Annual Report • Feb 12, 2013
Annual Report
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| MEUR | Q4 2012 | Q4 2011 | Δ% | 2012 | 2011 Δ% | |
|---|---|---|---|---|---|---|
| Operating net sales | 629.0 | 591.6 | 1) 4 |
2,380.0 | 2,177.6 | 1) 5 |
| Revenue adjustment 2) | - | - | n.a | - | -8.5 n.a. | |
| Net sales | 629.0 | 591.6 | 1) 4 |
2,380.0 | 2,169.1 | 1) 5 |
| Operating earnings (EBIT1) | 135.3 | 121.8 | 11 | 489.5 | 439.8 | 11 |
| Operating margin, % | 21.5 | 20.6 | 0.9 | 20.6 | 20.2 | 0.4 |
| Earnings before taxes | ||||||
| excl. non-recurring items | 124.8 | 106.9 | 17 | 441.3 | 380.9 | 16 |
| Non-recurring items | - | - | n.a. | - | -8.5 n.a. | |
| Earnings before taxes | 124.8 | 106.9 | 17 | 441.3 | 372.4 | 19 |
| Net earnings | 101.1 | 85.1 | 19 | 357.4 | 297.4 | 20 |
| Earnings per share, EUR | 0.28 | 0.24 | 17 | 1.01 | 0.84 | 20 |
| Earnings per share, excl. | ||||||
| non-recurring items, EUR | 0.28 | 0.24 | 17 | 1.01 | 0.85 | 19 |
1) Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.
2) Non-recurring reduction of acquired deferred revenue in Q1-2 2011 related to the acquisition of Intergraph.
Ola Rollén, President and CEO, Hexagon AB
"When closing 2012, we look back at a year of strong performance for Hexagon. Quarter after quarter the company reached record sales and profitability levels and the fourth quarter was no exception. We report a sales growth of 7 per cent and an operating margin of 23 per cent in the core business which is impressive considering the weak global economy. The 2012 net earnings increase of 20 per cent coupled with a record cash flow have reduced our net debt to the target level we set in 2010. This gives us the opportunity to significantly increase the dividend, as well as, freedom to expand going forward. It is not yet meaningful to make predictions regarding demand in 2013. We do know, however, that our business continues to become less cyclical as more and more of our revenues consist of recurring software contracts. We are also driving growth for our company through the development of innovative technology solutions. In 2012, we invested 255 MEUR in R&D which represents 11 per cent of sales, and hence 2013 will be a year full of product releases. I therefore believe that 2013 will be yet another good year for Hexagon"
Recorded sales grew by 6 per cent and organic growth was 4 per cent in the fourth quarter. The operating profit (EBIT1) increased by 11 per cent to 135.3 MEUR.
The organic growth in the Group's core business, Measurement Technologies (MT), was 5 per cent and amounted to 613.6 MEUR. Operating earnings in MT increased to 139.6 MEUR, which corresponds to an operating margin of 23 per cent.
Geosystems reports organic growth of 0 per cent. The division represents 32 per cent of net sales in the fourth quarter.
Metrology, which represents 32 per cent of net sales, reports organic growth of 6 per cent in spite of tough comparison numbers from 2011.
Technology, which represents 33 per cent of net sales, reports 7 per cent organic growth. Intergraph SG&I prioritised profitability over growth in the quarter and reached a margin in line with company average whilst PP&M continued to outgrow its underlying market.
| Net sales | |
|---|---|
| 2011, MEUR | 591.6 |
| Structure, % | 0 |
| Currency, % | 2 |
| Organic grow th, % | 4 |
| Total, % | 6 |
| 2012, MEUR | 629.0 |
Net sales from acquisitions during the last twelve months are reported as " Structure" in the table above.
Compared to Q3, customer demand in the engineering sector improved in Europe in the fourth quarter. In Americas the growth primarily came from the recovery in US construction sector coupled with strong demand in South America. In Asia demand continued to accelerate with China being the engine for growth.
Customer demand in EMEA increased in the fourth quarter. The organic growth in net sales was 3 per cent in MT and -13 per cent in Other Operations.
In Western Europe Hexagon experienced increased activity levels in the North but continuous weak demand in the South. The demand for measurement solutions from customers involved in infrastructure related activities remained weak. Demand from customers in the automotive and manufacturing sectors improved sequentially in the quarter and demand remained at high levels in the segment for enterprise engineering, construction and data management software used in power and process industries.
In Africa, Eastern Europe and the Middle East demand varied country by country where the outperformers were Russia and Turkey.
Americas recorded 3 per cent organic growth in net sales in the fourth quarter.
Apart from defence related products, all of Hexagon's market segments grew in NAFTA, including automotive, aerospace and general engineering, as well as residential housing projects related to the Hexagon Geosystems application area.
In South America, demand for the Technology products continues to be strong in spite of a clearly weaker macro scenario in Brazil. Geosystems and Metrology however reported more modest growth numbers in the region in the quarter.
Asia recorded organic growth in net sales of 12 per cent in the fourth quarter.
All of Hexagon's application areas recorded growth in China in the quarter. The growth primarily came from strong demand in the infrastructure related businesses, but growth was also reported in the automotive, aerospace, power and energy markets.
The customer demand improvement in the infrastructure related businesses was primarily related to solutions within rail, subway and monitoring.
In addition to China, several other markets and industries in the region, such as India, Korea and Japan, reported strong growth.
| Net sales | Earnings | |||||
|---|---|---|---|---|---|---|
| Hexagon MT | 613.6 | 574.6 | 5 | 139.6 | 124.5 | 12 |
| Other Operations | 15.4 | 17.0 | -13 | 0.2 | 0.8 | -75 |
| Net sales | 629.0 | 591.6 | 4 | |||
| Group cost and eliminations | -4.5 | -3.5 | -29 | |||
| Operating earnings (EBIT1) | 135.3 | 121.8 | 11 | |||
| Operating margin, % | 21.5 | 20.6 | 0.9 | |||
| Interest income and expenses, net | -10.5 | -14.9 | 30 | |||
| Earnings before taxes | 124.8 | 106.9 | 17 | |||
| Taxes | -23.7 | -21.8 | -9 | |||
| Net earnings | 101.1 | 85.1 | 19 |
1) Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.
Net sales amounted to 629.0 MEUR (591.6) in the fourth quarter. Using fixed exchange rates and a comparable group structure, net sales increased by 4 per cent.
Operating earnings (EBIT1) increased by 11 per cent to 135.3 MEUR (121.8), which corresponds to an operating margin of 21.5 per cent (20.6). Operating earnings (EBIT1) were positively affected by exchange rate movements of 3.2 MEUR.
The financial net amounted to -10.5 MEUR (-14.9) in the fourth quarter.
Earnings before taxes amounted to 124.8 MEUR (106.9). Earnings were positively affected by exchange rate movements of 3.2 MEUR.
Net earnings amounted to 101.1 MEUR (85.1), or 0.28 EUR (0.24) per share.
| Movement 1) | Income less cost | Profit impact | |||
|---|---|---|---|---|---|
| CHF | Strengthened | 2% | Negative | Negative | |
| USD | Strengthened | 4% | Positive | Positive | |
| CNY | Strengthened | 6% | Positive | Positive | |
| EBIT1, MEUR | 3.2 |
1) Compared to Q4 2011.
EMEA reported organic growth of 3 per cent in the fourth quarter, whilst Americas reported organic growth of 3 per cent. Asia reported 12 per cent organic growth in the quarter.
Organic growth in net sales stemming from Intergraph has been included in the graph above as of 1 November 2010.
Hexagon's core business Measurement Technologies has consistently improved its profitability. In 2007 and in 2008 the EBIT margin was 20 per cent. In 2009, the margin decreased to approximately 17 per cent due to reduced volumes caused by the global economic downturn. In 2010, the margin was back to 20 per cent and in 2011 it reached 21 per cent. In the fourth quarter of 2012, the
| Net sales | Earnings | |||||
|---|---|---|---|---|---|---|
| MEUR | 2012 | 2011 | Δ % 1) | 2012 | 2011 Δ % | |
| Hexagon MT | 2,317.6 | 2,112.3 | 6 | 504.2 | 450.1 | 12 |
| Other Operations | 62.4 | 65.3 | - 6 |
1.3 | 2.1 | -38 |
| Operating net sales | 2,380.0 | 2,177.6 | 5 | |||
| Group cost and eliminations | -16.0 | -12.4 | -29 | |||
| Operating earnings (EBIT1) | 489.5 | 439.8 | 11 | |||
| Operating margin, % | 20.6 | 20.2 | 0.4 | |||
| Interest income and expenses, net | -48.2 | -58.9 | 18 | |||
| Earnings before non-recurring items | 441.3 | 380.9 | 16 | |||
| Non-recurring items | - | -8.5 | n.a. | - | -8.5 | n.a. |
| Net sales | 2,380.0 | 2,169.1 | 5 | |||
| Earnings before taxes | 441.3 | 372.4 | 19 | |||
| Taxes | -83.9 | -75.0 | 12 | |||
| Net earnings | 357.4 | 297.4 | 20 |
1) Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.
| Movement 1) | Income less cost | Profit impact | |
|---|---|---|---|
| CHF | Strengthened 2% |
Negative | Negative |
| USD | Strengthened 8% |
Positive | Positive |
| CNY | Strengthened 11% | Positive | Positive |
| EBIT1, MEUR | 15.5 |
1) Compared to 2011.
Hexagon continually monitors a large number of companies to identify acquisitions that can strengthen Hexagon's product and technology portfolio and/or improve the distribution network. Each acquisition target is financially, technologically and commercially evaluated on a regular basis. A candidate's potential place in Hexagon is primarily determined on the basis of synergy opportunities and implementation strategies.
In 2012 Hexagon acquired ten companies or a shareholding in a company:
The companies will in total, as of their consolidation dates, contribute to Hexagon's earnings. For more information, see Press Releases on our website (www.hexagon.com).
On 22 January 2013, Hexagon entered into an agreement to acquire all outstanding shares of Navgeocom, the largest distributor for Geosystems in the Russian Federation. The transaction is expected to close as of end of February 2013.
On 28 January 2013, Hexagon has acquired Listech - a software development company in Australia. Consolidated as of 1 February 2013.
Hexagon has strengthened the Group Management team by making the following additions, effective as of February 2013:
Operating net sales amounted to 2,380.0 MEUR (2,177.6) in 2012. Using fixed exchange rates and a comparable group structure, net sales increased by 5 per cent.
Operating earnings (EBIT1) amounted to 489.5 MEUR (439.8), which corresponds to an operating margin of 20.6 per cent (20.2). Operating earnings (EBIT1) were positively affected by exchange rate movements of 15.5 MEUR.
The financial net amounted to -48.2 MEUR (-58.9) in 2012.
Earnings before taxes, excluding nonrecurring items, amounted to 441.3 MEUR (380.9).
Earnings before taxes in 2011 included nonrecurring items of -8.5 MEUR related to reduction of acquired deferred revenue stemming from the acquisition of Intergraph. Earnings before taxes, including non-recurring items, amounted to 441.3 MEUR (372.4). Earnings before taxes were positively affected by exchange rate movements of 15.5 MEUR.
Net earnings, excluding non-recurring items, amounted to 357.4 MEUR (302.7), or 1.01 EUR (0.85) per share.
Net earnings, including non-recurring items, amounted to 357.4 MEUR (297.4), or 1.01 EUR (0.84) per share.
Intergraph's GIS platform has been selected by the Guangdong Power Grid in China. Guangdong is the biggest subsidiary of China Southern Power Grid, supplying power to the entire Guangdong province. This lays the foundation for further power grid construction in the Guangdong province.
Capital employed increased to 4,515.2 MEUR (4,429.0). Return on average capital employed, excluding non-recurring items, for the last twelve months was 11.0 per cent (10.5). Return on average shareholders' equity for the last twelve months was 13.3 per cent (13.1). The capital turnover rate was 0.5 times (0.5).
Total shareholders' equity increased to 2,772.6 MEUR (2,525.8). The equity ratio was 51 per cent (47). Hexagon's total assets increased to 5,435.3 MEUR (5,343.7).
Hexagon's primary source of financing is a 900 MUSD and a 1,000 MEUR Term and Revolving Credit Facilities Agreement that expires in July 2015. In the fourth quarter of 2009 Hexagon issued a 2,000 MSEK five year bond and to further diversify the debt structure, Hexagon, in the first quarter of 2012, established a Swedish Commercial Paper Program. The program enables Hexagon to issue commercial paper up to a total amount of SEK 8 billion. Commercial paper can be issued with tenor of up to 12 months under the program.
On 31 December 2012, cash and unutilised credit limits totalled 450.8 MEUR (360.1). Hexagon's net debt was 1,611.9 MEUR (1,786.8). The net indebtedness was 0.54 times (0.66). Interest coverage ratio was 9.3 times (7.0).
During the fourth quarter, cash flow from operations before changes in working capital increased to 145.2 MEUR (114.5),
corresponding to 0.41 EUR (0.32) per share. Cash flow from operations in the fourth quarter increased to 167.9 MEUR (113.3), corresponding to 0.48 EUR (0.32) per share. The operating cash flow in the fourth quarter 2012 amounted to 116.9 MEUR (70.6).
For the full year, cash flow from operations amounted to 497.3 MEUR (369.0), corresponding to 1.41 EUR (1.05) per share and the operating cash flow including nonrecurring items amounted to 325.5 MEUR (217.1).
Hexagon's net investments, excluding acquisitions and divestitures, amounted to -51.0 MEUR (-42.7) in the fourth quarter and -171.8 MEUR (-135.9) in 2012.
Depreciation, amortisation and impairment amounted to -30.1 MEUR (-26.7) in the fourth quarter and -120.8 MEUR (-102.6) in 2012.
The Group's tax expense for 2012 totalled -83.9 MEUR (-75.0), corresponding to an effective tax rate of 19 per cent (20). Since the Swedish corporation income tax rate has been decreased effective 1 January 2013 from 26.3 per cent to 22.0 per cent, a revaluation of the Swedish deferred tax assets and liabilities has impacted the tax expense for 2012.
The average number of employees in Hexagon during 2012 was 13,203 (12,475). The number of employees at the end of the year was 13,754 (13,060).
Earnings per share for the fourth quarter amounted to 0.28 EUR (0.24). Earnings per share for 2012 amounted to 1.01 EUR (0.84).
On 31 December 2012, equity per share was 7.84 EUR (7.15) and the share price was 163.10 SEK (102.90).
Hexagon's share capital amounts to 78,471,187 EUR, represented by 353,642,177 shares, of which 15,750,000 are of series A with 10 votes each and 337,892,177 are of series B with one vote each. Hexagon AB treasury shares amounted to 967,340 shares of series B.
In accordance with a decision by a Shareholders' General Meeting in December 2011, an incentive programme was introduced, under which a maximum of 13,655,000 warrants can be issued. At full exercise of the warrant programme, the dilutive effect would be 3.7 per cent of the share capital and 2.7 per cent of the number of votes. On 31 December 2012, 7,768,305 warrants were outstanding.
Associated companies affected Hexagon's earnings during 2012 by -0.5 MEUR (0.0).
The parent company's earnings after financial items in 2012 amounted to 126.2 MEUR (295.1). The equity was 1,579.7 MEUR (1,473.3). The solvency ratio of the parent company was 39 per cent (37). Liquid funds including unutilised credit limits were 291.4 MEUR (206.4).
| MEUR | Q4 2012 | Q4 2011 | Δ% | 2012 | 2011 | Δ% |
|---|---|---|---|---|---|---|
| Net sales | 613.6 | 574.6 | 1) 5 |
2,317.6 | 2,112.3 | 1) 6 |
| Operating earnings (EBIT1) | 139.6 | 124.5 | 12 | 504.2 | 450.1 | 12 |
| Operating margin,% | 22.8 | 21.7 | 1.1 | 21.8 | 21.3 | 0.5 |
1) Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.
| MEUR | Q4 2012 | Q4 2011 | Δ% | 2012 | 2011 | Δ% |
|---|---|---|---|---|---|---|
| Net sales | 15.4 | 17.0 | -13 1) | 62.4 | 65.3 | -6 1) |
| Operating earnings (EBIT1) | 0.2 | 0.8 | -75 | 1.3 | 2.1 | -38 |
| Operating margin,% | 1.3 | 4.7 | -3.4 | 2.1 | 3.2 | -1.1 |
1) Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.
In the fourth quarter, net sales amounted to 613.6 MEUR (574.6). Using fixed exchange rates and a comparable group structure, net sales increased by 5 per cent.
Operating earnings (EBIT1) amounted to 139.6 MEUR (124.5), which corresponds to an operating margin of 22.8 per cent (21.7).
The number of employees by the end of the quarter was 13,437 (12,728).
In the fourth quarter, net sales amounted to 15.4 MEUR (17.0). Using fixed exchange rates and a comparable group structure, net sales decreased by -13 per cent.
Operating earnings (EBIT1) amounted to 0.2 MEUR (0.8), which corresponds to an operating margin of 1.3 per cent (4.7).
The number of employees by the end of the quarter was 306 (320).
| Net sales | Net sales | |||||
|---|---|---|---|---|---|---|
| MEUR | Q4 2012 | Q4 2011 Δ % 1) | 2012 | 2011 | Δ % 1) | |
| Geosystems | 203.3 | 196.1 | 0 | 790.7 | 757.0 | 1 |
| Metrology | 201.0 | 183.5 | 6 | 722.1 | 633.5 | 9 |
| Technology | 209.3 | 195.0 | 7 | 804.8 | 721.8 | 7 |
| Total Hexagon MT | 613.6 | 574.6 | 5 | 2,317.6 | 2,112.3 | 6 |
1) Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.
Geosystems reported 0 per cent organic growth in net sales in the fourth quarter. Metrology displayed organic sales growth of 6 per cent. Technology including Intergraph reported 7 per cent organic growth.
Product innovations including new technology, lower manufacturing costs and an increasing software content enables Hexagon to continuously improve the gross margin. In 2012, the gross margin reached a new record level of 56 per cent (54).
Hexagon Metrology has signed an agreement with the Bloodhound SSC Project to provide expert metrology consultation and services to design and build the high-speed, aerodynamic Bloodhound Super Sonic Car. The team hopes to break the current land speed record and push the car to 1,000 mph.
The Board of Directors and the President and CEO declare that this year-end report provides a true and fair overview of the company´s and the Group´s operations, their financial position and performance, and describes material risks and uncertainties facing the company and companies within the Group.
Stockholm, Sweden, 12 February 2013 Hexagon AB (publ)
Melker Schörling Chairman of the Board
Mario Fontana Ulrika Francke Board Member Board Member
Ulf Henriksson Gun Nilsson
Board Member Board Member
Ulrik Svensson Ola Rollén
Board Member President and CEO Board Member
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 2011. New and amended IFRS Standards effective 2012 had no significant impact on the financial statements.
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 2011 Annual Report.
No significant related party transactions have been incurred in 2012.
The AGM will be held on 13 May 2013, at 17:00 CET in Stockholm (Operakällaren, Karl XII:s Torg). The Annual Report for 2012 will be distributed during the week starting 15 April. To participate at the AGM shareholders must be registered in the share register maintained by Euroclear on 6 May. Notification of attendance should be made to Hexagon's head office no later than on 7 May. To participate in the AGM, shareholders with nominee-registered holdings should temporarily re-register their shares in their own names through the agency of their nominees so that they are recorded in the share register in good time before 6 May.
The Hexagon Board of Directors proposes a dividend of 0.28 EUR per share (0.17).
This Year-End Report has not been reviewed by the company's auditors.
| MEUR | Q4 2012 | Q4 2011 | 2012 | 2011 |
|---|---|---|---|---|
| Net sales | 629.0 | 591.6 | 2,380.0 | 2,169.1 |
| Cost of goods sold | -284.8 | -281.2 | -1,076.3 | -1,025.6 |
| Gross earnings | 344.2 | 310.4 | 1,303.7 | 1,143.5 |
| Sales and administration costs, etc. | -208.4 | -188.5 | -813.7 | -712.2 |
| Earnings from shares in associated companies | -0.5 | -0.1 | -0.5 | 0.0 |
| Operating earnings 1) | 135.3 | 121.8 | 489.5 | 431.3 |
| Interest income and expenses, net | -10.5 | -14.9 | -48.2 | -58.9 |
| Earnings before taxes | 124.8 | 106.9 | 441.3 | 372.4 |
| Taxes | -23.7 | -21.8 | -83.9 | -75.0 |
| Net earnings | 101.1 | 85.1 | 357.4 | 297.4 |
| Attributable to: | ||||
| Parent company shareholders | 100.3 | 84.4 | 354.5 | 295.2 |
| Non-controlling interest | 0.8 | 0.7 | 2.9 | 2.2 |
| 1) of w hich non-recurring items |
- | - | - | -8.5 |
| Earnings include depreciation, amortisation and impairments of | -30.1 | -26.7 | -120.8 | -102.6 |
| Basic earnings per share, EUR | 0.28 | 0.24 | 1.01 | 0.84 |
| Earnings per share after dilution, EUR | 0.28 | 0.24 | 1.00 | 0.84 |
| Total shareholder's equity per share, EUR | 7.84 | 7.15 | 7.84 | 7.15 |
| Closing number of shares, thousands | 352,675 | 352,490 | 352,675 | 352,490 |
| Average number of shares, thousands | 352,524 | 352,490 | 352,499 | 352,484 |
| Average number of shares after dilution, thousands | 354,384 | 352,490 | 353,494 | 352,546 |
| MEUR | Q4 2012 | Q4 2011 | 2012 | 2011 |
|---|---|---|---|---|
| Net earnings | 101.1 | 85.1 | 357.4 | 297.4 |
| Other comprehensive income: | ||||
| Exchange rate differences | -65.6 | 88.2 | -45.6 | 77.1 |
| Effect of hedging of net investments in foreign operations | 7.7 | 30.3 | 1.9 | 38.9 |
| Fair value adjustment | -4.8 | - | -4.8 | - |
| Cash flow hedges, net |
0.2 | -2.8 | 1.5 | -0.8 |
| Tax attributable to "Other comprehensive income" | -5.8 | -7.2 | -4.6 | -10.0 |
| Other comprehensive income, net of tax | -68.3 | 108.5 | -51.6 | 105.2 |
| Total comprehensive income for the period | 32.8 | 193.6 | 305.8 | 402.6 |
| Attributable to: | ||||
| Parent company shareholders | 32.2 | 192.6 | 303.0 | 399.9 |
| Non-controlling interest | 0.6 | 1.0 | 2.8 | 2.7 |
| MEUR | 31/12 2012 | 31/12 2011 |
|---|---|---|
| Intangible fixed assets | 3,931.6 | 3,872.3 |
| Tangible fixed assets | 239.0 | 229.3 |
| Financial fixed assets | 39.8 | 28.6 |
| Deferred tax assets | 89.0 | 88.5 |
| Total fixed assets | 4,299.4 | 4,218.7 |
| Inventories | 376.8 | 358.9 |
| Accounts receivable | 514.5 | 509.8 |
| Other receivables | 53.4 | 83.6 |
| Prepaid expenses and accrued income | 60.5 | 56.3 |
| Total current receivables | 628.4 | 649.7 |
| Cash and cash equivalents | 130.7 | 116.4 |
| Total current assets | 1,135.9 | 1,125.1 |
| Total assets | 5,435.3 | 5,343.7 |
| Equity attributable to parent company shareholders | 2,765.3 | 2,518.7 |
| Equity attributable to non-controlling interest | 7.3 | 7.1 |
| Total shareholders' equity | 2,772.6 | 2,525.8 |
| Interest bearing liabilities | 1,503.8 | 1,407.5 |
| Other liabilities | 12.5 | 29.9 |
| Pension liabilities | 37.2 | 38.6 |
| Deferred tax liabilities | 286.2 | 245.7 |
| Other provisions | 15.3 | 81.3 |
| Total long-term liabilities | 1,855.0 | 1,803.0 |
| Interest bearing liabilities | 187.6 | 456.9 |
| Accounts payable | 156.3 | 144.8 |
| Other liabilities | 84.7 | 79.0 |
| Other provisions | 34.1 | 8.2 |
| Accrued expenses and deferred income | 345.0 | 326.0 |
| Total short-term liabilities | 807.7 | 1,014.9 |
| Total equity and liabilities | 5,435.3 | 5,343.7 |
| MEUR | 2012 | 2011 |
|---|---|---|
| Opening shareholders' equity | 2,525.8 | 2,172.3 |
| Total comprehensive income for the period 1) | 305.8 | 402.6 |
| Rights issue, net of issuance cost | - | 2.8 |
| Dividend | -62.5 | -57.3 |
| Sale of repurchased shares | 2.7 | - |
| Repurchase of stock options | - | -2.8 |
| Stock options issued | 0.8 | 8.2 |
| Closing shareholders' equity 2) | 2,772.6 | 2,525.8 |
| 1) of w hich: Parent company shareholders Non-controlling interest |
303.0 2.8 |
399.9 2.7 |
| 2) of w hich: Parent company shareholders Non-controlling interest |
2,765.3 7.3 |
2,518.7 7.1 |
| series A | series B | Total | |
|---|---|---|---|
| 2009-12-31 Total issued and outstanding | 11,812,500 | 252,534,653 | 264,347,153 |
| Sale of repurchased shares | - | 20,070 | 20,070 |
| Rights issue | 3,937,500 | 83,845,572 | 87,783,072 |
| 2010-12-31 Total issued and outstanding | 15,750,000 | 336,400,295 | 352,150,295 |
| Rights issue | - | 339,335 | 339,335 |
| 2011-12-31 Total issued and outstanding | 15,750,000 | 336,739,630 | 352,489,630 |
| Sale of repurchased shares | - | 185,207 | 185,207 |
| 2012-12-31 Total issued and outstanding 1) | 15,750,000 | 336,924,837 | 352,674,837 |
1) As per 31 December 2012, there were in total 353,642,177 shares in the company, of which 15,750,000 are of series A with ten votes each and 337,892,177 are of series B with one vote each. Hexagon AB treasury shares amounted to 967,340 shares of series B.
| MEUR | Q4 2012 | Q4 2011 | 2012 | 2011 |
|---|---|---|---|---|
| Cash flow from operations before change in w orking capital |
||||
| excluding taxes and interest | 168.5 | 148.5 | 596.9 | 523.9 |
| Taxes paid | -15.6 | -20.3 | -57.2 | -71.1 |
| Interest received and paid, net | -7.7 | -13.7 | -45.3 | -55.6 |
| Cash flow from operations before change in w orking capital |
145.2 | 114.5 | 494.4 | 397.2 |
| Cash flow from change in w orking capital |
22.7 | -1.2 | 2.9 | -28.2 |
| Cash flow from operations |
167.9 | 113.3 | 497.3 | 369.0 |
| Cash flow from ordinary investing activities |
-51.0 | -42.7 | -171.8 | -135.9 |
| Operating cash flow | 116.9 | 70.6 | 325.5 | 233.1 |
| Non-recurring cash flow | - | - | - | -16.0 |
| Operating cash flow after non-recurring items |
116.9 | 70.6 | 325.5 | 217.1 |
| Cash flow from other investing activities 1) |
-49.9 | -9.3 | -81.0 | -99.2 |
| Cash flow after other investing activities |
67.0 | 61.3 | 244.5 | 117.9 |
| Dividends paid | -0.1 | - | -62.5 | -57.3 |
| Rights issue net of expenses | - | - | - | -5.7 |
| Sale of repurchased shares | 2.7 | - | 2.7 | - |
| Repurchase of stock options | - | - | - | -2.8 |
| Stock options issued | 0.2 | - | 9.0 | - |
| Cash flow from other financing activities |
-54.0 | -85.1 | -177.4 | -97.8 |
| Cash flow for the period |
15.8 | -23.8 | 16.3 | -45.7 |
| Cash and cash equivalents, beginning of period | 118.8 | 136.5 | 116.4 | 160.4 |
| Effect of translation differences on cash and cash equivalents | -3.9 | 3.7 | -2.0 | 1.7 |
| Cash flow for the period |
15.8 | -23.8 | 16.3 | -45.7 |
| Cash and cash equivalents, end of period | 130.7 | 116.4 | 130.7 | 116.4 |
1)Acquisitions totalled -67.3 MEUR (-83.0) and other was -13.7 MEUR (-16.2) in 2012.
| Q4 2012 | Q4 2011 | 2012 | 2011 | |
|---|---|---|---|---|
| Operating margin, % | 21.5 | 20.6 | 20.6 | 20.2 |
| Profit margin before taxes, % | 19.8 | 18.1 | 18.5 | 17.2 |
| Return on shareholders' equity 12 month average, % | 13.3 | 13.1 | 13.3 | 13.1 |
| Return on capital employed 12 month average, % | 11.0 | 10.5 | 11.0 | 10.5 |
| Equity ratio, % | 51.0 | 47.3 | 51.0 | 47.3 |
| Net indebtedness | 0.54 | 0.66 | 0.54 | 0.66 |
| Interest coverage ratio | 11.6 | 7.6 | 9.3 | 7.0 |
| Average number of shares, thousands | 352,524 | 352,490 | 352,499 | 352,484 |
| Basic earnings per share excl. non-recurring items, EUR | 0.28 | 0.24 | 1.01 | 0.85 |
| Basic earnings per share, EUR | 0.28 | 0.24 | 1.01 | 0.84 |
| Cash flow per share, EUR |
0.48 | 0.32 | 1.41 | 1.05 |
| Cash flow per share before change in w orking cap, EUR |
0.41 | 0.32 | 1.40 | 1.13 |
| Share price, SEK | 163.10 | 102.90 | 163.10 | 102.90 |
| Share price, translated to EUR | 19.00 | 11.55 | 19.00 | 11.55 |
| MEUR | Q4 2012 | Q3 2012 | Q2 2012 | Q1 2012 | 2012 | Q4 2011 | Q3 2011 | Q2 2011 | Q1 2011 | 2011 |
|---|---|---|---|---|---|---|---|---|---|---|
| Hexagon MT | 613.6 | 565.2 | 590.3 | 548.5 | 2,317.6 | 574.6 | 507.9 | 526.7 | 503.1 | 2,112.3 |
| - Of w hich |
||||||||||
| Geosystems | 203.3 | 188.4 | 210.8 | 188.2 | 790.7 | 196.1 | 179.2 | 196.6 | 185.1 | 757.0 |
| Metrology | 201.0 | 173.8 | 179.9 | 167.4 | 722.1 | 183.5 | 157.5 | 155.6 | 136.9 | 633.5 |
| Technology | 209.3 | 203.0 | 199.6 | 192.9 | 804.8 | 195.0 | 171.2 | 174.5 1) | 181.1 1) | 721.8 1) |
| Other Operations | 15.4 | 12.9 | 16.8 | 17.3 | 62.4 | 17.0 | 13.3 | 16.8 | 18.2 | 65.3 |
| Group | 629.0 | 578.1 | 607.1 | 565.8 | 2,380.0 | 591.6 | 521.2 | 543.5 | 521.3 | 2,177.6 |
| MEUR | Q4 2012 | Q3 2012 | Q2 2012 | Q1 2012 | 2012 | Q4 2011 | Q3 2011 | Q2 2011 | Q1 2011 | 2011 |
|---|---|---|---|---|---|---|---|---|---|---|
| Hexagon MT | 139.6 | 120.3 | 130.9 | 113.4 | 504.2 | 124.5 | 101.5 | 117.2 | 106.9 | 450.1 |
| Other Operations | 0.2 | -0.2 | 0.5 | 0.8 | 1.3 | 0.8 | 0.0 | 0.4 | 0.9 | 2.1 |
| Group costs | -4.5 | -4.4 | -3.9 | -3.2 | -16.0 | -3.5 | -2.6 | -3.3 | -3.0 | -12.4 |
| Group | 135.3 | 115.7 | 127.5 | 111.0 | 489.5 | 121.8 | 98.9 | 114.3 | 104.8 | 439.8 |
| Margin,% | 21.5 | 20.0 | 21.0 | 19.6 | 20.6 | 20.6 | 19.0 | 21.0 | 20.1 | 20.2 |
| MEUR | Q4 2012 | Q3 2012 | Q2 2012 | Q1 2012 | 2012 | Q4 2011 | Q3 2011 | Q2 2011 | Q1 2011 | 2011 |
|---|---|---|---|---|---|---|---|---|---|---|
| EMEA | 268.5 | 222.6 | 250.4 | 237.2 | 978.7 | 258.5 | 223.2 | 242.6 | 231.3 | 955.6 |
| Americas | 196.4 | 190.6 | 185.9 | 183.5 | 756.4 | 190.7 | 163.6 | 158.4 | 153.7 | 666.4 |
| Asia | 164.1 | 164.9 | 170.8 | 145.1 | 644.9 | 142.4 | 134.4 | 142.5 | 136.3 | 555.6 |
| Group | 629.0 | 578.1 | 607.1 | 565.8 | 2,380.0 | 591.6 | 521.2 | 543.5 1) | 521.3 1) | 2,177.6 1) |
1) Excluding non-recurring effect from revaluation of acquired deferred revenue of -4.4 MEUR in Q1 2011 and -4.1 MEUR in Q2 2011, in total -8.5 MEUR for 2011.
| Average | Q4 2012 | Q3 2012 | Q2 2012 | Q1 2012 | 2012 | Q4 2011 | Q3 2011 | Q2 2011 | Q1 2011 | 2011 |
|---|---|---|---|---|---|---|---|---|---|---|
| SEK/EUR | 0.1159 | 0.1184 | 0.1122 | 0.1130 | 0.1149 | 0.1099 | 0.1091 | 0.1110 | 0.1128 | 0.1107 |
| USD/EUR | 0.7721 | 0.8000 | 0.7788 | 0.7624 | 0.7783 | 0.7427 | 0.7077 | 0.6954 | 0.7310 | 0.7192 |
| CNY/EUR | 0.1236 | 0.1260 | 0.1230 | 0.1208 | 0.1234 | 0.1169 | 0.1104 | 0.1070 | 0.1110 | 0.1113 |
| CHF/EUR | 0.8279 | 0.8309 | 0.8321 | 0.8278 | 0.8297 | 0.8130 | 0.8650 | 0.7977 | 0.7768 | 0.8131 |
| Closing | Q4 2012 | Q3 2012 | Q2 2012 | Q1 2012 | 2012 | Q4 2011 | Q3 2011 | Q2 2011 | Q1 2011 | 2011 |
| SEK/EUR | 0.1165 | 0.1183 | 0.1140 | 0.1131 | 0.1165 | 0.1122 | 0.1080 | 0.1090 | 0.1119 | 0.1122 |
| USD/EUR | 0.7579 | 0.7734 | 0.7943 | 0.7487 | 0.7579 | 0.7729 | 0.7406 | 0.6919 | 0.7039 | 0.7729 |
| CNY/EUR | 0.1216 | 0.1231 | 0.1250 | 0.1189 | 0.1216 | 0.1226 | 0.1160 | 0.1070 | 0.1075 | 0.1226 |
| 2012 | 2011 | |||
|---|---|---|---|---|
| MEUR | Acquisitions | Divestments | Acquisitions | Divestments |
| Intangible fixed assets | 61.1 | - | 138.5 | - |
| Other fixed assets | 0.4 | - | -49.1 | - |
| Total fixed assets | 61.5 | - | 89.4 | - |
| Total current assets | 8.9 | - | 11.0 | - |
| Total assets | 70.4 | - | 100.4 | - |
| Total long-term liabilities, etc | 12.7 | - | -51.6 | - |
| Total short-term liabilities | -10.8 | - | 65.4 | - |
| Total liabilities | 1.9 | - | 13.8 | - |
| Total net assets | 68.5 | - | 86.6 | - |
| Total acquisition cost/divestment income Adjustment for non-paid part of acquisition cost/divestment income |
-65.2 | - | -110.5 | - |
| incl. payment of items from prior years | -3.3 | - | 23.9 | - |
| Adjustment for cash and bank balances in aquired entities | 1.2 | - | 3.6 | - |
| Cash flow from acquisitions |
-67.3 | - | -83.0 | - |
During 2012, Hexagon acquired the following companies or businesses: my Virtual Reality Software AS in Norway, Visava Oy in Finland, Lasertopo BVBA in Belgium, MicroSurvey Software Inc. in Canada, GTA Geoinformatik Gmbh in Germany, Sematec in France, New River Kinematics in the US and Geosystems Kazakhstan. The purchase price allocations are preliminary.
The final purchase price allocation (PPA) regarding Sisgraph, acquired in 2011, doesn't differ significantly from the preliminary PPA reported in the Annual Report 2011.
In addition to the above mentioned acquisitions of companies or businesses in 2012, a 25 per cent holding in Blom ASA, Norway and a 10 percent holding in North West Geomatics Ltd, Kanada, have been acquired. These holdings are included in financial fixed assets in the balance sheet.
After the balance sheet date, Hexagon has acquired the Australian company Listech and signed an agreement to acquire the remaining 52.8 per cent of the shares in the Russian company Navgeocom.
There were no divestments in 2012.
| MEUR | Q4 2012 | Q4 2011 | 2012 | 2011 |
|---|---|---|---|---|
| Net sales | 3.0 | 3.1 | 10.5 | 8.6 |
| Administration cost | -5.7 | -4.4 | -17.7 | -13.1 |
| Operating earnings | -2.7 | -1.3 | -7.2 | -4.5 |
| Earnings from shares in Group companies | 154.0 | 5.3 | 204.0 | 149.0 |
| Interest income and expenses, net | -0.9 | 133.0 | -70.6 | 150.6 |
| Earnings after financial items | 150.4 | 137.0 | 126.2 | 295.1 |
| Taxes | 19.1 | -16.7 | 37.4 | -20.3 |
| Net earnings | 169.5 | 120.3 | 163.6 | 274.8 |
| MEUR | 31/12 2012 | 31/12 2011 |
|---|---|---|
| Total fixed assets | 3,902.3 | 3,772.5 |
| Total current receivables | 155.3 | 207.5 |
| Cash and cash equivalents | 4.5 | 0.2 |
| Total current assets | 159.8 | 207.7 |
| Total assets | 4,062.1 | 3,980.2 |
| Total shareholders' equity | 1,579.7 | 1,473.3 |
| Total long-term liabilities | 1,471.8 | 1,371.0 |
| Total short-term liabilities | 1,010.6 | 1,135.9 |
| Total equity and liabilities | 4,062.1 | 3,980.2 |
| Capital employed | Total assets less non-interest bearing liabilities |
|---|---|
| Capital turnover rate | Net sales divided by average capital employed |
| Cash flow | Cash flow from operations, after change in working capital, excluding non-recurring items |
| 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 cover ratio | Earnings after financial items 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 indebtedness | Interest-bearing liabilities less interest-bearing current receivables and liquid assets divided by shareholders' equity excluding non-controlling interests |
| Non-recurring items | Income and expenses that are not expected to appear on a regular basis |
| Operating earnings (EBIT1) | Operating earnings excluding capital gains on shares in group companies and other non-recurring items |
| Operating margin | Operating earnings (EBIT1) as a percentage of operating net sales |
| Operating net sales | Net sales adjusted by the difference between fair value and book-value of deferred revenue regarding acquired businesses |
| Profit margin before tax | Earnings after financial items as a percentage of net sales |
| Return on capital employed (12 month average) |
Twelve months to end of period earnings after financial items, excluding non-recurring items, plus financial expenses as a percentage of twelve months to end of period average capital employed |
| Return on 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. |
| 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 OMX Nordic Exchange on the last business day for the period |
| Americas | North, South and Central America |
|---|---|
| Asia | Asia, Australia and New Zealand |
| EMEA | Europe, Middle East and Africa |
| MT | The segment, Measurement Technologies |
Hexagon is a leading global provider of design, measurement and visualisation technologies. Our customers can design, measure and position objects, and process and present data to stay one step ahead of a changing world. Hexagon's solutions increase productivity, enhance quality and allow for faster, better operational decisions, saving time, money and resources. Hexagon has over 13 000 employees in more than 40 countries and net sales of about 2 400 MEUR. Our products are used in a broad range of industries including surveying, power and energy, aerospace and defence, safety and security, construction and manufacturing. Learn more at www.hexagon.com.
Hexagon gives financial information at the following occasions:
Interim Report Q1 2013 13 May 2013 Interim Report Q2 2013 8 August 2013 Interim Report Q3 2013 23 October 2013 Year-End Report 2013 February 2014
Financial information is available in Swedish and English at the Hexagon website and can be ordered via phone +46 8 601 26 20 or e-mail [email protected]
The interim report for the fourth quarter 2012 will be presented 12 February 2013 at 10:00 CET at a telephone conference. Please view instructions at Hexagon's website on how to participate.
Mattias Stenberg, VP Strategy and Communications, Hexagon AB +46 8 601 26 27, [email protected]
This year-end report is a type of information that Hexagon AB (publ) is obliged to disclose in accordance with the Swedish Securities Market Act and /or the Financial Instruments Trading Act. The information was submitted for publication on 12 February 2013 at 08:00 CET.
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 forwardlooking statements.
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