Hexagon AB (publ)

Good morning, and thank you for standing by. Welcome to the Hexagon Q2 Learnings Report conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. I would also like to advise you that today's call is being recorded. I would now like to hand the conference over to your first speaker today, Anders Svensson. Please go ahead.

Thank you, operator. and good morning everyone and a warm welcome also from my side. It's a pleasure to join you this morning in my new role as President and CEO of Hexagon. I have asked Norbert Hanke along with David Mills and Ben Maslin to lead this call today due to their proximity to the business and performance during the second quarter. But before they begin, I want to take a few moments to discuss what attracted me to Hexagon and some very early thoughts. So moving to the next slide. First, some high-level thoughts on Hexagon. Hexagon has, via strong execution, built an excellent reputation for innovation. We have invested in products that makes our customers' lives easier. And as a result, we are seen as a scaled disruptor by both customers and peers. This has allowed the team to build strong leadership positions in several structurally attractive markets with long-term great growth dynamics, which in turn has allowed Hexagon to build an impressive financial profile with continued growth in recurring revenues and also gross margins. This provides a rock solid foundation from which we will build and develop. The ingredients are there for at least another 25 years of continued growth and success. My arrival to the company comes at an exciting junction in the future of Hexagon. The potential separation of Hexagon and Octave is a catalyst for both businesses to refocus on the core value that they provide and also doubling down on their strength. Hexagon within precision measurement technologies and Octave in data-driven insights to power more effective responses. Today's result demonstrates a return to organic growth excellent cash conversion and stable gross margins. This is very encouraging given the market backdrop. However, it's clear for me that we need to accelerate organic growth and that the existing cost base needs to be adjusted. As a result, I've started working with my leadership team on a cost improvement program, which we will not delay in implementing. And I will update the market on the nature and the status of this initiative No later than at our third quarter results. And I will now hand you to Norbert, David, and Ben, who will talk you through the quarterly development in more details.

So, Norbert, over to you. Thank you, Anders, and please let me extend my welcome to Hexagon. We are all thrilled to have you here with us. As Anders joined us only on Monday, I will now take you all through the Q2 performance. In Q2, we were pleased to return back to organic growth of 3% while maintaining gross margin and generating an excellent cash conversion of 104%. Geopolitical uncertainty continues and we notice delays of customer decision making, but the divisions have managed to mitigate some of these headwinds with price increases, innovation and close customer relationships. A significant negative currency impact of 130 basis points impacted operating margins in the quarter, which were 26%. During the quarter, we were very proud of the success of our Hexagon Live event, which was attended by roughly 3,000 customers and partners. We made several important announcements during this event, one of which was a live demonstration of Aon, our autonomous humanoid robot designed for industry. This is a very exciting product development, and we will revisit this later in the presentation. We also revealed the name of our potential spin-off company, Octave. Octave brings together our ALI and SIG divisions, as well as other related software business. The separation is on track, to complete in the first half of 2026. Finally, we are very pleased to be named on of Time World's most sustainable companies in 2025.