2024-04-26 10:14:08 ET
Hexagon AB (publ) (HXGBF)
Q1 2024 Earnings Conference Call
April 26, 2024, 04:00 AM ET
Company Participants
Paolo Guglielmini - President and CEO
Ben Maslen - CSO
David Mills - CFO
Conference Call Participants
Daniel Djurberg - Handelsbanken
Andre Kukhnin - UBS
Joachim Gunell - DNB Markets
Sven Merkt - Barclays
Alexander Virgo - Bank of America
Viktor Trollsten - Danske Bank
Toby Ogg - JPMorgan
Johan Eliason - Kepler Cheuvreux
Mikael Laseen - Carnegie Investment Bank
Nay Soe Naing - Berenberg
Presentation
Operator
Good day, and thank you for standing by. Welcome to Hexagon First Quarter 2024 Report Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.
It is now my pleasure to hand you over to the President and CEO of the company, Mr. Paolo Guglielmini. Please go ahead, sir.
Paolo Guglielmini
Yes, good morning. Thank you for joining our Q1 2024 earnings call.
We are pleased to report another solid quarter, with organic revenue growth of 3%, resilient margins and strong cash conversion. Slow demand in Europe and the weak construction market combined with strong comparable growth in prior periods made for a difficult backdrop, but the teams did very well to capitalize on a strong U.S. market, the demand from countercyclical verticals, and more importantly, our own innovation and proximity to clients in order to deliver a 13th quarter of consecutive growth.
The gross margin at 66.5% and the operating margin at 29% were solid achievements despite slower growth and inflation. We delivered on those through focus on recurring revenue, growing at 6% in the quarter now at €520 million, with SaaS growing above the 20% mark, and through innovation for active cost management and portfolio optimization as we have seen from the recently announced divestments.
Cash conversion was also very positive in the quarter at 88% considering its seasonality, supported by the constant internal focus and the favorable mix. Despite the short term challenges in market demand, we keep on strengthening the business model. We have an exciting pipeline of innovation ahead of us and we are very well positioned looking into the future.
Moving on to Slide number 4. We have leveraged regionally our balanced footprint. In the quarter, we grew the business in the Americas by 4% despite the weakness in South America with good demand coming from infrastructure, from manufacturing, Aerospace and Defense. EMEA was flat with market conditions that are remaining difficult, particularly in Central Europe and the U.K., but supported by commercial aerospace growth and good adoption of our software solutions.
Asia was up by 4 percentage points in the quarter despite a very strong quarter last year in India. In China, the market is and will remain challenged, but this quarter highlighted once again that we have a fantastic team in place, making the most out of the local trading environment as analysts and investors got to appreciate during the visit to our operations earlier in March....
Read the full article on Seeking Alpha
For further details see:
Hexagon AB (publ) (HXGBF) Q1 2024 Earnings Call Transcript