Interim report Q October 2017

Transcription

1 Interim report Q October 2017

2 1. NET SALES AND EARNINGS 2. MARKET DEVELOPMENT 3. REPORTING SEGMENTS 4. ORDERS AND PRODUCT RELEASES 5. SUMMARY 2

3 Net sales and earnings

4 Overview Q Organic growth of 6 per cent, operating sales growth of 10 per cent Strong growth in Geosystems, Manufacturing Intelligence (MI) and Positioning Intelligence (PI) China recorded 19 per cent organic growth Strong demand across all divisions PPM heading in the right direction Positive momentum in the business outside of oil & gas supports expectation of growth towards the end of the year Improved profitability year-on-year despite currency headwind Gross margin of 60.4 per cent (59.8) and EBIT1 margin of 24.0 per cent (23.1) Benefited from organic growth, product mix and improved cost structure NRI of -7.3 MEUR (haircut) related to the acquisition of MSC 4

5 Seasonality in profit Seasonal pattern: Q1 weakest, Q3 second weakest, Q2 & Q4 strong MEUR % EBIT Margin % 25% 20% Net Sales 15% 10% EBIT1 5% 0 0% 5

6 Key figures Q MEUR Q Q Change % Operating net sales 2) ) Operating earnings (EBITDA) Operating margin, (EBITDA) % Operating earnings (EBIT1) Operating margin, % Earnings before taxes, excl. non-recurring items Non-recurring items 3) n.a. Earnings before taxes Net earnings Net earnings, excl. non-recurring items Earnings per share, EUR Earnings per share, excl. non-recurring items ) Adjusted to fixed exchange rates and a comparable group structure (organic growth) 2) Excluding acquired deferred revenue (haircut) related to the acquisition of MSC Software 3) Non-recurring items in Q relate to the acquired deferred revenue (haircut) in MSC Software 6

7 Key figures first nine months 2017 MEUR Q1-Q Q1-Q Change % Operating net sales 2) 2, , ) Operating earnings (EBITDA) Operating margin, (EBITDA) % Operating earnings (EBIT1) Operating margin, % Earnings before taxes, excl. non-recurring items Non-recurring items 3) n.a. Earnings before taxes Net earnings Net earnings, excl. non-recurring items Earnings per share, EUR Earnings per share, excl. non-recurring items ) Adjusted to fixed exchange rates and a comparable group structure (organic growth) 2) Excluding acquired deferred revenue (haircut) related to the acquisition of MSC Software 3) Reduction of acquired deferred revenue (haircut) related to the acquisition of MSC Software, costs related to the implementation of a cost savings programme and the acquisition of MSC Software. 7

8 Cash flow MEUR Q Q Q1-Q Cash flow from operations before changes in working capital excl. taxes and interest Cash conversion of 94% in Q and 91% in Q1-Q Cash conversion target of 80-90% Q1-Q Taxes paid Interest received and paid, net Cash flow from operations before changes in working capital Change in working capital Cash flow from operations Investments tangible assets Investments intangible assets Operating cash flow before non-recurring items Non-recurring cash flow Operating cash flow

9 Working capital to sales 35% 30% 25% 20% Consolidation of Intergraph Full impact from recurring revenue Consolidation of MSC Q % 15% 10% 5% 0% 9

10 Market development

11 Sales mix Hexagon Q (Q3 2016) North America China 31% (31) Western Europe 29% (30) EMEA (excluding Western Europe) 7% (7) 16% (16) South America Asia Pacific (excluding China) 3% (3) 14% (13) 11

12 Analysis of organic growth 1) per geographic region CONTRIBUTORS TO GROWTH 1) (descending order) Q China North America Eastern Europe, Middle East & Africa Asia ex. China South America Western Europe Q >8% 0 to 8% Negative 1) Adjusted to fixed exchange rates and a comparable group structure (organic growth) 12

13 Analysis of organic growth per geographic region Share of sales 1) W EU 29% EMEA 2) 7% NA 31% SA 3% CN 16% ASIA 3) 14% Surveying 22% Power, Energy & Mining 18% Electronics & Manufacturing 12% Infrastructure & Construction 12% Automotive 10% Safety & Security 9% Aerospace & Defence 8% Other 9% TOTAL 1) Share of sales per customer segment as of 31 December 2016 and share of sales by region as of Q ) EMEA, excluding Western Europe 3) Asia, excluding China >8% 0 to 8% Negative x 13

14 EMEA market trends Q Western Europe recorded 0 per cent organic growth Hampered by tough comparatives in MI Good growth in Germany, France and the Nordic countries but weak development in the UK and Spain Continued strong development in Africa driven by mining Double digit decline in the Middle East due to difficult comparatives after last year s large Smart City project Q3 Share of sales, % 36 Q3 Organic growth, % 1 - Organic growth, GES % 4 - Organic growth, IES % -2 14

15 Americas market trends Q North America recorded 8 per cent organic growth Strong growth in infrastructure & construction and the Content Programme Weak aerospace and automotive industry due to tough comparatives South America is recovering and recorded 4 per cent organic growth Q3 Share of sales, % 34 Q3 Organic growth, % 8 - Organic growth, GES % 12 - Organic growth, IES % 2 15

16 Asia market trends Q China recorded 19 per cent organic growth with strong demand across all industries Electronics continued to be the largest contributor Continued solid development in Smart City solutions Weak development in South Korea and India Q3 Share of sales, % 30 Q3 Organic growth, % 11 - Organic growth, GES % 15 - Organic growth, IES % 9 16

17 Reporting segments

18 Industrial Enterprise Solutions Q overview Organic growth of 3 per cent MI: 6 per cent organic growth driven by strong demand from the electronics industry in China. Growth hampered by tough comparatives in automotive and aerospace PPM: -4 per cent organic growth negatively impacted by the challenging oil & gas market. Positive momentum in the business outside of oil & gas supports expectations of growth towards the end of the year CAD CAM Stationary sensors EBIT1 Sales of MEUR (389.1) EBIT1 of MEUR (96.3) and operating margin of 25.1 per cent (24.7) Positively impacted by increased software mix in MI but adversely impacted by the decline in PPM Portable sensors Asset management Services Sales per geography Sales per segment Power & Energy 18% 28% Asia 31% Electronics & Manufacturing 40% EMEA Automotive Americas 25% Aerospace & Defence 32% 26% Software & services Recurring revenues Direct sales Emerging markets % 18

19 Geospatial Enterprise Solutions Q overview Organic growth of 9 per cent Geosystems: Organic growth of 12 per cent driven by solid development in infrastructure & construction, the Content Programme and mining SI: -1 per cent organic growth hampered by difficult comparatives from last year s large Smart City projects in the Middle East and India. Solid development in public safety solutions and Smart City solutions in China Positioning: 17 per cent organic growth driven by continued strong demand in agriculture and defence EBIT1 Sales of MEUR (390.6) EBIT1 of MEUR (88.7) and operating margin amounted to 24.0 per cent (22.7) Positively impacted by organic growth, improved cost structure and product mix Surveying Positioning Machine control Mapping 3D scanning Public safety Sales per geography Sales per segment 19% 8% 5% Surveying EMEA Infrastructure & Construction 41% 10% Americas 44% Public Safety 12% Natural Resources Asia 40% Transportion & Utilities 21% Defence Software & services Recurring revenues Direct sales Emerging markets % 19

20 Gross margin R12M quarterly data % 65 R12M 61% (60) Trend % 60 GM %

21 Operating margin R12M quarterly data % 30 EBIT1, % Target 2021: Opportunity (28%) 25 Target 2021: Base (27%) R12M 24% (23)

22 Orders and product releases

23 The world s fastest GNSS RTK rover Leica GS18 T GNSS RTK rover is the first calibration-free tilt compensating GNSS solution immune to magnetic disturbances It is the only one of its kind to use precise enough inertial measuring units and not a compass saving considerable time on site and increasing productivity Users can now measure close to buildings, underneath cars and close to metallic objects with this tilted pole 23

24 CMES Inc. leverages machine control solutions for safety and optimisation Construction Management and Engineering Services, CMES Inc., is a U.S based company that specialises in new road construction, mass grading, underground utilities, park renovations and bridge construction CMES has invested in Hexagon s machine control solutions to provide a safer work environment while cutting costs in labour, fuel, surveying and rework The investment is expected to increase the company s profitability and enable CMES to complete projects ahead of schedule 24

25 Hexagon Content Programme supports hurricane recovery Hexagon s Content Programme provided first responders and non government organisations access to professional quality imagery data which is critical for damage analysis and focused cleanup efforts In just under a month, hundreds of thousands of images were accessed of the area surrounding Hurricanes Harvey and Irma 25

26 Hexagon s technology featured in Baidu Apollo Project Hexagon s positioning solutions will provide position, orientation and time components to the autonomous driving programme, Project Apollo, at the Baidu Create Conference in Beijing These solutions will be leveraged through our partner, AutonomouStuff the world s leader in supplying components, engineering services and software that enable autonomy These solutions are a key component on various Baidu autonomous and mobile mapping vehicles and demonstrate Hexagon s extensive capabilities in the autonomous driving space 26

27 Hexagon s Mining solutions driving innovation around the world Canada s Victoria Gold is a leading gold exploration and development company that will leverage Hexagon s mining solutions for redesign and allow for consistent models, plans and schedules Hexagon s grade control solution will assist customers with understanding and document any variability in sampling and ore reserve leveraged for grade control, reconciliation of operations and exploration to see the variance between forecasted/planned model and actual model CMOC International, a natural resources company with a diverse portfolio of mineral assets, will leverage Hexagon s mining solutions in the corporate office and Tenke copper-cobalt mine site for mine planning, geological modelling, grade control and drill and blast purposes 27

28 Austria federal police drive historic transformation with Hexagon s solutions The ELKOS Austria project focuses on developing nationwide command and communication systems for the federal police in Austria ELKOS will leverage Hexagon s solutions to support this project the largest computer aided dispatch and crisis management project in Austria to date This is a historic step for Austrian police as this will provide the next generation of command and control center solutions transforming small, local police centers to a new, nationwide integrated structure 28

29 Strengthening communication with computer-aided dispatch The Cambridge and Kitchener fire departments provide firefighting and rescue services in Ontario, Canada The computer-aided dispatch system will enhance agency situational awareness and lead to better emergency responses by allowing personnel to share information between police and fire services 29

30 Critical infrastructure protection provides increased oil field security One of the largest oil fields in the world Iraq Zubair Giant Field, owned by Eni Iraq BV selected Hexagon s technologies for critical infrastructure protection Hexagon s physical security information management and computer aided dispatch systems will aid in protecting local security operator stations at the Zubair Giant Oil and Gas Field 30

31 Shaping national security & disaster management in Japan Hexagon s solutions will aid the Japanese government in processing and analysing data from optical and radar satellites The solution harnesses the latest remote sensing technology to quickly inform decision-makers and stakeholders on issues like national security and disaster management 31

32 Hexagons power & energy solutions growing in China The world s largest oil and gas company, China National Petroleum Corporation (CNPC), purchased substantial service hours for their current information management tool, SmartPlant Foundation. This will enable users to make rapid, accurate design and operational decisions from large and complex data sets Leading Chinese textile company, China Hi-Tech (Jiangxi) Textile Design Institute (CHJTDI), recently purchased Intergraph Smart 3D in addition to CAD Worx, their current 3D design tool 32

33 Smarter quality data management with HxGN SMART Quality Hexagon launched HxGN SMART Quality, an online quality data and measurement resource management software platform that brings information automation to quality management in manufacturing HxGN SMART Quality s tools for connectivity, statistical analysis and resource management enable businesses to work smarter by taking control of their data 33

34 Accuracy for industry specific applications Hexagon s High Throughput and Accuracy (HTA) Measurement Solution Range launched this year in September HTA solutions provide fast, accurate, non-contact scanning and dramatic time reductions when measuring complex parts such as blisks, gears, camshafts, splines, synchro rings and clutch baskets This integrates dimensional inspection more effectively into the production process by reducing measurement cycle times and providing rich data sets 34

35 Product launch of EcoSys 8 Ecosys TM is the first software platform to offer integrated portfolio management, project controls and contract management solutions The integrated solution enables real-time, seamless data flow between all stages of a project life cycle to maximise returns and margins Data can be recycled and leveraged for future projects assisting with estimation and forecasting First purchase in Greater China Region by China Nuclear Power Engineering Co., Ltd. 35

36 Luciad acquisition strengthens ability to deliver Smart Digital Realities Specialises in the visualisation and analysis of real-time geospatial information Luciad s technologies support: 3D environments Rapid fusion of multi-source content from real-time sensor feeds (4D) Dynamic analytics (5D) Acquisition will enhance the Hexagon Smart M.App platform, benefitting all kinds of applications from public safety to smart cities to defense and intelligence About Luciad: Belgian-based Fully consolidated and operating within Geospatial division 2016 turnover amounted to 16 MEUR More than 100 highly-skilled professionals in 8 countries More than 100,000 global users 36

37 Summary

38 Summary 6 per cent organic growth driven by strong development in Geosystems, Manufacturing Intelligence and Positioning Intelligence Continued robust organic growth in China, 19 per cent, driven by electronics and Smart City solutions Growth hampered by continued weak oil & gas sector Positive momentum in the business outside of oil & gas supports expectation of growth towards the end of the year Strong profit development despite currency headwind Happy Halloween 38

39 Disclaimer This presentation contains forward-looking statements. These forwardlooking statements reflect the views of Hexagon's management as of the date of this presentation. The forward looking statements 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. Please read our earnings reports and our most recent annual report for a better understanding of these 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, but are inherently uncertain and difficult to predict. Actual results or experience could differ materially from the forwardlooking statements. Hexagon disclaims any intention or obligation to update these forward-looking statements. It should also be noted that past performance is not a guide to future performance and that interim results are not necessarily indicative of the full year results. THIS COMMUNICATION DOES NOT CONTAIN AN OFFER OF SECURITIES IN THE UNITED STATES OR ANY OTHER JURISDICTION; 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 OR ANY OTHER JURISDICTION WILL BE MADE BY MEANS OF FORMALLY DRAWN UP AND APPROVED PROSPECTUS. 39