Hexagon (HEXA) Status Update summary

Leadership changes and strategic direction

• Norbert Hanke appointed as Interim President and CEO, effective immediately, following Paolo Guglielmini's departure by mutual agreement.

• The board has initiated the search for a new permanent CEO to accelerate growth and capitalize on market opportunities.

• Leadership change aims to accelerate top-line growth and margin expansion for both core and ALI businesses, aligning with the next phase of development.

• The decision to change CEO was a result of ongoing evaluation and is not linked to the ALI separation.

• Norbert Hanke has been with Hexagon since 2001, most recently as COO and previously led the Manufacturing Intelligence division for over a decade.

ALI division separation evaluation

• The board is evaluating a potential separation of the ALI division (NewCo), with updates to follow as the process develops.

• ALI and Hexagon AB have diverging business models and technology needs, prompting consideration of a split to create two public companies with distinct strategies.

• ALI focuses on asset management and performance, with 100% software and 75-80% recurring revenue.

• No final decision has been made on the separation; management continues to assess strategic options and the exact scope and results of NewCo are still being determined.

• Both entities will focus on targeted investment, growth, and innovation in their respective markets.

Financial and operational highlights

• Hexagon AB reported €4.4 billion in sales for the first nine months, with a 64% gross margin and 28% EBIT margin.

• ALI division (NewCo) posted €980 million in sales, 80% gross margin, and 35% EBIT margin, with high recurring revenue.

• Recurring revenue is 35% for Hexagon AB and 75-80% for ALI/NewCo, with software and services comprising about 50% of Hexagon AB's revenue.

• Hexagon employs approximately 24,500 people across 50 countries, with net sales of about €5.4 billion.

• Hexagon AB focuses on digital twins, software, sensors, and robotics, while ALI/NewCo specializes in enterprise industrial software.