Hexagon AB Class B

Q2 headline performance (good/surprising strength): Hexagon delivered 12% organic growth (highest in last 5 years) with growth across all 3 business areas and backlog built in all areas. Gross margin held ~62%, despite a currency headwind and very strong hardware sales (mix headwind). EBITAC improved to 24.3% (+330 bps YoY), driven ~+100 bps currency and ~+230 bps operational leverage plus ~EUR 14m restructuring savings in the quarter. Cash conversion: 149% (operating cash flow ~EUR 364m pre-tax, with strong working capital).

Business-area momentum (good; some pockets weak): - Autonomous Solutions: +20% organic growth, strong positioning demand (notably aerospace & defense) offsetting weaker agriculture & marine. Backlog continued to grow; margins expanded but were partly offset by FX. - Manufacturing Intelligence: +13% organic growth, strong in stationary & portable metrology, led by aerospace & defense, general manufacturing, electronics. Automotive remained structurally weak (especially China and EMEA). - Infrastructure & Geospatial: +4% organic growth in challenged markets; growth strongest in construction software & services, geomatics, radar & monitoring, machine control. TS20 total station sold very well. Margins improved on higher volumes/product mix/cost control; EMEA construction remains challenging but there’s “slight improvement” QoQ (still low base).

Portfolio reshaping & M&A (opportunity + timing): - Octave separation completed (effective 22 May); Octave began trading Nasdaq Stockholm (25 May) and Nasdaq New York (28 May). Hexagon is now “simpler and more focused.” - Waygate Technologies acquisition announced (adds non-destructive testing into Manufacturing Intelligence). Expected close H2 2026, “most likely Q4.” Purchase price guidance: ~USD 630m for Waygate at roughly ~10% EBIT margin (with internal discussion: two focus groups ~USD 330m at ~16% margin). Consolidation expected “as quickly as possible,” but integration/reporting (including U.S. GAAP needs) will take effort. - Completed bolt-on acquisitions: Inertial Sense (Autonomous Solutions) and ITRES (Infrastructure & Geospatial).