet specific customer needs. SaaS Platforms Enable clients to access and share data abo
Slide 23: Product launch: Nexus Compute
Product launch: Nexus Compute Nexus Compute provides scalable cloud-based computation capacities that allow users to launch simulations without compute resource and software licence limitations. On-demand HPC access Provides the compute capacities needed, without the limitations of the available HW
Slide 24: Jacto
Jacto Customer background Customer challenge Jacto manufactures equipment for Orchard spraying is a necessary but time- precision agriculture with the goal consuming and hazardous task of citrus of driving efficiency through production in Brazil. technology. How Hexagon is helping Outfitted with a H
Slide 25: Ma'aden
Ma’aden Customer background Customer challenge Ma'aden ranks ninth in the world’s top mining Ma’aden requires accurate insights into companies with a market cap of 44 bnUSD. their material movement to minimise ore Appointed by royal decree to develop Saudi’s going to waste dumps, which impacts minin
Slide 26: PERI
PERI Customer background Customer challenge PERI is a leading manufacturer and PERI required a solution to enable efficient supplier of framework and scaffolding 3D design and collaboration with an open systems and 3D construction printing BIM approach. The transition needed to be with more than 9,1
Slide 27: Massachusetts RECCs
Massachusetts RECCs Customer background Customer challenge Massachusetts recently consolidated many The centers needed to modernise their small dispatch centers into regional emergency dispatch systems. communications centers (RECCs) distributed across the state. How Hexagon is helping In 2023, Hexa
Slide 28: KLM
KLM Customer background Customer challenge KLM is the Dutch national airline with a diverse Seeking to improve gas turbine inspections fleet. It offers passenger and cargo services, during the 4-week downtime, with a goal to prioritising sustainability and innovation in reduce this period as much as
Slide 29: LEGOLAND Korea
LEGOLAND® Korea Customer background Customer challenge LEGOLAND Korea Resort is a theme park Manage its safety-critical asset portfolio in Chuncheon, South Korea. Covering an and support change management across area of 280,000 square meters, the resort is 40 amusement rides and attractions. the lar
Slide 30: IV. Closing remarks & QA
IV. Closing remarks & QA 30 | HEXAGON INTERIM REPORT 1 JANUARY – 30 JUNE 2023
Slide 31: Growth momentum, strong margins, cash conversion
Growth momentum Strong margins Cash conversion Future ready Dividend increase FY23 organic growth Continued gross 103% cash Innovation and Board proposes at top end of the margin and EBIT1 conversion in Q4, execution focus position dividend of 0.13 EUR 2026 financial plan expansion 80% in FY23 us we
Slide 32: Upcoming events: China site visit, Hannover Messe, Minexpo
w/c 4 March China site visit 24 April Hannover Messe 24-26 Sept Minexpo 24-26 Sept Intergeo 32 | hexagon.com
Slide 33: Cautionary statement
Cautionary statement This communication may contain forward-looking statements. When used in this communication, words such as "anticipate", "believe", "estimate", "expect", "intend", "plan" and "project" are intended to identify forward- looking statements. They may involve risks and uncertainties,
Slide 34: Appendix
Appendix 34 | HEXAGON INTERIM REPORT 1 JANUARY – 30 JUNE 2023
Slide 35: Cash flow statement
Cash flow statement MEUR Q4 2023 Q4 2022 Cash flow from operations before changes in working capital excl. taxes and interest 539.3 497.6 Taxes paid -51.1 -66,1 Interest received and paid, net -46.9 -18.3 Cash flow from operations before changes in working capital 441.3 413.2 Change in working capit
Slide 36: Sustainability targets: Scope 1 & 2
Sustainability targets Dec 23 CMD Dec 23 CMD Announcement Announcement 2023 2025 2027 2030 2050 Conduct audits on Achieve at least Use Achieve 100% 30% women in leading 100% power from renewables 80% procurement spend to Net-Zero in our full value of key suppliers in risk areas positions be covered
Slide 37: 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% 37 | hexagon.com
Slide 38: Global leader in digital reality solutions
Global leader in digital reality solutions that are empowering an autonomous, sustainable future by putting data to work