On June 9, Leica Geosystems reported sales of CHF 31.8 million for its HDS division for its fiscal year 2005 ended March 31 (approximately $26.5 million at the exchange rate on 3/31/2005). This is up a staggering 149% over last year, or 46% CAGR since FY2001. Another way of looking at it – Leica HDS sales in FY2005 totaled about the same as our $27 million estimate for the entire 3D laser scanning hardware market in calendar 2003.
The company says it expects growth to slow in the upcoming year, particularly in the first half. According to CFO Christian Leu, slower year-over-year quarterly growth rates are to be expected because of high backlog shipments in the first quarter of last year. Leu expects growth to level off and to be in line with overall company growth for 2006, approximately 10%. According to Leica Geosystems CEO Hans Hess, the growth for HDS this past fiscal year was three times what was expected a year ago, and it is not realistic to expect the same level of growth in the coming year. Hess says the order intake rate suggests that growth rates of order of 20-25% are likely after correcting for the special effects of backlog shipments and special upgrade programs. Absent these effects, sales would have been more in the range of CHF 27-28 million, according to Hess.
Profitability for the HDS division was in positive territory but only just. Hess says that for now, “sales growth is more important than profitability.” Hess added that with current development budget plans and growth forecasts, the division ought to attain EBITDA rates of around 15% by the end of fiscal 2007.
Hess says the company is in the middle of a search process for a new president for the HDS division to replace Erwin Frei who resigned for personal reasons, an effort that Hess says he will guide himself until it is completed. Separately, Hess says he will step down as CEO by the end of 2005 but will remain on the board of directors.
We see no signs of slackening demand for 3D laser scanning hardware, software or services, and it looks to us like Leica Geosystems HDS and the other 3D laser scanning hardware and software suppliers are headed for another banner year. geovisit();