Hexagon posts tepid Q1

A very quick update on Hexagon before I rush back to all things Internet of Things at PTC’s Liveworx event:

• Total revenue was up 19% as reported to €705 million in Q1. In constant currencies (cc), and removing acquired revenue but adding back in sold revenue, total revenue was up 5%.
• That’s quite a slowdown, even for a traditionally weak Q1: revenue was up 9% y/y on a like basis in Q4 and up 8% in Q3 and up 5% in Q1 2014 — but the further back we go, the less relevant even the “like group structure” is, since the company has been buying and divesting like crazy over the last couple of years. In any event,
• Results for Q1 2015 were below expectations, which had been for total revenue of around €720 million
• By business line, Geospatial Enterprise Solutions (GES) revenue was €355 million, up 2% on a cc/like basis.
• Industrial Enterprise Solutions (IES), which includes the metrology, CAD and CAM businesses in Hexagon Metrology and Intergraph PP&M, reported total revenue €351 million. That’s up 28% as reported but up 8% cc/like because of all of the acquisitions for this part of the business
• Intergraph PP&M reported organic growth of 7% y/y as a “result of several smaller to mid-sized deals (no large project orders). The organic growth also benefited from the continued shift among PP&M’s users from legacy software to 3D-based engineering software applications”. That sounds like CADWorx had a good quarter, but we’ll see if the company gives more detail on the call
• By region,  cc/like growth was 6% in EMEA, 5% in the Americas and 3% in
• Asia. Highlights (lowlights?): Hexagon saw significant weakness in Russia, flat sales in South America; while growth rates in Asia “weakened significantly on a sequential basis due to weakness in the infrastructure and mining-related businesses”

Hexagon’s earnings call is later today; in prepared remarks, CEO Ola Rollén said, “Growth was primarily driven by the Industrial Enterprise Solutions segment which recorded organic growth of 8 per cent, driven by solid performance in Metrology and PP&M. Our Geospatial Enterprise Solutions segment is being impacted by a slowdown in Asia and Russia, and recorded 2 per cent organic growth … We are pleased to see the continous strong cash flow and remain confident in our ability to generate profitable growth and reach our financial targets.” More to come. If you’re interested, follow #Liveworx on Twitter to keep up with happenings there.