Sweden · Delayed Price · Currency is SEK Hexagon AB Earnings Call Transcripts
Fiscal Year 2026
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The company has refocused on precision measurement and positioning, set ambitious growth and margin targets, and introduced a new profitability metric (EBITAC) to drive R&D discipline. Growth will be fueled by innovation, new product launches, and strategic M&A, with Robotics positioned for long-term industrial impact but excluded from group targets.
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Q1 2026 saw 8% organic growth, 26% operating margin, and 77% cash conversion, driven by strong performance in Manufacturing Intelligence and Autonomous Solutions. Major portfolio actions included the sale of the design & engineering business and the announced acquisition of Waygate Technologies. Octave's spin-off remains on track, with recurring revenue growth and SaaS momentum.
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A $1.45 billion acquisition of a leading NDT platform expands into regulated, high-growth markets and completes the measurement chain from surface to internal inspection. Significant synergies, especially in Radiography and CT, are expected, with integration focused on cross-selling and China localization.
Fiscal Year 2025
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Q4 2025 saw 3% organic growth, record gross margin, and strong cash conversion, despite currency headwinds and ongoing restructuring. Segment performance was led by Autonomous Solutions, while Octave continued its SaaS transition and spin-off preparations.
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Organic growth reached 4% year-over-year, with strong performance in Autonomous Solutions and solid cash conversion. Operating margins improved sequentially but remain below targets, prompting a EUR 110 million cost efficiency program. The D&E business sale and new product launches position the group for future growth.
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Q2 saw 3% organic growth, stable 67% gross margin, and strong 104% cash conversion despite FX headwinds and market uncertainty. New product launches and the Occtave spin-off are set to drive future growth, while a cost improvement program is underway.
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Q1 2025 delivered flat organic growth, strong gross margin, and a drop in operating margin due to March's tariff-driven volume decline. Segment results were mixed, with recurring software revenues up but hardware and perpetual licenses weak. Management remains cautious amid ongoing geopolitical uncertainty and is focused on cost control and new product launches.
Fiscal Year 2024
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Q4 2024 saw 1% organic growth, strong software and recurring revenue, and robust margins, with cash conversion at 116%. Segment performance was mixed, but software and new products offset market weakness. Several acquisitions and leadership changes position the company for future growth.
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Norbert Hanke has been named Interim CEO as the board seeks new leadership to drive growth and margin expansion. The board is evaluating a potential separation of the ALI division, with both entities expected to focus on their core strengths. Commitment to 2026 targets remains firm.
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Management is evaluating a spin-off of ALI and related businesses to form a new software-focused company, aiming to unlock value and sharpen strategic focus. Q3 saw resilient margins and strong recurring revenue growth despite a 2% organic sales decline, with positive outlook for 2025 as markets recover.
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Q2 2024 saw resilient performance with flat sales but record gross margin and strong recurring revenue growth. Operational improvements and cost savings drove margin expansion, while macro headwinds persisted in construction and automotive. Outlook for Q3 remains cautious but confident in long-term growth targets.