Hexagon - Annual Report 2005

Hexagon Measurement Technologies meters to 0.3 micromillimeters. In the absence of any comprehensive sector statistics, Hexagon estimates the market value on its own sector knowledge and the Annual Reports of the market’s other players. Hexagon MT controlled approximately 4 per cent of the total metrology market in 2001. In 2005, because of growth and the acquisition of Leica Geosystems, this share increased to some 15 per cent. The second biggest player, Carl Zeiss of Germany, controls some 12 per cent of the market. The Macro Segment Through its acquisition of Leica Geosystems, Hexagon MT is a world-leading player in the macro segment of the metrology market, whose accuracy extends from 10 meters down to 100 micromillimeters. This interval extends from the surface of the earth to buildings and smaller construction projects. The macro segment can be divided into two sub-markets, air-borne measurement and land-based measurement. Air-borne measurement is conducted with the aid of camera technology, called photogrammetry or LIDAR, laser measurement from aircraft. ADS 40 digital sensors are produced for this purpose, as is software for interpreting images in two and three dimensions. The primary customers are map offices and cartography companies. Land-based measurement employs both photogrammetry and laser technology to measure distance and GNSS (Global Navigation Satellite Systems) for positioning measurement instruments and position finding for applications including GIS (Geographic Information Systems) and land surveying. Products like theodolites and total stations can be positioned on terrain to measure it through optical and laser technology spanning distances of up to several kilometers. Leica Geosystems has also developed what is termed a hand-held laser for short-distance measurement. This product, marketed under the Leica DISTOTM brand, is used mainly by architects, construction technicians, painters, carpenters and real estate brokers. Hexagon estimates that Hexagon MT enjoys a leading market position in the macro segment of the metrology market behind Trimble of the US. This market’s other major play- Accuracy < 10 metres < 100 my < 20 my < 0,3 my HEXAGONTODAYGPSLaser ScanLaser TrackOpticsPhotogramLaser ScanLaser TrackLaser RadarPhotogramOpticsTactilePS3D Tactile2.5D VisionTechnologiesLightMicro OpticsMacroMicroNano ers include Topcon and Sokkia of Japan. In air-borne measurement, the primary competitor is Intergraph of the US. Hexagon estimates the market value of the macro segment at approximately MSEK 27,000, and Hexagon MT’s market share at some 18 per cent. The Micro Segment Through its subsidiary Hexagon Metrology, Hexagon MT is also a world leader in the micro segment of the metrology market. This segment’s accuracy extends from 100 micromillimeters to 0.3 micromillimeters, a segment extending from large aircraft down to micro-components in small electronics applications. The micro segment can be divided into three sub-markets: large objects, standard applications and what are known as prismatic parts. The primary large objects, or sheet metal applications, are plate components for the automotive and aerospace industries. Standard applications include components for engineering machinery, or mobile phone chassis. Measuring prismatic parts involves the measurement of complex components with high precision such as gearwheels or cylinder blocks. These applications are primarily in the automotive and aerospace industries. Hand tools for effective measurement in research and development and production activities, is another sub-market in the metrology market’s micro segment. Hexagon estimates that Hexagon MT is the market leader in the micro segment of the metrology market followed by Mitutoyo of Japan and Germany’s Carl Zeiss. Other players in this market are Faro, Perceptron, Metrologic and Renishaw. Hexagon estimates the value of the market, including aftermarket business, at some MSEK 22,000. Hexagon MT’s market share is around 15 per cent. The Nano Segment The metrology market’s nano segment encompasses applications with measurement accuracy exceeding 0.3 micromillimeters. The main customers are materials and electronics corporations, with objects extending from chips for the electronics industry to materials with new characteristics. The metrology market’s nano segment harbors a wide array of players including Veeco, Zygo, KLA Tencor and Carl Zeiss. Hexagon estimates the value of the nano segment at approximately MSEK 10,000, with robust growth prospects. Although Hexagon MT does not conduct business in this market segment at present, it intends to enter this segment in the longer term. Operations in the Year Business area profitability progressed well in the year. Hexagon MT’s order intake increased to MSEK 4,525 (2,960) in the year and net sales were MSEK 4,539 (2,889). Organic growth was 11 per cent. EBITA operating earnings grew to MSEK 550 (292), equivalent to an operating margin of 12 per cent (10). At year-end, Hexagon MT had 4,798 (2,121) employees. 14 HEXAGON ANNUAL REPORT 2005