Geo Week News

December 2, 2013

Hexagon shakes up Intergraph



3D imaging firm names new chief for its Alabama-based subsidiary

3D imaging firm Hexagon AB on Monday rolled out big changes for its subsidiary, Intergraph Corporation, including a new president, a new geospatial business group, and a Hexagon Solutions group to highlight the company’s transition to a more software-centric solutions business model.

Intergraph CFO Steven Cost is now president of Intergraph SG&I, replacing John Graham, who recently resigned to “pursue a new role outside of Hexagon,” the company said.

Alabama-based Intergraph largely comprises Hexagon’s Technology business segment, which operates two divisions:

  • Process, Power Marine (PPM) – a major provider of engineering software for the design, construction, and operation of plants, ships, and offshore facilities. 
  • Security, Government, Infrastructure (SG&I) – a provider of geospatial software to the Security, Government & Infrastructure markets.

Hexagon’s latest quarterly financial results showed zero sales growth for the Technology segment, which represents 33 percent of Hexagon’s net sales and posted €188.9 million (US$259 million) in revenue for the third quarter.

The PP&M segment continued to expand with 7 percent organic growth, while SG&I reported negative growth due to the continued downturn in the defense segment, which sank 36 percent in the third quarter.

New biz units among changes at Intergraph

Among the other changes announced Monday by Hexagon is a new Technology business unit called Hexagon Geospatial, basically Intergraph’s geospatial technology portfolio but spun off from SG&I.

Another new group, Hexagon Solutions, will expand the company’s Smart Solutions software portfolios. Hexagon called the new business unit “a natural, next step” to move its software-centric business strategy forward.

Hexagon Solutions is led by Claudio Simão, Hexagon president South America, and will start operations Jan 1.

New chief strategy officer

Joining Cost on Hexagon’s management team is Mattias Stenberg, newly appointed chief strategy officer, and formerly vice president, strategy and communications.

Speaking about the changes announced Monday, Hexagon CEO Ola Rollén said the company continues to “move from a product-centric organization toward a solution-centric provider of business-oriented applications.”

Based in Stockholm, Sweden, the publicly traded company (NASDAQ OMX Stockholm: HEXA B), with annual sales of €2.4 billion ($3.3 billion), sells 3D measurement and visualization software and hardware under the Leica Geosystems, Intergraph, and Hexagon brands for the surveying, power and energy, aerospace and defense, construction, safety and security, automotive and manufacturing industries.

Nearly all of Hexagon’s revenue is generated by its core Measurement Technologies (MT) business segment, which operates the Technology business segment and two others:

  • Geosystems – represents about 35 percent of Hexagon’s revenues and consists largely of the operations of Leica Geosystems AG, selling systems for data capture, modeling and visualization of 3D spatial information.
  • Metrology- represents about 30 percent of Hexagon’s business and sells 3D imaging hardware and software systems for manufacturing evaluation, reverse engineering, process qualification and inspections of final parts.

The Geosystems unit grew third quarter sales by 12 percent to €203.9 million (US$279 million). Metrology posted €173.3 million (US$238 million) in third quarter net sales, up 3 percent.

Hexagon’s overall third quarter sales were €577 million (US$790.3 million), basically flat compared to last year’s third quarter sales. Third quarter net earnings were down 9 percent to €76.4 million ($104.7 million).

“The operating margin expansion in the quarter underscores the shift in our business model as we move towards software centric solutions,” said Rollén, at the time.

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