Geo Week News

August 20, 2014

Hexagon Geosystems Shows Steady Growth in Q2, Slows in Asia, Bolsters Content as a Service Offering


In an interim report delivered to investors on August 7, CEO Ola Rollén announced the Stockholm-based Hexagon’s earnings for Q2. The company’s performance has been mixed, with their overall revenue remaining flat. However, the Geosystems division made a steady if not spectacular showing with organic growth of 3%, down from 9% last quarter.

This organic growth for the Geosystems division was driven by demand for infrastructure and construction activities in Western Europe and North America. That growth was slower than expected, Rollén says, because of a slowdown for surveying, infrastructure and construction in China due to what he calls the “clampdown on corruption in the construction industry initiated by the new Chinese government.” This will no doubt affect those looking to establish a foothold in the region.

Rollén was careful to note that, however the market may look for the Geosystems division, Asia remains a strong market for Hexagon overall. “If we look at an overview over a couple of years,” he said, “we can see that Asia is continuing to grow organic growth over and above the peak level of the second quarter of 2008.” The slide (slide 19 in the presentation deck linked above) bears this out, with Asia showing an increase of 50% total in organic growth over the period from 2008-2014, as compared with what Rollén called “pre-crisis records.”

Northwest Geomatics and Content as a Service (CaaS)
I reported back in June that Rollén teased Hexagon’s new Content as a Service. During the interim report, Rollén spoke to a recent acquisition that should increase the amount of data offered by the service before the first scan is even uploaded by one single user.

“We bought out the remaining 90% percent of the Canadian-based company North West Geomatics,” Rollén said. “North West Geomatics has, over the past five years, created a very impressive database called Valtus, where North West have stored spatial data. And North West has started to build a Content as a Service business around Valtus, and the idea now with launching Hexagon’s Content as a Service initiative is that Valtus is the basic asset that we will use across the world to sell this data.”

Hexagon’s acquisition of Valtus means that, in addition to Hexagon’s own data from Europe, they now have a great deal of data for Canada as well. It remains to be seen how many of the gaps in their coverage the company plans to plug before offering CaaS to customers.

See Hexagon’s press release for more information about the acquisition.

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