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AGENDA
HEXAGON INTERIM REPORT Q2 2012 2
01
02
03
04
05
Net sales and earnings
Market development
Segment information
Orders and product releases
Summary
Overview Q2 2012
• Recorded growth of 12 per cent – organic growth 6 per cent • All geographic regions display organic growth in
net sales. There is an acceleration in Asia & South America and more normalised growth in the US compared to previous quarters. Europe is still very much a two-speed story, with growth contributions primarily from the Northern and Eastern regions
• Geosystems back to growth - previous contraction in China, due to the lack of activity in the high-speed rail sector, came to an end
• Metrology business and the PP&M division of Intergraph continue to be the primary engines of growth
• Intergraph SG&I has seen a turnaround - reported growth & improved profitability
• Strong Gross and EBIT margin in MT • Record gross margin of 56 per cent and EBIT
margin at 22 per cent
• Strong cash flow
4 HEXAGON INTERIM REPORT Q2 2012
Seasonality in profit
• Seasonal pattern still valid
• Although less accentuated with Intergraph in the Group
Q1 Q2 Q3 Q4
HEXAGON INTERIM REPORT Q2 2012 5
Key figures Q2 2012
MEUR Q2 2012 Q2 2011 Change %
Operating net sales 607.1 543.5 61)
Revenue adjustments 2) - -4.1 na.
Net sales 607.1 539.4 61
Operating earnings (EBIT1) 127.5 114.3 12
Operating margin, % 21.0 21.0 0
Earnings before taxes excl. non-recurring items 114.7 99.5 15
Non-recurring items - -4.1 n.a.
Earnings before taxes 114.7 95.4 20
Net earnings 92.8 76.3 22
Earnings per share, EUR 0.26 0.22 18
Earnings per share excl. non-recurring items, EUR 0.26 0.22 18
1) Adjusted to fixed exchange rates and a comparable Group structure (organic growth).
2) Non-recurring reduction of acquired deferred revenue in Q2 2011 related to the acquisition of Intergraph.
HEXAGON INTERIM REPORT Q2 2012 6
Key figures first six months 2012
MEUR H1 2012 H1 2011 Change %
Operating net sales 1,172.9 1,064.8 61)
Revenue adjustments 2) - -8.5 n.a.
Net sales 1,172.9 1,056.3 61)
Operating earnings (EBIT1) 238.5 219.1 9
Operating margin, % 20.3 20.6 -0.3
Earnings before taxes excl. non-recurring items 212.2 189.7 12
Non-recurring items - -8.5 n.a.
Earnings before taxes 212.2 181.2 17
Net earnings 171.8 144.9 19
Earnings per share, EUR 0.48 0.41 17
Earnings per share excl. non-recurring items, EUR 0.48 0.42 14
1) Adjusted to fixed exchange rates and a comparable Group structure (organic growth).
2) Non-recurring reduction of acquired deferred revenue in H1 2011 related to the acquisition of Intergraph.
HEXAGON INTERIM REPORT Q2 2012 7
Cash flow
MEUR Q2
2012
Q2
2011
H1
2012
H1
2011
FY
2011
Cash flow from operations before changes in
working capital
120.7 80.3 233.2 179.0 397.2
Changes in working capital -8.6 -25.9 -33.6 -50.4 -28.2
Cash flow from operations 112.1 54.4 199.6 128.6 369.0
Ordinary investment activities -40.6 -28.4 -75.6 -56.8 -135.9
Operating cash flow 71.5 26.0 124.0 71.8 233.1
Non-recurring cash flow - - - -16.0 -16.0
Operating cash flow after non-recurring items 71.5 26.0 124.0 55.8 217.1
HEXAGON INTERIM REPORT Q2 2012 8
• Cash flow from operations increased by 106 per cent in the quarter
• Operating cash flow increased by 175 per cent in the quarter
Movement Income - cost Profit impact
CHF Strengthened Negative Negative
USD Strengthened Positive Positive
CNY Strengthened Positive Positive
EBIT, Q2 2012 5.1 MEUR
Sales, Q2 2012 34.5 MEUR
Currency effects as compared to EUR
HEXAGON INTERIM REPORT Q2 2012 9
• CHF strengthening has had a negative impact on Group EBIT margin of
0.4 percentage points in Q2 and approximately 1 percentage point for the
first six months
Sales mix Hexagon MT Q2 2012 (Q2 2011)
South America
4% (3)
North America
27% (27)
Western Europe
35% (38)
EMEA excl. Western Europe
5% (5)
China
15% (14)
Asia Pacific
14% (13)
HEXAGON INTERIM REPORT Q2 2012 11
Q2 business trends
1) Sales per customer segment is per December 31, 2011 and sales by region is as of Q2 2012.
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W EU
35%
MEA
5%
NA
27%
SA
4%
CN
15%
APAC
14%
Surveying 22%
Power & Energy 19%
Aerospace & Defence 12%
Construction 11%
Public Safety & Security 10%
Automotive 9%
Manufacturing 9%
Other 8%
0-8% Negative >8%
TOTAL
Share of
sales 1)
Q2 2012
= Shift in trend since previous quarter
EMEA market trends, Q2
HEXAGON INTERIM REPORT Q2 2012 13
Q2 Share of Group sales 41 %
Growth, % Group MT
Net sales 3 3
• The demand for Hexagon’s products and
services in EMEA grew slightly in the second
quarter
• Improved demand for measurement
solutions used in automotive, aerospace and
manufacturing
• Customers continue to invest in enterprise
engineering, construction and data
management software used in power and
process industries
• Construction related activities and
governmental businesses remained weak
• Eastern Europe and Middle East continued to
grow
• Southern Europe remained weak
Americas market trends, Q2
HEXAGON INTERIM REPORT Q2 2012 14
Q2 Share of Group sales 31 %
Growth, % Group MT
Net sales 5 5
• Automotive, aerospace and general
engineering primary growth drivers
• Infrastructure projects grew Geosystems sales
in NAFTA
• Defence and security products – negative
sales growth
• High demand in the natural resources sector
in Canada
• Significant organic growth in South America as
all end markets are growing
Asia market trends, Q2
HEXAGON INTERIM REPORT Q2 2012 15
Q2 Share of Group sales 28 %
Growth, % Group MT
Net sales 10 10
• Asia recorded an organic growth of 10 per
cent as all of Hexagon’s application areas
recorded growth in China in the quarter
• The growth primarily came from strong
demand in the automotive, aerospace, power
and energy markets
• Geosystems returned to growth and further
recovery in China is expected as new
business initiatives start to contribute during
2012
• Other regions such as Korea and Japan also
reported growth in the quarter
-40
-20
0
20
40
2007 2008 2009 2010 2011 2012
Organic growth1) per geographic region (MT)
Asia 28%
Total 100 %
Americas 31%
%
EMEA 41%
1) Adjusted to fixed exchange rates and a comparable Group structure.
Share of sales Q2
HEXAGON INTERIM REPORT Q2 2012 16
Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Measurement Technologies (MT)
MEUR Q2
2012
Q2
2011
Change
%
H1
2012
H1
2011
Change
%
Net sales 590.3 526.7 61) 1,138.8 1,029.8 61)
Operating earnings (EBIT1) 130.9 117.2 12 244.3 224.1 9
Operating margin, % 22.2 22.3 -0.1 21.5 21.8 -0.3
1) Adjusted to fixed exchange rates and a comparable Group structure (organic growth).
HEXAGON INTERIM REPORT Q2 2012 18
• CHF strengthening has had a negative impact on Group EBIT margin of 0.4
percentage points in Q2 and approximately 1 percentage point for the first six
months
-40
-30
-20
-10
0
10
20
30
40
50
60
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2008 2009 2010 2011 2012
Organic growth1) by application area (MT)
%
1) Adjusted to fixed exchange rates and a comparable group structure (organic growth)
Share of sales Q2 2012
Metrology
30%
Technology
34%
Geosystems
36%
Metrology
Geosystems
Technology
Total
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0
10
20
30
40
50
60
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Q2
Gross margin (MT) – yearly data
Gross margin
Trend line
HEXAGON INTERIM REPORT Q2 2012 20
Q2 2012 56% (55) %
EBIT margin (MT) – quarterly data
0
5
10
15
20
25
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
EBIT MT
Trend line
HEXAGON INTERIM REPORT Q2 2012 21
%
NovAtel Technology Customer Order
Chinese Internet company, Tencent, invests in Novatel technology as part
of its effort to develop its social network services, mobile offering and
overseas presence
• Purchased NovAtel SPAN-CPT GNSS &
Inertial systems for mobile mapping
applications
HEXAGON INTERIM REPORT Q2 2012 23
Soso.com is a Chinese search engine owned by Tencent Holdings Limited, which is well known for its other creation QQ.
QQ, is a free instant messaging computer program in China. In February 2011, QQ.com ranked 10th overall in the Alexa Internet rankings
just behind Twitter.
HEXAGON INTERIM REPORT Q2 2012 24
Hexagon Guides Nasa on Mars
“Errors are not an option when it comes to manufacturing the largest Mars
rover to date…”
• Novatel and Hexagon Metrology equipment key parts of solution
• Parts had to have no tolerance for failure
• NASA JPL (Jet Propulsion Laboratory) own
and operate:
• Brown & Sharpe CMMs in various sizes
• ROMER portable measuring arms
• Leica Laser Trackers
NovAtel SPAN system
Significant Intergraph PP&M Enterprise/Software Wins
• The Dow Chemical Company, the second-largest chemical
manufacturer in the world by revenue, signed a three-year multi-
million dollar agreement, representing a continued commitment
to Intergraph 3D solution (plus additional software)
• Petrofac, a global engineering company with headquarters in the
UAE, purchased millions of dollars in software and maintenance
involving 3D and schematics solutions
• NIAEP, a leading Russian design and construction company
specializing in nuclear plants, purchased SmartPlant® 3D and a
range of other solutions
• China Institute of Atomic Energy, the entity responsible for atomic
energy research, design, construction, and operation in China,
purchased software, maintenance, and services
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Major Software/Support Announcements from Intergraph PP&M
Smart 3D 2011 R1
• Next-generation plant, offshore, and
material handling design solution released
in June
• Includes features to enhance quality and
productivity, as well as licensing flexibility
CADWorx® Plant Professional 2013
• AutoCAD® -based, intelligent 3D plant
design and modeling solution
• New pipe routing engine which can
significantly reduce design times
Expanded Intergraph Global Marine Center
• Opened in Busan, South Korea and features
a dedicated team of marine experts to
support customers in marine and offshore
projects
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Image: SmartPlant 3D Ltd.
HEXAGON INTERIM REPORT Q2 2012
Large Customer Order from ESB Networks, Ireland
• Intergraph’s solutions to automate the
generation of reports, plots, network
diagrams, and interfaces with other business
and operational management systems
• Intergraph’s G/Technology and GeoMedia®
solutions to deliver full two-way integration
with SAP and Oracle Outage Management
HEXAGON INTERIM REPORT Q2 2012 27
ESB Networks Ltd., the licensed operator of electricity distribution system
in Republic of Ireland – is responsible for building, operating, maintaining
and developing the electricity network and serving all electricity customers
Lifeline for City of Calgary Relies on Intergraph
HEXAGON INTERIM REPORT Q2 2012 28
Public Safety Communications (PSC) 9-1-1 centre – the lifeline for the City
of Calgary in Alberta, Canada – chose Intergraph
• PSC links people who need the help of police, fire
and emergency medical services, managing
almost a million 9-1-1 calls each year
• PSC selected Intergraph's Business Intelligence
solution for Public Safety to improve visibility and
evaluation of its services and ultimately – improve
response
• Intergraph's Business Intelligence tools enable
timely and meaningful reporting to Alberta Health
Services (AHS) and other stakeholders
Ministry of Agriculture in Brazil
The Ministry of Agriculture in Brazil selected
Intergraph’s products to facilitate the monitoring
of sugar cane crops used for producing
eco-friendly biofuels
• Intergraph’s ERDAS IMAGINE and ERDAS APOLLO
products will be used to create the AgriCana web
portal
HEXAGON INTERIM REPORT Q2 2012 29
HEXAGON INTERIM REPORT Q2 2012 30
Customer Order – City of Lucerne
Football Stadium Lucerne
City of Lucerne (Switzerland) selected Leica ScanStation C5
to create 3D city model with airborne scan data and
terrestrial laser scanning
HEXAGON INTERIM REPORT Q2 2012 31
Customer Order – Swiss Earthwork Companies
Two Swiss earthwork companies equip entire fleet with guidance systems
from Hexagon – Hess HG and JMS
• Hess AG specializes in complex excavations
• JMS specializes in Civil Engineering, including drilling and pile work
• Both equipped entire fleet with Leica Power Digger 2D and 3D guidance systems
Sinclair Knight Merz (SKM) Australia
Sinclair Knight Merz (SKM) Australia is a
leading global EPC
SKM has been an Intergraph PP&M
customer customer since 2009, using
Smartplant3D
• SKM will integrate new Leica products into
existing software solutions that include
Intergraph SmartPlant 3D
HEXAGON INTERIM REPORT Q2 2012 32
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Changjiang Institute of Survey, Planning, Design and Research (CISPDR) is
relying on monitoring solutions from Hexagon Geosystems for the
Nuozhadu Hydropower Station project
Customer Order: CISPDR
HEXAGON INTERIM REPORT Q2 2012
• Largest hydropower station in Yunnan
Province – an important base and
backbone of the Yunnan project to send
electricity power eastwards
• CISPDR purchased Leica Total Stations
and GNSS systems
HEXAGON INTERIM REPORT Q2 2012 34
Anglo American’s Dawson Mine, in
Australia’s Bowen Basin which contains the
largest coal reserves in the country,
completed a multimillion dollar platform and
software upgrade
Large Mining Orders
Lumina Copper’s Caserones Mine, in Chile,
to use a full Hexagon Mine Management
Solution
HEXAGON INTERIM REPORT Q2 2012 35
Newmont Boddington Gold Mine, in Western Australia, completes world’s
1st commercial deployment of Leica Jigsaw Positioning System (Jps),
powered by Locata
A New Constellation for Mining
• Drills using Locata and GNSS signals
experience unprecedented 98%
availability
• Co-developed Leica Jps network: only
precision (HP) solution that augments
standard RTK GPS/GLONASS signals with
Locata signals
HEXAGON INTERIM REPORT Q2 2012 36
Swedish National Land Survey (Lantmäteriet) chose Leica Geosystems
Sweden as exclusive supplier to deliver all instruments for their cadastral
surveying division
Customer Order: NLS Sweden chose Leica Geosystems
• Lantmäteriet expects significant cost reduction
due to instrument standardization
• Four-year contract covers delivery, training,
support and maintenance
New Product Release and Initial Order
New generation of successful mid-range
series of total stations
• Best-in-class Electronic Distance Measurement
(EDM)
- 1,000m range without a prism
- 2mm accuracy
• Integrates new mySecurity theft protection
system that disables instrument if stolen
• New touch screen colour display
• USB stick and Bluetooth cable-free connection
HEXAGON INTERIM REPORT Q2 2012 37
Grupo GinPro in Monterrey Mexico – one of the
largest wholesalers of Surveying Equipment in
the region – ordered hundreds of FlexLine
instruments
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Foxconn Group, a supplier of Apple,
ordered hundreds of shop floor bridge
machines
• All purchased machines will be used to support
future iPhone products
Large Order from Foxconn Group for New Shop Floor CMM
HEXAGON INTERIM REPORT Q2 2012
Small Size Shop Floor CMM
• First one of small size for shop floor, specially
designed for smaller parts and tight spaces
• Built to excel in manufacturing environments,
shoulder-to-shoulder with machine tools
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Hexagon 2012 Exceeded All Expectations
HEXAGON INTERIM REPORT Q2 2012
Combined 30,000 hours of info sharing, including:
• Over 400 sessions totaling 480+ hours of
presentations and 115 hours of training
• Over 100 TechPark displays and
demonstrations
Synergies Took Center Stage with presentations on how our brands are
coming together to shape new solutions
Over 3,000 attendees – 76 nationalities represented
• Additional 4000 watched opening live
streaming
Over 90% of attendees felt it met their expectations
and would recommend the event to a colleague
Hexagon had another strong
quarter:
• Sales growth of 12 per cent
• 6 per cent organic growth
• Gross margin of 56 per cent and
22 per cent EBIT margin in MT
• Operating cash flow increased
by 175 per cent
Summary Q2 2012
HEXAGON INTERIM REPORT Q2 2012 41
Disclaimer
"This presentation contains forward-looking statements. When used in this presentation, words such as "anticipate", "believe", "estimate", "expect", "intend", "plan" and "project" are intended to identify forward-looking statements. They may involve risks and uncertainties, including technological advances in the measurement field, product demand and market acceptance, the effect of economic conditions, the impact of competitive products and pricing, foreign currency exchange rates and other risks. These forward-looking statements reflect the views of Hexagon's management as of the date made with respect to future events and are subject to risks and uncertainties. All of these forward-looking statements are based on estimates and assumptions made by Hexagon's management and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results or experience could differ materially from the forward-looking statements. Hexagon disclaims any intention or obligation to update these forward-looking statements.
This communication is directed only at persons who (i) have professional experience in matters relating to investments or (ii) are persons falling within Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc) of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (as amended) or to whom it may otherwise lawfully be communicated (all such persons together being referred to as relevant persons). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.
It should be noted, that past performance is not a guide to future performance. Please also note that interim results are not necessarily indicative of the full year results. Persons requiring advice should consult an independent adviser.
THIS COMMUNICATION DOES NOT CONTAIN AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES; SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR EXEMPTION FROM REGISTRATION, AND ANY PUBLIC OFFERING OF SECURITIES TO BE MADE IN THE UNITED STATES WILL BE MADE BY MEANS OF A PROSPECTUS THAT MAY BE OBTAINED FROM THE ISSUER AND THAT WILL CONTAIN DETAILED INFORMATION ABOUT THE COMPANY AND MANAGEMENT, AS WELL AS FINANCIAL STATEMENTS."
HEXAGON INTERIM REPORT Q2 2012 42