Release Date: January 31, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Could you remind us of your positioning in North America regarding localization and potential tariffs? A: Norbert Hanke, Executive Vice President: The US accounts for about 30% of our group sales, with around 6% of revenues being imported. Two-thirds of these imports come from Europe, mainly Switzerland, and a third from Canada. The specialized products from Canada are not easily replaceable, so tariffs are unlikely to have a significant impact.
Q: Can you elaborate on the trends in Manufacturing Intelligence, particularly the negative trend in the Americas and stabilization in China? A: Norbert Hanke, Executive Vice President: The US saw a slight pause in Q4, possibly due to the election, but we expect improvement in Q1. In China, Q4 was better due to delivery phasing, but we anticipate softer growth in Q1. Overall, MI is stable, with the US improving and China softening.
Q: Regarding the spinoff, will software-centric M&A remain a focus, or will there be a shift towards organic initiatives and capital distributions? A: Norbert Hanke, Executive Vice President: Post-spinoff, the separated company may pursue software M&A more easily. Hexagon will continue integrating hardware and software, investing in R&D, and pursuing M&A in sensors and software to drive growth in markets like precision agriculture and mining.
Q: How are key customers reacting to the ALI spinoff, and what are the internal sentiments? A: Norbert Hanke, Executive Vice President: Customers and internal teams are positive about the spinoff, as it allows for more focused operations, which typically adds momentum.
Q: Can you discuss the trends in other segments like ALI and SIG, and what should we expect in Q1? A: Norbert Hanke, Executive Vice President: The economy is stable, with ALI and SIG expected to show good growth in 2025. Autonomous Solutions had a strong 2023, and we anticipate growth reacceleration with new product launches in 2025. MI and Geosystems are stable, with potential benefits from new product launches in the second half.
Q: Could you explain the gross margin trend in Q4 and its outlook for 2025? A: David Mills, Chief Financial Officer: Q4 gross margin was 66.7%, up year-over-year but slightly down sequentially due to product mix. The full-year margin improved by 80 basis points to 66.9%. We expect continued positive margin trends into 2025.
Q: What are the expectations for product launches in 2025 and their growth contributions? A: Norbert Hanke, Executive Vice President: We anticipate major product releases in 2025, particularly around June and July. These launches are expected to contribute positively to growth.
Q: What is the M&A outlook, and should we expect larger deals to meet midterm growth targets? A: David Mills, Chief Financial Officer: The M&A pipeline looks strong, but deals will be pursued based on strategic fit and shareholder value, not just to meet targets. We remain open to opportunities that align with our strategy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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