Hexagon AB (publ) (HEXAB) Earnings Call Transcript & Summary

Hello, everyone, thank you. Thank you very much for being here with us this afternoon. Thanks for making the trip to King's Place. And of course, thanks to all the ones that are connected online, which is plenty. It's a privilege, and we love the fact that you've decided to take some time to learn about Hexagon. Before we start, on a more personal note, as you know, I've been almost one year in the job, right? It's been relatively eventful, I would say. But it did a lot of fun, and I feel like I got the most of my learning curve in year one, which was great. I spent -- the first half will be predominantly looking outside in, right? I spent a lot of time with customers have traveled, the business a lot of the sites as you know Hexagon relatively decentralized. So I've been on the road, a lot of partnerships and events, lot of feedback, a lot of listening and asking questions. And the second half of the year has been a little bit more inward looking for me. In between drafting plans with the divisions that you're going to hear in the course of the afternoon in between working with the Board, of course, the short response but also working with the efficiency plan and other things that we wanted to get in motion. The more I moved throughout the year, the more I realized that I was really excited to come here today and then I chose to talk to you to a captive audience, which happens really and adding a little bit more time to talk about everything that we are doing. So how we're looking at the future. And the reality is that I couldn't be here excited if I was excited about the future, right? I couldn't stand up here to talk about targets, if I don't have confidence about what we are planning, what we're working on for the future. And the reason why I feel very strongly about Hexagon and the leaving what we're doing. And the reason why the team believes in what we're doing is predominantly for 3 reasons, right? Very simple. We think we have phenomenal value proposition that is going to become more and more crucial for our customers, the more we're going to grow. We think that the value proposition that we sit on is extremely strong, it's proven and all the trends that we see moving around us will make it even more a priority for customers. The second reason has to be what you do about it, right? So the more you learn about the momentum, the initiatives, the investments that we did over the time. The more I learn everything that is happening in terms of change management, the more I grew in terms of confidence on the direction. And the third one is people. It's team, it's culture. And it takes time, even if you've been in the organization for a long time. It takes time to go through the layers, understanding everywhere you look, motivation, energy levels, skills are we ready for the future. And I would like for you to walk away from the meeting today in this afternoon, the same sense of belief. Having said that, what are we planning to do today? We basically want to talk about 4 things. We want to talk about the growth opportunities and how we plan to capitalize on it. And we have tried to be relatively tight on the how, right? What we're going to do today this afternoon tomorrow is going to set us up for what 2026 is going to look like. Secondly, we will talk a lot about divisional structures, right? This is how we run the business. This is how we draft plans. This is how we address these industries. Thirdly, we're going to talk about financial disclosures, which basically means the tools that you're going to have to track our progress against those targets. And then last but not least, we're going to talk about those targets, what 2026 looks like and beyond. Great. So table stakes. What's the starting point? What is Hexagon, right? Who are we? The way we talk about our mission is shaping reality. Why do we say shaping reality. At the end, we do something that is relatively simple. We try and build digital replicas of the world, anything that is physical in the world. And then we throw technology at it to make it count for our customers, basically, right? So we duplicate, we map reality. We measure, we position anything physical products and processes in the real world. We use digital technologies to improve it, to build better quality products, build better quality cars and planes and phones or whatever that is, right, to make our customers more efficient. This is something that we have been going on about for a long time, right? The history of the group is relatively recent 20 years of living by this value proposition that is allowed to build an incredible footprint in some of the most transformational industries on the planet, right? Look at some of these statistics from the number of infrastructure and construction sites that we work on and we support them on a daily basis to the number of assets and production assets that we connect to on a daily basis. The number of planes, commercial vehicles and smartphones that we touch, right? The fingerprint situation that is discrete. Our public safety business that provides protection through digital tools for more than 1 billion people. Geospatial applications, when it gets tough, that's a beautiful application for Hexagon technologies, right? So when you want to land something on planet Mars, right? That's something we would like to work on with customers. Burj Khalifa petrochemical installations where the name of the game is productivity. And of course, that has resulted in a financial profile that is very solid, right? We're going to have time to talk about that divisional split over the course of the day. But of course, we are very proud of the growth trajectory that we have in all of these 5 businesses that you're going to hear from later today. Our revenue footprint by region is very stable and it's a testament to the fact that we certainly have a strong foothold in mature economies, but also that we have a good way of going about growing emerging markets. We've talked about this in the last quarters, where you know they would have a great trajectory of growth in Middle East, in Asia, of course, in China, in [indiscernible] and the likes. At the end of the day, what's on the price list? We sell hardware. We sell services, we sell software, right, with the split that you see on screen at the moment. The thin red line that cuts across this group is a very strong DNA towards innovation, right? These technologies are complex, making it easy to adopt, it's even more complex, right? And the technology components that we use for these value propositions to come alive are complex technology components. And so we invest in innovation. These are technologies that move very, very fast. So there's a constant investment in innovation, and we're going to talk about what these areas of investments predominantly are. But at the end of the day, the end result of everything we do is on screen now, right? And this might actually be the one single slide that we have been most proud of in the whole of the afternoon. I remember looking at an extract of our customer base 10 years ago when I've interviewed for Hexagon. And that was one of the primary hooks for me to decide to join the organization. Hexagon was not simple to understand that it is today, if I can reassure you, right? So in my preparation for the interview at the end of the day was the [ hook ]. I deeply believe that the quality of your customer base, the breadth of your customer base, the depth of these relationships is the best measurement for extrapolating success and potential for the businesses that you also look at. And when you look at this customer base, you find market share leaders, CapEx drivers, you find champions, large organizations with hundreds of facilities, but then you also find innovators. Companies that are changing the game of how technology is consumed. And you find a footprint across multiple industries. So being at the crossroad of those industries and being able to learn and reutilize some of those learnings in other industries, has always been a key success factor for us. At the end of the day, those commercial operations translate into an installed base and a number of people that you try and serve and make successful on a daily basis. When you look at this installed base in terms of software users, licenses that today, as we speak, are utilized a number of components, devices, pieces of hardware, data capture devices that our customers are consuming today. Those are impressive numbers. There's one number on the top right on the screen that I would like you to pay some attention to as well. We often talk about what we sell, right? Some of the key success factors are what we do is having 10,000 people in field that day in, day out in presales in application engineering and services in sales, make our customers successful. The more we succeed in making sure that they get a great payback from their investments on Hexagon through these people, the more we have a trajectory for the future. And then the statistics that maybe we haven't shared with you in the past, our devices on an annualized basis as of today have created 150-perabytes worth of data. That's data that we have captured or that's data that customers have captured. The reason why I love to look at that data and try and keep a good handle on that data is because the power of the value proposition of Hexagon is just at the beginning. There's only a limited amount of companies that have gone beyond compliance and beyond using that data for quality and have really found more impactful ways to generate return on investment, the level of creativity of our customers in terms of using their reality capture, to generate return on investment is just at the beginning. We're going to talk later about digital twinning, right? The more we talk with CDOs and CIOs, and we understand that they realize that there's an entire potential in that data, the more we get confidence on the future and the software stack, particularly that we're building for the future. And then, of course, all of this has translated in building a financial profile over the last 10 to 20 years that has been extremely strong. From the share price appreciation since 2001, when all has started to drive this transformation all the way to dividend payout and EPS for the last 10 years. And of course, that's supported by operational improvement by 9 percentage points of revenue CAGR in the last 10 years, 1.8 percentage points of gross margin improvement in the last 10 years, which we believe is one of the most pure measurements of quality in the business. And then cash conversion that we have talked about a fair amount in the last quarter, there has been 83% for the last 10 years. This is about the past and about the presence. So let's kick it off a notch and talk about what's coming, right? Let's talk about the future. I want to be brief when it comes to macro trends because we tend to all read the same sort of newspapers and nobody is in the room for more buzzwords, right? But at the end of the day, whenever we look at what's happening in the world, from shifting capital from country to country, think about reshoring and automation, think about growth in terms of emerging economies. We all read GDP projections for the last 3 to 5 years, and that clearly is a divided between what's happening in mature economies and in emerging economies. So what you want is to battle somebody that has a track record in terms of cracking the code of localizing technology, localizing expertise and growing with these growth markets. Emission reduction, sustainability is already today and will be for the future a phenomenal driver for our business. It is undeniable. We're going to see in a second, some of the core industries that we work within, the level of transformation that these industries are going through because of sustainability requirements. It's phenomenal and is excellent news for us. Labor shortages and labor shortages have multiple meanings in terms of how we need to look at these opportunities. For sure, it's got to do with digitizing experience, right, digitizing capabilities, trying to digitize the understanding of the process and all of that know-how in terms of what set productivity back in some of these processes. But then labor shortage, of course, has got to do with making, for instance, the data capture way more automated, right? Can we -- everywhere around the world across applications, can we shorten the time to capture that data? Can we make it available to one operator when in the past, it was only available for 2. So everything that we do is about taking in account that there's going to be generational shifts and shortage of capabilities and skills in the industry that we work with them. And these are some of those industries that we work on, on a daily basis. Think about the impact of energy shifts. By the time you've done mapping, what needs to happen from a technology and engineering perspective as a result of engineering of energy shift, you're going to find that there's so much new, high-quality e-accuracy parts that need to go into wind mill into small modular reactors. There's so much intelligence that needs to go into utilities grids, just to mention one. All of that is opportunity for us. Think about the construction sector. I think about safety in the construction sector, think about construction sector and emerging economies or the opportunity for infrastructure build. And think about transportation from EV tolls to, of course, the shift in automotive that we know about. And at the end of the day, you want to be well positioned and when you do business with these companies on a daily basis, when your technology is already ingrained in those industries, you're in great shape to support them as they move into the future. That's going to generate opportunities for some of the core technologies that all of you know about. But if you are going to remember these 5 areas of innovation that we all have heard of and then you're going to check how much of these 5 areas of innovation you're going to hear about from the divisional presidents, from [indiscernible] later in the day, you will realize how much we are at the epicenter of a massive opportunity. We have done a survey with more than 100 of our customers in the last month and we're trying to keep it relatively high level. We wanted to talk to decision-makers, people that truly own budgets, right? So we've talked with pretty much all the ones that you've seen on screen earlier in terms of their logos. And we wanted to understand what their sense of confidence in terms of what they're going to be spending for the foreseeable future. And I was reassured also from the angle to see physical and digital interfaces and technologies being very up there in terms of their sense of urgency because the industry is realizing the potential that is in these digital twins, right, in these technologies. So we said we are shaping reality. How do we do it practically, right? How do we do it? So I wanted to share with you a story and one specific example that might be illuminating in terms of how Hexagon looks at business opportunities. So I want to talk to you about an example from the world of utilities. Nothing to do with cars, planes or phones that my colleagues tell me, I talk about all the time, right, coming from that part of the business. So let's talk about utilities, which maybe is a slightly more less field application for 3D technologies. One of the top 5 utilities companies in the world has a phenomenal challenge, right? They need to serve electricity to 30 million people in the country. They have 1 million kilometers of grid to be maintained with high levels of reliability. They have 0.5 million primary and secondary distribution stations for that to happen. And then you can imagine that those have been built over a very long period of time. Those have been maintained by different people, different points in time, there's no digital records. And then the transformation coming, right, in terms of distributed energy generation and storage and e-vehicles and the likes. So how do you go about it, right? If you have 15,000 people in field with problems of attrition with problems of expertise that needs to be maintained. And you want these people to be as effective as possible in maintenance because they probably need to maintain 2 or 3 of those maintenance per day. So how do you go about it? Well, the first thing that they decided to do was to build the perfect digital replica of their infrastructure. So they have invested in hundreds of scanners to help them build a perfect 3D markup of their infrastructure. They get these technologies handheld or drones or automated scanners, they give them to their people, 10 to 15 minutes for a data capture to build a perfect replica of these distribution stations. Then, of course, once you have a whole bunch of data, you have to make it intelligent, right? So how do you move from capturing data to making that data more relevant, creating insights from the data. But ideally, considering the size of these data collected, ideally, you want AI to do the job for you. Ideally, you want analytics to read through a point cloud and understand what's a circuit breaker, what's the secondary station, what's the substation, what's the transformer, right? You want AI to label the data inside those point clouds autonomously, right? The moment you recognize the components, you can start thinking about maintenance, spare parts, we can start thinking about efficiency. This is what we would call the intelligence creation stage, right? Reality creation. The first stage is really immersion, what we just saw, right? Sorry if I went too quick on the video, but it's a great one. So I want you to have a good look at it. What do we call immersion -- no chance. What would we call immersion, and this is something that Burkhard is going to talk about at length in his presentation. What we call immersion are cloud-based data repositories that are highly immersive. So this is where you bring all of these technologies together in a way that is highly immersive because you want to train new operators in those repositories and you want to be able to connect as many users inside these companies as possible, right? That's what we call the immersion phase, the data immersion, the reality immersion phase, and it's got to do with collaboration tools, has got to do with visualization, also it's got to do with making that data available on mobile devices. Reality activation is when you actually generate your return on investment, is when you move 3D data inside an asset management structure, which for them is the single source of truth to go and buy spare parts, to go and create work orders, to go and dispatch maintenance crews in field. The more you build continuity, the more you're going to see dropping time to uptime, time to maintenance executed in field for your service crews and maintenance crews, okay? So this is how they have looked at return on investment. It's efficiency field, it's time saved, it's money saved. The spare parts, they go purchase autonomously, right? It's training for these people so that when they go and intervene in field, they know exactly what those distribution stations look like, is giving the data to designers so that when you plan for an upgrade, you know exactly what those realities look like. So what have we just witnessed is a value creation model that is relatively simple, that Hexagon tries to follow across divisions, right? Reality capture using hardware and software reality creation, which is basically design labeling the data, understanding the data, creating insights. Reality immersion because you want to grow the population of users within that company that have access to data and come up with brilliant ideas in terms of generating return on investment. And then last but not least, how do we improve design, how do we impact the process, how do we go and generate ROI for customers is what we call the activation stage. In some of the presentations, you're going to hear from Maria and Josh, orchestration. This is when we drive quality processes. This is when we go back and control road train to optimize fuel efficiency, for instance, right? This is when we generate a return on those digital twins. Of course, the more we live by that, the more we move a value proposition for selling transactionally to a value proposition that a C-suite would see tremendous value in. The more we do that, the more we create opportunities for Hexagon, right? Now we try and drive our hardware business with higher and higher gross margin levels through automation. We try and monitor and measure the attach rate between hardware and software. So the more we link capture and creation, the better. We try and drive the -- to measure usage for our immersing devices because the more customers share that data, the more that data is going to travel create transformation and opportunities for us. And then last but not least, reality activation has got a lot to do with our sales motions with key accounts, where we try and monitor the number of solutions that we managed to cross-sell and upsell. We're going to talk about it in some of the divisional reviews. So what this divisional structure looks like. These 5 divisions try and follow a very similar path of development. Of course, with the specificity of markets, there are difference and portfolios that have been built over the last 20 years differently. Internally, we run the business through 5 P&Ls that are fully empowered, manufacturing intelligence focused on discrete asset life cycle intelligence focused on anything process. Geosystems that pretty much supported the surveying market and increasingly more applications for machine control to reality capture, heavy construction, even media and entertainment. Autonomous Solution is a division that has been recently built, bringing together autonomous and position technologies previously reported as part of our industrial enterprise reporting segment and bringing together mining that previously was reported as part of Geosystems. So the fusion of these 2 divisions has a very strong -- is a very strong, I would say, rational that Maria is going to tell you more about in the afternoon. And then last but not least, is the Safety Infrastructure and Geospatial division that supports utilities communication, public safety and the likes. This is the way we look at the business. This is the way we measure it, and this is the way we would like you to be able to measure our progress. So throughout the afternoon, David, Ben and the divisional presidents, who will give you way more financial detail on these 5 divisions and come next year, we're going to start reporting the business division by division on a quarterly basis. Great. So we've talked about how we grow about value creation. Let's talk about the future, right? What do we actually spend time on? What's important to us? What are the plans that we're putting in motion looking at the delivery of the 2026 targets. So internally, we have tried to summarize what we actually set in motion across 3 categories. And these are pretty much my priorities and our priorities as a leadership team that we try and push across the various divisions. We talk about technology leadership and innovation. We talk about commercial execution and operational excellence. So I want to take you through some of these specific plans and projects and house that I thought might help you with some tools to understand the rest of the afternoon. Technology leadership, how do we drive innovation to drive growth and customer expansion. Let's focus first on what we developed before we look at the human element of innovation. What we developed, the thin red line that cuts across innovation for us are cloud, automation, analytics. Automation intended as physical automation and digital automation, right? So cloud and automation pretty much. Three things that are important to us. We are on an investment phase for sure. You've seen it through our numbers, right? We are coming through with an organic innovation wave that is going to give us way better tools to compete across all of these 5 divisions. And this is also why we've embarked on our journey to refresh our lineup. And every time that we look at generating in building a next-generation device, we want those devices to be incrementally data-rich, embedded software heavy. We want to limit the cost profile of these devices and use the power of software to generate more data through firmware middleware embedded software. And of course, we want to move edge analytics into these devices. Why? Because data becomes heavier and heavier, we want to help customers with latency with the cost of uploading and unloading, and we want to have a tight hand shake in between hardware and software. It's convenient, as I did a couple of weeks -- a couple of slides ago, it's convenient to separate the business in between hardware and software. The more we build analytics at the edge, the more data creation of the hardware at the point of data capture and software are intertwined. By the way, Burkhard also is going to tell you more about the make of our R&D operations. If I remember correctly, not to steal the fund market, more than 70%, close to 75% of our innovation staff and R&D staff are software engineers. So there's a lot of software that is built and is embedded in those devices today. That's what we call hardware, 75% of people that are actually software engineers throughout the organization. And the goal, of course, is to drive market share, grow gross margin. We want to keep on being on that gross margin trajectory and drive the attach rate between the hardware and the software. The second point is automation, right? We want to drive devices that are as automation ready as possible. We're going to drive customer TCO, lower the cost to capture data. And what we try and do is to lower our cost, our own COGS, right? We want to have intelligent devices that we can maintain remotely as much as possible. So all of our next-generation devices will be capable to do so. One of the reasons why we're so focused on cloud is also to make sure that we counter the cost of cloud with configurability of these solutions to lower the amount of services that is required to deploy our software. When it comes to cloud platforms, you're going to hear a lot about that from our divisions and Burkhard, why cloud platforms, it's all about data continuity, generating insights from the data. It's all about growing recurring revenue, a journey that we've been on for a long time. And then, of course, there's the human side of innovation. We want to have the right skills through our teams and partners. And then, of course, we want to make sure that technology is easy to consume for customers. And so we're putting a lot of work, we're thinking very hard about usability and UX, as you're going to see in the rest of the afternoon. Let's talk a little about commercial execution. What are some of the key things that we focus on. And I want to spend a few minutes on one that is part important for us. Customer success teams are investments that we are making across the spectrum of the business. We have a vast installed base. We want to drive the attach rates between hardware and software. We want to use customer success team so that our customers will get the most out of our technology and so that these motions will help us cross-selling and upsell and drive an acceleration in organic growth. Let's talk about people and tools, for instance, something that is particularly important for us is to try and be as data-centric as possible in the way we measure our sales motion but also try and be as strategic as possible in how we measure value creation for customers. Mattias is going to talk to you a little bit later in the afternoon about a methodology. But if I'm not mistaken, you're trying to patent as well. A methodology to transform return on investment for his customer into calculations, methodologies also for technology deployment that we can use throughout the life of those projects. Those methodologies increasingly will include sustainability and carbon avoidance concepts. Last but not least, operational excellence. So how do we transform innovation, work on product, work on market reach and go to market into value for Hexagon, value for our shareholders. A few thoughts on capital allocation. You all know that M&A motions are very important to us. We're very good at M&A. We pride ourselves with our track record in terms of M&A. This is something that is very important because we're building on technologies that are getting very rapidly adopted in the market. So we want to have best-in-class tools and great market reach, right? But increasingly, we're going to be very focused on having a disciplined approach to M&A. And increasingly, we're going to be very focused on the organic side of the equation and making sure that we get the most out of synergies for acquisitions that have been done recently, they still have a lot of unexpressed potential. Portfolio optimization, I think we have talked about some of these examples in the first 3 quarters of the year. We have pockets within the group of businesses that we are readdressing that are not in line with the vision for a business that becomes increasingly recurrent, increasingly focused on organic growth for a business that is becoming increasingly intertwined in between our hardware and software motions. In terms of driving performance, it's very important to us, we want to make sure that we align our own incentives, of course, to 2026. And so we are going to move from 2024 our own incentivization to make sure that it perfectly reflects the 3 quarter, I guess that we are going to talk about because of organic growth in terms of margin improvement, in terms of cash conversion. OpEx Efficiency. I believe David will tell you more about the efficiency plan where a few examples of things that we're setting in motion to make sure that we use the scale of the group to drive leverage from an OpEx perspective. And then last but not least, of course, cash conversion. There too, you're going to find some of the examples of things that we have in motion because we want working capital management and conversion to become one of the key priorities for everybody in the organization. That all results in the financial profile that we're trying to build for 2026. The financial profile that we deeply believe is achievable. So we have a high degree of confidence in terms of achieving our organic growth targets that Ola and the leadership team have announced in 2021. We're going to grow by 5% to 7% over the period, compensated by 3 to 5 percentage point of M&A, and we're building and planning for an operating margin, EBIT 1, including PPA, purchase price accounting, of more than 30% by 2026. The guidance in cash conversion is something that we have talked about several points in times in the past that we reconfirmed here. We want to stay within 80% to 90%. We, of course, a track record of doing so, we're going to go back to being in that range very soon. From an ESG perspective, we are very focused on this. We believe that this is a primary driver for our solution. We want to be able to explain to customers how we can help them on their own journey for sustainability. Eva is going to tell you more about our roadmaps and our goals this afternoon. But of course, the digitization journey for our customer has got way longer motions and time frames than a couple of years. And when we look at innovation, our innovation cycle is long. The cycle for return on investment is long. A lot of these transformations take a long time to come through. So when we plan, we plan for the long term. We don't plan for 2026. So what does the future look like? If I can give a glimpse into the business that we're trying to build with the leadership team, what does that look like? We believe in what we do today. We think that we have all of the right projects and initiatives in motion. We are very well positioned for long-term success. We have a very strong track record. And we've already done a very strong shift for the last 10 years in terms of moving our motions to being very software-centric. The first order of priority for everybody in the leadership team is to deliver -- is to deliver on the trust contract in between all of us in terms of what we have promised and what we want to deliver by 2026. So for us, the primary focus is one on attention to detail and execution and making sure that we stand behind the 2026 delivery. But then, of course, the role doesn't end there. And a lot of what we're doing now also in terms of the wave of innovation that we have talked about. A lot of that will pay back over the longer period. So what we envision past 2026 is a group that is going to get stronger and stronger in terms of its organic growth trajectory. If the group whose portfolio is going to be solely driven by cloudification and automation. We live by being a hybrid player in between the data capture and the exploitation of the data through digital technologies. We're always going to be in hardware and software. We believe in that value proposition because we see that being transformational and powerful day in, day out customers. But increasingly, those data capture devices, those will be asset light. There's a trend to go in that direction. You're going to hear about software-defined receivers. You're going to hear about calibration in AI helping lower the cost structure of our metrology devices. You're going to hear from Burkhard, David and others about gross margin for some of the new vanity capture technologies that we brought to market. Increasingly, the vision is one of building digital reality technologies and then connecting their reality to the assets and the people that have created that reality. The more we can create data gravity, the more we can generate return investment for customers. And then, of course, AI is going to have a massive impact. You have understood how much data we create today. You can have a perception for why some of the cloud vendors or AI champions of the world want to work with us and partner with us. Because the potential for that data to be utilized is barely top at the moment. And that's going to generate a business that has an acceleration in terms of growth that has a continued margin delivery. They get stronger and stronger in terms of cash generation and higher and higher in terms of recurring revenue components. Thank you very much. I wanted to give you a couple of tools for you to be able to connect the dots of what we do across the divisions in the rest of the afternoon. Thank you for your attention. I'm going to leave you now with our Chief Strategy Officer, Ben Maslen.

Thank you, Paolo. Good afternoon, everyone. I'm Ben Maslen, Chief Strategy Officer for Hexagon. I've been with the group for around 6 years. Prior to that, I was an equity analyst. So I did a lot of December Capital Markets Day. I know it's a lot of time. So as Paolo said, thank you very much for coming. I'm going to talk about 2 things today. Firstly, Hexagon's TAM, how the current product footprint that we have was assembled, what the current addressable market is and how fast we expect it to grow and how we're positioning Hexagon as Paolo said, for additional opportunities we see beyond the 2026 period. Secondly, I'm going to do an update on our M&A strategy and the recent larger acquisitions that we've made, EAM and ETQ. So to start now I want to pick up where Paolo left off and revisit the very strong growth and margin performance for Hexagon has delivered over the last 20 years or so, which has been very impressive. This chart as reminder that Hexagon is still a young company, younger than most of us and has built its platform over this period and is such -- is at a very different stage in its life cycle to some more mature companies you might follow. Our success over this period has been built on a combination of investment in both organic innovation and also acquisitive growth. And we've been following a strategy driven by Ola and now Paolo for trying to invest ahead of the curve to position ourselves for attractive markets and growth trends that may be ahead of us. So this approach can be seen in more detail on this slide, and it shows the same time frame. Here, what we're showing is that the larger acquisitions that Hexagon did historically, which formed a starting point for the 5 divisions that we're going to start reporting on as of next year. The Browne & Sharpe acquisition took us into the world of Metrology, like Geosystems, surveying and machine control, Novatel and Mintec, advanced positioning technologies and mine planning software and then Intergraph took us into computer-aided dispatch and CAD design software. And with the colors, you can see how these different acquisitions map to the 5 new divisions. On top of these platforms, we've added further acquisitions, which expanded the addressable market that we had and strengthened the market position of these original acquisitions. This is obviously not all the acquisitions we've done over this period, just the major product categories that we've added along the way. Finally, we add in some of the more transformative innovations that we've launched over this time period like laser trackers in 2013, the BLK360 laser scanner in 2016 and the SDX software platform in 2017 which expanded our presence in 3D metrology, reality capture and asset life cycle information software. So together, this combination of targeted acquisitions and organic innovation to help build the current product suite that we have today. You can also see the different phases of growth that Hexagon has been through. Firstly, building a market-leading portfolio in precision measurement, 3D digitization and advanced positioning then adding software companies in computer-aided dispatch, CAD design software, CAM software simulation software, 3D visualization and so forth. And then adding the tools and platforms that help combine these software tools with real-world center data that we can then take into customer operations or use across the life cycle of different assets. And these platforms include EAM and ETQ that we acquired recently as well as the recent product launches of HxDR and Nexus, which Burkhard and the divisions will talk about later, and you can see being demoed out in the full year. So if we take these combined investments, this feeds into a map of the product footprint that we have today. This doesn't show every product that Hexagon has, but what we try to do here is show the main product categories that we have and how they map to the new divisional structure and the end market verticals that they serve. We also try to show here where we see our market positions in these end markets. So those boxes shaded blue signify where we think we have a leading market position by that approximately top 3. And without going through each one, you can see that Hexagon is very well positioned for the future with market-leading positions across all of our divisions. Here, we've taken our product footprint and built it up into what we see as a total addressable market or TAM for our products. So here, we show it by end market vertical, which is similar but not a one-to-one map to the divisional structure because the divisions would obviously sell products into a lot of different end markets. This analysis gives a TAM for Hexagon of just over $100 billion in 2022 and we expect that to grow at a CAGR of around 7% to the 2026 period over the kind of forecast horizon. This is obviously a faster growth than the output of some of the underlying industries that we serve and that reflects many of the positive drivers for the adoption of our digital solutions within those markets, some of which are shown on the right of that slide. So I won't go into them in detail. The divisional presidents will talk about them a lot later in the day. But overall, we see a good underlying market growth rate to support the achievement of our targets. And 2 years in, approximately, we're running slightly ahead of this growth rate. Now as well as capturing the growth for investments that we've done historically, we're obviously constantly investing for future growth, and that isn't reflected in the TAM that we have today. And what I wanted to do here was just highlight a few potential accelerators of Hexagon's growth rates that we see beyond 2026. So firstly, autonomy and robotics. Hexagon has a lot of core competencies in this attractive market, spatial computing, perception engines, computer vision, solutions drive by wire, GNSS et cetera, et cetera. And these technologies are already being applied in both our Autonomous Solutions division. And Maria will talk later about the road train project that we mentioned on the quarterly results as well as in robotic sensors like the BLK2FLY and the BLK ARC in Geosystems, which Burkhard will showcase. Adoption all these industries is at a very early stage. And in the -- the agriculture example that we show here, only 18% of global pharmas are currently using precision agriculture solutions and less than 5% are using what we would call fully autonomous solutions. And those numbers would be fairly similar in mining markets. Next on to Digital Twins, which Paolo mentioned earlier, Hexagon has a lot of technology that you can see there that is used to create either a visual or operational twin of an asset, CAD design software, BIM software, reality capture technology and so forth. And as Paolo mentioned in the survey that we did earlier this year, we expect an acceleration in the technology adoption around digital twins from 20% of companies using them today to around 80% in 5 years' time. Next, the industrial metaverse. A lot of hype around this theme. And I think the reality is it remains to be seen how big these markets can be. But if you attended trade shows like the Hanover Fair this year, you will have already seen many examples of how immersive 3D experiences are starting to be used in industrial processes. And as this develops, we see a good opportunity for our technologies, reality capture, augmented reality technologies, AI, spatial computing and so forth. And this is obviously an area where our partnerships with companies like NVIDIA are working to develop solutions and potential use cases in this space. And again, Burkhard will throw more light on that later. And then finally, climate change. Eva will talk about this. Obviously, most of Hexagon's products are already geared to reducing waste, improving the efficiency of our customers and thereby helping the environment. The point here is that these are going to remain very powerful long-term drivers, both in terms of the investments that we'll need to go into segments like electric vehicles and renewable but also, unfortunately, the increasing cost of climate mitigation and the need to react to natural disasters. So we'll see how these trends develop over the longer term, but we see Hexagon is well positioned to participate in the extra growth they can bring beyond 2026. So now we're going to talk a bit about the M&A strategy and process, which has been instrumental, as you've seen in building the platform that we have today. Firstly, a recap of our M&A strategy, which has remained basically unchanged for 10 years, and I inherited this slide from Mattias. It looks better than it did back then, but the concept is exactly the same. The ambition is that we aim to add 3% to 5% revenue growth per annum from acquisitions, and that basically has translated historically into 10 to 15 deals per year. We target a net debt-to-EBITDA ceiling of around 2.5x. That's the threshold we're happy to go up to. That's actually well below the debt capacity that we do have, which is closer to 4x net debt to EBITDA. In terms of the M&A process, it all starts with the strategy, the growth strategy. And we have a constant iteration with the divisions at least every 6 months, where we review in detail the end markets, how technology is changing, what competitors are doing. And we prioritize the adjacencies that we want to expand into. Then we look at whether it makes more sense to buy something or develop something, and there will be sometimes situations where development projects and acquisitions will overlap because M&A timing can be unpredictable. We always focus on the most synergistic opportunities over the longer term for the group. And as you've seen in the buildup of Hexagon historically, we will occasionally acquire new platforms for growth like Browne & Sharpe and Leica or EAM and ETQ more recently and make further bolt-ons on to those platforms to strengthen their market position. In terms of the financial criteria, as we showed in the TAM section, we're trying to find companies that have a very strong market position. Software and Services has accounted for around 70% of revenues acquired over the last decade. And as Paolo said, we remain disciplined on valuation. We reject many potential targets to get to the ones that we acquired. So it's a very active screening process and we dropped them either due to unattractive risk reward, a lack of synergies or just unattractive valuation. And we also, as we have in the past, use earn-outs where it makes sense to bridge a valuation gap between the buyer and the seller. So now we have a quick update on EAM and ETQ, and Josh and Mattias will talk about them more later. Firstly, Hexagon EAM, which is our market-leading enterprise asset management software business which we acquired in October 2021. EAM is undergoing a transition of its customer base to multi-tenant SaaS, which obviously drags a little bit on near-term growth, but sets the business up well for the future. And as shown here, SaaS revenues for EAM are now over half of overall revenues and they're growing at 20% plus rates. And that's what we expect to carry on going forward. We see great synergy potential. Firstly, in terms of geographic expansion. So 2/3 of that business when we acquired it was the customer base was in North America. We see great potential to cross-sell EAM into the asset-intensive customer base of the other divisions and we plan to integrate it with our existing technologies, GIS, so you can position assets, BIM models for use of facilities management and to integrate the shop floor data that we get from a discrete manufacturing environment. Synergies are not yet contributing much to this growth. It took time to carve this business out. So it was a carve-out -- of info, but we expect that to start contributing going forward. And with the integration done, we see EAM well positioned to deliver consistent double-digit growth going forward led by SaaS. Similarly with ETQ, the QMS software platform that we bought in March last year and we see a very similar development there. It's also moving its client base to SaaS, and that's grown off a lower base at a compound annual growth rate of around 30% over the last few years and we would expect that good momentum to continue. Synergy initiatives are on track, again, to expand outside of North America. So 80% of existing customers are in the U.S. And also by connecting ETQ with the quality data coming off the shop floor that the rest of our MI product portfolio generates. And again, it's now fully integrated and positioned for double-digit growth going forward. So to recap on M&A, we have a consistent track record as is shown in the chart down below. It's created a lot of value for shareholders as we've acquired these companies and built platforms. 2023 has been a quieter year and that reflects a bit of a slowdown in the overall M&A market, but we have a good pipeline going into next year and we would expect overall activity levels to pick up. So we're confident in the 3% to 5% M&A target that we have out to 2026. There are a few disposals we're looking at as well. And as we've mentioned on conference calls so far this year, with revenues totaling in aggregate between EUR 100 million and EUR 200 million of sales. We will look to see whether it makes sense to exit them going forward because they're in markets that are not a focus for us and they are dilutive to group growth and profitability. So we'll announce those as they happen as we did with the help desk services business that we exited in Q3 in SIG. And then finally, disclosures. David's going to talk about additional disclosures we'll make around the M&A process. So you can better understand the contribution of these acquisitions to the 5 new divisions that we're moving to. So in conclusion, Hexagon has built a strong footprint and has a very attractive growth outlook. At the same time, we're continuing to invest for what we see as a very attractive longer-term opportunities and M&A is a key part of that, and we have a consistent strategy and execution. So thank you. With that, I will hand over to David.

Okay. So I would like to begin with a brief introduction to myself, as many of you have not met me before. I was appointed CFO Hexagon at the beginning of July this year, but a long way prior to that, I started my professional financial career at Caudwell Communications, probably an unfamiliar name, perhaps, but they became phones for you. I then move to a division of GEC, so seeing a mixture of entrepreneurial and corporate environments. And I certainly know which one I preferred. I moved to Brown & Sharpe in 1999. And so I've been with Hexagon since that first acquisition in April 2001. My career development, whilst at Hexagon began with responsibility in the U.K. then expanding to the EMEA on the manufacturing, sales and service side and becoming MI divisional CFO in 2010. We then began working closely with Paolo, completing several large software acquisitions, like MSC, like Vero, Romax, VG and a few more, that together with organic growth or MI business triple in size. So what have I found as Hexagon's CFO. I found that the divisional controlling structure is very well established with broad diverse skills including M&A and importantly, a very deep understanding of their respective businesses. And this complements the very efficient and slightly small and established group financial reporting function, which I feel is the most important -- what I feel is most important is that Hexagon has a very well defined and tested business model for value creation. And I will spend some time in the next few Slides, expanding on that. We also commissioned an investor survey post my arrival and amidst the recognized strength of the business, one feature stood out that the business is perceived as complex and that's challenging to follow. During this presentation, I will highlight some of the changes we have already made and those we will be making to address this topic. My long-term intention being to support the continued success of the organization on its next phase of the growth journey. So let's look at the 3 areas I'm going to focus on today, how Hexagon has and will continue to create value, some of the drivers of our cash generation and how we allocate capital and communication. A number of initiatives that we have already begun to undertake and will build on further to help better understand the group. Closing with a proposed refreshed management incentive structure aligned to the targets and value drivers of the business. Paolo has already touched on the admirable achievements of Hexagon in the last decade. Here, we summarized the strong financial performance of the business since 2013 to 2022. Innovation-led organic growth and market expansion with strategic M&A driving 9% CAGR over this time period. This revenue growth consistently improving margins 80 basis points per year, from product innovation, operational gearing and the shift in mix to higher software margin sales. This has also translated to an 11% per annum EPS growth. So let's look at the components of revenue growth. Organic growth is foundational for Hexagon. Continued innovation, driven by our consistent reinvestment of revenue in R&D. This is a pivotal differentiator of the group. It has allowed us to use -- has allowed us to open up new product categories, new markets and to access new geographies. And the divisional presidents will later discuss about the future increasing opportunities in the various end markets. We have averaged 5% per annum organic growth over the cycle and the target is to at least maintain that level going forward. Ben has already talked about M&A, which is the supplement to our organic growth. Importantly, it has been driven by requirements for the division with strategic overview from the center on a make or buy evaluation basis. Of our acquisitions in the last 5 years, 75% of acquired revenues, circa EUR 700 million has been on software, underpinning the changing shape of the group. We target 3% to 5% annual revenue growth from M&A, achieving 3% per annum at this moment in time. This is obviously dependent on the M&A environment. So let's walk through this diagram, which is how I describe the business model for Hexagon for value creation. From continued top line growth and expanding gross margin with simultaneous OpEx management, EBIT growth is achieved. We have seen 10 points growth in gross margin while investing 3% in OpEx to achieve this. This brings us to where we are today or the line. And therefore, this brings us way and broadly speaking, we expect to continue to create value in the same manner, and therefore, have line of sight to achieve our 2026 margin target. So we will drive continued expansion in gross margin by the established innovation process and with an increased software mix. And in conjunction with this, continued OpEx management. We will continue to invest in sales and marketing to drive the top line. And I will go into more detail on the elements of R&D progression, but we will see a rebalancing as the gross spend to sales percentage decreases to a degree offsetting the amortization increase as our latest innovations are released. In addition, we are progressing well with the Q3 announced rationalization program to improve the operational efficiency in the business to support delivery of our targets. Here, we see the foundation of our confidence in achieving our target. There is the strong correlation between gross margin and operating margin development, reinforcing the previous Slide. The additional information here is that the gross margin expansion is delivered from 2 key elements: improvements in the underlying hardware gross margin and improvement in the software and services gross margin from mix impact and more software content. The gross margin improvement is driven by technology innovation in terms of both cost improvement, market expansion and operational efficiency. So returning to the R&D topic. The bars show historical trend of gross R&D expense and the line is the percentage of gross R&D to sales. The general moderate upward trend from 11% to 13% as a percentage of sales representative of the increase in the software mix over the time horizon as it's a blended rate of hardware and software investment. Worthy of note, though, is the 2% increase over '22 and '23, up to 15% as we are a key and important stage of the innovation cycle, as you will see in Burkhard's presentation, with multiple key platforms simultaneously coming to fruition across all the divisions, be it Nexus in MI, HxDR for Geosystems, autonomous platforms in AS and the SaaS transition for ALI with SDX and SIG with OnCall and of course, multiple next-generation sensors. As I mentioned on the earlier Slide, we expect the gross investment percentage to rebalance over future periods moving towards the 13%. Due to the importance of innovation over the next slides, I want to walk you through 3 cases that intentionally vary in scope and impact and importantly represent examples of the financial gross margin improvements achieved by the continual innovation focus at Hexagon. The image in the center of the screen is an absolute rotary encoder. This is a core technology block from Geosystems used extensively across their product family, the BLK, the laser scanners, the total stations and the 3D Disto. MI was using a purchase solution as the original geospatial rotor encoders didn't achieve all the metrology specifications. We embarked on a EUR 5 million investment to adapt and develop it for MI products, successfully replacing the third-party source part. The development with multiple reader heads enabled improved speed, improved accuracy, and robustness and being absolute doesn't require homing for establishing initial position. So the initial investment is paid back annually through cost improvement for MI. This gives additional leverage on volume for Geosystems and product material performance enhancement for the customers. And obviously, the cumulative returns are year-by-year at circa EUR 30 million as we speak today. My second example is software, 3D reshaper. This is an application and a sales development and a key component providing meshing technology. This originated as an acquisition for MI. So the first example was Geosystems to MI. This is an example of MI to Geosystems and has seen significant ongoing development since its original purchase. Our scanning has become more prevalent in the Geosystems world. This technology was incorporated into Geosystems applications and now provides the availability of meshing functions across the wider group's product portfolio, including HDR. And as you probably know, meshing is an important technology building block as is the basis for many AI calculations. The third example I have is of a different scale and is likely more familiar to many of you. And this demonstrates the success of internally developed disruptive technology release. The BLK portfolio has been instrumental in delivering EUR 285 million additional revenue since its release in 2017, as it provides high-quality mobile scanning and in doing so, has changed the addressable market from around 1,500 scanners per year to now 17,000 devices in the market. There are multiple generations but they use common technology blocks. They use the absolute encoder, they utilize 3D reshaper. These examples illustrate the tremendous leverage of technology across the group and is facilitated by a CTO who has worked in 2 of the main divisions and has a strong software domain knowledge. And you will hear a lot from Burkhard following in the afternoon. So we have seen the value of innovation, but I want to talk about the management of the cost. This schematic is taken from our internal 60-page training document on IAS 38 and highlights the organization, the importance of monitoring and evaluating the innovation process and the need to have strong financial oversight on our investments. I'll briefly walk you through it. So it splits between the project phase and the product life. And it exemplifies that the cash flow in the opening periods between the idea and product release is negative by the downward red line. The green line reflecting the improved cash flows post product release. You see the life of the intangible asset and the trajectory from beginning capitalization after you have mitigated the risk from the idea phase to year 1. And then the amortization period during product release, ensuring you have the matching of cost of revenue. In the center, you see the regular actions that the organization has to take to ensure that the project is on target under the business plan with IRR, NPV, payback calculations is still holding. This process is in lockstep with the Hexagon innovation process and deeply ingrained in finance, development and product management to ensure strict financial rigor on all our investments. Finally, on the innovation process, I want to highlight some of the metrics to give you additional context of the balance sheet. The proportional mix of the capitalization investment reflects the importance of software in all our innovations with 70% related to software and 30% related to hardware. And this is broadly in line with the development resources. The capitalization rate versus gross R&D spend is in the range of 53%, plus or minus 3%. And this information, we will disclose quarterly in the future. I've also given an indication of the proportions of the gross book value split into the various phases of development. 18% of the gross book value being in the build phase, 32% being in depreciation and 50% completely amortized, which demonstrates that the average life of those in depreciation is below 6 years. I want to give you a brief update on the rationalization program. We took a circa EUR 200 million charge as a one-off and expect to deliver EUR 160 million to EUR 170 million annualized savings from 2025. We introduced this in Q3, and the numbers that you see on the bottom of the Slide are the Q3 numbers. And we will give you an update in Q4 as to the progress in the implementation but it is continuing on or ahead of schedule. I also wanted to give some more examples of the activities that are going on in the different categories. We are broadening our implementation of the European shared services center by onboarding MI. And in addition, opening a similar center in the Americas. You will hear in Steven Cost's presentation that we have either cessation in some low-margin government-related service contracts. And finally, we're moving through our facility reduction program, which to date stands at 30 facilities. So moving to my second topic, capital allocation. We're going to look more closely at cash generation and, in particular, the impact of working capital as it's a focus on our business as it shifts in nature. So this chart is very familiar to you. And it shows the working capital to sales has positively developed from a peak of 25% to lower 4% in early 2021 and has now come back to circa 10%. Looking at the dynamics. The improvement was more about as the proportion of software sales in the group increased. We then saw a further marked downward shift during the COVID period, software was more resilient than hardware revenue. Hardware also being impacted and exacerbated by the component shortage. Subsequently, we have seen a normalization in hardware and this ratio has returned to 10%. Clearly, though, the general environment has changed. And with higher interest rates, we need to be proactive to sustain this level and to return to the overall downward trend. We're taking a number of measures to deliver a sustainable working capital improvement, such as stricter Ts and Cs, improving inventory management, and we're considering if appropriate to increase our supply of financing, which is today is about EUR 40 million on a EUR 300 million supplier base. Moving from working capital to cash conversion. In the graph, the dotted blue line represents the quarterly cash conversion percentage, whereas the solid blue line is the cash conversion excluding movement in working capital. Given the explanation on the previous Slide about the impact of normalization in a cycle, this shows that taken over the long term cash conversion, excluding the impact has remained in a relatively narrow band, typically hovering around 80% to 90%. With an average of 86% compared to an average of 83%, including the working capital. With the sustained working capital management program and investment management, this gives us confidence that we will return and achieve the 80% to 90% cash conversion range. This Slide looks at the allocation -- the capital allocation in the last decade. Let's walk down the elements. I talked an awful lot about the innovation. So it's not perhaps not a surprise at the top of the chart relates to gross R&D, consistent investment to drive innovation. M&A is next on the list. And you can see that we have a history of M&A and the block at the top shows the allocation between stock and cash for the EAM deal. We consistently return to shareholders with a payout ratio of above 30%. The share buybacks, very, very small because we kept the scale equal is relative to our LTIP program, but could be expanded if the conditions are favorable with the option to purchase up to 10% of outstanding shares. Finally, we have continued to manage our financial leverage between -- below our internal threshold of 2.5x net debt. The previous slide takes us to the summary of the robust financial position as we enter the next stage of Hexagon's development with an investment capacity of EUR 1 billion, which would take us to 2.5x our internal target. This would be well below our covenant threshold of 3.5x. And for reference, the proportion of our debt floating exchange rate is 80% versus 20% fixed with an equal split between long and short term. So on to my last topic, communication. I would like to address the topic of communication because basically, we have listened to your feedback looking at opportunities to help support the understanding of the group, including a more segmented reporting structure, more detailed P&L disclosure and the proposal of alignment of management incentives. A key area of focus since July and in the next few months is to expand and enhance our disclosures. We have already started to move in this direction. In Q3, we introduced the profit bridge, splitting out the contribution of organic growth, structure and currency from sales through to EBIT. We gave more detail about the components of working capital and more disclosure around the acquisitions. Today, we are introducing the new divisional structure, which should give a lot more transparency and visibility on the financial characteristics of the divisions. We will report 2023 in the current form, but for Q1, we will report the new structure and I will now take you through a few examples. We will make it easier to model the effects of acquisitions. For our larger acquisitions with seller approval, we'll tell you what the business costs, it's revenue and EBIT. And we'll identify the division in which it will go into. The smaller acquisitions will give the revenues, some indication of profitability and hopefully, this will make your modeling much easier. Perhaps the most important change though, is that we have changed our segment reporting from the current 2 segments of IES and GES to 5 divisions. This is how I monitor the business. And with these additional metrics, it should support your understanding of the dynamics of the business. Quarterly, we will show the EBIT margin for the revenue and the EBIT margin for the 5 divisions whereas annually, we will give the broader spectrum, including gross margin. This Slide draws together some of the key financial characteristics of the divisions. I won't go through them but the divisional presidents will touch on many of them in their subsequent presentations. But this brings the key characteristics together on 1 page for your convenience and should significantly help you. Having looked at how we present our numbers, we're proposing this enhanced structure, which will support more transparency by providing information quarterly that was only previously available annually. Starting on the left, we will present a bridge between IFRS revenue and the adjusted P&L, showing the impacts of PPA, LTIP and NRI at the various levels through the P&L statement. In the center section, within the adjusted P&L, we will break down the effects of capitalization, amortization. So you can see these elements on a quarterly basis. Finally, on the right-hand side, the cash flow. You will see the starting point is EBIT1, we will work down through EBITDA, break down the movements on working capital and show the cash conversion calculation and the cash flow before nonrecurring items. Hopefully, this will be far more intuitive. This Slide summarizes the extent of the proposed changes we have discussed. We're trying to show the scale and the change we are proposing to make Hexagon more transparent. My final disclosure Slide is the proposed management incentive scheme. Historically, management remuneration schemes have been based around a single measure of absolute EBIT growth. We're proposing to broaden the criteria for management and remuneration to reflect the key value drivers of the group, namely organic revenue growth, the adjusted EBIT growth and cash conversion. We understand from our stakeholder feedback that these are the key value drivers of the business and we want to ensure that management and shareholder interests are aligned. So to summarize, we're a highly successful group with an excellent record of innovation and growth and expanding margins. My objective as CFO is to ensure we continue our growth momentum by allocating capital effectively. We are committed to providing greater transparency and clarity as we strive to deliver our targets. So next, I would like to introduce Eva. She'll talk to you about ESG.

Hi, everyone. Good afternoon. My name is Eva Carranza. I've not met at many of you, so I'll go ahead and introduce myself shortly. I have the last almost 20 years working in the chemical and in the building material industries, helping these companies to grow their business while improving the impact that they have on the planet and on the people and communities where they operate. And I joined Hexagon about 2 years ago in the Geosystems division, where I had the opportunity to learn about our process, about our people and our industry. And also to get a view into how complex our supply chain is. And since earlier this year, I was appointed Head of Sustainability for the group. I will be walking you slightly over what is our sustainability strategy. I'll also give you some details into some of the initiatives that we are already implemented. And I will touch upon how our products and solutions are actually driving sustainable outputs in our customers hands. So our strategy. I'm here to reassure you, it's still following to have sustainable business growth with the respect of people and the planet. We will be having a 2 side pillar into our impact where we see a major impact as all the sustainability outcomes through efficiency that we bring the industries where we operate. And then we have our second pillar of the impact, which is those actions that we make. So it's the positive impacts that we create. And here, we follow a program through the whole ESG, which is for environment, social and governance. And what you see in the picture, it's actually one of our environmental initiatives. This is our solar park in Spain, which is able to power almost 6,000 households on a yearly basis with its capacity. We also have initiatives on the social aspects where you will also hear some from Mattias, who will be telling you how we use an inclusive culture to drive employee engagement. But we also have initiatives where we try to operate on a more responsible level in the communities where we are present. And you will also hear later on from Paolo who will give you our claims on how we are also improving our governance structure as a group. Now when we talk about the strategy, we are looking at our impact. And to make sure that we have the right impact in place, we have set ourselves commitments. Already some years ago, we decided or we committed to audit all our key suppliers in high-risk countries. And this was to be added by this year. And we are already in the process, almost finishing on taking that one off. So we have actually committed supplier outage in 100% of the suppliers that are strategic to us and that are located in high-risk countries. We have also committed ourselves to have a 30% women in leadership positions by 2025. And we have said that to follow our improvement program, we will source only 100% renewable power by 2027 in all our facilities. And we have committed as well to a net 0 long-term -- short- and long-term trajectory. So we have committed to have a 95% reduction on Scope 1, that is mostly driven by the company cars as well as Scope 2, which mostly streams from the electricity that we purchased by 2030. And we also have a target to engage our supply chain. So we are committing to have at least 80% of our procurement spend covered by science-based target approved suppliers. Now when we are talking about CO2, I'd like to give a short glimpse because 2030 looks hard. But we are studying today, we have already within the year, use the time to build up our baseline. So we have designed our road map in terms of corporate and we are currently drafting site-by-site improvement initiatives to have yearly commitments on each of the locations. We have also transformed our target and brought from 2030 to 2025, the carbon neutrality target and we are going further. We are starting to quantify, what is the improvements that our solutions are bringing customers. So we are taking a structured approach and using an externally recognized methodology published this year by the World Business Council for Sustainable Development to quantify what are the avoided emissions on our reference case versus the case that our customers are able to have in any of their workflows. And we are aligning to net 0 on a 2030 and also on a 2050 long-term trajectory. And it's all about numbers, right? So we've started already with the super lengthy carbon disclosure project, CDP. We have also already committed and reported on the UN Global Compact. We are on the way to cover all the other type of frameworks that you need to be able to better address our progress through the targets. And we are also able to do this within a fast forward mode. So we're already starting with the next integrated report. Now I'd like to tell you a bit about our actions. And I already mentioned that the biggest impact we have is actually in the hands of our customers, how our solutions are bringing efficiency and therefore, putting sustainability in their hands. But in our actions, we are starting by us. We are starting to see how can we improve. And we start by the people that we have. So we are driving a program to be able to ensure and to foster a culture that is focused on inclusivity, a performance-driven culture where any of our employees, any of our colleagues and any of our customers feel that they belong and they stay with us. You'll hear a little bit more on it from Mattias, who will tell you how in his provision, particularly, employees play a key role and motivation is actually key. Then we look towards our full value chain and see where can we generate positive impact? So we have a sustainable procurement program. We also have already started with driving life cycle assessments of our products and then seeing how can we make our operations much more efficient. And any of our current initiatives is not starting or ending only in our own facilities. We're looking on how to drive actual improvements within the market on logistics, on packaging, on customer engagement. So how do we bring customers over and try to address their ESG challenges as part of our development pipeline in innovation. And we are also looking at what happens with our products at the end of their lifetime. We already have in some of our divisions, the opportunity to refurbished products when they have finished and use. And we are also looking at how do we scale this up and become much more circular. So I was mentioning about the supplier engagement program. Just to give you a glimpse. We have roughly, I don't know, 10,000 suppliers more or less. But what we have done is that we prioritize them into which of them are strategic suppliers. And from this, which of those are actually located in high-risk countries. And we have then started to ensure -- sorry, we have then started to make engagements with the suppliers that follow the full supplier relationship management program to ensure that these suppliers are following human rights exactly at the same level that we have followed and that we have committed as an organization to Champion. And then why do we look into suppliers? One of the key aspects for our CO2 emissions will deal with them. So I already mentioned we have made our baseline in terms of Scope 1, 2 and Scope 3. And we have committed ourselves already to have a total of 95% reduction on Scope 1 and 2 by 2030. But given that we have also find the validations with the science-based target and we are currently in the process of being validated. So the overall validation process is ongoing. We have also decided to look into the full value chain and there is where we see that suppliers pay a key component because they are actually the biggest lever we have to decarbonize. And that's how we will reach a 25% reduction in our full value chain by 2030. You will ask, how is it that you expect, let's say, to grow our business while still reducing CO2 emissions. And here, I come, we have already heard from Ben and from Paolo and also from David about how our growth will look like. So we will probably grow much faster in terms of software and in terms of SaaS as in terms of hardware. That's more or less, we want to have a balanced growth, but it's likely to be higher in terms of SaaS and software. And what happens with the hardware is that we are integrating ESG criteria within the innovation process in Hexagon. And you will hear from Burkhard the details on how the innovation process looks like. And what I can just tell you here is we are including a life cycle assessment approach already at the moment of the starting of prototyping hard work products to try to analyze, which are those hotspots, that our hardware will have so that our engineers can take a look into how to reduce or mitigate the impact. Now I come to our solutions. So what about the solutions. You will hear from all the preference of the revisions, how their customers are using our software and hardware. But what is important to recognize is that if we take a look at the trends that were already mentioned by Paolo and Ben, we see that the trends globally in our markets are actually increasing the demand for sustainable solutions on the short and long term. And Hexagon is very well located to fulfill that tech man. Hexagon is -- we're located to work with the customers and to accelerate this growth. And we are thinking on working with the customers because what we see is that in the latest years, we have witnessed that climate change has really exacerbated and the risk that exposing, it's changing completely not only how supply changes are working, not only how certain industries are being, let's say, analyzed even by investors or by their stakeholders. But also it's changing how cities or normal citizens in any of the communities are being prone to their changes. So what we are doing is that we are trying to work with our customers in trying to find how do we empower the value that they bring by enhancing the link to nature. And here, I'm sure you all know very much in most of the industries, economic activity, it's highly linked to nature or natural resources. We are here in the U.K. and just in the U.K., we have more than GBP 45 billion per year that is directly linked to economic resources and nature. And what we see is that on the one hand, we have all type of demands for minerals and for materials increasing with the macroeconomic trends. But on the other hand, we also see that nature capital is not being able to restore itself as fast we should. So you will see from some of our presidents, including Maria, who will walk you into how is it that our customers are using our solutions into managing their own capital. How are they using maybe positioning services to understand how do they take the most out of agriculture out of for us? How do they even take position in services to better construct renewable energy sources, for example, when we're talking about offshore wind farms. And another topic, all of this, it's related to climate change mitigation. So all of these examples you would -- that you see are actually related to reducing CO2 emissions. But what we have seen is that we are passed this reduction. So even in a hypothetical scenario where emissions just stop now, we already have changes that have happened into different areas globally, which means that mitigation, it's not enough. We need to move towards adaptation. And when we move towards adaptation, we are talking about building resiliencies. It's one of the topics that will be discussed afterwards by Steve, who will tell you how our customers are using data to bring in what is the real world scenario. And how are they using software to project into the future and analyze what are possible things that might happen? You will see that we can use our products to design better urban areas. We will also be able to use our products in the customer hands to be able to be prepared in case of any disaster happens. And also, you will see afterwards from Thomas, regarding how do we improve construction. And this is one of the key aspects as well for resilience in cities and in communities. Because becoming resilient means being able to sustain all the changes coming. And it's not only about increasing the amount of buildings that a city needs or grow in the city. It's really about becoming much more efficient and upgrading the existing infrastructure to ensure that the city is better place to actually withstand demand. So let me give you a glimpse example about how our solutions are actually being used by the customer into becoming more resilient and more efficient in construction. So we have a customer in the Netherlands, [indiscernible], that it's actually refurbishing buildings. So what they do is that they go to houses, they measure parts and they use prefabricated elements to upgrade the buildings that their customers have. And they want to just bring all of these buildings to the best industry standard in terms of energy consumption. They have a reference scenario, which is the use case or their workflows on a normal basis. And we also have now quantified what happens with our solution, BLK360. So what happens is that a customer is able to save material, time and money in construction. And we've actually used -- just published global methodology from the WBCSD, to quantify what does it mean in terms of the gap of CO2 emissions. So what we are doing actually is that we have helped this customer understand how can they reduce their own impact by using our products. And this is very important because this will shape our future. So our biggest sustainability impact is our solutions and it's our solutions in the hands of customers. So we will deploy this structural quantification of avoided emissions in a 3-level approach looking at what is a reference scenario and what is a solution scenario. We will look at how our product portfolio to strategize those industries where we see that our solutions being the biggest decarbonization potential. We will measure the gap between reference and solution scenario to understand what is the avoided emissions that the customers have. And we will stick to scale the impact that we have as a company by forecasting growth in these markets. So I have some priorities. And my biggest one is really closing the gaps on sustainability, closing the gap towards ESG. And then we will work parallelly together in the shifting towards an impact-driven strategy. And what that means for us is quantifying at our customers, how much are we making them more sustainable and being able to show them what alternatives do they have with a different set of products that we have within the portfolio. And this way, we will be able to use sustainability as a key driver for business growth.

Hello, everyone, and welcome back. Hopefully, you didn't lose too many of you during the break. It doesn't look so although I'm quite blinded by the lights up here. Maybe first, just to do a brief introduction about myself. This is my first Capital Markets Day. I've been with Hexagon about 9 years. I spent the bulk of my time in Hexagon for running the Mining division. And then more recently, in leadership roles within Geosystems as the Chief Operating Officer and Chief Digital Officer. I've had the pleasure to follow Paolo's footsteps in running the Manufacturing Intelligence division, as he mentioned earlier, as he stepped up into the larger role. He left some big shoes to fill, as you saw earlier, but I'm trying to do my best to fill his shoes. What were you going to talk about today? We're going to talk about the future of manufacturing and discrete manufacturing. Maybe first, starting with our overall business profile. You saw some of these metrics earlier, but you're going to go a bit deeper into those now here today. Our revenue in 2020 finished at close to EUR 1.9 billion in sales. We've been averaging a 7% CAGR or compounded growth rate during that time organically and more than double that organically over the past 3 years, coming out of the pre-pandemic. Our gross margins have also improved from that time to 62% and our EBIT finishing at 26%. Although based on the question, if I heard earlier, I think there's even more room for improvement. But seriously, I think we are the market leader in both gross margins and EBIT in most of our categories compared to our peers. I can't say all categories, but I also do like the idea of aligning that with the Hexagon ambitions and that's our own personal ambition is to be at the Hexagon Group average in the next 5 years. Our revenue makeup is 30% reoccurring. Maybe one interesting data point of that is we're growing our recurring revenue at double the rate of our revenue growth, which is by design and we expect that to continue into the future. You'll see and hear more of that throughout the strategy update today. Our business model is predominantly direct sales at 69%. I'll explain a bit further on, on why that's important for us. And our software and services are 56%. If you break this down by sales by industry, as I mentioned discrete manufacturing being at the core of this, our big 3 industries are automotive, aerospace and general manufacturing of all shapes and sizes, from large OEMs. So you can see some of the logos there at the bottom to machine shop operations. We do, however, have an expanding presence into what we call emerging industries: life sciences, made up of both pharmaceuticals and med devices, energy, which you heard some of that supporting the green energy transition, so the maker of wind turbines, panels, solar panels, blades, et cetera, and consumer electronics. Those industries are growing at roughly double the pace of our core industries where we're also growing. But again, that was by design, as we're diversifying our portfolio strategically to further penetrate those industries. If you look at our revenue makeup, we're almost evenly distributed throughout the world with close to 29% of our business coming from the Americas, 30% in EMEA and 41% in APAC. Of that 41%, close to 29% is coming from China. And then the difference being in the rest of Asia, where we're also doubling our growth in what we call emerging country markets. And similar can be said for the Americas if you look at Latin America, we've more or less doubled our business in the past 3 years as well. And we think there's a huge amount of opportunity and upside to further penetrate into those local country markets. Most of these growth as an example, came from Mexico and Brazil, which we still think has a huge amount of upside, but there's also a lot of other countries in those types of emerging markets with a growing manufacturing base that we are positioning ourselves well for. Our strategy, I'm not going to go into all the details because that is kind of the basis of this presentation here that but I'll summarize it that we aspire to be the experts in all things, quality, quality manufacturing throughout our customers' value chain. We call it multi persona-based, meaning we service the quality-related needs at the shop floor, at middle management and at the C-suite for the top floor, as I heard you call recently. All in all, if you look at our installed base and what this equates to is we're serving over 70,000 customers annually. We have over 500,000 active software licenses in use today, and we ship over 15,000 devices per year. That compounds and adds up to over or close to 1 million active hardware devices in use today. We've grown our overall installed base in the last 12 months, close to 13% as well, which is also a nice promising leading indicator for us. One other comment on our overall strategy, I thought would be worth noting is the amount of internal transformations that we've been on as well. And I heard that brought up in a couple of the questions related to the sales force, and I had you have an example on that a bit. But this is a major effort for us to better service and support our customers. Also for us as we scale our growth in the most efficient and effective ways, not just for the size of the business that we have today, the size of the installed base that we have to manage, but also our ambitions and our aspirations of where we're going. And so just to look at that in a bit more detail. There we go. We call this our go-to-market transformation. And so all in all, we do have a very high-touch model for our customers. We have over 1,600 sales professionals and 3,200 employees also focusing on customer success and customer support as well. So more than 50% of our employee base is front-facing, interacting with customers on a daily basis. However, we did have an urgent need to truly unify the sales force overall, and that's what we've been embarking on. And so if you look at the different ways that we segment our customer base, we have enterprise accounts at the top. Those represent roughly EUR 5 million per year in turnover. We have major accounts in the middle between EUR 500,000 and EUR 5 million, and then we have small, medium-sized businesses, which typically represent below EUR 0.5 million per year. We've organized and optimized the ways that we can touch and penetrate our customers, so concepts like key account management, we extend that much further to having dedicated account reps serve leaders that can represent the entire breadth of our portfolio to things like technical account leads, heads of customer success, marketing support. It's very much the high-touch model at the top that we're striving to do. And maybe just to show the effectiveness that it's having, we've been able to grow our enterprise accounts close to 15% -- 15% to 20% year-on-year as well. So it's clearly working and paying off right now and our customers are seeing the value that we're able to provide for them. As you move on down the pyramid, though, we get into more of the value and volume selling. So you're talking a lot more volume of transactions. Things like efficiency become very important for us, not just for us in how we manage and optimize our own business processes, but also how we can support our customers because they have the same levels of burden typically as well. And so we've introduced things like inside sales or overlaid sales models, e-commerce platforms, expanding a lot of the automation capabilities and how we can transact and interact with our customers and also channel partners as well. Underpinning all this is the massive transformation tied to our own digital transformation. We've gone from 20 different CRM applications down to 1. And we've also gone from 40 different customer portals down to 1 as well. And through that is a complete redesign, aligned to our different personas and customer journeys along the way and trying to optimize and streamlining all those underlying processes. We're not quite there yet. We're about 80% in full transparency, but the amount of steps we've made in building up the foundations in the layers is there, and we've done a bulk of that heavy lifting over the past couple of years. And we're doing the same in our business operations, and we've also done the same already in our portfolio and innovation teams, which I would say is the furthest along. Addressable market, you saw this earlier, so I'm not going to go into that in a lot more detail. We do have our core markets, I already mentioned the diversification strategy and turning into new markets. We do think it's a sizable market as is roughly EUR 29 billion, and we expect it to grow over 7% in the next coming years, whether or not there's some variation, as Ben mentioned earlier, that's to be determined. But between a lot of the strategies we have put in place we're quite confident in our ability to continue to penetrate that, capitalize on that. So how we're going to do it? First, I think it's important to start with our evolution and kind of the journey we've been on. Many of you as I heard reference earlier the days of Brown & Sharpe going back to the original Hexagon acquisition 20 years ago, where we were basically the producers of multisensor CMMs or coordinated measurement machines. That still continues to be one of our cash cows. It's growing, it's innovating. We've been enhancing that and improving that along the way. But throughout that time, we pivoted into adjacent areas, in new emerging areas like portables, more portables made up of laser tracking or standing solutions in a more recent times, automated inspection. I'll show you 2 deep dives on those later on, but it's quite impressive to see the evolution to not only grow our core market, but expand into new adjacent areas within the world of metrology. And we didn't just stop there. We also expanded into production software or CAM solutions, started first with CNC machines, but now we can do all different machine types. One of the most recent additions that we launched earlier this year is an end-to-end suite for additive manufacturing is just another example within that and further efficiencies through things like automatic parts programming and other efficiency gains for our customers and really optimizing the use and productivity of those assets that our software is running on. If you stepped into about 7 years ago through the acquisition of MSC, we got into the CAE space. First, I would say it started with multibody dynamics and multi-body physics. Since then it's continued to evolve as well into things like virtual manufacturing, getting into the production environment, simulating all these real-time conditions, et cetera. And even in the more recent times getting into concepts like generative AI, advanced simulation, the shift to the cloud and so on as well. So that's also continued to develop and evolve overall. But if I had to summarize this, this was more or less our portfolio, as you would recognize us at the last Capital Markets Day that we physically had. Since then, if you've been following us closely, earlier this year, we launched Nexus. Nexus is the platform for the future to connect all of our software and hardware devices. But what exactly is Nexus and how does it work? It's much more than the shift to cloud. It encompasses entire new redesigns of all of our solutions, driving so much faster and better user experiences or functionality that they didn't have in the past. It will also host cloud native applications, underpinned by a multi-tenant architecture, a complete redesign of our data models to optimize performance for not only our customers but also for us. We started with some select applications that you can see here, but it will go through rapid app deployment over the next 12 to 24 months. And as I mentioned before, you will see all of our solutions connected and powered by Nexus in the future. But we didn't just stop there. You heard about the acquisitions of enterprise quality and enterprise asset management. With these, we've further expanded into our customer enterprises. Now we're dealing with the CIO environment, more of the top level decision-makers and economic buyers, but also in connecting quality and factory-related workflows, truly end-to-end across their value chain. I'll show you examples of exactly what that looks like. But first, maybe just a short highlight on ETQ. What is ETQ? It is tailored and optimized specifically around industry standards, such as ISO or other compliance and regulated industries, but it also drives overall digital transformation for quality-related systems. A lot of this is still disparate in nature and/or paper-based as well. And it's a system of record for all quality-related events. So anytime there's a quality-related event, this is a single source of truth for our customers across their entire quality value chains. Making up what they call the Reliance platform, our 42 different unique applications built on 1 multi-tenant cloud-native platform, and it is portable to Nexus, and it will be continuing to be more and more, let's say, embedded and inclusive into the Nexus environment. And the same applies for Enterprise Asset Management or EAM. EAM, we are targeting first in discrete, as you heard earlier, focusing on automotive and aerospace. Why? because they're most heavily asset-intensive industries. But they also have many sites that they need to digitally connect with throughout the world. We're seeing a true demand pull from our customers for both enterprise asset management and ETQ solutions that you heard as part of the globalization strategies that we have behind them and scaling them outside of the Americas. But even more than that and do further penetration into these industries, digital adoption transformations that they're doing and so on. So what does this look like? In summary. We have a leading position across enterprise quality management and quality-related solutions across the entire value chain. And within that, if you look at each one of our sub portfolios, we're in the top categories as well. So we're definitely in a position of strength. To take this down into the personas that I referenced earlier, starting first with data capture, I just wanted to show a few examples. Looking at our portable metrology portfolio and laser trackers, if you go back to 2009, we've been averaging close to a 14% CAGR, and that's all organic. What's really interesting, though, if you look deeper into that, is where the growth is coming from. What we call diversification and differentiation, things like ease of use, reorganization opens up a whole new wave of applications, getting more in-line, near-line. And then automation is just taking us to that next step. You saw some of the efficiencies also that we get out of that with common components like encoders and so on. All in all, that leads to a 27% market share that we have compared to competition. The next level, what we call process managers. To show an example of what that looks like, our automated inspection itself is opening up a whole new value of opportunities for us. I heard a lot of the customer needs and kind of the fundamental drivers mentioned earlier. I would say the top 2, if I had to select 2, is by far the skilled labor shortage that we see at the factory floor and higher flexibility, meaning being in-line, near-line and modularize to the factory floor layouts of our customers. The use cases are quite clear in the effort of time, which I'm running out of up here. I'd like to talk about the Hexagon value that we're creating. If you look at this, let's say, on an individual sale basis, if we did not have this type of truly end-to-end turnkey solution, we still would have sold a laser tracker or a scanner. But through having this complete solution set, we're able to compound that with automation capabilities, robotics, et cetera. So you can see not only are we growing the overall component value of our hardware, but we're also adding a heck of a lot of additional software and services and increasing the average deal size close to 233%. But it doesn't just stop there. With the addition of Nexus and ETQ, we're adding on additional levels and opportunities for not only software content, but also recurring revenue. And finally, for the last example here, if you look at ETQ or enterprise quality and process organization across the entire value chain, maybe just 2 examples to highlight. We've opened up a whole new buyer personas, 1 being an example in the supply chain management arena. One of our reference customers, Wabtec saw a EUR 30 million annual savings in quality programs related to supplier-related quality issues and events as they occurred. Through this implementation, they were able to directly and digitally connect with their suppliers in real time, and that generated EUR 30 million in savings opportunities. It also penetrates further into sales, customer support and so on. But lastly, because I'm out of time here, I had to rush there at the end. If I had to summarize our strategy in a short summary, we'll continue to leverage our position of strength. We'll continue to expand our portfolio, driving our strategy and penetrating into new markets, and we'll continue to implement a multi-persona growth strategy through 2030. And with that, we will empower the future of manufacturing and to have a massive impact on society as a whole. Thank you all. I will now bring up Mattias to talk about the Asset Lifecycle Intelligence division. Mattias?

All right. Thank you very much, Josh. Okay. Good afternoon, everybody. Good to be here. A lot of familiar faces, some new ones also. So for those of you who don't know me, my name is Mattias Stenberg, I've been with Hexagon about 14 years in several different roles, but in the last 6 years, I've been the President of Hexagon ALI. So let's talk about that. What is ALI? We are a leading software provider to a lot of the Fortune 500 companies in the world. So what do we do? We design, construct, operate and maintain these facilities for them to basically help them make them more safe, profitable, efficient and so on. But that's what we do. I know you guys are here for numbers, right? So let's talk about numbers. A lot of numbers on this slide, and I'll try to walk you through it so you get a sense of it, right. So if we start with the revenue we did, this is 2022, all the numbers you see on the screen, right. So we did EUR 728 million last year. And we had a CAGR the last 5 years of 5%. That is organic growth, right, so excluding M&A and any currency fluctuations. I think 2 important things to note with that CAGR. One is that 2020, we had negative growth of, I think, roughly 3%. And that was obviously because of COVID and also because the oil price collapsed, right, as you all probably remember back in 2020. And without dwelling too much on the past, that is one of the reasons why we decided to go on a diversification journey in this business over the last 5, 6 years. As you can see from the pie in the middle here, oil and gas is now 38% of our revenue. It used to be a little bit above 50% 5 years ago. So I'm not going to have time today to go into every detail, but we've changed our portfolio. We've changed our go-to market. We've changed a lot of the internal ways, how we digitalized internally and so on, to really expand our customer -- customer base and our footprint. And you will see this evident in a lot of these numbers, right? So if we start -- sorry, the second thing I should say about the CAGR. One thing also that's important to note with us is that today, roughly 20% of our business is SaaS, right? All of our business, apart from 15% is software; with 15% in services, the rest is software. Out of that, total revenue, 20% is SaaS. If you look 5, 6 years ago, SaaS was a very small number, right? So SaaS has been growing a lot faster on the cost, if you like, of the perpetual revenue. So when you look at our CAGR over the last 5 years, there's probably, I would say, about a 1, 2 percentage points negative drag from perpetual kind of being replaced by SaaS. But as I'm sure you guys know, that's obviously a good thing for the long term, right, because we're building a much more recurring business. Okay. If we move then to the profitability side, as you can see, we do high margins, 80% gross margin. And last year, we did 36% EBIT margin. We have about 7,000 customers today. That was roughly 5,000 5 years ago. So another evidence that we have expanded our footprint and really gone after a lot of different customer industries, let's say, as you can see from the pie here as well. It's a direct sales model. It's well over 90%. So think of it, we're selling enterprise solutions software, right. We have a few resellers in a few countries, but predominantly it's a direct sales model. Like I said, recurring revenue, 74% last year, 15% is services. So not recurring, but we do think that's a very strategic part of our business. We need, call it, high-end implementation services to deliver our software, right? And think Paolo or Ben, I can't remember, mentioned also, of course, we work with big SIs as well. Our goal is not to build the world's biggest services business. But we do think a certain smaller high-end services business is very much needed, right? The other part in our revenue that's not recurring is standard the perpetual revenue. We have about 10%, 11%, 12% depending on the year left there of perpetual revenue. So I know you guys like to model things. So I mean that is the revenue that over time, of course, we think, will shift to SaaS gradually. It's going to take time, but that's going to happen gradually. We have 4,500 employees. And I hope you agree with me that there's a lot of good numbers on the slide, but the number that I'm most proud of, to be honest, is that number that says 74%. That's the engagement score, and that's something that Korn Ferry, the organization, they measure this globally for different companies by doing interviews and surveys. And what they call a top-performing tech company has an average of 62% of this engagement score with their employees. We have 74%. So obviously, I think that's very good. And without going into all the details, I think we've done a lot of investments in our talent management, in our benefits and how we kind of work with people and so on. So I think it's super important because in the end, right, we're a software company. So what assets do we have, it's the people. So that's where we really need to focus to make sure we have the best talent, the smartest people and so on. Okay. On the other side of this slide, I'll try to split up our revenue into 3 buckets to give you some help of what drives our performance. So the biggest bucket is still Design & Engineering. That's kind of the legacy where we come from. So a little bit over 50%. If you would have looked at this 5, 6 years ago, that number would have been more like 80%. So we have clearly diversified, right? What we call project planning and execution is about 12%. That's kind of our construction bucket of software. And then the bit that's grown the fastest the last couple of years has been the operations and maintenance, right, which is now a little bit more than 1/3 of revenue. Okay. Saying a few words about our market. I think Ben mentioned this. This is an external study from a mix of companies, Gartner, IDC, Frost and Sullivan and also 120 expert interviews of decision makers in the industry. And basically, their conclusion is that our markets, as they define them, should grow about 7%. And that's a blended rate of they're saying that what they call the core markets, oil and gas and chemicals should grow slightly slower than that. But kind of the areas that we have been expanding into should grow faster, so at a blended rate of 7%. Okay. But let me try to give you a little bit of a look into what we actually do. What does our solutions look like? And why did we pick this name, Asset Lifecycle Intelligence? I mean if we start with the assets, like I tried to allude to here, we cover a broad range of assets, right? It's not just oil and gas facilities, whether it's data center, a pharmaceutical facility, manufacturing facility. It could be a ship, it could be an airport, it could be a fleet of vehicles. We cover a lot of different assets. But other than just covering them, we really follow our customers throughout the life cycle. If you look at where we came from, where this business started 20, 30 years ago, right, it was design and engineering. We are the market leader in this space. It doesn't -- just because we've had it a long time, doesn't mean that this is a business we're not investing in. We're investing a lot into this. It's still growing. It's still generating a lot of money for us. So you see some of the latest innovations here in the video. And without going into great detail, I would say to you that basically, what we've been focusing on here has been integration, technology and UX. It's not the feature function game, any more software. It's all about integration and UX. But what we realized, very, what you say, clearly, in the last, call it, 10 years is that even though customers spend a lot of money in design and engineering, that is not usually where projects go wrong, right. When a project goes over budget, over schedule, it's usually because something happens in the execution phase, right, the construction, the building of it. So we decided over the last decade to really build out our portfolio in this area. We did this through innovation like Smart Materials, Smart Construction, Smart Completions, but we also did some acquisitions. You heard about Bricsys, EcoSys, Jovix, iConstruct, right, to really build out this offering. And as you can see from the videos here, we're also connecting our software to the sensors and solutions from our sister division, Geosystems, which Thomas will talk more about soon. So I'm sure you have figured out already. We didn't stop there, right? We said, okay, you've designed it, you built it, now you need to operate and maintain it for many, many years, right? So here is where we've really expanded the last 5, 6 years. Our biggest innovation here, you've heard it mentioned several times today, something called SDx. And that is the video, let's say, that's the one you see on the top there. The other 2 videos are showing EAM and then some laser scanner solutions. So basically, other than SDx, we've obviously acquired a couple of companies, EAM, for sure, being the biggest, and I'll talk a little bit more about SDx and EAM and how they integrate and so on. And then we've done some smaller acquisitions. You've heard of maybe about J5, [ AKMS], PAS, which is our cybersecurity offering, to really build out this portfolio. So today, we would claim, I would argue that we are really covering the full life cycle of our customers' process and workflow. I mean, I guess many companies can put up a slide like this and say, we cover the full workflow. That's great. But while we are unique, I would argue, we are the only ones that put up this slide and say that we are natively connecting these processes on a data-centric level. It is not copy paste. It is not file transfer. It is truly data-centric. What does that mean? It means that if you do a change in the design, it will ripple through the other software you have connected to the system. It could be EcoSys, which is the project planning, scheduling, costing. It could be the, EAM, right, the maintenance of the asset. It could be many different things. But if you connect it on a data-centric level, you can get a lot of value from such a system. So I guess this is what people used the buzzword is a digital twin; to me, that is what it is. And rather than me maybe trying to explain it to you in words, let me show you a short video that kind of explains what I mean. So we're looking here at the SDx, the Info Map, this kind of where a user usually starts the journey. And in this scenario, they have a problem with a heat exchanger. So the customer opens up SDx, then goes in the 3D software. So this is a different product, right. He finds the part, the heat exchanger. He then opens up the diagram, this is a third product, it's called P&ID product. He finds that on the diagram, clicks on that and can then open up the different sensors that are attached to this heat exchanger. The sensors, giving him real-time data for her, showing the customer that the history, how this has performed. And he basically, the customer finds out that, okay, there seems to be a problem here with a filter. So he opens up EAM, right now we're in a fourth product, sending out somebody to have a look at this filter; does it need to be replaced, does it need to be cleaned or whatever, right? So that was just 1 example, 1 asset, a heat exchanger. It was using 4 different products. But my point is we cover thousands of these assets, right, and thousands of workflows. I showed you 1 here, but the point is really the more different type of data you can connect to the system, the more valuable. But again, rather than me telling you how fantastic, I think it is, I picked a quote from a customer that implemented a similar solution this year from Cargill and their head of the digital twin area, said this, right? In the last 30 minutes using SDx, I found more information than in the previous 6 months. So to me, that's a very clear value proposition, right, what a customer can get from this solution. Final attempt of explaining what it does is putting this slide here, right. Here, I'm trying to put 1 picture on all of the kind of data that it collects or that you can connect to it. So most of this is Hexagon products or data, but some of it is also third party, right? This is not a closed Hexagon system. If you're operating on some other software, or some other data, we certainly can connect to that, right. Okay. So how do we sell this stuff? And Paolo talked about how we try to build operational excellence and we have actually built a process around how we go to market that we call AdvantX, right? Everything with Hexagon has to end with an x, that's their naming policy. So we actually have a patent pending on this. Without going into all the details, similar to what Josh talked about, right, of course, this is depending on high touch, low touch, depending on the size of the customer. But basically, we are connecting our marketing, our sales teams, our customer success organization, support and service, everything is connected through the life cycle of the customer. It's selling software today is not like 10, 15 years ago, you sell some software and you leave it. We try to follow the customer throughout the life cycle. And of course, we do this to sell more, but we really think by investing more in the beginning, maybe a higher cost model at some point, we get more value out of the life of the customer, right, they -- by them realizing value, getting a return on investment, they will hopefully buy more with us. So one way to look at that is to look at retention, of course. And I would say our gross retention is in the high 90s. But if you look at our net retention include -- I mean, on the SaaS business, it's well above 100%, right? So we see this model working. We're expanding this every year. We're currently covering a little more than, I think it's about 50%, 60% of our customer base. The goal is not to take it to 100%, right. Somewhere you're going to have more low touch model. But in general, this is the way we go to market. Okay. So I mentioned 1 company, Cargill, but let me show you a couple of other customers to give you kind of an idea of how this is used and what they do with it. So the world's largest retailer company all know of, I'm sure. They use this in their American distribution centers and facilities to manage all of their different assets. Another one would be the world's largest semiconductor manufacturer. They have, I shouldn't say all, but close to all of our different solutions to both design, construct and operate their, call it, growing list of manufacturing facilities. Another one would be one of the world's largest pharmaceutical companies. They used this to manage their very high-end facilities. Another one, which I think is an impressive one is, of course, probably the world's most advanced research organization center. They use this to monitor and manage their particular accelerator, but also many, many other assets within their operation. And this one, I could really have picked any of those customers in that space. I would say all of them more or less use this technology. I picked one of the big ones. But I think important to say here is also that I talk about diversification, we have diversified a lot, but so have our customers, right? If you look at these type of names, they have also diversified. So that has certainly helped our kind of mix in industries, right? And finally, I picked a more maybe unexpected one to show you that we are truly covering all kinds of assets, right? So LEGOLAND in Korea is a customer. And they use this solution to deliver a world-class customer experience, right? What -- how is the crowd moving, what attractions are open or not? Is there a [indiscernible] problem with one? Do we need to send somebody there? So yes, you can imagine, right, if you have an asset, we have a solution for you. Okay. So in summary, if I were to summarize our strengths, I think we are the market leader in most of our segments. We certainly have an A+ customer list, as I'm sure you will agree. We have strong financials, a high recurring revenue, SaaS is growing a lot faster than all other revenue streams. I think we have proven also that we know how to do M&A, and we know how to integrate them. We integrated EAM over the last 2 years and was certainly a big effort, big task, but I would say it's gone well. And I'm very proud of that AdvantX I showed you, I think we have a world-class sales and marketing machine. And again, I'm very proud of my colleagues that I work with. I think it's a great, great team. I would also argue that we have a good market position. Our traditional markets are growing, but like Ben said, right, if you look at the whole digital transformation, it's all -- it's a buzzword, but the truth is it's just very early in that hype cycle, even though we're already tired of the world, right? The adoption is still to happen. And also, I would argue, like I said in the beginning, we are very well positioned to help our customers with productivity, efficiency and ultimately, sustainability right, Eva? Yes. Good. Okay. And then Paolo asked me, can you talk about the 3 biggest growth opportunities for ALI? And it was honestly hard to pick 3. I think we have a lot of growth opportunity, but certainly, 1 would be EAM. Like I said, we bought it 2 years ago almost. Still very much North American business. So we have built now an organization in China, APAC, South America, EMEA they were already pretty strong, but I think that's a big opportunity. Another one, the biggest one is probably the story I've been telling here today, right? The whole digital continuity with SDx. SDx has had a CAGR of 120% the last 5 years, we hope and think that, that should continue. But also, I think it could and will pull through other Hexagon solutions and technologies getting repetitive, but like I showed you, the more you can connect to it, the more value you will get. And the final one I would mention is our diversification. We have changed a lot in the last 5, 6 years, but yes, still a long way to go. If we can win more customers like the one I showed you, the 6 different examples, right, we can certainly diversify even further. So that's it from me. Thank you very much for paying attention. And with that, I'll introduce my friend and colleague, Thomas, who will talk about Geosystems.

Thanks a lot, Mattias. There has been never a better time to get digital solutions into vital industries. Hello, everyone. My name is Thomas Harring, I'm President of Geosystems. What we are doing? We make work easier. Insights available and decisions better. And with that, we pave the way to a more sustainable future. Let me start with business profile and first with some financials, which you have seen already. We have achieved a revenue in '22 or EUR 1.6 billion of revenue, which is a CAGR of 8% from '18 to '22. On Russia we lost 1% of growth over that period, which corresponds to roughly 3.5% of our business. We had strong improvement on gross profit, ending up with 65% in '22. And EBIT1 was growing stronger than gross profit and sales and ended up at 33% in '22, and 25% of our revenue was recurring. All of that, we achieved with 6,000 people, 6,000 colleagues all around the world and more than 1,900 in R&D and related functions. We have a healthy distribution across industries with surveying and geospatial being roughly 1/3, buildings and infrastructure slightly more than half of the business and more than 10% in adjacent industries, such as media entertainment, forensic, rail and a few others. Our regional distribution puts our truly global approach. Americas is close to 1/3, EMEA is 47% and Asia, over 20% of our revenue. We are benefiting from strong growth drivers, which I will explain throughout the presentation, confirming how we are pairing technology leadership and domain expertise in our growth industries. Moving to the next slide. Talk a little bit about our customers and our operations. We have global presence, this global representations in 43 countries of the world. We have innovation factories which are stronger than ever. We have a well-established software and hardware and [ adjacency ] capabilities in many countries in the world, and additional software development centers in many other countries being close to our customers. You have heard before that over the last years, we established our global business service center in Barcelona, which we scaled up during the pandemic. And since many years, we have broadened and strengthened our Asian supply chain, which proved to be very resilient during the pandemic and all the supply chain shortages, which we experienced. We have many long-term channel partners in many countries of the world, and we've added new ones for supporting our customers wherever they do their business, whatever kind of support they need to get if we implement customer success through our distribution channels as well. The strong Hexagon brand, which we are using is supported by strong solution brands which has a very good reputation in the industry, such as like our Leica Geosystems, IDS GeoRadar, Leica BLK, OxBlue or BricsCAD and AGTEK. Everything we are doing is centered around our educated view on what customers actually want. We are increasing their loyalty satisfaction and retention. And this, in turn, will help us to connect to even more customers and we'll be able to capture more sales with that and, of course, increase the economic value for them. Our customers have also a strong network effect within the organizations and among different stakeholders in the industries which we are serving. This is for us the flywheel effect, which really is the foundation for our long-term growth, powering market share expansion in our existing industries and providing even more resilient business moving forward. If you look at our total industrial market, all the different subsegments are growing. That's a prediction. Our addressable market has been slightly over USD 40 billion and it's assumed to have a growth rate of 8% until '26. It's very important to mention that our future TAM also encompass things which we actually don't contemplate right now, like in autonomy, artificial intelligence, which will provide future opportunities moving forward. And please don't forget, our board positioning in different industries and towards the whole life cycle of building infrastructure makes us resilient even if one of the subsectors is going under pressure. Turning to our strategy with a simple and it's a granular strategy. Our ongoing business transformation and collaborative industry-centric approach. Founded on key capabilities, which is shown on that slide. We put them together, software, hardware and platform capabilities, and we create portfolios, which are then applied to the different industries. You see many capabilities we have like CAD/BIM like simulations and SGAI visualization, cloud and edge processing, machine automation, positioning, scanning radar and so on. And these portfolios are clustered either in what we call field solutions, where the value starts to be created in the field, on the construction site, on a [ film ] set or some of the elsewhere operations are getting done. And then data are created and this data getting processed and into the office. In the office, the value starts to be created in what we call AECO software solutions, which stands for Architecture, Engineering, Construction and Operations. And there, we have many different capabilities as well. If you look at some of the solutions on this slide, you see relative capture. You see machine automation, different industries on the field solutions side, and you see software that BIM/CAD project management and software for digital twins as well throughout the different industries with some overlap. AEC software has grown stronger, has a much higher share of recurring revenue, but it's very important to mention how strongly field solutions have been growing as well with roughly 7% over that period and where we increased significantly the gross profit due to more innovative solutions and more software content. So over the past years, we have also continued to work on collaboration platforms. You see HxDR on that slide, which is for us essential. We launched different applications powered by HxDR to utilize geospatial data across all the different industries across different customer organizations across different stakeholders in our markets. We have and we will shape markets by pioneering innovation. And these successive innovations enable us to encourage diversification and accelerate the shift towards more growth opportunities for the future. So we are activating our capabilities to grow. Our granular strategy, which you see on that slide helps us deliver our proposition to be a high-performing business and become even more resilient. Let's look what we're actually doing on that slide. What we're doing right now. We are bringing together the capabilities in the area of the digital continuity in buildings infrastructure throughout the whole life cycle. And this is enabled by one of the freshest line [of the ] industry. From preconstruction, design planning to construction to operations and renovation, supporting all the different stakeholders along the life cycle, whether it is architects, engineers, general contractors, sub-trades, facility managers, asset managers and so on. And not to forget the asset owner, which we take with us, we take through that process right from the beginning. It starts with capital planning and continues through to 3D surveillance, protecting assets or creating digital twins at city scale. This is our proposition, and this is an open and inclusive approach within Hexagon and of course, in the border ecosystem, with many well-established industry partnerships, which Burkhard will talk about later on. Our strategy is granular. We are making choices, and then we are relentlessly executing on them. Achieving our ambition comes down to 2 things: understanding our customer needs, customer problems to deeply understand what they actually want and need and then quickly turn that into software solutions or products and doing it better and better. For our customer, really what matters are the results. And for us, the results of our customers makes the difference. So whether it's accuracy, productivity improvements, safety or sustainability. That's what we need to develop, we need to achieve with our solutions. On the following slide, I would like to explain certain solutions, certain areas where we really today solve customer problems. And how we embark them on the journey. And it's an exciting journey. It's a journey towards the future, and that future is very much driven by innovation, convergence and platforms, which plays a fundamental role. Let's start with a successfully doing both approach. You heard David talking about the BLK story. Until 2016, we developed hardware and software for experts in laser scanning. Please remember, laser scanning is a rather young technology. So you see some pictures of how it looked before. And then in 2016, we implemented our doing both approach, which means we have separate tracks for differentiated and disruptive innovation. We implemented sales enablement coupled with commercial setting skills and inside sales. Our channel partners have been -- some channel partners have been selected to become part of the premium approach for the BLK. We have strengthened our loyal customer base and accelerated network effects among customers, among stakeholders, also via industry partnerships. What did we achieve? We launched the BLK's 360 back at '17 and this is really unique success story, as you've seen before. And we launched the RTC360, very differentiated laser scanner back in '18 to manage successfully also. Until today, as you see on that slide, we have at least 8 disruptive solutions under the BLK brand from static scanners to mobile to flying sensors. But not only the BLK family has grown substantially, as you can see on that chart, the differentiated products under the lead of the RTC360 has gained momentum and strong momentum as well. In total, we have been able to 9x the number of units since '16 until end of '22 on [indiscernible] base, which provides significant potential for us to deploy more software platform technologies moving forward. And trust me, we are not stoppable in this. We have a road map of new disruptive innovation coming up. And with the launch of our digital reality platform, HxDR, we are just getting started. There's so much more to do in creating digital twins in all these different industries, digital realities. And we are all excited to move forward to really create digital realities for everybody, for all. Coming from doing both, going to pairing both, how we successfully integrate M&A and provide the tangible value for asset owners? You have seen on Ben's slides 2 acquisitions, 1 being OxBlue, a leading webcam solution, this business with strong growth and very much very quality revenue and the experience of over 35,000 projects. And the other one, it's about ProjectMates, a project management software for asset owners with more than 20,000 users. It's also about AI analytics and how we translate data into insights. It is the combined solution, which we see -- you see on the second video playing, creates distinctive capabilities in industry because it provides real-time process and progress updates on construction site, productivity and safety. It allows you to benchmark project performance for an asset portfolio and support safety and security during the construction, as I said before. Put simply, we support asset owners to realize the full potential, harnessing data to learn from every project and then makes the next one better. Looking ahead, it's about expanding and ensuring digital continuity from capital funding to asset management. with solutions such as Hexagon EAM, you have seen in Mattias' presentation. And with that, keeping the digital reality updated and progressing towards the industrial metaverse. Let's move from asset owners to general contractors and towards 5D project delivery. 5D means adding time and cost to the 3 spatial dimensions of CAD and DIM. Our proven approach is to co-create technology adoption together with the customer by implementing data-centric workflow solutions. Right now, we are bringing new unique workflows together with virtual design and construction teams to projects, we call it from workflows to integrated solutions. Whether it's about job site progress, building progress or digital handover, that's what we are doing. It's all about sustainable value creation for general contractors in their subtrades by turnkey solutions, where we provide everything as a service or we provide of course pivotal sales solutions as well, where we then provide hardware/software and quality insurance as a service as well. And 5D project delivery means insights at every step of the process and ensuring a digital handover into operations, keeping the BIM model alive and updated during construction and most importantly, indicating critical deviations realtime. Let's go to a customer, Peri, a leading manufacturer of scaffolding and 3D printing material for construction with 2,000 engineers in 70 countries in the world. They want to further improve the 3D BIM in collaboration with Open BIM and the implementation required a seamless transition because the engineers had to work with highest precision and highest performance. They are using our Hexagon's BricsCAD solution, engineering software and they're developing a Peri software, PERI CAD software on top of it, all together with us. And clearly, looking ahead, we see a lot of potential to use AI during the design and collaboration process for workflows, as you can see [indiscernible] BIM for others. That's the future for design and collaboration. Another example would be Mortenson, general contractor, quite strong in sports facilities, renewable energy in the U.S. During the recent prefabricated project for hotel, they [ did a gross ] use of technology to an extreme because they want to connect all the information to all the different stakeholders on the field and in the office. They applied and deployed multiple Hexagon solutions such as webcam visibility, construction focus tracking, software and reality capture solutions. Looking ahead, technologies which we have, and you see something later on that as well, such as spatial anchoring, our immersive technology will provide location-based insight virtually on-site, so the industrial metaverse becomes a reality. Another example, the last example from [indiscernible], a company working in road construction, that project for 38 kilometers of road construction, they wanted to make the magic happen, increase time, speed, efficiency, productivity, all of these criteria, but at the same time, ensuring safety in the construction -- during the construction as well. They benefited from multiple Hexagon solutions, which we had, so 3D for asphalt paving, 3D grading, personal alert for safety and so on, and cloud-based collaboration platforms. And reality capture as well. And the future there is clearly autonomous and safe construction. That's the past we are going. Let's see. Let's look at a summary of Geosystems. We are business geared for growth. We have moved over the last decades from instruments to digital solutions. More than 60% of our developers are in software. We have impactful, differentiated and disruptive innovation. Our doing both approach is deeply anchored in our organization. We have a strong loyal customer base and strong brands which provide tangible business value and support recurring revenue creation. Our go-to-market approach is optimized and customer success teams are in place for the continued expansion of our different business models to serve customers even better in the future. For sure, we can do much more and we can accelerate with our attractive business mix. We can expand in that strong market which we are in, we can power innovation in the border Hexagon Group. As you have seen some example, how Geosystems technologies is applied in different groups, and we are leading customers to the future and supporting them and creating network effects within the companies to connect different departments in their companies. And with that to lift business value and increase recurring revenue. For sure, with all the capabilities we have in place, we can realize the full impact of our software platform technologies and capabilities because we see ample opportunities for integration play in construction and all the other industries which we are serving. You know us by our track record, and you can count on us going forward. Going forward, we will accelerate our transformation to upgrading to a unique powerhouse. We remain ambitious as we are. We are ambitious team empowering digital realities for all. We are focusing on 5D portfolio in project management. We are focusing on autonomy and robotics, and we want to achieve the digital continuity in the markets we are serving in our core markets and beyond and with that supporting a sustainable future, all of that supported by our strong teams and our strong Hexagon culture. In summary, we have a granular strategy and the potential to create tremendous value for both customers and investors is there, being an innovation powerhouse, supporting shifting expectations in a changing world. Thank you so much. And with that, I would like Maria to come on stage.

Okay. Hi, everyone. I just want to shortly introduce myself. My name is Maria Luthstrom. I joined Hexagon in 2015. I was recruited by Mattias Stenberg. And I know some of you here today from my days in Investor Relations. But since 2022, I run the Autonomy and Positioning division, which is a part of Autonomous Solutions division today. Okay. So autonomy is solving some of the biggest challenges of modern time. It's a very bold statement, right? But now I'm going to explain to you today what Hexagon's Autonomous Solutions division is doing to solve these challenges. And it's a highly profitable business for us today. So let's start with looking at these big megatrends. The world is going autonomous, everything from automotive, mining, agriculture, logistics, everything is going autonomous. And it's going to be the industries where there's a huge amount of labor shortage, which is going to go fastest. Mobility state regulations is going to become tougher and tougher and especially when autonomy comes into play. And the demand for natural resources, like minerals and agriculture, is going to continue to grow, especially when there's more electrification and the population growth. And also, you need to produce more on the same amount of land or even less amount of land with less erosion. So currently, our division, or in 2022, our division had revenue of closer to EUR 500 million. A strong growth, double-digit growth of 13% on average in the past 5 years and 33% EBIT margin. We're addressing a TAM of EUR 13 billion today, but that's projected to grow by 11% on average in the coming years to EUR 20 billion. And with our technology, we're perfectly positioned to capture these megatrends and the TAM. So what are the customer problems that we're solving today, that our division is solving? Well, first of all, everything in autonomous, you need to know where it is and what's around it. We do this with high accuracy positioning technology down to centimeter level and perception technology. These are core capabilities in the Autonomy & Positioning division today. You also need to make sure you operate safely with technology like collision avoidance, fatigue monitoring, also perception and remote control operations. And you need to optimize your operations by orchestrating and monetize your feeds and assets, and this we do with enterprise software. These technologies are core capabilities in the Mining division today. We do this in many different industries, but the biggest ones is Mining, Agriculture, Aerospace and Defense, Automotive and Marine. All of these technologies are subsets of autonomy, semiautonomy and automation. This is a mature technology today, and it's highly profitable. But if you put all of these technologies together, you will create a full Autonomous Solution. This is a horizontal technology, meaning that you can apply to many different verticals. And this is the reason why the Autonomy & Positioning division and the Mining division came together to create one division, the Autonomous Solutions. I'm going to highlight 2 growth industries where a big focus is autonomy. It's Mining and Agriculture. So in Mining, we started by solving one customer problem from 15 years ago. And the strategy has been to verticalize this industry, meaning that we have added on adjacent technologies to solve more and more problems in the mining ecosystem or in the mining life cycle. There's been a consolidation in the mining tech industry. And today, we have become the market leader in mining tech for planning, safety and operations. Some 10 years ago or 15 years ago, we had EUR 10 million in revenue, and today, it's closer to EUR 300 million. Our solutions are used in over 1,000 mines and over 50,000 mining vehicles are using our safety solutions. So what's the strategy going forward? Well, we heard Paolo talking about immersive data and activation. But data analytics spend in the mining industry is projected to double in the coming years. And by going from point solutions to integrated customer workflows, you can connect the mine with our cloud-based platform and use data analytics to optimize your mine. Safety. I said that we are the market leader in mining safety, but it's still an underserved market. Still today, the market penetration is only about 15%. And with stricter safety regulations coming in place, this is a big opportunity for us to continue growing in this industry. Autonomy is going to be the next big wave in Mining. It's going to outgrow any other mining tech. We're already delivering autonomy technology that solve the semiautonomous or automation, like remote control or collision avoidance and vehicle intervention. But we're also creating full autonomous sites from pit to port. And I'm going to talk to you just in a bit about our customer case with this is actually becoming a reality. Another industry, which is very similar to the mining industry when it comes to the customer workflow is Agriculture. Today, we are the market leader in supplying OEMs with precision ag technology solving positioning. Similar to the mining industry, we started by solving one problem in this industry. And recently, we have added on adjacent technologies like machine control solution and software for planning and optimization of your operations. So the growth strategy going forward in Agriculture is to continue expanding the portfolio and continuing to verticalize. We want to focus on autonomy to sell more of these customer problems. As many other industries, agriculture is facing a huge labor shortage. It's estimated that there's a yearly financial loss of USD 300 million due to the shortage just in the U.S. And autonomy, just like Mining, is going to be the next big wave. So we are investing in perception technology for autonomy, which is used in -- to increase safety, with our object detection and object classification algorithms, but we're also going to use perception to -- for agronomy applications, to develop new applications in agronomy. We're also going to grow with the broader customer base, OEMs, integrators, but there's also a new market of autonomy first robotics, which is exponentially growing, and that's going to continue to grow a lot in the coming years. And an enabler to grow with these new customers is to introduce a new business model with positioning as a service. If we introduce positioning as a service, we're going to bring precision ag to the masses by expanding the technology to the mid-range greenfield market, so the lower horsepower market. Today, we are mostly addressing the high-end market, which is the high horsepower market. And the adoption rate of precision ag today is only about 15%. So by bringing this to the masses, we're going to open up a whole new market for us. So what happens when you put all of these technologies together and create a full Autonomous Solution? Will you remove the driver from the cab? Or you remove the cab altogether? But that's really unlocking the true value of autonomy. For years, we have been delivering more full autonomous vehicles to the research industry than any other company in the world. But research is now turning to full development or full production. You always talk about these industries that are dirty, dull and dangerous. And it's usually these industries where there's a clear return on investment, which is going to go faster in this -- in full autonomy. So take Western Australia, for example, where the mining industry is really struggling with labor shortage. To operate 1 truck for 24 hours, 365 days per year, it takes on average 4 drivers, and every driver cost, on average, 1 million. So there is clearly a lot of cost to cut if you cut the driver out from the equation. I'm going to show you a customer story where this is becoming a reality today. [Presentation]

Okay. Impressive, right? Okay. So we have partnered with mineral resources to build the world's first and full autonomous road train system in Western Australia. We're going to transport iron ore from the processing site to port, and we're equipping 120 trucks with by-wire systems, collision avoidance, perception and also software for planning and orchestration of the full autonomous site. So it's a combination of sensors, software and services with a recurring revenue profile of 60%. But there's really no difference in transporting iron ore than it is to transport grain in agriculture. So this technology, as I said before, is a horizontal. We're going to apply it to many different verticals where it makes sense and where there is a clear return on investment. Okay. So to summarize all of this, in '22, we were closer to EUR 500 million in revenue. We're growing fast, double digits, 13% on average in the past 5 years with a strong EBIT margin. And with our strategy around autonomy, safety, positioning as a service, data analytics, we're going to continue to grow. And we're going to continue to grow subscriptions and recurring revenue. But this is just the beginning, right? We're super excited about the future and all of the opportunities that we have in front of us. The world is going autonomous, and we're perfectly positioned to capture these trends in the new economy. So with that, I would like to thank you all, and welcome Steve -- Steven to the stage.

So I came to Hexagon through the Intergraph acquisition back in 2010, and I've been with SIG for most of that period. You can see that our products touch about 1 in 8 people globally, and that's through our public safety as well as our infrastructure products, energy as spatial. You can see the markets that we serve and ultimately our technologies support national security, safety in our communities, and the resilience and sustainability of critical infrastructure. I'd like to take a minute and at least talk briefly about our products and our solutions, and it will play into some of the examples that I give later on. So the first is our HxGN OnCall portfolio. It's an industry-leading cloud-native public safety, computer-aided dispatch. And so when you call 911, our software runs the 911 center, also in the asset deployment of the police car, the fire truck or the ambulance. We then have further solutions that handle the record. So if you happen to be arrested, all of the record that's generated behind that is all of Hexagon software. The second product is a video management product that we bought via the acquisition earlier this year of Qognify, and this is used in -- it can be used in retail settings, ports, campuses. It's really been a nice adjacency for us. I'm going to talk a little about that. HxGN NetWorks is another GIS cloud-enabled product that is used in gas, electricity and water for asset design. And then the last 2 products are Luciad and M.App Enterprise, and those are geospatial products that are taking almost real-time map data in creating operational pictures. The 2 biggest customers and where that is sold the most is in National Security. So the National Geospatial Agency in the U.S. and NATO are the 2 larger customers in that setting. So I'm going to start over on the right, and let's talk about the growth strategy and what are we doing to really energize SIG. So the first thing is to leverage this recently released OnCall platform. We made a significant R&D investment in it. I believe it's an industry-leading platform. We've got good momentum and backlog that's growing. And we want to not only sell our products, not only across our internal verticals, but also across all of the Hexagon verticals as well as well as bringing some of their products this direction, EAMs, mobile workforce management, you can see the connection with the mobile workforce that happens in utilities in our division as well. Bolt-on M&A, obviously, filling gaps in our product offering. The Qognify was moving into an adjacency, different lanes and different agency software opportunities that we're looking at. And then lastly, really building out and capitalizing on our cloud enablement and adding to our recurring revenue. You can see that sales by region that the Americas represents 63% and EMEA at 29%. So predominantly, Americas and EMEA. And then if you move to the next chart, the 39 and the 15 represent public safety and security as well as infrastructure. Those are very sticky businesses. Most of those customers have been customers for more than a decade. And when you have one, they generally are retained for that long. Maintenance is almost always taken just because of the criticality of that infrastructure in the uptime. So it does drive some recurring revenue. The 30% in geospatial, a large portion of that is with the U.S. federal government as well as other defense agencies around the globe. I'll move to the right and talk about the 23% EBIT margins. And some of the things we're doing to address it. And by doing that, I want to talk about the 17% wedge, which is a quite significant portion of our business. And that is comprised of unrelated services businesses that have been a part of this business for decades. And it is where the divestiture that was announced in Q3 took place. We're also defocusing on some of the low-margin defense business, services only business that we talked about at some of the quarters along the way. And so that's where those businesses are, and we are actively working to defocus on that and focus on driving software content. So what does the macro look like? The macro is actually quite good, with about an 8% addressable market growth. And what's driving that? Well, in both public safety and infrastructure, public safety agencies are threatened every day now by cyber. New Orleans was recently completely locked down to a cyber-attack. And so pushing into the cloud, to really push that risk out of their IT staff into the cloud is driving some migration to the cloud. Additionally, renewals and renewal energies, obviously driving the infrastructure macro. Climate change and additional hurricanes and natural disasters are making cities and municipalities really drive toward updating their technology stack to make sure they're taking advantage of all the citizen apps and all the information that's available. And then lastly, terror, acts of terror, active shooters, all of that, really making cities invest in their infrastructure to stay current. How does SIG go to market? You can see, we talked about that it's primarily an Americas and an EMEA business. It is inverted because of the number of customers in public safety in the U.S. versus the number of utilities and geospatial customers in EMEA, 8,000 customers globally, so it's spread out pretty wide. Really no customer has any significant concentration across the board. But we do have presence in Latin America as well as Asia as well, very little in China at the moment. So I want to talk about a couple of ways that we're enabling our growth strategy. And the first one is in cities where we are having multiple agencies within a city come on to Hexagon platforms. We've had this in Toronto as well as Munich, but I want to talk about Miami today and some of the products. Granted, some of these came from acquisitions. You can see public safety with the OnCall suite, the Qognify suite, as well as ALI's EAM. And so first of all, the video management solution of Qognify is up and running. This is going to ultimately be about a EUR 25 million deployment. Most of its done. There are some pieces that are still underway, and that includes the install in the first year maintenance. University of Miami is a Qognify, so they have the video management around the perimeter for security, an adjacency that we're moving into with our OnCall, and I'll talk about that in a minute. The Miami Airport has both Qognify and EAM for mobile workforce management on the ground at the airport as well as the security, the doors, the cameras, all of that in Miami. The Port of Miami, obviously, another place that security is very important with the camera, physical incident management system of Qognify. And then ultimately, we've put it all together and all 3 exist in Miami-Dade County. This supports 2.7 million people. They have our full OnCall suite in the cloud, obviously, the EAM product as well as the Qognify product. And then recently, in public safety, we picked up the fire and EMS. That's an active and ongoing implementation. And so two things happen here, right? Number one, each of these relationships open the door for additional Hexagon people to come in and sell. So do we have one person that sells it all? No, but we have relationships that I can get an appointment and get a meeting with somebody that's a decision maker to continue it. And then, here in the lobby, we have HxGN Connect. And HxGN Connect is our form of having one pane of glass for a city to ultimately see. It's a fully multi-tenant cloud solution that you can subscribe to. We have fire and EMS on it now or will be on it. And it's a subscription. So each of these agencies can put their data up and then see what's going on across that platform. Think about a hurricane in Miami, it would affect all of these, some large inauguration something, an active shooter that's moving through the city, having access to that information really enables decision makers and first responders to react in a very efficient manner. So the next one is also a cross-selling, except this is geospatial and infrastructure. There's almost 10,000 kilometers of rail in Czech Republic. This was about an EUR 11 million opportunity. We're continuing to implement this today. And we're taking our enterprise asset, manages a GIS enabled asset management product, and then we've overlaid it with the Luciad map layers. And so you can all see all of the assets as well as the map data for vegetation coverage, change in what's going on, but really a full suite for Czech rail. Again, the first time we've been able to marry those two together and bring a reference customer forward. So one of the ways that we're working to better margins is to take OnCall and move outside of public safety, working around government funding, budget restraints, tax dollars and moving outside of that lane. And we've done that with BMW. And so we've taken HxGN OnCall, and we partnered with a security company, and we now have installed a large industrial campus our OnCall suite. And we've now done this at 5, or we'll be doing it at 5 BMW campuses around the globe. And we hope to expand this to have more than 30 total. So another way to cross-sell and really move outside of the public safety lane. So our products, our customers don't compete with each other. So one city does not compete with another city. And so they share a lot of information. Referenceability becomes paramount for us. Resiliency of our platform also becomes paramount. Recently, late in 2022, we went live in Lee County, Florida, which is Fort Myers, Florida. And there's about 1.2 million people there. We happen to co-live 8 days before Hurricane Ian hit. We put people on site, they lived in the comp center there, both before, during and after. The product was resilient and stayed up, and they ultimately became a very valued reference for us, and we're directly responsible for us winning Alpharetta, which is a place just outside of Atlanta, and it's really helped with our reference selling of our OnCall platform. So talking about driving OnCall's backlog and really, where is it going and how does it help SIG grow? So you see these are all booked business that we have between 2020 and 2025. And all of these are additional bookings that we have, and we'll be going live, 1 including London Met Police. And so we're actively in an installation there. And so you can see the number of backlog and the number of opportunities of all booked business. And so we're really gaining momentum and really driving some maturity into this product. So real quick, just to summarize for SIG and where are we going and how are we growing? Look, we are completing the divestiture and some of the defocus of some of our low-margin business, coupled with the gaining maturity of OnCall, and you can see some of the momentum with the backlog there. Our new infrastructure cloud offering in the utility space. And then an 8% total addressable market growth, I think, really sets the stage for SIG to move forward with growth going forward. So with that, I'm going to turn it over -- I think we're going to have a short video, and then I'm going to turn it over to Burkhard. Thank you. [Presentation]

Welcome. My name is Burkhard Bockem, and I'm the Chief Technology Officer of Hexagon. Today, I want to show you 3 things. I'm going to discuss Hexagon's R&D strategy, and I'm going to talk about our ability to efficiently innovate from ideas to products. And I'm going to show you examples of our technology leadership and how it creates business impact. innovation is our past, our present and certainly, our future. We have an unmatched combination of sensors, software and platforms, and we create products and solutions that achieve a significant impact in any ecosystem in any industry where we play. And we believe in a reality that is enhanced with insights and improved by actionable information. We heard today from Paolo, unlocking human potential. And that is our purpose, driven by customer demand and delivered beyond expectations. And you heard Thomas talking today about differentiated and disruptive innovation and understanding the customers' demand and delivering the right product and going beyond. And how do we do this? We call it HIP, Hexagon Innovation Process. Every single project is treated like a business, some like a startup, and every R&D investment follows a strict business plan. The HIP framework is aligned to a stage-gate process in between the milestones, agile methods are deployed. And this is how we drive efficiency throughout the process. It is our R&D and the related functions that empowers Hexagon's innovation. Let us take a closer look on what we mean with powered by innovation. Globally diversified teams of highly skilled individuals. We have almost 6,800 team members in R&D and related disciplines, distributed over all 5 continents. We have R&Ds embedded in our divisions and a central innovation hub that serves the group. And this approach places us directly in the domain where we operate. Speaking the language of the customer and the industry paired with an incredible talent proof. And we prefer smaller agile teams and innovative hub over large centralized corporate structures. If you look at our R&D skill set, and Paolo was already talking about this, 76% of Hexagon's engineers are actually software engineers, followed by 11% QA engineers, 9% hardware engineers and 4% of project managers. David and Paolo were talking about this, our gross R&D cost 2023 year-to-date amounts to EUR 610 million, which is a 15 percentage of sale. And this 15% of sales reflects that we are in a key phase in our innovation cycle. And that includes investments in platforms such as NEXUS, HxDR and Autonomy. Transition to new SaaS optimized architectures, you've heard a lot of times, such as Martin, Tennessee and exciting next-generation products. We also strategically categorized our projects by type. More than 50% are innovation projects, which include a large number of industry first. If a product goes into a new generation with added features, functionality, new UX, then we speak of improvement projects, which are around 27% in the current portfolio. Having innovation and improvement project in this magnitude shows the unmapped innovation power of Hexagon. And this is followed by 12% life cycle projects for the group. Here, we maintain market relevance throughout the life cycle, adding features incrementally in refining the user experience. The other category are feasibility projects, technology scouting, but also core module developments. We are holding more than 5,500 patents, which gives us a significant competitive advantage. And this year alone, we filed more than 59 new significant patent applications. And we have released 432 major products in 2023 as a result of the strategy. We are proud of our philosophy of doing both, and you heard Thomas talking about it, and we are proud that our technology leadership is recognized through industry accolades and commercial success. Earlier today, Paolo illustrated how Hexagon drives customer value by leveraging of 3D reality data. We underpin this value, this value creation with our core competencies and with precision technology. It's a reality capture, measurement, scanning, positioning, modeling the physical world at any scale. All our sensors play here in all our devices related workflows. And reality creation, design and simulation capabilities in our software portfolio paired with a strategy to enrich the data and to use AI to unlock actionable insights. And reality immersion, making information accessible to everyone, being able to share and collaborate on data in real time, creating an immersive user experience by visualization. And you heard Thomas talking about spatial computing. And reality activation, delivering tools integration and services that empower the custom to make real-world impact, predictive maintenance and feedback [indiscernible], processes and transfer designs into reality. Let's take a closer look on how this creates business impact. Each action of our strategy has a clear business focus. Cloud native platform with a data strategy in AI combined create a higher degree of revenue, increased recurring revenue. Visualization and collaboration technologies expand the reach of 3D data, next-generation devices and full ecosystems lead to continued gross margin percentage accretion. A robotics enabled portfolio drives customers' ROI for commercial impacts. And very important, assembling the best R&D talents leads to best-in-class portfolio and commercial wins. And you will hear in the special section, partnerships provide access to scaling innovation technologies, while Hexagon focused on its core developments and owning the TAM. We diversify our project road map for the most efficient use of our R&D resources. And we think thereby in 3 categories. Strengthen our technology leadership position and maintain our loyal relationship with our long-term customers. And this includes updates, improvements and refactoring and facelifting on products so they are [ valuable ] to the market then. Growth, investing in growth includes the evolution of software by developing new features and making it deployable on different platforms. Simply put, transform, it transforms the market or the industry by technologies disruption where none of our competitors or even startups can follow. We invest about 35% of our R&D spend into this strengthen category across the group. For the growth category, we invest around 50%. And for the transform category, it's currently around 15% of the portfolio. And especially in the last 5 years, we had an amazing track record here. Let's have a look on the development road map on the product releases for the last 3 years. The number of releases clearly indicates the innovation pace we own. And as an example, out of many, we see ALI Smart 3D in the strengthen category, an improved version of our next-generation collision avoidance, picked one release out of many SDx update releases here, our public safety platform, OnCall, and our metrology Arm RA8 in the version 3 in the growth category. And the BLK360 second generation reality cloud studio part by HxDR as examples in the transform category. All products releases have been strategically positioned to achieve maximum impact in the market. Let's have a closer look towards a strengthen category if we look into the divisions. And the percentage number indicates what is the invest of the R&D portfolio for the division in this strengthen category. We see that different divisions serving the various industries have slightly different dynamics. The technologies in the strengthen categories are clear in established market winners. They are delivering consistently in revenue for Hexagon and serve the needs for our customers, and that is proven. Our customers, who are working with these technologies, depend on the consistent value and continued development that we deliver. Being very close to these customers with continued R&D investments and value added through our portfolio will here protect our market share and our market relevance. Coming to our growth category in the R&D road map portfolio. These investments are paired with innovation that grows significantly our market share or grow the market at all. And let us focus now on 2 examples, one from ALI and 1 from our Autonomous Solution division. Let's start with ALI. And Mattias was talking already about SDx, our smart digital twin solution. And SDx, to summarize, creates a reliable digital twin, fully compliant and connected to project work processes. Diving a little deeper in the technology, as engineering works on the updated design, especially 3D, the data and documents are being shared in near real time to what we call the digital backbone. And this happens that various enablers in the digital backbone, begin their work in checking for consistency, consolidating data for each project, get the documents into formats for fast viewing and provide updates to other systems, for example, project control on progress. Another example in the growth category comes from Autonomous Solutions division, and Maria was already talking about it. It's 120 trucks orchestrated to operate in the most efficient way possible, from loading ore at the extraction site to unloading at the port. Looking at the technology. We are leading the breakthrough to autonomous haulage at scale in the mining industry to increase safety of life, soft labor shortages, increase operational efficiency and reduce full consumption. So autonomous road trains enable efficient operation in extremely remote areas where, of course, labor shortages are a very real challenge. They increase safety by instrumenting these massive trucks with advanced perception sensors, drive-by-wire technologies, position technologies, radar technologies, imaging technologies, vehicle invention technologies and, of course, positioning technologies paired with our correction services. And with central orchestration of all machines on site, operations flow smoothly without unnecessary waiting or bottlenecks. And we think that 120 trucks is just the beginning. It's a world first, as you can clearly see, and it's the first of many. Talking once more about R&D efficiency. If you want to innovate and release products in fast pace, as we do, you have to build on common shared modules and platform components. The depiction shows the number of core modules we base on our products on. By developing hardware and software synchronous, we can always decide what gets deployed at the edge or what gets deployed in the cloud. And this is a huge competition, competitive advantage. For us, building on the foundation of shared modules and platform components look very similar if you're talking hardware for a laser tracker, a metrology Arm and 3D disto, a laser scanner, a BLK product or a total station. Starting from a modular framework, fast tracks go-to-market and allows development to focus on the core market differentiator that these products will bring. For example, let's dive into a total station. And now we break the sensor apart and you see various components in there. Let's pick one, and David already talked about it, let's focus on Hexagon's encoder platform, an absolute encoder with subsecond angular accuracy. What does it mean? Think of measuring the width of 1 hair in a distance of 1 kilometer. Our encoder is the most advanced in the industry by far, I would say. And it's proprietary available only to us, only to our sensors where we build it in. It's fully IP protected. And as David was saying, an investment of EUR 5 million led to a device that is up to 10x less expensive to make than to buy. And close to 85,000 encoders are produced every year. To lead the transformation future-proofing Hexagon's technology stack and serve our division, which is very important, we serve our divisions with the most relevant technologies. We set up in 2015 our Hexagon's innovation hub. Within the innovation hub, we strive to lead the industry in terms of sensors, robotics, visual computing, software native cloud technologies, AI, UI, UX and industrial design. And this is all paired with the domain expertise of the divisions to develop world-class products to create their business impact. Let us proceed to the transform category. An example that we heard a few times this afternoon is to transform the market by technology disruptions as we did with the BLK series. It started in 2016 with the original BLK360. And for us, this kicked off an innovation sprint that saw these releases of the new BLKs coming out every year, and we will continue to do so. And each BLK technology applies our mastery of photonics, mechanical precision and simplicity in all aspects of the design. And it's also built on the aforementioned [ chat ] modules. In fact, it has 2 of this miniaturized angular encoders in there that I was mentioning before. It's very miniaturized in every component in a very all-inclusive way. Let's talk about the business impact. The first BLK360 changed the industry as we knew it. And Thomas was speaking about it. And today, the BLK series has a globally distributed installed base, you see on the map, on the blue dots, and it's serving 50-plus percent of customers that are brand new to Hexagon, and delivering a 75% gross profit. So BLK data is creating value for customers from reality capture that was once only available to experts. Talking about R&D efficiency in the context of software, the same modularity as in the encoder example applies as well. Building on the foundation of shared modules, micro services and platform components increase the speed and efficiency how we develop. And currently, all Hexagon software platforms are developed with this technology. This is the method of platform engineering. Hexagon continues to develop industry transforming software platform, as some examples are shown on this slide, and all our platform allow us to rapidly innovate and deploy valuable new functionality to our customers. Let us take a closer look at Nexus, and Josh already talked a bit about it, it brings together teams from every discipline. It's about collaboration. It's about connectivity. It's an open platform to connect manufacturing technologies and digitalization, data-driven insights to improve operations and quality. The platform streamlines developments. It allows for a design adaptation and simulation. It ensures quality production. It eliminates any issues with data handling, which is, in fact, a big issue in the manufacturing world. And Nexus provides unprecedented collaboration to it for all our manufacturing customers. We developed HxDR with a vision to process, fuse and share digital reality data at any scale. HxDR can be described with 3 things: collaboration and visualization paired with user management that gives you access and privacy, cloud storage with very big data and automated processing for insight creation. And we connect existing Hexagon products to the cloud. And we use their HxDR 4 and it creates a completely new applications that are powered by HxDR as we call them. We can visualize as you see entire cities, environmental simulations build custom industry solution, connect people to digital twins. You heard me probably talking in our Hexagon Live in June 2023 when we launched a few applications. Since then, we have doubled the number of applications available on the platform. So we have apps for data purchasing and licensing. It's mostly geospatial content data. We have apps for smart cities for immersive visualization, -- we're talking special computing here. And we have apps created by our customers. Focal to our platform strategy is the flow and accessibility of data. It's from software to software. It's from sensors to software and from ecosystems to ecosystems. And this is why we have partnered with other leading technology companies. And these partnerships allows us to leverage our technologies in expanded markets and user groups.

Microsoft and Hexagon are shaping the future of industries, defining new ways to collaborate and unlocking the true potential of emerging technologies to deliver value at scale for our customers. One example is combining capabilities to build digital twins more rapidly. Hexagon will bring their Nexus platform for smart manufacturing on Azure.

HxDR will allow customers to combine previously stovepipe data and [ stovepipe ] expertise to build highly advanced digital twins that always reflect the actual state of the fiscal system. It will also allow us to experiment faster and with much less risk and to test and fix failures and user experiences before modifying the physical systems.

Our team is constantly looking for and integrating the latest imaging technologies to help bridge the gap between the real world and the virtual world. So we use a lot of VR and AR headsets and also like as BLK 360 laser scanner, which allows us to literally bridge that gap.

We co-developed with Hexagon team for BLK2GO PULSE. It has enabled the scanner to capture the best data with [ spark ] precision. The partnership with Hexagon is working very well for us. And it brings us new vision on how our centers can be utilized in wide-area Hexagon products.

I am so excited to see Hexagon connect to Omniverse, our ecosystem benefits from Hexagon's digital reality expertise, geospatial reality capture, sensors, software and autonomous technologies. So our customers can build, simulate, operate and optimize these virtual worlds faster, more accurately and easier than ever.

Coming down a little closer to the NVIDIA examples. With our NVIDIA partnership, we combined 3 platforms to create an interconnected industrial metaverse -- it's HxDR, Nexus and NVIDIA's Omniverse. And the flow of data across the platform is strengthened by open data formats like USD, universal scene description. And we're in the consortium together with NVIDIA, Adobe and others to define this format. And our industrial metaverse technologies are complementary, as you heard, for example, Jensen talking about. And they offer an end-to-end toolset for customers for planning and retrofitting industrial plans. And this is a real example that we did jointly together with NVIDIA. We created a digital twin and used it to simulate and optimize the manufacturing process. Hexagon portfolio of sensors, software and platforms is ideally suited to realize the potential of industrial metaverse. And this is where multiple digital reality technologies really converge talking about AI, and we are building AI. And we have done, in fact, quite early on. So we began investing into AI as early as 2012 with our first project, and I remember them well. We started 2014 with productizing machine learning applications. And when deep learning emerged as a new technologies we redeveloped classifiers for identifying objects in terabytes of 3D point cloud. And our initial experience with generative started in 2018. And as we all know, 2022 mark the breakdown -- or breakthrough, but also marked the breakthrough for us, and we were happy that we are invested that early on this in order to capitalize on our investments. And we have already incorporated our AI capabilities into multiple products that are active on the market today. And we are working now on strong acceleration with our partners, Microsoft, NVIDIA and AWS. And we use generative AI for [ COPA ] pilots in products across several industries and internally for operational efficiency. And furthermore, we leverage [indiscernible] to enhance our trainings for deep learning networks for scenes and scans. And so we keep pushing the boundaries on the main specific AI for devices and sensors. And coming back to the strong partnerships, where do we use the partners for Microsoft, for example, supports us in regards of large language models for the productization for document management for the processing industry. NVIDIA supports us to fuel our deep learning models with long-tailed themes. And we train our AI-assisted devices, which is very, very unique to us with the help of stable diffusion by AWS and for the realistic scenes in Omniverse, as you can see in the middle on autonomous solution -- autonomous project. We've been talking about reality capture, reality creation, reality immersion and reality activation. Let's talk about a tight integration of all those competencies in one embodiment. Let's talk about robotics. We turned fear lights and total stations quite early on into robotic total stations. And we made laser trackers precisely orchestrate industrial robots. And we created automation say using robotic scanning technology and made reality capture, as you can see here, autonomous. So Hexagon has always been on the forefront of robotic systems. Today, I've shown you 3 things: how our R&D strategy creates R&D efficiency and serves our customers, how we innovate from ideas to products with a focus on platform conversions. And third, on our technology leadership allows us to rapidly deploy emerging technologies. Thank you very much.

Hello, everyone. I'm Hongquan Li, the in charge of Hexagon Group China. I worked for Hexagon since year 2000, now is the 23 years. I started my job the industry metrology since 1990, now is the 33 years. Actually, Hexagon Chinese management team have been working for Hexagon more than 20 years. I'm very proud. We had a very loyal team in Hexagon China. We had a one slogan in China called 1 person, 1 life, 1 carrier. In Hexagon China, we are focused on industry workflow solutions. This is our smart [indiscernible] center. In fact, Hexagon Smart Park was built by Hexagon in-house technology we call smart building technology. So this factory is the biggest manufacturing for HMI around the world. With Hexagon Smart Manufacturing Solutions, we are targeted on the lighthouse factory nearby in the future. As planned, we will organize the investor meeting in Qingdao next year. Looking forward, to see of yield in Hexagon Smart Park in March 2024.

Thank you very much for -- and congratulations for the resilience on the -- throughout the day and throughout, I don't know, many hundreds of slides. But I think this is a phenomenal opportunity. For those of you that can head to China in the first period of March, this would be illuminating. Not only because of the facility that we just have witnessed is one of those places in which the soul of Hexagon comes alive, right? We've talked about to capture the creation, the immersion and the activation. In China, those teams have practice going to market that way, and to see all of those solutions in the same area really opens everybody's eyes in front of the capabilities of the group. But also we would like during that week for investors to have direct access to our customer base. So in between Qingdao, in between Shanghai and then Shenzhen, there's going to be an opportunity to visit fantastic customers in e-mobility, fantastic customers in consumer electronics and companies that are really changing the world. So I think it would be very stimulating above and beyond what you're going to hear and see from Hexagon. So in closing, I want to share a couple of concluding thoughts with you. Maybe more of a reminder in terms of what we have discussed throughout the day. Very important. We wanted to basically to lower the threshold in terms of understanding the group and the drivers and the financial metrics and how you can not only model the reality of Hexagon and the future of Hexagon, but truly understand how do we compete in the world? How do we try and grow? How do we try and improve our financial profile? And I think that by the end of today, I hope we have accomplished the mission for you to get a little bit more under the skin of what we do. And because I believe we have phenomenal plans across the divisions to really drive towards that 2026 and Vision 2030. We've talked about the value creation model. We have talked about capturing the data, gluing software to the data to extract the full potential of that data. The handshake between the hardware and the software for us to go and keep on becoming that modern company that lives by full fusion between the physical and the digital, it's super important for us. And the more we're going to win that strategy, the more we're going to be able to lift and create value on both of those portfolios. And immersion truly is about building usage and making sure that, that 3D data travels inside those organizations. A lot of the logos that we've seen this morning are very large organizations, operating across several continents with tens of thousands of engineers consuming a lot of technology from a lot of vendors, right? So if we want to move the needle and create these realities in a digital space and have that 3D data fully being utilized, we need to adopt cloud. We need to use the full potential of AI. We need to visualize better than anybody else. We need to make sure that the data is consumed. And then live by return on investment and make sure that the organization become as proficient as possible in developing those return on investment cases, because that is going to lift the value of the entirety of the portfolio. At the end of the day, a lot of what we do right? It's not about hardware, it's not about software, but it's about people. It's about energy levels, it's about skills. It's about desire to win, right? It's about how we build the right chemistry, by being an organization that has grown through acquisitions and through a relatively short period of time, right? So we've built this business and all has been incredibly enlightened in having this vision constantly in mind. But we've built this business over 20 years through a lot of acquisitions, integration with high expectations in terms of growth, changing and being in a constant stage of evolution, right? So how do you think about culture in a group that is so diversified and so global? I love to see 3 elements and drive 3 elements and think about 3 dimensions that are considered to be exceptionally important. We want to have the culture of the place that we do business in. We don't want to have one culture within Hexagon, right? Nobody wants that. We want to have an organization that is generous, an organization that is powerful, right? The leverage is the value of the various teams that we are in, right? But we want to have a couple of key common threads across these teams and organizations. I'd like to call them empowering, entrepreneurial and diverse, right? And pardon me if -- with my broken English, that's not the best definition for it. What do I mean with empowering? A lot of you, especially those that are more related to the Swedish investment communities, know Hexagon for being decentralized, right? And that truly is the case, but I find that an organization can be very decentralized without being empowering, right? Empowering means you take that one level further, yes. For me, empowering means making sure that you fully entrust people, that you select these teams and you fully entrust people, given the clarity of the objective, right? And then creating an environment of full accountability that releases the potential of people, right? Empowerment also means speed. At the end of the day, the technology that we've talked about today are all in a fast-moving phase, right? There's so much that we need to go and master. And very often, we are in a speed race, more than anything else. So you want to have an organization that is vibrant. You want to have an organization in which decisions can be made as close as possible to market and to technology. Entrepreneurial, I spent a fair amount of my career in Hexagon doing acquisitions myself, right? And as you know, we have, by now, almost a statistically relevant sample of small and midsized companies that have been acquired by Hexagon through the years and entrepreneurs that have remained within the organization. So we know a thing or two about -- a thing or two about being entrepreneurial, right? If I think about the individuals and the entrepreneurs that I've met in my careers and those that I've met in my career with Hexagon, a lot of those have these 3 characteristics in common. People that are highly open, very transparent, very open for change, very open to ask questions, listen, take on board the feedback and change. People that are absolutely market-centric, people that are absolutely laser-focused on the market opportunity. And the more we can live by it across the organization, it doesn't matter in which function you are in Hexagon, it doesn't matter what your role is, right? You need to know exactly why we win and what is the value that we create for customers for that win to come. And then there's an ambitious level, there's an ambition level that we have, I believe, that we need to nurture, right? And they're very, very often entrepreneurs have. And that ambition level is within the organization. We think that there's an untapped potential in Hexagon that we're going to be able to release over time, that we want to live by in each of the teams that we facilitate. And then it's about diversity. And as Eva said, we can do more to build an environment that is from an ethnic perspective, from a gender perspective as diverse as possible. The diversity of thought is something that we have nurtured pretty well in the organization over the years. If you think about what Burkhard has talked about, there's so much technology that we need to go in master. There's such a diversity of skills and experiences that we need to nurture and bring together. The diversity from an industrial perspective, the verticals that we do business with, the lessons that you learn in industries that are at very different rates of digitization from each other is a treasure that sits within the group. And then last but not least, diversity in terms of market exposure, right? You want to localize your business, you want to be able to have a very bilateral conversations with your markets. A lot of this as well has got to do with communication and transparency. And communication and transparency is a lot of what we have talked about today. Also when it comes to constantly upgrading and improving our governance at all levels in the organization so that we can go and become best-in-class in everything that we do. We've talked about new reporting segments. We've talked about disclosures, aligning the incentives. But of course, you've also learned in the last couple of weeks that our Board is getting -- is becoming wider and we have the privilege of bringing on board come next year 2 more independent board members that are going to bring even more incredible experience that all of the leadership team, including myself, can tap into. And that, of course, will come as well with new leadership for the audit committee. In conclusion, what is the opportunity ahead? What have we observed today? We have an incredible foundation to build on. That foundation is the track record of the Hexagon Group. 9 percentage points of CAGR over 10 years, 65 percentage points of gross margin, more than 80 acquisitions, and the capability of doing more and the capability of integrating with the right level of common sense in between adding value and keeping the identity and the vibrancy of those cultures. In terms of market, we play in a vast market. We play in a market landscape that is vast, that offers opportunity that is growing strongly. And that is supported by macro trends that are undeniable and very much aligned to the essence of the group, our value proposition and what we do very well. In terms of plans, we're trying to align everything to be ready to capitalize on those opportunities, and we have very solid change management in place as we speak, at all levels commercially, from an innovation perspective and from an operational excellence perspective to build the best possible quality business for the future. We have the right culture to enable all of this change and we're very serious about ESG, not only in terms of the demand that it can generate for us, but also in terms of our own role in building a world that is more sustainable. Last but not least, we have talked about financial guidance for the next 3 years, and we have talked about our full confidence in achieving the goals that were expressed already to the market in 2021. And with this, thank you very much again for spending time with us. We have a little bit more time for a Q&A. So I invite the President and all of my colleagues to join me on stage. Thank you.

Now to the questions, and thank you for submitting these. Okay, we're going to start with, and this is one for all of you. I think. How would you think about Hexagon, the biggest slowdown? In the past, Hexagon has been more cyclical, but now you've created a much more diverse dynamic company. I didn't write that myself. You talked about 5% to 7% through this through-the-cycle organic growth, but how is that positioned if we see a larger than anticipated slowdown?

Yes. I mean I can share a few thoughts and then you guys chime in. I think you can look at the strength of the business from multiple angles. There's the end market that we work within. So you want to be as leverage as possible as equally fitted as possible in between growing economies and mature economies and in between industries that are like we see already today, more exposed to a slowdown in demand and industries that are a little bit more resilient that have drivers that are different. So from this perspective, I mean you're going to get to appreciate, I think, even more later this afternoon, how we have businesses already today that are confronted with a slowdown in terms of demand, but they have managed to open up the number of verticals that they work within, and industries that are carried and have been for the last several quarters by trends and drivers that are much more long-term. So I think that's an inherent strength in the way you look at the business. And then, of course, there's the secondary aspect of the resilience of the specific product drivers and product areas. I mean, today, we have a percentage of our recurring revenue that is in and around 40%. And that's, of course, that's a big area of focus. It's something that has steadily grown over the years, and that's an increasingly important sort of cushion from our perspective. So yes, there's a couple of levers that help the group navigate these areas, these moments of slowdown. So we stay very positive because that's something that is that we live by as we speak, right? In a market that has become increasingly sort of complex and diverse area from area, industry from industry.

Yes. And I'd maybe add on the 5% to 7% organic growth target. I mean, when that was set as always has been the case with Hexagon. You kind of baked into that 5-year period, the idea that there will be some kind of slowdown. You obviously don't -- you don't know, but that's normally how business cycles work. So if you look at the first 7 quarters of that period, we've grown above the top end of that organic range, despite having to exit Russia and the exit of some of the businesses in SIG. And if there's no recession between now and 2026, then we'll obviously do better than 5% to 7%. So let's see.

Great. One more for you, Ben. On M&A, do you expect doing more strategic transformational M&A deals? And if so, will you be focused mainly on hardware or mainly on software or can hardware fit in there as well?

Yes, I mean, we've just done 2 big acquisitions, and as I described, I mean, the idea is that they will become platforms for the group, and there are a lot of synergies that we can extract from them. So there's no urgency to do transformative deal. If something comes along and the time is right, and it makes sense, we'll obviously look at it, but you don't go out with that ambition. The pipeline that I mentioned going into next year is more small and medium-sized deals. So we'll -- yes, we'll see how that develops. On hardware versus software, yes, I mean, I think we're -- we're indifferent. I think if a great hardware business comes along, where we have hardware and software, and it fits and it's synergistic, then we definitely will look at it. What I would say is if you look at both Manufacturing Intelligence, Geosystems and autonomous solutions that have the hardware, they are already market leaders in their field. So it's easy for them to expand their addressable market with innovation than it is by buying something where software we didn't have, we've added those technologies over time.

I mean I think there's also the innovation capabilities in these areas that have been different at different points in time. So sometimes, as you said before, make or buy, right? I mean I think we have so many capabilities in terms of how the development sensor fusion. We've built so many capabilities in that area. The very, very often it's a complete no-brainer from a financial return perspective to keep on innovating in that part of the business. Anything that has got to do with sensor fusion and automation is something that we're very strong at. What happened in the last couple of years is that partly because of multiples and partly because of innovation capabilities, we have leveraged having an incrementally big innovation capability in software to develop these new platforms, right? So when you look at HxDR or Nexus, when you look at SDx for Mattias, when you look at the one mining platform in that part of the business that Maria is going to talk about, or when you look at on call that Steven Cost will talk about, that is adding a lot of adoption. All of those are homegrown capabilities. So I think there's been a complete step change in the last 5 years in terms of the innovation capability around software, cloud platforms and analytics and that changes the way you look at M&A.

Great. Okay. David, when you look at the free cash flow conversion, what are the low-hanging fruit you see to improve?

I mean, obviously, I talked about the working capital. And I think we have seen the environment and working capital change and people become tighter on their cash. So we need to be stricter too, and I think that's an area where we can see an opportunity. And obviously, with the investments that we've been making, we'll now see those investments tick down, and we'll see the amortization come up, and that will equally help us on a cash flow basis. So they will be the 2, I would see, as the fastest opportunities, right.

Okay. Eva, this is a long one, but I think I need to give you the whole question. So can you confirm if the new target of 95% S1 and S2 by 2030 includes offsets? If it does, what is the commitment, excluding offsets, which is what the SBTi will validate as a short-term target.

Yes, I can confirm that it does not include offsets. We are only talking about offsets by the 2025 target of full neutrality, where we are working with our own solutions to drive carbon credit and working only with high-quality offsets. But when we talk about the 95% reduction on Scope 1 and Scope 2 by 2030, this does not include offset. This is the target that has been already given to the SBTi and which is currently under validation. No offsets are allowed.

Okay. Great. There's a little bit more that I'll give you as well. So if it does not include offsets, then it's effectively Net Zero by 2030 under SBTi definitions and then accordingly a peer-leading target. Can you clarify that?

It is totally. Right.

Okay. What gross margin support your -- what gross margin supports your midterm operating margin target?

I mean, as we know, the group is around the 65% margin. And we sell on my business plan that the trajectory needs to increase. So I would expect mid-60s, is mid- to high 60s, this is the area we need to be in for the future to achieve our target.

I think a good frame of reference is the improvement that you have mentioned that happened over the previous 10 years, right? We -- there's absolutely scope for a continuation from that perspective. And that's going to come as a byproduct of volume in certain areas. It's going to come as by product of next-generation technologies. We need to keep working on our cloud vendors as we expand the SaaS business. We need to keep working on our services delivery. This part of the business, in which I think we can get better at working with system integrators that are taking more and more interest in our enterprise solutions to go and deliver some of those service dollars on our own solutions. So there's absolutely scope for that to materialize. And then as David said before, we're going to keep on working on normalizing our R&D spend and be very, very focused on the payback from the innovation that we've worked on for the last couple of years. We need that future cycle to continue. But we think we have very good line of sight for that to happen.

Okay. Moving on to the addressable markets. So with the TAM growing by 7%, how can you only target 5% to 7% organic growth? Is this conservative, given the discussion on the wave of innovation within the company?

Yes. There's a good question. It's kind of -- follows on a little bit from the question that we just had and a difference in approach here. I mean when the external parties to put these TAMs together forecast them, they don't bake in any slowdown. What's the industry going to grow at? And what's the penetration of these products in that industry? So if there's no recession, then we would have TAM growth of 7%. Our 5% to 7% target bake in a slowdown during that 5-year period. So there's an inconsistency there. If you didn't get a downturn, as I said, then we would as we have done in the last 7 quarters, grew above the 5%.

Okay. And then how do you see software progressing as a percentage of sales by 2026, and then looking further ahead to 2030?

Yes. I mean the -- I mean we love all of our revenue streams equally, right? We're very democratic that way. Dollar is a dollar, is a dollar, right? So -- and what I thought it was important as a takeaway from today, again, I mean the hardware software classification is interesting, but that's not really the reality of how we want to go to market and incrementally, we try and do so. The better we get using software and analytics, for customers to build value on the data that we generate, the more that we'll see value in purchasing premium devices, which is what we bring to market, right? And the opposite is true pretty much, right? So it's a business case that incrementally we want to see in its totality. We want to see great growth from hardware, we want to see growth from software. When you look out at 2030, I mean we know where we stand in terms of recurring revenue. I think in 2030, we're probably going to have the majority of our revenues that are recurrent, and that's going to be a byproduct of several things coming into play. I think an important takeaway from the morning as well is that when we plan out for 2026, there's an acceleration in terms of recurring revenue, but is an acceleration that doesn't come at the expense of the margin profile for the group. And so -- and this is why we have reconfirmed the targets that we have talked about, but we keep on working on our revenue mix.

Okay. David, what tax rate is a good number to use for our models?

Okay? I mean, currently, I would stick with where we pretty much are. Obviously, there's changes in the tax system going on. But right now, from my line of sight, I wouldn't change from around the 18% that we currently utilize today.

Okay. A bit of a different topic here. So moving to solutions and more integration requires a change in the type of salespeople you have, and you might need more central account executives who can sell all the Hexagon versus salespeople in the business units. How far along are you in shifting to the new model? How much training is needed? How much more to do?

I mean I think it's a great conversation also to have with the divisional presidents later on in the Q&A, right? In a sense that these industries by -- in a very different way, right? The purchasing patterns in the world of construction is extremely different from what happens in an industry like mining, right? That is highly consolidated with a lot of those digitization decisions that are made in a relatively small number of key accounts by a relatively small number of people, right? So those dynamics is something we need to keep in mind. We don't plan to build a big -- a big sort of account exec team in corporate. That is not going to happen. But what I see in all of the divisions is that the team is very focused on constantly rethinking the sales motion, knowing that there's complexity in the portfolio. We want to protect and defend the business and build incremental layers of solutions and software-centric revenue.

Okay. And Eva, can you confirm whether the benchmark for the SBTi targets have been resolved and when we can expect the SBTi targets to be approved?

So the benchmark or like the baseline for the SBTi, will be 2022 full year, that would be our baseline. We have -- we are in the process of validation, which just started -- I mean we submitted back in July. The target was maybe many of you may know, there is huge increase of workload on the SBTi side. So we are in the validation process and is expected to be finished within the next 3 months.

Okay.

She's asking for more people.

I have an [indiscernible] agile.

Okay. On SIG and MI, they both have EBIT1 margins below the targets and the other 3 segments. What's your view on the EBIT1 margins for these segments? The reasons for the margin difference, which may be more appropriate for the divisions. And are there any reasons why they could not reach above 30%?

Yes. I mean, I think, of course, there are reasons why those margins are where they are now. It's also important, I think, to benchmark those margins with peers. There's different dynamics in those industries. So it's important to use various benchmarks. I mean, I love the benchmark against the group average and the group level. I prefer the one against the leading divisions in terms of EBIT delivery. But I think those markets have different dynamics. I think it's interesting if Steven and Josh later, maybe spend a few comments. I think there's content in those presentations in terms of how they've both looked at addressing cost, addressing areas of underperformance, growing the software mix to constantly be on a gross margin trajectory.

Okay. Great. And the last question for now. On the organic innovation wave and investment normalization, what is the timing? Have we turned the corner already i.e., is the balance between investments and product solutions generating revenues, profit improving as of today?

Yes. Great. I do think that we are at the peak, I think for us, 2024 is going to be a super important year in terms of bringing a lot of these new technologies to market for really starting to scale the commercial impact for those that have already been released, right? For some of the software, some of the platform as it takes some time, you need to build usage before applications that are built on these platforms get consumed and turn bookings into recognizable revenue. And for some of the hardware, the dynamics are a little bit different. And we're going to launch products that we will want to have an immediate, very positive impact in 2024. So yes, that's what we stay focused on.

How has the customer feedback been so far on Nexus and the HxDR platforms? And what do you see as the key delivery mechanism to realize those opportunities?

I guess I'll take that one. Yes, as you saw some of the statistics from Burkhard, we have over 30,000 users already on the platform and that's within roughly 6 months. That was one of the major goals originally. It's getting users on the platform. I would say to look at the commercial opportunities and truly unlocking it, it's really just getting those first reference customers underway, which we're doing right now. And then typically from that, once you prove it out with those customers, and they'll go through their own kind of pilot phases, implementations, et cetera, it will triple and cascade out. As I mentioned before, we're seeing a lot of pull from the market. So I'm incredibly optimistic and not only just getting users on the platform, but with the rapid app deployment is coming and then the commercialization of those apps coming in the next 2 years.

Maybe to add on, it's extremely encouraging. If you look at that. The same applies what Josh mentioned, on Nexus. If you separate our customer is into 3 different groups, you have our existing customers which is a benefit of collaboration of data exchange and all these kind of things. We are working with many innovation centers like [ CBDC's ] and general contractors, architectural firms to create feasibility studies as well, to really connect different applications on HxDR. And then we have to really go and to vote these enterprise accounts, which really want to have one geospatial platform in place for sharing data across continents, across organizations. That's something which takes a bit more time. So our approach is bottom up through the existing organization in the middle management, so to say, in this kind of innovation centers and then really on the C level as well, providing an enterprise solution on geospatial data.

Great. Maria. We've had a couple of questions in agriculture on the recent activity with Trimble selling their business. Can you kind of give us a bit more context on your position on that, how that impacts us?

Well, as I talked about today, we have a lot of opportunities. Yes, some of the bigger OEMs are building their own technology, but there's a whole other market out there with OEMs, integrators and the robotic first companies that are going to grow as well. We're introducing positioning as a service, which is going to be a differentiator as well and autonomy. We're investing a lot in autonomy and perception. Perception is not only going to be for agriculture, that it's what we're starting with, but that's going to be applied to mining, construction, et cetera. It's autonomous truly verticalized -- horizontal technology for different verticals. So there's a lot of opportunities in agriculture definitely.

Okay, Burkhard. So a data question for you here. You clearly have access to very large quantities of data. But how do you access it if it sits on-premise, in machines or software? And how do you manage what is relevant and usable, given the scale of the data created? Can you give some examples of where you're applying AI to this data to drive value for companies?

It's a very good question. Maybe start with the data and the content. As you all know, we have a content program, which includes a lot of geospatial data. And this is for us, first of all, a very vast source to train a model on and then basically later give the insights to them back to our customers in terms of land cover, object classification and segmentation can be point class, but it can be everything from -- we have currently, I think, 27 land cover classes on this. So that is our own data where we make it usable and then basically train models for the -- what I use. Then also our own operations like we have in Geosystems with construction progress monitoring. And you see software for example, this example with the video cams and Thomas talk. This also gives us a vast data. And maybe as a third pillar to say, all of our new sensors are fully connected and IoT enabled and there we get already the data on it. If it's on-premise, on machines that are have not yet in our installed base, these connectivities. Normally, they come once -- at least once in [ lifetime ] back into service and these kind of things, then we can read out a lot of things. This holds true for construction of MI devices, surveying devices and all of it. And then the other thing, the nice thing is if you operate in a very high accuracy range, then you can also utilize your own data that you have, obviously, from assembling and calibration with devices and testing the devices, whether they -- they're in inspection you take this data and train the models. And this is normally in accuracy range that is -- can gather all the other devices that are not yet connected.

Okay. Mattias. Where specifically are you on predictive maintenance or APM in EAM? How strong is your position in that market?

Yes. That's a good question. I think -- I don't know for you -- for those of you who want to say, may use at the time we paid attention out there. There was 2 booths out there, SDx and EAM, and he was actually showing the APM capabilities out there. So the answer is, yes, it's included in our EAM offering. It's also true that, that's kind of a market that's at a very early stage. So we're investing a lot into it. And yes, we see it as a big growth opportunity. And so in short, yes, we have an offering, but the market is still kind of early stage, I would say.

Okay. Well, we just [indiscernible] one from earlier now. So Steven and Josh, we had a question earlier on SIG and MI on the profitability of your divisions, particularly with the reference case of the other divisions in the group. Can you -- do you have any thoughts on that and expanding the profile of your businesses from that point of view?

Let me start. So look, it's a fact, right? And it's a journey. We're addressing it from both sides by moving away from some of these businesses that are very low margin. We've had a divestiture earlier in the year. Moving outside of government and public safety customers into the industrial sector where margins generally tend to be better, but it's going to be -- it's going to take some time, but we're definitely moving in that direction.

Yes. I would say, similar to Steven, we're also looking at divestments that are either low margin or just a different quality of revenue with ARR and other factors coming into play or are nonstrategic. So we're also undertaking on that journey. I mentioned before some of the internal transformations we're doing. A big part about that is unlocking efficiency, especially as we scale our growth. And so that will also help us dramatically improve our OpEx and our margins. And then as I mentioned before, I was pretty kind of pointed, our own goal as a division is to be at least at the Hexagon group average, because I feel like we should be aligned with the Hexagon ambitions. And so that's our personal goal and ambitions.

Okay. Another one for Burkhard. Can you give us a sense of your innovation? Do you measure a number of products launched within the last 3 years or something similar?

It was referring -- the answer to the slides I've shown when I showed the segmentation of the roadmap, and I've indicated that in the last 3 years, we did about 1200 releases combined in this industry categories. The category where we -- or how we innovate in is set by the divisions and by the product teams, because they have the knowledge what is through a lot of market research feedback, et cetera. What is then basically wished for and desired. And we have a large funnel of ideas. We have even larger basket of technologies and only it looked like massive innovations that we have in numbers, but only a few make it really in the stage that we write a business plan to it and give the go ahead in the productization pace.

Okay. Josh, within MI software, what plans do you have for offering consumption-based or flexible licensing as some peers have begun to do so?

Yes. We actually already do that today with our token license system. And Nexus also will have consumption-based elements to it too tied to the cloud consumption, et cetera. So we are doing that. We also have other flexible arrangements. I think we have 12 different license types. We're taking that down to 6 and a good portion of those are consumption base today.

Great. Okay. Last question of the day, and it's going to be one for Paolo. In terms of China, a broad question here. So obviously, it's in the new [indiscernible] quite a lot about tensions and different political environments and things like that, particularly geopolitical relations. And how do you manage that in terms of data IP, managing competition and things like that?

Yes. Very good question. So first of all, I mean, as you know, China has been -- has always been a powerhouse of growth for us and very impressive in terms of how they execute on business, not only in terms of the end result in terms of the financial performance of the team, right? So we've talked about creating solutions that are more and more software-centric, having an approach that starts to lean a little bit more heavily towards large accounts and towards key account management motions. And this is something that in China have always done very, very well. Our business in China today is primarily focused on Manufacturing Intelligence, Geosystems and ALI, less so on the other 2 divisions, and we have a lot of opportunity to pursue in the future. In terms of how we think about IP and sort of checks and balances, I mean we, of course, apply to the latter, the rules and the regulations that are in place through teams that do oversight, through tools that are in place, through processes that are in place. So every time there's matters of IP of export control and the likes, we work very closely with the bodies that are sort of in charge of reviewing our processes and the like. And we feel that we are very advanced from that perspective. What we need to keep on doing is making sure that we build capabilities in China so that the teams are very self-sufficient in terms of not only technology development, not only manufacturing for the product categories that we commercialize in China, but also in terms of software development capabilities. And we start to have a software development center in China that is very, very sizable so that we go and develop capabilities that are unique for that market, with front ends, with workflows that are very much adapted to the way software wants to be consumed in China. And that's something that we're going to keep on doing for the future.

Okay. Well, thank you very much to the panel here for all of the -- answering all of those questions. Thank you all for coming. Very much appreciate seeing you here. Thanks for everyone who's dialing in online as well. That concludes today's session. We look forward to seeing you in the future. Thank you.

Thank you.