By Johannes Hellstrom
STOCKHOLM, June 5 (Reuters) – Measurement technology group
Hexagon AB’s top executive said on Tuesday market
demand so far in the second quarter had remained in line with
the first few months of the year and he still expected to see
sales growth in all regions.
The Swedish-listed company, which sells under brands such as
Leica Geosystems, as well as its own name, posted record sales
in the first quarter as strong growth in North America offset
weaker development in Europe and Asia.
Chief Executive Ola Rollen said in a Reuters interview that
demand in Europe, home to roughly a third of group revenues, had
remained weak, but had not worsened since the end of the first
quarter, despite renewed turmoil cause by the debt crisis.
“We see similar trends as in Q1 and all major geographic
regions are expected to grow, with Metrology and Intergraph PP&M;
driving growth, and Geosystems on the recovery,” he said in a
telephone interview from a meeting with clients and analysts in
Las Vegas, Nevada.
Metrology, Intergraph PP&M; and Geosystems are business units
that combined make up the brunt of the group’s sales.
Western Europe was Hexagon’s top market in the first
quarter, a region overshadowed by the sovereign debt crisis that
has left large swaths of it in recession and created turmoil in
financial markets across the globe.
“It remains weak in western Europe, but we have not seen a
deterioration compared to the first quarter,” Rollen said.
“We have not seen anything new, but that doesn’t mean we
won’t see anything new. This is liquid matter and of course the
negative effects will have an impact on our customers and,
further down the line, on us.”
A steady stream of acquisitions and strong organic growth
has made Hexagon the market leader in a specialised sector
straddling software and engineering hardware, pitting it against
rivals such as U.S. Trimble Navigation Ltd.
Hexagon set new financial targets last year, setting its
sights on stronger profitability and sales in the coming years
in the wake of its 2010 acquisition of U.S. software firm
Intergraph, its biggest purchase to date.
The company, which makes measurement equipment as well as
software, stood by its target of reaching sales of 3.5 billion
euros with an operating margin of 25 percent in 2015, but
fleshed out some of the guidance.
“As far as turnover is concerned, we are saying that current
structure should be able to grow 8 percent per year through to
2015, leaving us with organic sales of 2.9 billion euros,”
Rollen said.
The company will also make acquisitions to reach the sales
target.
Rollen also estimated that synergies stemming from the
combination of Hexagon’s and Intergraph’s technology portfolios
would total 100 million euros to 200 million euros in 2015.
(Writing by Niklas Pollard; editing by Andre Grenon)
