Hexagon AB (HXGBF) Q4 2024 Earnings Call Highlights: Strong Margins and Strategic Growth Amid ...

In This Article:

  • Organic Growth: 1% in Q4 2024.

  • Gross Margin: 67% in Q4 2024.

  • Operating Margin: 31% in Q4 2024.

  • Cash Conversion: 116% in Q4 2024; 91% for the full year 2024.

  • Net Revenue: 30% operating margins for the full year 2024.

  • Dividend Proposal: 8% increase to EUR0.14 per share.

  • Manufacturing Intelligence Revenue: EUR530 million, down 2% organically in Q4 2024.

  • Asset Life Cycle Intelligence Revenue: EUR228.8 million, 10% organic growth in Q4 2024.

  • Geosystems Revenue: EUR400 million, 2% organic decline in Q4 2024.

  • Autonomous Solutions Revenue: EUR146.5 million, 2% decline in Q4 2024.

  • Safety Infrastructure and Geospatial Revenue: EUR140.8 million, 11% organic growth in Q4 2024.

  • Q4 2024 Sales: EUR1.448 billion, 0.9% reported growth.

  • Q4 2024 Operating Earnings: EUR450.3 million, 3% growth.

  • Q4 2024 EPS: EUR12.4, 5% growth.

  • Full-Year 2024 Sales: EUR5.401 billion, 0.2% organic growth.

  • Full-Year 2024 Operating Earnings: EUR1,602.9 million.

  • Full-Year 2024 EPS: EUR0.433.

Release Date: January 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Hexagon AB (HXGBF) reported a strong gross margin of 67% in Q4, showcasing innovation-driven pricing power and a strong product mix.

  • The company achieved a cash conversion rate of 116% for Q4, reflecting operational improvements and focus on cash flow management.

  • Hexagon AB (HXGBF) announced an 8% increase in the dividend to EUR0.14 per share, indicating confidence in future cash flows.

  • The company made several strategic acquisitions, including indurad and Geomagic, to strengthen its market leadership and expand into new markets.

  • Recurring revenues increased by 7% organically during the quarter, driven by strong performance in software product lines.

Negative Points

  • Hexagon AB (HXGBF) experienced only modest organic growth of 1% in Q4, with weaknesses in key markets such as construction and automotive.

  • The Manufacturing Intelligence division reported a 2% organic decline in revenues, impacted by a cyclical slowdown in key verticals.

  • Geosystems saw a 2% organic decline in revenues, with continued weakness in construction markets in EMEA and North America.

  • Autonomous Solutions experienced a 2% revenue decline due to tough comparatives and a different product mix compared to the previous year.

  • The company faces challenges in the automotive market, particularly within EMEA and the US, affecting overall growth prospects.

Q & A Highlights

Q: Could you remind us of your positioning in North America regarding localization and potential tariffs? A: Norbert Hanke, Executive Vice President: The US accounts for about 30% of our group sales, with around 6% of revenues being imported. Two-thirds of these imports come from Europe, mainly Switzerland, and a third from Canada. The specialized products from Canada are not easily replaceable, so tariffs are unlikely to have a significant impact.