Hexagon (HEXA) Q4 2024 earnings summary

Executive summary

• Q4 2024 delivered 1% organic growth, robust margins, and strong cash conversion, supported by software, new product launches, and several strategic acquisitions.

• Board proposes an 8% dividend increase to EUR 0.14 per share and continues to investigate a potential ALI division spin-off.

• Leadership changes announced: Anders Svensson to become CEO in July 2025; Björn Rosengren proposed as Deputy Chair.

• Innovation and recurring revenues offset market weakness, especially in automotive and construction.

• Market conditions remained challenging, but acquisitions and product launches supported performance.

Financial highlights

• Q4 sales reached EUR 1,448 million, with 1% organic growth and adjusted EBIT1 up 3% to EUR 450.3 million.

• Q4 gross margin improved to 66.7%; operating margin at 31.1%; EBITDA margin at 40.5%.

• Full-year 2024 sales were EUR 5,401 million, with flat organic growth and gross margin up to 66.9%.

• Full-year operating earnings at EUR 1,602.9 million, margin at 29.7%; EPS at EUR 43.3.

• Q4 operating cash flow before non-recurring items rose 19% to EUR 421.5 million; net debt reduced to EUR 3,231.1 million.

Outlook and guidance

• Board maintains conviction in 2022-2026 targets: 5-7% average annual organic growth, 3-5% M&A growth, EBIT1 margin above 30% by 2026, and 80-90% annual cash conversion.

• Market environment expected to remain stable in Q1 2025, with some improvement in the U.S. and softer growth in China.

• ALI and SIG expected to maintain good growth in 2025, driven by recurring revenues and new product launches.

• ESG targets include 95% reduction in Scope 1 and 2 emissions by 2030 and net zero by 2050.