As a brand, blank stares usually accompany mentions of "Hexagon." Here's a company with a US$7 Billion market capitalization that few people recognize as one of the largest companies doing business in surveying, mapping, plant design, metrology and security.
In technology circles, many have heard of Intergraph; the name Leica is well known in the optics industry; still others may know about NovAtel. But Hexagon, as a brand still flies under the radar. That may change in the next year as word begins to filter out about the companies that comprise the Hexagon portfolio and the vision of its management to leverage each to support solutions in another part of its portfolio.
A look at the numbers tells more of the story. According to a briefing for financial analysts (PDF), Hexagon reported that sales grew 46% with gross margins of 54% in 2011. In Q1 2012, the company saw organic revenue growth of 6% with the divisions of Metrology, Geosystems, and Process, Power and Marine showing good growth. The only lagging division was the Security, Government and Infrastructure (SG&I) division, i.e. the division with geospatial products, that showed negative growth. However, management expects this trend to stop and is impacted by customers delaying purchases and in some cases where Hexagon has not more quickly executed on the GeoMedia and IMAGINE integration, according to Ola Rollen, CEO.
The report to analysts suggested that SG&I's fortune may return because of the following:
- The market potential is huge
- Strong backlog supports return to growth
- Offering needs to be taken globally as Emerging Markets share is too low
- Margin is expected to improve
- Long-term growth of 8% is a reasonable target for Hexagon Geosytems while SG&I is not expected to show growth above 5%
Public safety is the fastest growing market for the SG&I division with growth expected above 8% but the defense, intelligence and federal solutions groups are predicted to be in negative growth territory.
During a session with the industry press, Rollen sees sensor technology, 3D visualization and mobile apps as areas to drive customer adoption of Hexagon's solutions. But his most interesting comment came when he suggested that the company host data for clients in a "data as a service" (DaaS) model. "The technology piece is small compared to capturing data and we need to look at ways to automate data collection and share that data [with customers]. What Rollen suggests is that some projects require that data capture be a part of the total solution that Hexagon offers to the clients and then make that data available to the client in a DaaS model. Hexagon would act as a host provider to store and then serve back to clients.
Finally, when asked how Rollen would achieve his revenue growth goals and whether this would be through organic growth or acquistion, he stated that "we've acquired more than 100 companies since 2000, why would we stop that kind of behavior now?"
So, expect more messaging from Hexagon as it parlays its individual solutions from its separate divisions into a more cohesive branding that builds upon its unique technology advantages.