Hexagon (HEXA) investor relations material

Strategic transformation, ambition, and business focus

• Streamlined portfolio through the spin-off of Octave, divestment of D&E, and acquisition of Waygate, sharpening focus on precision measurement, positioning, and autonomy technologies.

• Operates via a decentralized model with 17 divisions, each accountable for strategy, resources, and performance, emphasizing transparency and speed.

• Business areas include Manufacturing Intelligence, Geosystems/Infrastructure & Geospatial, Autonomous Solutions, and a Robotics Division in investment phase.

• Robotics and Ventures divisions serve as incubators for disruptive innovation, with AEON humanoid robotics positioned for industrial deployment and pilots underway.

• Portfolio management emphasizes growth, profitability, and stability, with regular reviews and targeted exits of underperformers.

Financial performance and targets

• Targets for 2026–2030: 4–6% average annual organic growth, 24–26% EBITAC margin, and 90–100% EBITAC cash conversion, up from 2.6% growth and 22% margin in 2025.

• EBITAC is the primary profitability metric, fully expensing R&D to align with cash flow and drive discipline.

• Robotics investments are excluded from group financial targets, with performance disclosed separately to maintain focus and agility.

• Cash conversion of EBITAC targeted at 90–100% annually, supporting disciplined capital allocation for growth.

• Capital allocation prioritizes organic growth, bolt-on M&A, progressive dividends, and selective strategic moves, with net debt/EBITDA below 2.5x.

Growth drivers, innovation, and market trends

• Growth driven by megatrends: labor shortages, sustainability pressures, and rising demand for precision, autonomy, and AI-driven solutions.

• Significant R&D investment and accelerated product launches, with major new products and AI central to future growth.

• China is a global growth engine, leveraging local leadership and manufacturing for export and cost optimization.

• M&A remains a core strategy, focusing on bolt-on acquisitions in core and adjacent markets.

• Sustainability initiatives include 100% renewable energy, logistics emission reductions, and doubling sales of circular products.