Hexagon Reports Weaker Than Expected Q1 2025 Financial Performance Amid Economic Uncertainty

Hexagon's Q1 2025 Financial Overview

Hexagon has released its financial performance update for the first quarter of 2025, revealing that the results for March were considerably weaker than anticipated. Despite a promising start to the year, various factors contributed to the downturn in financial results during the most critical month for revenue generation.

The figures indicate that the growth witnessed in significant markets such as NAFTA and China declined sharply in the last two weeks of March due to growing economic uncertainty. This challenging economic landscape affected the deliveries, aggravating Hexagon’s revenue situation. Although recurring revenues exhibited robust growth for the quarter, this was counterbalanced by a notable decline in sensor sales, which has detrimental effects on the overall performance. The decrease in sensor volume during March further compounded the issue, resulting in significant obstacles to the company’s EBIT (Earnings Before Interest and Taxes) margins, which also faced a 6 million Euro drag from negative currency transaction effects.

Preliminary reports suggest Hexagon reported revenues close to 1,322.8 million Euros for Q1 2025, compared to 1,299.9 million Euros for the same quarter in 2024. This indicates an organic growth rate of 0% for the group, a significant drop from the 3% organic growth observed in Q1 2024. When factoring in currency and structural contributions, total growth for the quarter is projected at around 2%, attributable to 1% from each contributor.

Hexagon's EBIT for this quarter is anticipated to be around 345 million Euros, down from 376.5 million Euros in Q1 2024, translating into an adjusted operating margin of approximately 26.1%, a further decline from 29.0% in the previous year.

The management team is closely observing the economic uncertainties influencing the end markets and is prepared to implement necessary action should the demand trajectory continue to be adversely impacted. According to company leadership, a review of the group's cost base is possible in response to fluctuating demands. Hexagon is committed to transparency and is expected to provide another update during their Q1 2025 report, scheduled for release on April 30, 2025.

For stakeholders and investors seeking detailed insights into Hexagon's financial standing, they can connect with Tom Hull, Head of Investor Relations, or Anton Heikenström, Investor Relations Manager via their provided contacts. The company stresses the importance of this information, as it is obligated to comply with the EU Market Abuse Regulation, indicating the necessity for public dissemination of these updates.

Overall, while the first quarter started off positively, various factors, including external economic shifts and market-specific challenges, have led Hexagon into a more volatile financial context, prompting necessary contingencies as it navigates through the current economic climate.