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Hexagon

Quarterly Report Oct 28, 2021

2919_10-q_2021-10-28_d0c979ba-769b-4f22-a891-a0acf46d8a59.pdf

Quarterly Report

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INTERIM REPORT

1 JANUARY - 30 SEPTEMBER 2021

THIRD QUARTER

  • Net sales increased by 15 per cent to 1,077.2 MEUR (939.9). Using fixed exchange rates and a comparable group structure (organic growth), net sales increased by 10 per cent
  • Adjusted operating earnings (EBIT1) increased by 19 per cent to 296.8 MEUR (250.1)
  • Earnings before taxes, excluding adjustments, amounted to 290.5 MEUR (242.2)
  • Net earnings, excluding adjustments, amounted to 238.3 MEUR (198.6)
  • Earnings per share, excluding adjustments, amounted to 0.09 EUR (0.08)
  • Operating cash flow decreased to 179.6 MEUR (191.2)
MEUR Q3 2021 Q3 2020 Δ% 9M 2021 9M 2020 Δ%
Net sales 1,077.2 939.9 10
1)
3,130.7 2,726.4 14
1)
Adjusted gross earnings2) 692.9 599.7 16 2,015.8 1,735.4 16
Adjusted gross margin, %2) 64.3 63.8 0.5 64.4 63.7 0.7
Adjusted operating earnings (EBITDA)2) 413.4 347.2 19 1,182.9 997.0 19
Adjusted EBITDA margin, %2) 38.4 36.9 1.5 37.8 36.6 1.2
Adjusted operating earnings (EBIT1)2) 296.8 250.1 19 855.8 669.0 28
Adjusted operating margin, % 27.6 26.6 1.0 27.3 24.5 2.8
Earnings before taxes, excluding
adjustments 290.5 242.2 20 835.1 648.9 29
Adjustments (before taxes)3) -9.4 - n.a. -19.1 -135.0 n.a.
Earnings before taxes 281.1 242.2 16 816.0 513.9 59
Net earnings 230.6 198.6 16 669.2 422.2 59
Net earnings, excl. adjustments 238.3 198.6 20 684.9 532.1 29
Earnings per share, EUR 0.09 0.08 13 0.26 0.16 63
Earnings per share, excl.
adjustments, EUR 0.09 0.08 13 0.26 0.21 24

1)Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.

2)For definition, see page 18.

3)Adjustments in 2021 relate to share programmes (LTIP).

COMMENTS FROM THE CEO

"Once again, we delivered a record quarter. Recorded sales grew by 15 per cent, 10 per cent organic, and the operating margin (EBIT1) improved by 1 percentage point to 27.6 per cent. The overall demand situation is strong for most of Hexagon's businesses and regions, but supply of some components is strained. With unrestricted supply we would have increased sales by another 2 per cent with even stronger incremental margins. No orders were lost, resulting in a record order backlog. We believe that we will see a similar situation in the fourth quarter, with a furtherincrease in backlog, but envision a gradual improvementin components supply in the first half of 2022.

China recorded 10 per cent organic growth despite last year's strong comparison. Geosystems recorded 16 per cent organic growth, primarily driven by continued high activities in the infrastructure, construction and mining markets. Manufacturing Intelligence recorded 13 per cent organic growth, supported by a broad-based recovery across most industries and regions. As expected, the PPM division started to recover, recording 2 per cent organic growth, led by strong demand in the asset information management and AEC portfolios. Autonomy & Positioning recorded 8 per cent organic growth fuelled by continued strength in precision agriculture. Safety & Infrastructure recorded -6 per cent organic decline, hampered by weaker US defence orders.

We hosted a Capital Markets Day in September, where we presented how our digitalreality solutions and autonomous technologies will continue to fuel growth and sustainable outcomes in the years ahead. We also launched a new five-year financial plan consisting of an annual average sales growth of 8-12 per cent whilst reaching an operating margin (EBIT1) of over 30 per cent by 2026."

GROWTH

ADJUSTED OPERATING MARGIN 28 %

CONVERSION

GROUP BUSINESS DEVELOPMENT Q3

NET SALES

Net sales increased by 15 per cent to 1,077.2 MEUR (939.9). Using fixed exchange rates and a comparable group structure (organic growth), net sales increased by 10 per cent. Regionally, organic growth was 11 per cent in Asia, 10 per cent in Americas and 10 per cent in EMEA. In Asia, China recorded 10 per cent organic growth, mainly driven by continued strong demand in manufacturing. Japan, India, Australia and New Zealand recorded double-digit growth, however, South Korea declined due to weakness in the power and energy segment. In the Americas, North America recorded 8 per cent organic growth, fuelled by strong demand in surveying, infrastructure and construction, manufacturing and power and energy, but hampered by weakness in defence. South America recorded high double-digit growth driven by a solid development in mining and agriculture solutions. In EMEA, Western Europe recorded 11 per cent organic growth, mainly driven by strong growth in surveying, infrastructure and construction and a continued recovery in manufacturing. Russia, the Middle East and Eastern Europe continued to record strong organic growth.

EARNINGS

Adjusted operating earnings (EBIT1) increased by 19 per cent to 296.8 MEUR (250.1), which corresponds to an adjusted operating margin of 27.6 per cent (26.6). The adjusted operating margin (EBIT1) was positively impacted by volume growth, cost savings and a richer product mix. Adjusted operating earnings (EBIT1) were positively impacted by currency translation effects of 1.5 MEUR and positively impacted by currency transaction effects of 2.6 MEUR. Earnings before taxes, excluding adjustments, amounted to 290.5 MEUR (242.2) and were positively impacted by currency translation effects of 1.5 MEUR.

FINANCIAL SUMMARY - THIRD QUARTER

Net sales Earnings
MEUR Q3 2021 Q3 2020 Δ% 1) Q3 2021 Q3 2020 Δ%
Geospatial Enterprise Solutions 551.9 487.3 10 167.5 138.5 21
Industrial Enterprise Solutions 525.3 452.6 10 133.9 114.8 17
Net sales 1,077.2 939.9 10
Group cost -4.6 -3.2 -44
Adjusted operating earnings (EBIT1) 296.8 250.1 19
Adjusted operating margin, % 27.6 26.6 1.0
Interest income and expenses, net -6.3 -7.9 20
Earnings before adjustments 290.5 242.2 20
Adjustments2) -9.4 - n.a.
Earnings before taxes 281.1 242.2 16
Taxes -50.5 -43.6 -16
Net earnings 230.6 198.6 16

1)Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.

2)Adjustments in 2021 relate to share programmes (LTIP).

CURRENCY TRANSLATION IMPACT COMPARED TO EUR - THIRD QUARTER

Movement 1) Income less cost Earnings impact
CHF Weakened -1% Negative Positive
USD Weakened -1% Positive Negative
CNY Strengthened 6% Positive Positive
EBIT1, MEUR 1.5

1)Compared to Q3 2020

SALES BRIDGE - THIRD QUARTER ORGANIC GROWTH1) PER REGION

Net sales 1)
2020, MEUR 939.9
Structure, %
Currency, %
Organic growth, %
Total, % 15
-2021 MEUR

1)Net sales from acquisitions and divestments during the last twelve months are reported as "Structure" in the table above. Percentages are rounded to the nearest whole per cent.

Net sales1) Region Q3 2021
2020, MEUR 939.9 North America (31% of sales)
Structure, % 4 Western Europe (28% of sales)
Currency, % 1 2 China (16% of sales)
Organic growth, % 10 Asia excl. China (13% of sales) >8%
Total, % 15 South America (4% of sales) 0-8%
2021, MEUR 1,077.2 EMEA excl. Western Europe (8% of sales) Negative ↘
1)Net sales from acquisitions and divestments during the last twelve Total

1)Adjusted to fixed exchange rates and a comparable group structure (organic growth).

GEOSPATIAL ENTERPRISE SOLUTIONS – Q3 2021

Geospatial Enterprise Solutions includes a world-leading portfolio of sensors for capturing data from land and air as well as sensors for positioning via satellites. The sensors are complemented by software (GIS) for the creation of 3D maps and models which are used for decision-making in a range of software applications, covering areas such as surveying, construction, public safety and agriculture. This segment consists of Geosystems, Safety & Infrastructure and Autonomy & Positioning.

NET SALES

Geospatial Enterprise Solutions (GES) net sales amounted to 551.9 MEUR (487.3). Using fixed exchange rates and a comparable group structure (organic growth), net sales increased by 10 per cent. Regionally, organic growth was 14 per cent in EMEA, 10 per cent in Asia and 6 per cent in Americas. In EMEA, Western Europe recorded 18 per cent organic growth, supported by strong demand in the surveying and infrastructure and construction segments. Russia recorded double-digit organic growth, Eastern Europe and the Middle East recorded single-digit growth and Africa declined. In Asia, China recorded -3 per cent organic growth, facing a tough comparison from last year's strong recovery in infrastructure and construction. India, Australia and New Zealand recorded double-digit growth, supported by solid demand in the mining, surveying, infrastructure and construction markets. In the Americas, North America recorded 3 per cent organic growth, driven by strong demand in agriculture, surveying, infrastructure and construction. South America recorded double-digit organic growth, positively impacted by solid demand in mining.

Geosystems recorded 16 per cent organic growth, driven by continued strong demand in surveying, mining, infrastructure and construction. The Safety & Infrastructure division recorded -6 per cent organic growth, hampered by weaker US defence orders. The Autonomy & Positioning division recorded 8 per cent organic growth, fuelled by continued strength in precision agriculture.

EARNINGS

Adjusted operating earnings (EBIT1) increased by 21 per cent to 167.5 MEUR (138.5), which corresponds to an adjusted operating margin of 30.3 per cent (28.4). The adjusted operating margin (EBIT1) was positively impacted by volume growth, cost savings measures and a richer product mix.

NET SALES, EARNINGS AND NUMBER OF EMPLOYEES

MEUR Q3 2021 Q3 2020 Δ% 9M 2021 9M 2020 Δ%
Net sales 551.9 487.3 10 1) 1,614.9 1,398.7 16 1)
Adjusted operating earnings (EBIT1) 167.5 138.5 21 487.7 359.8 36
Adjusted operating margin, % 30.3 28.4 1.9 30.2 25.7 4.5
Avg. number of employees 9,303 8,929 4

1)Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.

NET SALES PER REGION – THIRD QUARTER NET SALES PER CUSTOMER SEGMENT - THIRD QUARTER

INDUSTRIAL ENTERPRISE SOLUTIONS – Q3 2021

Industrial Enterprise Solutions includes metrology systems that incorporate the latest in sensor technology for fast and accurate measurements, as well as CAD (computer-aided design), CAM (computer-aided manufacturing) and CAE (computer-aided engineering) software. These solutions optimise design, processes and throughput in manufacturing facilities and create and leverage asset management information critical to the planning, construction and operation of plants and process facilities in a number of industries, such as automotive, aerospace and oil and gas. Industrial Enterprise Solutions consists of Manufacturing Intelligence and PPM.

NET SALES

Industrial Enterprise Solutions (IES) net sales amounted to 525.3 MEUR (452.6). Using fixed exchange rates and a comparable group structure (organic growth), net sales increased by 10 per cent. Regionally, organic growth was 17 per cent in Americas, 11 per cent in Asia and 4 per cent in EMEA. In the Americas, North America recorded 16 per cent organic growth, driven by solid demand in the manufacturing segments and a recovery in the power and energy segment. South America recorded strong double-digit growth, driven by strength in the power and energy segment. In Asia, China recorded 15 per cent organic growth, fuelled by continued strong and broad-based demand in manufacturing. Japan and India recorded double-digit growth, but South Korea declined due to weak demand in the power and energy segment. In EMEA, Western Europe recorded 2 per cent organic growth, driven by a continued recovery in manufacturing and automotive, but hampered by weakness in power and energy. Eastern Europe and the Middle East recorded solid double-digit organic growth, but Russia declined in the quarter.

Manufacturing Intelligence recorded 13 per cent organic growth, driven by strong demand in general manufacturing, automotive, electronics and the software portfolio. The PPM division recorded 2 per cent organic growth, mainly driven by a recovery in North America and solid growth in the asset information management and AEC portfolios.

EARNINGS

Adjusted operating earnings (EBIT1) increased by 17 per cent to 133.9 MEUR (114.8), which corresponds to an adjusted operating margin of 25.5 per cent (25.4). The adjusted operating margin (EBIT1) was positively impacted by volume growth and cost savings measures while negatively impacted by a weaker product mix.

NET SALES, EARNINGS AND NUMBER OF EMPLOYEES

MEUR Q3 2021 Q3 2020 Δ% 9M 2021 9M 2020 Δ%
Net sales 525.3 452.6 10 1) 1,515.8 1,327.7 11 1)
Adjusted operating earnings (EBIT1) 133.9 114.8 17 382.5 318.5 20
Adjusted operating margin, % 25.5 25.4 0.1 25.2 24.0 1.2
Avg. number of employees 11,709 11,112 5

1)Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.

NET SALES PER REGION – THIRD QUARTER NET SALES PER CUSTOMER SEGMENT – THIRD QUARTER

FINANCIAL SUMMARY – 9M 2021

NET SALES

Net sales amounted to 3,130.7 MEUR (2,726.4) for the first nine months of the year. Using fixed exchange rates and a comparable group structure (organic growth), net sales increased by 14 per cent.

EARNINGS

Operating earnings (EBIT1) amounted to 855.8 MEUR (669.0), which corresponds to an operating margin of 27.3 per cent (24.5). Operating earnings (EBIT1) were negatively affected by currency translation effects of -35.5 MEUR and positively affected by currency transaction effects of 6.5 MEUR.

The financial net amounted to -20.7 MEUR (-20.1) for the first nine months of the year.

Earnings before taxes, excluding adjustments, amounted to 835.1 MEUR (648.9). Earnings before taxes, including these items, amounted to 816.0 MEUR (513.9) and were impacted by currency translation effects of -35.5 MEUR.

Net earnings, excluding adjustments, amounted to 684.9 MEUR (532.1) or 0.26 EUR (0.21) per share. Net earnings, including these items, amounted to 669.2 MEUR (422.2) or 0.26 EUR (0.16) per share.

FINANCIAL SUMMARY - 9M 2021

Net sales Earnings
MEUR 9M 2021 9M 2020 Δ% 1) 9M 2021 9M 2020 Δ%
Geospatial Enterprise Solutions 1,614.9 1,398.7 16 487.7 359.8 36
Industrial Enterprise Solutions
Net sales
1,515.8
3,130.7
1,327.7
2,726.4
11
14
382.5 318.5 20
Group cost -14.4 -9.3 -55
Operating earnings (EBIT1) 855.8 669.0 28
Operating margin, % 27.3 24.5 2.8
Interest income and expenses, net -20.7 -20.1 -3
Earnings before adjustments 835.1 648.9 29
Adjustments2) -19.1 -135.0 n.a.
Earnings before taxes 816.0 513.9 59
Taxes -146.8 -91.7 -60
Net earnings 669.2 422.2 59
1)Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.

2)Adjustments under 2021 relates to share programmes (LTIP).

CURRENCY TRANSLATION IMPACT COMPARED TO EUR - 9M 2021

Movement 1) Income less cost Earnings impact
CHF Weakened -2% Negative Positive
USD Weakened -6% Positive Negative
CNY Strengthened 2% Positive Positive
EBIT1, MEUR -35.5

1)Compared to 9M 2020.

Hexagon announced the acquisition of Immersal Oy, a pioneer and leading innovator of spatial mapping and visual positioning solutions used to produce augmented reality (AR) applications. The Immersal SDK (software development kit) allows developers to merge and "anchor" digital the physical space – by enabling a user's mobile device to locate and orient itself in the surrounding physical world using machine-readable maps.

GROUP SUMMARY

PROFITABILITY

Capital employed increased to 9,470.0 MEUR (8,536.9). Return on average capital employed for the last twelve months was 12.9 per cent (11.0). Return on average shareholders' equity over the previous twelve months was 13.8 per cent (10.1). The capital turnover rate was 0.5 times (0.4).

FINANCIAL POSITION

Total shareholders' equity increased to 6,710.3 MEUR (6,178.9). The equity ratio was 57.8 per cent (59.0). Hexagon's total assets increased to 11,614.6 MEUR (10,464.5). The increase in total assets is driven primarily by acquisitions. Hexagon's main sources of financing consist of:

1) A multicurrency revolving credit facility (RCF) established in 2014. The RCF amounts to 2,000 MEUR with maturity 2022

2) A Swedish Medium Term Note Programme (MTN) established in 2014. The MTN programme amounts to 20,000 MSEK with tenor up to 6 years

3) A Swedish Commercial Paper Programme (CP) established in 2012. The CP programme amounts to 15,000 MSEK with tenor up to 12 months.

On 30 September 2021, cash and unutilised credit limits totalled 1,847.8 MEUR (2,078.3). Hexagon's net debt was 2,052.5 MEUR (1,930.8). The net indebtedness was 0.28 times (0.28). Interest coverage ratio was 37.0 times (27.3).

CASH FLOW

During the third quarter, cash flow from operations before changes in working capital amounted to 347.6 MEUR (308.6), corresponding to 0.14 EUR (0.12) per share. Cash flow from operations in the third quarter amounted to 283.2 MEUR (303.1), corresponding to 0.11 EUR (0.12) per share. Operating cash flow in the third quarter, including non-recurring items, amounted to 179.6 MEUR (191.2).

For the first nine months of the year, cash flow from operations amounted to 981.2 MEUR (895.9) corresponding to 0.38 EUR (0.35) per share. The operating cash flow, including non-recurring items, amounted to 666.9 MEUR (567.3).

INVESTMENTS, DEPRECIATION, AMORTISATION AND IMPAIRMENT

Hexagon's net investments, excluding acquisitions and divestitures, amounted to -98.9 MEUR (-89.7) in the third quarter and -296.3 MEUR (-282.9) in the first nine months of the year. Depreciation, amortisation and impairment amounted to -116.6 MEUR (-97.1) in the third quarter and -327.1 MEUR (-388.8) during the first nine months of the year, whereof impairment charges amounted to -12.7 MEUR (-2.4) in the third quarter and -23.5 MEUR (-99.0) during the first nine months of the year.

TAX RATE

The tax expense for the first nine months of the year totalled -146.8 MEUR (-91.7). The reported tax rate was 18.0 per cent (18.0) for the quarter and 18.0 per cent (17.8) for the first nine months of the year. The tax rate, excluding non-recurring items, was 18.0 per cent (18.0) for the quarter and 18.0 per cent (18.0) for the first nine months of the year.

EMPLOYEES

The average number of employees during the third quarter was 21,109 (20,118). The number of employees at the end of the quarter was 21,427 (20,351).

SHARE DATA

The share split 7:1 resolved by the Annual General Meeting was transacted on 20 May, 2021. All historical data has been restated except for the share price.

Earnings per share, including adjustments, for the third quarter amounted to 0.09 EUR (0.08). Earnings per share, excluding adjustments, for the third quarter amounted to 0.09 EUR (0.08).

Earnings per share, including adjustments, for the first nine months of the year amounted to 0.26 EUR (0.16). Earnings per share, excluding adjustments, for first nine months of the year amounted to 0.26 EUR (0.21).

On 30 September 2021, equity per share was 2.60 EUR (2.40) and the share price was 135.95 SEK (677.80).

Hexagon's share capital amounts to 81,557,432 EUR, represented by 2,565,505,614 shares, of which 110,250,000 are of series A with ten votes each and 2,455,255,614 are of series B with one vote each. Hexagon holds 7,350,000 treasury shares.

PARENT COMPANY

The parent company's earnings before taxes in the third quarter amounted to -2.9 MEUR (345.1) and -7.4 MEUR (369.8) for the first nine months of the year. The equity was 4,928.9 MEUR (5,491.2). The equity ratio of the parent company was 44 per cent (52). Liquid funds including unutilised credit limits were 1,460.9 MEUR (1,609.0).

Hexagon expanded its BLK series with the introduction of BLK ARC and BLK2FLY. Leica BLK ARC is a laser scanning sensor purposely built to improve the autonomous navigation of robots and other carrier platforms to deliver fully autonomous mobile laser scanning. Leica BLK2FLY is the world's first fully integrated and autonomous flying laser

ACCOUNTING PRINCIPLES

Hexagon applies International Financial Reporting Standards (IFRS) as adopted by the European Union. Hexagon's report for the Group is prepared in accordance with IAS 34, Interim Financial Reporting and the Annual Accounts Act. Parent company accounts are prepared in accordance with the Annual Accounts Act. Accounting principles and calculation methods are unchanged from those applied in the Annual Report for 2020, see note 1 for further information.

RISKS AND UNCERTAINTY FACTORS

As an international group, Hexagon is exposed to a number of business and financial risks. The business risks can be divided into strategic, operational and legal risks. The financial risks are related to such factors as exchange rates, interest rates, liquidity and the ability to raise funds. Risk management in Hexagon aims to identify, control and reduce risks. This work begins with an assessment of the probability of risks occurring and their potential effect on the Group. There has been no change in the risks facing the Group compared to what was reported in the Annual Report 2020.

SHARE PROGRAMME

Hexagon's share programme is accounted for according to IFRS 2 and is classified as an equity-settled share-based payment transaction, which means the programme is reported within equity. Social fees are reported as a liability in the balance sheet. The cost of each share-based incentive programme is estimated at 60 MEUR and is allocated over the respective vesting period. The cost is recognised as a personnel expense in the profit or loss statement during the vesting period. The purpose of the share programme is to strengthen Hexagon's ability to retain and recruit competent employees, provide competitive remuneration and to align the interests of the shareholders with the interests of the employees concerned. Through a share-based incentive programme, the employees' remuneration is tied to the company's earnings and value growth and creates long-term incentives for the programme participants.

Currently, Hexagon has two ongoing programmes, with vesting periods of 2020/2023 and 2021/2024.

RELATED PARTY TRANSACTIONS

No significant related party transactions have been incurred during the quarter.

ANNUAL GENERAL MEETING AND NOMINATION COMMITTEE

The AGM will be held on 29 April 2022 at 17:00 CET at City Conference Center Stockholm (Norra Latin), Drottninggatan 71 B. The composition of the Hexagon Nomination Committee for the Annual General Meeting 2022 is: Mikael Ekdahl (Chairman), Melker Schörling AB, Jan Dworsky, Swedbank Robur fonder, Anders Oscarsson, AMF and AMF Fonder and Caroline Forsberg, SEB Investment Management.

EXTRAORDINARY GENERAL MEETING

An Extraordinary General Meeting will be held on 17 November to resolve the nomination committee's proposal of electing Brett Watson and Erik Huggers as ordinary members of the Board of Directors.

SUBSEQUENT EVENTS

On 1 October, Hexagon completed the acquisition of Infor's global EAM (enterprise asset management) business and resolved on an issue in kind. The total purchase price amounted to 2,820 MUSD on a cash and debt free basis including 792 MUSD in cash and 132.6M Hexagon AB series B shares. Infor's EAM business is expected to generate revenues of 184 MUSD for the full year 2021.

The Board of Directors and the President and CEO declare that this Interim Report provides a true and fair overview of the Company´s and the Group´s operations, its financial position and performance, and describes material risks and uncertainties facing the Company and companies within the Group.

Stockholm, Sweden, 28 October 2021 Hexagon AB (publ)

Gun Nilsson Chairman of the Board

Ola Rollén President and CEO Board Member

Henrik Henriksson Board Member

John Brandon Board Member

Märta Schörling Andreen Board Member

Ulrika Francke Board Member

Sofia Schörling Högberg Board Member

Patrick Söderlund Board Member

AUDITORS' REVIEW REPORT

Introduction

We have reviewed the condensed interim report for Hexagon AB as at September 30, 2021 and for the nine months period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of review

We conducted our review in accordance with the Swedish Standard on Review Engagements, ISRE 2410 Review of Interim Financial Statements Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group, and in accordance with the Swedish Annual Accounts Act regarding the Parent Company.

Stockholm, 28 October 2021

PricewaterhouseCoopers AB

Bo Karlsson Helena Kaiser de Carolis Authorised Public Accountant Authorised Public Accountant

CONDENSED INCOME STATEMENT

MEUR Q3 2021 Q3 2020 9M 2021 9M 2020 2020
Net sales 1,077.2 939.9 3,130.7 2,726.4 3,764.4
Cost of goods sold -385.1 -340.2 -1,116.6 -1,004.4 -1,390.1
Gross earnings 692.1 599.7 2,014.1 1,722.0 2,374.3
Sales expenses -192.4 -157.9 -564.1 -514.2 -687.3
Administration expenses -85.3 -76.6 -251.1 -245.7 -328.2
Research and development expenses -130.8 -110.4 -374.5 -353.5 -462.7
Capital gain (+) / loss (-) from sale of shares in Group companies - - 0.3 - -
Other income and expenses, net 3.8 -4.7 12.0 -74.6 -109.1
Operating earnings 1) 287.4 250.1 836.7 534.0 787.0
Financial income 1.5 1.3 3.7 5.1 6.3
Financial expenses -7.8 -9.2 -24.4 -25.2 -33.7
Earnings before taxes 281.1 242.2 816.0 513.9 759.6
Taxes -50.5 -43.6 -146.8 -91.7 -134.9
Net earnings 230.6 198.6 669.2 422.2 624.7
Attributable to:
Parent company shareholders 228.4 196.6 663.3 417.7 618.1
Non-controlling interest 2.2 2.0 5.9 4.5 6.6
1) of which adjustments -9.4 - -19.1 -135.0 -169.2
Earnings include depreciation, amortisation and impairments of -116.6 -97.1 -327.1 -388.8 -534.2
- of which amortisation of surplus values -13.8 -13.1 -40.7 -40.8 -53.3
Basic earnings per share, EUR 0.09 0.08 0.26 0.16 0.24
Earnings per share after dilution, EUR 0.09 0.08 0.26 0.16 0.24
Total shareholder's equity per share, EUR 2.60 2.40 2.60 2.40 2.31
Closing number of shares, thousands 2,565,506 2,572,857 2,565,506 2,572,857 2,568,335
Average number of shares, thousands 2,566,556 2,572,857 2,567,053 2,572,843 2,572,780
Average number of shares after dilution, thousands 2,573,906 2,572,857 2,573,267 2,572,843 2,573,914

CONDENSED COMPREHENSIVE INCOME

MEUR Q3 2021 Q3 2020 9M 2021 9M 2020 2020
Net earnings 230.6 198.6 669.2 422.2 624.7
Other comprehensive income
Items that will not be reclassified to income statement
Remeasurement of pensions 0.9 1.7 45.5 -26.5 -29.4
Taxes on items that will not be reclassified to income statement -0.1 0.1 -4.6 2.9 3.6
Total items that will not be reclassified to income statement, net
of taxes 0.8 1.8 40.9 -23.6 -25.8
Items that may be reclassified subsequently to income statement
Exchange rate differences 106.0 -209.3 314.3 -303.5 -468.5
Taxes on items that may be reclassified subsequently to income
statement -4.8 2.8 -10.4 7.6 23.3
Total items that may be reclassified subsequently to income
statement, net of taxes 101.2 -206.5 303.9 -295.9 -445.2
Other comprehensive income, net of taxes 102.0 -204.7 344.8 -319.5 -471.0
Total comprehensive income for the period 332.6 -6.1 1,014.0 102.7 153.7
Attributable to:
Parent company shareholders 329.7 -7.4 1,006.8 99.2 147.5
Non-controlling interest 2.9 1.3 7.2 3.5 6.2

CONDENSED BALANCE SHEET

MEUR 30/9 2021 30/9 2020 31/12 2020
Intangible fixed assets 8,359.8 7,629.2 7,941.8
Tangible fixed assets 511.0 482.8 480.1
Right-of-use assets 201.4 208.5 205.1
Financial fixed assets 68.1 68.9 80.4
Deferred tax assets 97.9 123.1 102.1
Total fixed assets 9,238.2 8,512.5 8,809.5
Inventories 425.3 406.0 371.1
Accounts receivables 900.6 853.3 884.7
Other receivables 172.8 125.0 113.3
Prepaid expenses and accrued income 170.5 140.5 127.6
Total current receivables 1,243.9 1,118.8 1,125.6
Cash and cash equivalents 707.2 427.2 397.4
Total current assets 2,376.4 1,952.0 1,894.1
Total assets 11,614.6 10,464.5 10,703.6
Equity attributable to parent company shareholders 6,679.9 6,163.0 5,934.8
Equity attributable to non-controlling interest 30.4 15.9 14.4
Total shareholders' equity 6,710.3 6,178.9 5,949.2
Interest bearing liabilities 1,111.5 724.8 1,995.4
Lease liabilities 150.3 155.3 153.5
Other liabilities 91.7 104.2 85.5
Pension liabilities 72.4 123.9 125.4
Deferred tax liabilities 485.7 451.7 460.2
Other provisions 12.2 10.4 14.7
Total long-term liabilities 1,923.8 1,570.3 2,834.7
Interest bearing liabilities 1,363.9 1,291.5 437.4
Lease liabilities 61.6 62.5 61.6
Accounts payable 230.2 186.7 207.4
Other liabilities 363.6 355.2 326.7
Other provisions 30.6 62.1 48.3
Deferred income 541.6 453.1 520.9
Accrued expenses 389.0 304.2 317.4
Total short-term liabilities 2,980.5 2,715.3 1,919.7
Total equity and liabilities 11,614.6 10,464.5 10,703.6

FINANCIAL INSTRUMENTS

In Hexagon's balance sheet derivatives and other long-term securities holdings are carried at fair value. Derivatives are measured at fair value based on valuation techniques with observable market data as input (level 2 according to definition in IFRS 13). Other longterm securities holdings amount to insignificant numbers. Liabilities for contingent considerations are measured at fair value and based on management's best estimation of the most probable outcome (level 3 according to definition in IFRS 13). Other assets and liabilities are carried at accrued cost.

For financial assets and liabilities that are carried at accrued cost, the fair value is deemed to be coincident with the carrying amount except for long-term liabilities to credit institutions. The difference between the fair value and the carrying amount for these long-term liabilities is deemed to be insignificant relative to the total balance sheet since the interest rate duration is short.

CONDENSED STATEMENT OF CHANGES IN EQUITY

MEUR Q3 2021 Q3 2020 2020
Opening shareholders' equity 5,949.2 6,076.9 6,076.9
Total comprehensive income for the period1)
Acquisition of treasury shares
Dividend
Acquisition of non-controlling interest
Share based programme (LTIP)
1,014.0
-35.2
-243.9
12.7
13.5
102.7
-
-0.7
-
-
153.7
-47.3
-234.1
-
-
Closing shareholders' equity2) 6,710.3 6,178.9 5,949.2
1) Of which: Parent company shareholders
Non-controlling interest
2) Of which: Parent company shareholders
Non-controlling interest
1,006.8
7.2
6,679.9
30.4
99.2
3.5
6,163.0
15.9
147.5
6.2
5,934.8
14.4

NUMBER OF SHARES

series A series B Total
2014-12-31 Total issued and outstanding 15,750,000 341,639,213 357,389,213
New issue, warrants exercised - 2,947,929 2,947,929
2015-12-31 Total issued and outstanding 15,750,000 344,587,142 360,337,142
New issue, warrants exercised - 106,000 106,000
2016-12-31 Total issued and outstanding 15,750,000 344,693,142 360,443,142
New issue, warrants exercised - - -
2017-12-31 Total issued and outstanding 15,750,000 344,693,142 360,443,142
New issue, warrants exercised - 2,481,550 2,481,550
2018-12-31 Total issued and outstanding 15,750,000 347,174,692 362,924,692
New issue, warrants exercised - 4,614,610 4,614,610
2019-12-31 Total issued and outstanding 15,750,000 351,789,302 367,539,302
New issue, warrants exercised - 11,500 11,500
Repurchase of treasury shares - -646,000 -646,000
2020-12-31 Total outstanding 15,750,000 351,154,802 366,904,802
Repurchase of treasury shares - -204,000 -204,000
2021-03-31 Total outstanding 15,750,000 350,950,802 366,700,802
Split 7:1 outstanding shares 94,500,000 2,105,704,812 2,200,204,812
2021-06-30 Total outstanding 110,250,000 2,456,655,614 2,566,905,614
Repurchase of treasury shares - -1,400,000 -1,400,000
2021-09-30 Total outstanding 110,250,000 2,455,255,614 2,565,505,614
Total amount of treasury shares - 7,350,000 7,350,000
2021-09-30 Total issued 110,250,000 2,462,605,614 2,572,855,614

Each share of series A carries entitlement to ten votes and each share of series B carries entitlement to one vote.

CONDENSED CASH FLOW STATEMENT

MEUR Q3 2021 Q3 2020 9M 2021 9M 2020 2020
Cash flow from operations before change in working capital
excluding taxes and interest 399.0 352.1 1,152.6 957.6 1,340.9
Taxes paid -45.2 -36.3 -148.1 -119.1 -163.2
Interest received and paid, net -6.2 -7.2 -19.3 -19.4 -24.5
Cash flow from operations before change in working capital 347.6 308.6 985.2 819.1 1,153.2
Cash flow from change in working capital -64.4 -5.5 -4.0 76.8 221.3
Cash flow from operations 283.2 303.1 981.2 895.9 1,374.5
Investments tangible assets, net -22.5 -21.1 -70.9 -72.5 -96.7
Investments intangible assets -76.4 -68.6 -225.4 -210.4 -286.6
Operating cash flow before non-recurring items 184.3 213.4 684.9 613.0 991.2
Non-recurring cash flow 1) -4.7 -22.2 -18.0 -45.7 -70.5
Operating cash flow 179.6 191.2 666.9 567.3 920.7
Cash flow from acquisitions and divestments -44.1 -29.5 -78.3 -285.1 -760.5
Cash flow from other investing activities -1.9 -5.0 2.7 -16.7 -34.5
Cash flow after other investing activities 133.6 156.7 591.3 265.5 125.7
Dividends paid -0.6 -0.3 -243.9 -0.7 -234.1
Repurchase of Treasury shares -20.4 - -35.2 - -47.3
Cash flow from other financing activities 183.5 -154.4 -15.6 -299.1 92.7
Cash flow for the period 296.1 2.0 296.6 -34.3 -63.0
Cash and cash equivalents, beginning of period 412.7 418.8 397.4 468.3 468.3
Effect of translation differences on cash and cash equivalents -1.6 6.4 13.2 -6.8 -7.9
Cash flow for the period 296.1 2.0 296.6 -34.3 -63.0
Cash and cash equivalents, end of period 707.2 427.2 707.2 427.2 397.4

1) Non-recurring cash flow consists of restructuring costs.

KEY RATIOS

MEUR Q3 2021 Q3 2020 9M 2021 9M 2020 2020
Adjusted operating margin, % 27.6 26.6 27.3 24.5 25.4
Profit margin before taxes, % 26.1 25.8 26.1 18.8 20.2
Return on shareholders' equity, 12-month average, % 13.8 10.1 13.8 10.1 10.1
Return on capital employed ,12-month average, % 12.9 11.0 12.9 11.0 11.1
Equity ratio, % 57.8 59.0 57.8 59.0 55.6
Net indebtedness 0.28 0.28 0.28 0.28 0.37
Interest coverage ratio 37.0 27.3 34.4 21.4 23.5
Average number of shares, thousands1) 2,566,556 2,572,857 2,567,053 2,572,843 2,572,780
Basic earnings per share excl. adjustments, EUR1) 0.09 0.08 0.26 0.21 0.29
Basic earnings per share, EUR1) 0.09 0.08 0.26 0.16 0.24
Cash flow per share, EUR1) 0.11 0.12 0.38 0.35 0.53
Cash flow per share before change in working cap, EUR1) 0.14 0.12 0.38 0.32 0.45
Share price, SEK2) 135.95 677.80 135.95 677.80 749.80
Share price, translated to EUR2) 12.76 64.12 12.76 64.12 74.72

1)All comparatives for key ratios per share have been adjusted to reflect the split 7:1 during Q2 2021.

2)The share price for Q3 2021 reflects the adjustment of the split 7:1. Historic data has not been restated.

SUPPLEMENTARY INFORMATION

NET SALES PER SEGMENT

MEUR Q3 2021 Q2 2021 Q1 2021 2021 Q4 2020* Q3 2020 Q2 2020 Q1 2020 2020*
Geospatial Enterprise Solutions 551.9 560.4 502.6 1,614.9 535.3 487.3 457.6 453.8 1,934.0
Industrial Enterprise Solutions 525.3 515.2 475.3 1,515.8 508.8 452.6 439.0 436.1 1,836.5
Group 1,077.2 1,075.6 977.9 3,130.7 1,044.1 939.9 896.6 889.9 3,770.5

ADJUSTED OPERATING EARNINGS (EBIT1) PER SEGMENT

MEUR Q3 2021 Q2 2021 Q1 2021 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 2020
Geospatial Enterprise Solutions 167.5 176.4 143.8 487.7 156.3 138.5 118.9 102.4 516.1
Industrial Enterprise Solutions 133.9 129.9 118.7 382.5 137.5 114.8 110.9 92.8 456.0
Group costs -4.6 -5.2 -4.6 -14.4 -6.6 -3.2 -3.3 -2.8 -15.9
Group 296.8 301.1 257.9 855.8 287.2 250.1 226.5 192.4 956.2
Adjusted operating margin, % 27.6 28.0 26.4 27.3 27.5 26.6 25.3 21.6 25.4

NET SALES BY REGION

MEUR Q3 2021 Q2 2021 Q1 2021 2021 Q4 2020* Q3 2020 Q2 2020 Q1 2020 2020*
EMEA 383.7 399.6 370.9 1,154.2 395.7 340.4 307.9 330.9 1,374.9
Americas 379.2 360.7 327.2 1,067.1 341.0 325.9 319.4 336.3 1,322.6
Asia 314.3 315.3 279.8 909.4 307.4 273.6 269.3 222.7 1,073.0
Group 1,077.2 1,075.6 977.9 3,130.7 1,044.1 939.9 896.6 889.9 3,770.5

EXCHANGE RATES

Average Q3 2021 Q2 2021 Q1 2021 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 2020
SEK/EUR 0.0981 0.0986 0.0988 0.0985 0.0973 0.0965 0.0938 0.0938 0.0954
USD/EUR 0.8483 0.8293 0.8302 0.8362 0.8393 0.8556 0.9092 0.9067 0.8777
CNY/EUR 0.1311 0.1284 0.1281 0.1293 0.1267 0.1237 0.1283 0.1299 0.1271
CHF/EUR 0.9238 0.9109 0.9165 0.9172 0.9279 0.9298 0.9425 0.9373 0.9343
Closing Q3 2021 Q2 2021 Q1 2021 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 2020
SEK/EUR 0.0983 0.0989 0.0977 0.0983 0.0997 0.0946 0.0953 0.0904 0.0997
USD/EUR 0.8636 0.8415 0.8529 0.8636 0.8149 0.8541 0.8930 0.9127 0.8149
CNY/EUR
CHF/EUR
0.1336
0.9234
0.1303
0.9107
0.1302
0.9033
0.1336
0.9234
0.1246
0.9258
0.1254
0.9256
0.1262
0.9389
0.1286
0.9447
0.1246
0.9258

*Operating net sales, i.e. excluding revenue adjustment (haircut)

ACQUISITIONS

MEUR 9M 2021 9M 2020
Fair value of acquired assets and assumed liabilities
Intangible fixed assets 20.4 44.5
Other fixed assets 2.1 7.2
Total fixed assets 22.5 51.7
Total current assets 37.1 34.5
Total assets 59.6 86.2
Total long-term liabilities -6.7 -9.0
Total current liabilities -5.3 -20.3
Total liabilities -12.0 -29.3
Fair value of acquired assets and assumed liabilities, net 47.6 56.9
Goodwill 92.4 273.5
Total purchase consideration transferred 127.3 330.4
Less cash and cash equivalents in acquired companies -5.3 -20.6
Adjustment for non-paid consideration and considerations
paid for prior years' acquisitions -43.4 -24.7
Cash flow from acquisition of companies/businesses 78.6 285.1

During the first nine months of the year 2021, Hexagon acquired the following companies:

  • Mecadat, a distributor of CAD and CAM software

  • CADLM, a provider of computer-aided engineering (CAE) software

  • ZGTech, a provider of metrology-grade 3D scanners

  • Immersal Oy, a provider of spatial mapping and visual positioning solutions

The acquisitions are individually assessed as immaterial from a group perspective which is why only aggregated information is presented. The analysis of the acquired net assets is preliminary and the fair value might be subject to change. Contingent considerations are recognised to fair value (level 3 according to definition in IFRS 13) each reporting period and based on the latest relevant forecast for the acquired company. The valuation method is unchanged compared to the previous period. The estimated liability for contingent considerations amounted to 153.0 MEUR (153.0) as of 30 September, whereof the fair value adjustment in 2021 amounted to 25.2 MEUR (39.2). In connection with the valuation of contingent considerations the assets acquired and liabilities assumed in the purchase price allocation are reviewed. Any indication of impairment due to the revaluation of contingent considerations is considered and adjustments are made to off-set the impact from revaluation.

CONDENSED PARENT COMPANY INCOME STATEMENT

MEUR Q3 2021 Q3 2020 9M 2021 9M 2020 2020
Net sales 3.8 4.3 11.4 12.9 10.5
Administration expenses -5.3 -4.1 -16.6 -11.5 -20.9
Operating earnings -1.5 0.2 -5.2 1.4 -10.4
Earnings from shares in Group companies - 360.1 0.6 360.1 360.1
Interest income and expenses, net -1.4 -15.2 -2.8 8.3 -19.8
Appropriations - - - - 31.9
Earnings before taxes -2.9 345.1 -7.4 369.8 361.8
Taxes 0.6 3.4 1.6 -1.8 -1.6
Net earnings -2.3 348.5 -5.8 368.0 360.2

CONDENSED PARENT COMPANY BALANCE SHEET

MEUR 30/9 2021 30/9 2020 31/12 2020
Total fixed assets 9,009.4 9,292.9 9,275.6
Total current receivables 1,803.5 1,241.1 1,494.3
Cash and cash equivalents 362.4 2.1 2.6
Total current assets 2,165.9 1,243.2 1,496.9
Total assets 11,175.3 10,536.1 10,772.5
Total shareholders' equity 4,928.9 5,491.2 5,208.2
Untaxed reserves 7.4 40.4 7.5
Total long-term liabilities 1,112.3 724.8 1,995.5
Total short-term liabilities 5,126.7 4,279.7 3,561.3
Total equity and liabilities 11,175.3 10,536.1 10,772.5

DEFINITIONS

In addition to the financial measures as required by the financial reporting framework based on IFRS, this report also includes other measures and indicators that are used to follow-up, analyse and manage the business. These measures also provide Hexagon stakeholders with useful financial information on the Group's financial position, performance and development in a consistent way. Below is a list of definitions of measures and indicators used in this report.

BUSINESS DEFINITIONS

Americas North, South and Central America
Asia Asia, Australia and New Zealand
EMEA Europe, Middle East and Africa
GES Geospatial Enterprise Solutions
IES Industrial Enterprise Solutions

FINANCIAL DEFINITIONS

Amortisation of surplus values When a company is acquired, the purchase consideration is allocated to the identified assets
and liabilities of the company. Intangible assets are most often allocated the substantial part
of the purchase consideration. The amortisation of surplus values is defined as the difference
between the amortisation of such identified intangible assets and what the amortisation
would have been in the acquired company had the acquisition not taken place at all
Adjusted gross earnings Operational net sales less cost of goods sold excluding adjustments related to cost of goods
sold
Adjusted gross margin Adjusted gross earnings divided by operating net sales
Adjusted operating earnings
(EBIT1)
Operating earnings excluding capital gains on shares in group companies and adjustments.
Adjustments are excluded to facilitate the understanding of the Group´s operational
development and to give comparable numbers between periods
Adjusted operating earnings
(EBITDA)
Adjusted operating earnings (EBIT 1) excluding amortisation, depreciation and impairment of
fixed assets. The measure is presented to give depiction of the result generated by the
operating activities
Adjusted EBITDA margin Adjusted operating earnings (EBITDA) as a percentage of operating net sales
Adjusted operating margin Adjusted operating earnings (EBIT1) as a percentage of operating net sales
Adjustments Adjustments consists of expenses related to the share programme (LTIP) and non-recurring
items which refers to income and expenses that are not expected to appear on a regular basis
and impact comparability between periods
Capital employed Total assets less non-interest-bearing liabilities
Capital turnover rate Net sales divided by average capital employed
Cash conversion Operating cash flow excluding interest, tax payments and non-recurring items divided by
operating earnings (EBIT1)
Cash flow per share Cash flow from operations, after change in working capital, excluding non-recurring items
divided by average number of shares
Earnings per share Net earnings excluding non-controlling interest divided by average number of shares
Equity ratio Shareholders' equity including non-controlling interests as a percentage of total assets
Interest coverage ratio Earnings before taxes plus financial expenses divided by financial expenses
Investments Purchases less sales of tangible and intangible fixed assets, excluding those included in
acquisitions and divestitures of subsidiaries
Net debt Interest-bearing liabilities including pension liabilities and interest-bearing provisions less
cash and cash equivalents
Net indebtedness Interest-bearing liabilities less interest-bearing current receivables and liquid assets divided
by shareholders' equity excluding non-controlling interests
Organic growth Net sales compared to prior period excluding acquisitions and divestments and adjusted for
currency exchange movements
Operating net sales Net sales adjusted by the difference between fair value and book-value of deferred revenue
regarding acquired businesses.
Profit margin before taxes Earnings before taxes as a percentage of net sales
Return on capital employed
(12-month average)
Twelve months to end of period earnings after financial items, excluding adjustments, plus
financial expenses as a percentage of twelve months to end of period average capital
employed. The twelve months average capital employed is based on average quarterly capital
employed
Return on shareholders' equity
(12-month average)
Twelve months to end of period net earnings excluding non-controlling interests as a
percentage of twelve months to end of period average shareholders' equity excluding non
controlling interests last twelve months. The twelve months average shareholders' equity is
based on quarterly average shareholders' equity
Shareholders' equity per share Shareholders' equity excluding non-controlling interests divided by the number of shares at
year-end
Share price Last settled transaction on Nasdaq Stockholm on the last business day for the period

Hexagon is a global leader in digital reality solutions, combining sensor, software and autonomous technologies. We are putting data to work to boost efficiency, productivity, quality and safety across industrial, manufacturing, infrastructure, public sector, and mobility applications. Our technologies are shaping urban and production ecosystems to become increasingly connected and autonomous – ensuring a scalable, sustainable future. Hexagon (Nasdaq Stockholm: HEXA B) has approximately 21,000 employees in 50 countries and net sales of approximately 3.8bn EUR. Learn more at hexagon.com and follow us @HexagonAB.

FINANCIAL REPORT DATES FINANCIAL INFORMATION TELEPHONE

Hexagon gives financial information at the following occasions:

2 February 2022
Interim Report Q1 2022 29 April 2022
Interim Report Q2 2022 27 July 2022
Interim Report Q3 2022 27 October 2022

Financial information is available in Swedish and English at the Hexagon website and can also be ordered via phone +46 8 601 26 20 or e-mail [email protected]

CONFERENCE

The Interim Report for the third quarter 2021 will be presented on 28 October at 10:00 CET at a telephone conference.

Please view instructions at Hexagon's website on how to participate.

CONTACT

Maria Luthström, Head of Sustainability and Investor Relations, Hexagon AB +46 8 601 26 27, [email protected]

This is information that Hexagon AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 CET on 28 October 2021.

This communication may contain forward-looking statements. When used in this communication, words such as "anticipate", "believe", "estimate", "expect", "intend", "plan" and "project" are intended to identify forward-looking statements. They may involve risks and uncertainties, including technological advances in the measurement field, product demand and market acceptance, the effect of economic conditions, the impact of competitive products and pricing, foreign currency exchange rates and other risks. These forward-looking statements reflect the views of Hexagon's management as of the date made with respect to future events and are subject to risks and uncertainties. All of these forward-looking statements are based on estimates and assumptions made by Hexagon's management and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results or experience could differ materially from the forward-looking statements. Hexagon disclaims any intention or obligation to update these forward-looking statements.

Hexagon AB [publ] P.O. Box 3692 SE- 103 59 Stockholm Fax: +46 8 601 26 21 Phone: +46 8 601 26 20 Registration number: 556190-4771 Registered Office: Stockholm Sweden hexagon.com

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