Interim / Quarterly Report • Jul 31, 2018
Interim / Quarterly Report
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| MEUR | Q2 2018 Q2 2017 | Δ% | H1 2018 | H1 2017 | Δ% | |
|---|---|---|---|---|---|---|
| Operating net sales | 936.9 | 872.0 | 1) 9 |
1,771.6 | 1,651.2 | 1) 8 |
| Revenue adjustment 2) | - | -8.8 | n.a. | - | -8.8 | n.a. |
| Net sales | 936.9 | 863.2 | 1) 9 |
1,771.6 | 1,642.4 | 1) 8 |
| Gross earnings | 583.9 | 531.7 | 10 | 1,101.5 | 1,008.7 | 9 |
| Gross margin, % | 62.3 | 61.0 | 1.3 | 62.2 | 61.1 | 1.1 |
| Operating earnings (EBITDA) 3) | 293.2 | 266.6 | 10 | 552.7 | 519.6 | 6 |
| EBITDA margin, % | 31.3 | 30.6 | 0.7 | 31.2 | 31.5 | -0.3 |
| Operating earnings (EBIT1) 3) | 228.2 | 205.3 | 11 | 426.5 | 381.7 | 12 |
| Operating margin, % | 24.4 | 23.5 | 0.9 | 24.1 | 23.1 | 1.0 |
| Earnings before taxes, excluding non | ||||||
| recurring items | 222.8 | 200.0 | 11 | 415.1 | 371.3 | 12 |
| Non-recurring items (before taxes) | - | -8.8 | n.a. | - | -59.6 n.a. | |
| Earnings before taxes | 222.8 | 191.2 | 17 | 415.1 | 311.7 | 33 |
| Net earnings | 182.7 | 155.5 | 17 | 340.4 | 253.3 | 34 |
| Net earnings, excl. non-recurring items | 182.7 | 164.3 | 11 | 340.4 | 304.8 | 12 |
| Earnings per share, EUR | 0.50 | 0.43 | 16 | 0.93 | 0.69 | 35 |
| Earnings per share, excl. non-recurring | ||||||
| items, EUR | 0.50 | 0.45 | 11 | 0.93 | 0.84 | 11 |
1) Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth
2) Non-recurring reduction of acquired deferred revenue (haircut) in 2017 related to the acquisition of MSC Software
3) For definition, see page 20
From 1 January 2018 a new standard for revenue recognition (IFRS 15) has been applied, with 2017 numbers restated accordingly (where applicable)
"The solid start to 2018 continued in the second quarter, with Hexagon recording 9 per cent organic growth, record earnings and strong cash flow. Once again, Geosystems recorded double-digit organic growth, 12 per cent in the quarter, fuelled by new innovative solutions and continued strength in infrastructure and construction. The 8 per cent organic growth recorded in Manufacturing Intelligence is attributable to increased demand in automotive and aerospace and continued strength in China. We are also pleased with the development in our PPM division, where several new large perpetual license orders and good market traction in North America contributed to organic growth of 14 per cent.
In the quarter, we signed an agreement to acquire AutonomouStuff, a leader in integrated autonomous vehicle solutions. When combined with our positioning, simulation, mapping and sensing technology leadership, this acquisition creates a nexus of domain expertise that will lead the autonomous mobility industry for years to come.
Looking ahead, our financial position remains strong which will enable us to further invest and execute upon our strategic objective – to drive the digital transformation of our customer base through autonomous connected ecosystems (ACE)."
– Ola Rollén, President and CEO, Hexagon AB
7
%
Q2
SALES GROWTH
ORGANIC GROWTH
OPERATING MARGIN
24%
9%
NET
Operating net sales increased by 7 per cent to 936.9 MEUR (872.0). Using fixed exchange rates and a comparable group structure (organic growth), net sales increased by 9 per cent. Regionally, organic growth was 11 per cent in Americas, 9 per cent in Asia and 8 per cent in EMEA. In Americas, North America recorded 10 per cent organic growth mainly driven by strong demand within infrastructure and construction, aerospace, positioning solutions and the power and energy segment. South America continued to recover, recording double-digit organic growth. In Asia, China recorded 13 per cent organic growth with a solid development in most of the businesses. South-Eastern Asia recorded double-digit growth, mainly driven by geospatial solutions. Japan and South Korea however, continued to be weak. In EMEA, Western Europe recorded 7 per cent organic growth, mainly driven by a favourable development in Germany and Italy. However, demand in Spain was weaker. Russia recorded double-digit organic growth across all businesses and the Middle East and Africa recorded strong growth rates.
Operating earnings (EBIT1) grew by 11 per cent to 228.2 MEUR (205.3), which corresponds to an operating margin of 24.4 per cent (23.5). The operating margin benefited from organic growth, product mix and improved cost structure. Operating earnings (EBIT1) were negatively impacted by currency translation effects of -10.9 MEUR. Earnings before taxes amounted to 222.8 MEUR (191.2). Earnings before taxes were also negatively impacted by currency translation effects of -10.9 MEUR.
| Net sales | Earnings | |||||
|---|---|---|---|---|---|---|
| MEUR | Q2 2018 | Q2 2017 Δ% | 1) | Q2 2018 | Q2 2017 | Δ% |
| Geospatial Enterprise Solutions | 454.8 | 429.8 | 9 | 113.7 | 104.0 | 9 |
| Industrial Enterprise Solutions | 482.1 | 442.2 | 9 | 121.6 | 107.9 | 13 |
| Operating net sales | 936.9 | 872.0 | 9 | |||
| Revenue adjustment 2) | - | -8.8 | n.a. | |||
| Net sales | 936.9 | 863.2 | 9 | |||
| Group cost | -7.1 | -6.6 | -8 | |||
| Operating earnings (EBIT1) | 228.2 | 205.3 | 11 | |||
| Operating margin, % | 24.4 | 23.5 | 0.9 | |||
| Interest income and expenses, net | -5.4 | -5.3 | -2 | |||
| Earnings before non-recurring items | 222.8 | 200.0 | 11 | |||
| Non-recurring items | - | -8.8 | n.a. | |||
| Earnings before taxes | 222.8 | 191.2 | 17 | |||
| Taxes | -40.1 | -35.7 | -12 | |||
| Net earnings | 182.7 | 155.5 | 17 |
1) Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.
2) Non-recurring reduction of acquired deferred revenue (haircut) in 2017 related to the acquisition of MSC Software.
| Movement 1) | Income less cost | Earnings impact | ||
|---|---|---|---|---|
| CHF | Weakened | -8% | Negative | Positive |
| USD | Weakened | -8% | Positive | Negative |
| CNY | Weakened | -1% | Positive | Negative |
| EBIT1, MEUR | -10.9 | |||
1) Compared to Q2 2017.
| Operating net sales* | |||
|---|---|---|---|
| 2017, MEUR | 872.0 | ||
| Structure, % | 3 | ||
| Currency, % | -5 | ||
| Organic growth, % | 9 | ||
| Total, % | 7 | ||
| 2018, MEUR | 936.9 |
*Operating 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.
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 Positioning Intelligence.
Geospatial Enterprise Solutions (GES) operating net sales amounted to 454.8 MEUR (429.8). Using fixed exchange rates and a comparable group structure (organic growth), net sales increased by 9 per cent. Regionally, organic growth was 10 per cent in Asia, 9 per cent in Americas and 9 per cent in EMEA.
GES benefited from robust growth in China and India, mainly attributable to increased demand within infrastructure and construction and positioning solutions. In Americas, North America also benefited from the solid development in infrastructure and construction markets and strong growth in positioning solutions. South America continued to recover, recording double-digit organic growth. In EMEA, Western Europe recorded high single digit organic growth supported by a solid contribution from Germany, Italy and the UK. Russia and Africa recorded double-digit growth but sales in the Middle East were weaker across all businesses in the segment.
Regarding the divisions within GES, Geosystems recorded 12 per cent organic growth, mainly driven by a strong development in surveying, infrastructure and construction and a positive impact from new solutions. Safety & Infrastructure recorded -3 per cent organic growth hampered by continued challenges in the US federal business and tough comparison numbers from last year's large safe city orders in China. Positioning Intelligence recorded 32 per cent organic growth, positively impacted by continued strong demand from defence, agriculture and autonomous solutions in the automotive sector.
Operating earnings (EBIT1) increased by 9 per cent to 113.7 MEUR (104.0), which corresponds to an operating margin of 25.0 per cent (24.2). The operating margin was positively impacted by organic growth and product mix.
| MEUR | Q2 2018 | Q2 2017 | Δ% | H1 2018 | H1 2017 Δ% | |
|---|---|---|---|---|---|---|
| Operating net sales | 454.8 | 429.8 | 1) 9 |
866.3 | 832.8 | 1) 9 |
| Operating earnings (EBIT1) | 113.7 | 104.0 | 9 | 215.1 | 194.9 | 10 |
| Operating margin,% | 25.0 | 24.2 | 0.8 | 24.8 | 23.4 | 1.4 |
| Average number of employees | 8,182 | 7,812 | 5 |
1) Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.
* Q2 2018 numbers * Q2 2018 numbers
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.
Industrial Enterprise Solutions (IES) operating net sales amounted to 482.1 MEUR (442.2). Using fixed exchange rates and a comparable group structure (organic growth), net sales increased by 9 per cent. Regionally, organic growth was 13 per cent in Americas, 9 per cent in Asia and 6 per cent in EMEA.
IES benefited from double-digit organic growth in North America, mainly driven by strong demand from the automotive and aerospace industry and order wins in the power and energy segment. South America recorded double-digit organic growth. In Asia, China continued to record robust organic growth across all businesses in the segment whereas South Korea remained weak. In EMEA, Western Europe recorded mid-single digit growth, mainly driven by strong growth in Germany and Italy but hampered by weak sales in Spain.
Regarding the divisions within IES, Manufacturing Intelligence recorded 8 per cent organic growth, mainly driven by strong demand from the automotive and aerospace industries and continued strength in electronics and the software portfolio. PPM accelerated in the quarter, recording 14 per cent organic growth, supported by several new large perpetual license orders and good market traction in North America.
Operating earnings (EBIT1) increased by 13 per cent to 121.6 MEUR (107.9), which corresponds to an operating margin of 25.2 per cent (24.4). The operating margin (EBIT1) benefited from organic growth and an increased software mix.
| MEUR | Q2 2018 | Q2 2017 | Δ% | H1 2018 | H1 2017 | Δ% |
|---|---|---|---|---|---|---|
| Operating net sales | 482.1 | 442.2 | 1) 9 |
905.3 | 818.4 | 1) 8 |
| Operating earnings (EBIT1) | 121.6 | 107.9 | 13 | 223.5 | 199.1 | 12 |
| Operating margin,% | 25.2 | 24.4 | 0.8 | 24.7 | 24.3 | 0.4 |
| Average number of employees | 10,441 | 9,086 | 15 |
1) Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.
| Net sales | Earnings | |||||
|---|---|---|---|---|---|---|
| MEUR | H1 2018 | H1 2017 Δ % | 1) | H1 2018 | H1 2017 | Δ% |
| Geospatial Enterprise Solutions | 866.3 | 832.8 | 9 | 215.1 | 194.9 | 10 |
| Industrial Enterprise Solutions | 905.3 | 818.4 | 8 | 223.5 | 199.1 | 12 |
| Operating net sales | 1,771.6 | 1,651.2 | 8 | |||
| Revenue adjustment 2) | - | -8.8 | n.a. | |||
| Net sales | 1,771.6 | 1,642.4 | 8 | |||
| Group cost | -12.1 | -12.3 | 2 | |||
| Operating earnings (EBIT1) | 426.5 | 381.7 | 12 | |||
| Operating margin, % | 24.1 | 23.1 | 1.0 | |||
| Interest income and expenses, net | -11.4 | -10.4 | -10 | |||
| Earnings before non-recurring items | 415.1 | 371.3 | 12 | |||
| Non-recurring items 3) | - | -59.6 | n.a. | |||
| Earnings before taxes | 415.1 | 311.7 | 33 | |||
| Taxes | -74.7 | -58.4 | -28 | |||
| Net earnings | 340.4 | 253.3 | 34 |
1) Adjusted to fixed exchange rates and a comparable group structure, i.e. organic growth.
2) Non-recurring reduction of acquired deferred revenue (haircut) in 2017 related to the acquisition of MSC Software.
3) Non-recurring items in H1 2017 related to the implementation of a cost savings programme and the acquisition of MSC Software.
Operating net sales amounted to 1,771.6 MEUR (1,651.2) in the first six months of the year. Net sales, including revenue adjustment, amounted to 1,771.6 MEUR (1,642.4). Using fixed exchange rates and a comparable group structure (organic growth), sales increased by 8 per cent.
Operating earnings (EBIT1) amounted to 426.5 MEUR (381.7), which corresponds to an operating margin of 24.1 per cent (23.1). Operating earnings (EBIT1) were negatively affected by currency translation effects of -29.2 MEUR.
The financial net amounted to -11.4 MEUR (-10.4) in the first six months.
Earnings before taxes, excluding nonrecurring items, amounted to 415.1 MEUR (371.3). Earnings before taxes, including these items, amounted to 415.1 MEUR (311.7). Net earnings, excluding non-recurring items, amounted to 340.4 MEUR (304.8) or 0.93 EUR (0.84) per share. Net earnings, including these items, amounted to 340.4 MEUR (253.3) or
| Movement 1) | Income less cost | Earnings impact | |
|---|---|---|---|
| CHF | Weakened -8% |
Negative | Positive |
| USD | Weakened -11% | Positive | Negative |
| CNY | Weakened -3% |
Positive | Negative |
| EBIT1, MEUR | -29.2 |
1) Compared to H1 2017.
Hexagon signed an agreement to acquire AutonomouStuff – a pioneer of integrated autonomous vehicle solutions, with more than 2,500 customers in the automotive and technology sectors. The acquisition bolsters Hexagon's leadership position in autonomous solutions, creating a nexus of domain expertise when combined with its positioning, simulation, mapping and sensing technologies.
Capital employed increased to 7,290.9 MEUR (6,960.6). Return on average capital employed for the last twelve months was 12.7 per cent (12.1). Return on average shareholders' equity for the last twelve months was 16.5 per cent (12.5). The capital turnover rate was 0.5 times (0.5).
Total shareholders' equity increased to 4,853.1 MEUR (4,356.9). The equity ratio was 54.1 per cent (50.7). Hexagon's total assets increased to 8,966.1 MEUR (8,594.0). 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 during 2014. The RCF amounts to 2,000 MEUR with maturity 2021
2) A Swedish Medium Term Note Programme (MTN) established during 2014. The MTN programme amounts to 15,000 MSEK with tenor up to 5 years
3) A Swedish Commercial Paper Programme (CP) established during 2012. The CP programme amounts to 15,000 MSEK with tenor up to 12 months
On 30 June 2018, cash and unutilised credit limits totalled 1,549.0 MEUR (1,300.6). Hexagon's net debt was 2,046.7 MEUR (2,278.5). The net indebtedness was 0.38 times (0.49). Interest coverage ratio was 31.1 times (24.8).
During the second quarter, cash flow from operations before changes in working capital amounted to 242.1 MEUR (205.2), corresponding to 0.67 EUR (0.57) per share. Cash flow from operations in the second quarter amounted to 243.9 MEUR (205.2), corresponding to 0.68 EUR (0.57) per share.
Operating cash flow in the second quarter, including non-recurring items, amounted to 157.0 MEUR (127.6).
For the first six months, cash flow from operations amounted to 421.5 MEUR (421.6), corresponding to 1.17 EUR (1.17) per share. The operating cash flow, including non-recurring items, amounted to 260.1 MEUR (271.1).
Hexagon's net investments, excluding acquisitions and divestitures, amounted to -81.7 MEUR (-70.4) in the second quarter and -151.3 MEUR (-135.2) in the first six months.
Depreciation, amortisation and impairment amounted to -65.0 MEUR (-61.3) in the second quarter and -126.2 MEUR (-148.4) during the first six months. There were no impairment charges in the first six months (-26.9).
The Group's tax expense for the first six months totalled -74.7 MEUR (-58.4).
The reported tax rate was 18.0 per cent (18.7) for the quarter and 18.0 per cent (18.7) for the first six months. The tax rate, excluding nonrecurring items, was 18.0 per cent (17.9) for the quarter and 18.0 per cent (17.9) for the first six months
The average number of employees during the first six months was 18,702 (16,968). The number of employees at the end of the quarter was 19,276 (17,990).
Earnings per share, including non-recurring items, for the second quarter amounted to 0.50 EUR (0.43). Earnings per share, excluding non
recurring items, for the second quarter amounted to 0.50 EUR (0.45). Earnings per share, including non recurring items, for the first six months amounted to 0.93 EUR (0.69). Earnings per share, excluding non-recurring items, for the first six months amounted to 0.93 EUR (0.84).
On 30 June 2018, equity per share was 13.42 EUR (12.04) and the share price was 499.50 SEK (400.50).
Hexagon's share capital amounts to 79,980,283 EUR, represented by 360,443,142 shares, of which 15,750,000 are of series A with ten votes each and 344,693,142 are of series B with one vote each.
In accordance with a decision by a Shareholders' General Meeting in May 2015, an incentive programme (2015/2019) was introduced, under which a maximum of 10,000,000 warrants can be issued. The dilutive effect at full utilisation of the programme would be 2.8 per cent of the share capital and 2.0 per cent of the number of votes. The number of warrants that have been issued are 7,107,660 and may be exercised during 1 June 2018 - 31 December 2019.
The parent company's earnings before taxes in the second quarter amounted to 69.5 MEUR (27.6) and to 58.9 MEUR (34.5) for the first six months. The equity was 4,434.7 MEUR (4,550.2). The equity ratio of the parent company was 52 per cent (52). Liquid funds including unutilised credit limits were 1,163.7 MEUR (970.3).
Hexagon introduced another industry-first solution in its popular BLK line – the Leica BLK3D – a compact 3D handheld imager that improves productivity by enabling immediate and precise 3D measurements from any image it captures. By combining measurement sensors, software, and on-device edge data processing capabilities, the BLK3D enables in-picture 3D measurements with professional-grade accuracy.
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 2017.
The group applies IFRS 15 Revenue From Contracts with Customers from 1 January 2018. The standard replaces all former published standards and interpretations about revenues with a comprehensive model of revenue recognition. The standard provides a five-step model for revenue recognition from contracts with customers. According to previous regulations, revenues are to be recognised when the essential risk and rewards associated with the goods or services are transferred to the buyer. The new model specifies that revenue should be recognised when (or as) an entity transfers control of goods or services to a customer at the amount to which the entity expects to be entitled.
From 1 January 2018, IFRS 9 Financial Instruments is also applied. The standard replaces IAS 39 Financial Instruments: Recognition and Measurement and provides a model for classification and measurement of financial assets and liabilities, extended disclosure requirements for risk management and the effect of hedge accounting, and a new model for impairment of financial assets based on expected loss. Financial instruments that would affect the Hexagon financial statements if remeasured occur in limited extent and the result of the analysis performed, shows that the standard will not have any significant impact on measurement and thereby the financial statements. The analysis by IFRS 9 methodology and Hexagon's experience also shows that the standard will not have a significant impact on the group's reserve for credit loss. As there is no significant impact on Hexagon's financial statements, there has been no adjustment of opening balances.
For more detailed accounting principles, please see note 1 in the Annual Report 2017.
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 2017.
No significant related party transactions have been incurred during the quarter.
No significant events effecting the financial reporting have occurred during the period between quarter-end and date of issuance of this report.
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, their financial position and performance, and describes material risks and uncertainties facing the Company and companies within the Group.
Stockholm, Sweden, 31 July 2018 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
Hans Vestberg Board Member
This Interim Report has not been reviewed by the Company's auditors.
| MEUR | Q2 2018 | Q2 2017 | H1 2018 | H1 2017 | 2017 |
|---|---|---|---|---|---|
| Net sales | 936.9 | 863.2 | 1,771.6 | 1,642.4 | 3,448.1 |
| Cost of goods sold | -353.0 | -331.5 | -670.1 | -633.7 | -1,329.0 |
| Gross earnings | 583.9 | 531.7 | 1,101.5 | 1,008.7 -323.3 | 2,119.1 |
| Sales expenses | -177.4 | -166.4 | -336.9 | -323.3 | -656.3 |
| Administration expenses | -77.2 | -70.3 | -144.1 | -152.4 | -303.5 |
| Research and development expenses | -104.6 | -93.9 | -198.6 | -203.4 | -390.2 |
| Earnings from shares in associated companies | - | - | - | - | -0.1 |
| Capital gain (+) / loss (-) from sale of shares in Group companies | - | - | 0.7 | - | - |
| Other income and expenses, net | 3.5 | -4.6 | 3.9 | -7.5 | -9.4 |
| Operating earnings 1) | 228.2 | 196.5 | 426.5 | 322.1 | 759.6 |
| Financial income | 1.1 | 1.5 | 2.4 | 2.7 | 5.6 |
| Financial expenses | -6.5 | -6.8 | -13.8 | -13.1 | -28.3 |
| Earnings before taxes | 222.8 | 191.2 | 415.1 | 311.7 | 736.9 |
| Taxes | -40.1 | -35.7 | -74.7 | -58.4 | -65.7 |
| Net earnings | 182.7 | 155.5 | 340.4 | 253.3 | 671.2 |
| Attributable to: | |||||
| Parent company shareholders | 180.4 | 153.6 | 336.6 | 250.0 | 664.1 |
| Non-controlling interest | 2.3 | 1.9 | 3.8 | 3.3 | 7.1 |
| 1) of which non-recurring items | - | -8.8 | - | -59.6 | -73.2 |
| Earnings include depreciation, amortisation and impairments of | -65.0 | -61.3 | -126.2 | -148.4 | -284.7 |
| - of which amortisation of surplus values | -11.9 | -11.3 | -23.4 | -20.9 | -44.9 |
| Basic earnings per share, EUR | 0.50 | 0.43 | 0.93 | 0.69 | 1.84 |
| Earnings per share after dilution, EUR | 0.50 | 0.42 | 0.93 | 0.69 | 1.84 |
| Total shareholder's equity per share, EUR | 13.42 | 12.04 | 13.42 | 12.04 | 12.74 |
| Closing number of shares, thousands | 360,443 | 360,443 | 360,443 | 360,443 | 360,443 |
| Average number of shares, thousands | 360,443 | 360,443 | 360,443 | 360,443 | 360,443 |
| Average number of shares after dilution, thousands | 361,697 | 361,752 | 362,576 | 361,479 | 361,589 |
| MEUR | Q2 2018 | Q2 2017 | H1 2018 | H1 2017 | 2017 |
|---|---|---|---|---|---|
| Net earnings Other comprehensive income |
182.7 | 155.5 | 340.4 | 253.3 | 671.2 |
| Items that will not be reclassified to income statement | |||||
| Remeasurement of pensions | -0.6 | 9.8 | 1.9 | 18.8 | 47.4 |
| Net profit/loss on equity instruments at fair value through other comprehensive income |
-2.5 | - | 10.6 | - | - |
| Taxes on items that will not be reclassified to income statement | 0.8 | -1.3 | -2.2 | -2.3 | -6.6 |
| Total items that will not be reclassified to income statement, net of taxes | -2.3 | 8.5 | 10.3 | 16.5 | 40.8 |
| Items that may be reclassified subsequently to income statement | |||||
| Exchange rate differences | 207.7 | -297.6 | 91.6 | -333.3 | -528.6 |
| Taxes on items that may be reclassified subsequently to income statement | -8.4 | 13.6 | -2.6 | 15.7 | 24.4 |
| Total items that may be reclassified subsequently to income statement, net of taxes |
199.3 | -284.0 | 89.0 | -317.6 | -504.2 |
| Other comprehensive income, net of taxes | 197.0 | -275.5 | 99.3 | -301.1 | -463.4 |
| Total comprehensive income for the period | 379.7 | -120.0 | 439.7 | -47.8 | 207.8 |
| Attributable to: | |||||
| Parent company shareholders | 377.3 | -121.1 | 435.7 | -50.3 | 201.5 |
| Non-controlling interest | 2.4 | 1.1 | 4.0 | 2.5 | 6.3 |
| MEUR | 30/6 2018 | 30/6 2017 | 31/12 2017 |
|---|---|---|---|
| Intangible fixed assets | 6,590.1 | 6,479.8 | 6,408.3 |
| Tangible fixed assets | 298.3 | 286.9 | 281.2 |
| Financial fixed assets | 58.1 | 32.8 | 40.4 |
| Deferred tax assets | 80.6 | 83.8 | 83.7 |
| Total fixed assets | 7,027.1 | 6,883.3 | 6,813.6 |
| Inventories | 463.3 | 465.6 | 431.8 |
| Accounts receivable | 887.0 | 778.3 | 895.5 |
| Other receivables | 87.2 | 84.0 | 93.9 |
| Prepaid expenses and accrued income | 110.4 | 69.7 | 69.2 |
| Total current receivables | 1,084.6 | 932.0 | 1,058.6 |
| Cash and cash equivalents | 391.1 | 313.1 | 309.4 |
| Total current assets | 1,939.0 | 1,710.7 | 1,799.8 |
| Total assets | 8,966.1 | 8,594.0 | 8,613.4 |
| Equity attributable to parent company shareholders | 4,838.1 | 4,340.7 | 4,592.5 |
| Equity attributable to non-controlling interest | 15.0 | 16.2 | 11.9 |
| Total shareholders' equity | 4,853.1 | 4,356.9 | 4,604.4 |
| Interest bearing liabilities | 1,871.5 | 2,321.2 | 1,960.2 |
| Other liabilities | 37.6 | 58.1 | 48.6 |
| Pension liabilities | 81.5 | 126.2 | 82.3 |
| Deferred tax liabilities | 436.1 | 524.9 | 442.6 |
| Other provisions | 8.4 | 5.4 | 8.5 |
| Total long-term liabilities | 2,435.1 | 3,035.8 | 2,542.2 |
| Interest bearing liabilities | 484.8 | 144.2 | 301.8 |
| Accounts payable | 197.3 | 176.0 | 189.3 |
| Other liabilities | 261.2 | 194.3 | 255.3 |
| Other provisions | 19.3 | 44.4 | 28.1 |
| Deferred income | 399.4 | 361.2 | 369.6 |
| Accrued expenses | 315.9 | 281.2 | 322.7 |
| Total short-term liabilities | 1,677.9 | 1,201.3 | 1,466.8 |
| Total equity and liabilities | 8,966.1 | 8,594.0 | 8,613.4 |
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 long-term 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.
| 2017 | |
|---|---|
| 4,590.8 | 4,590.8 |
| - -17.8 |
-17.8 |
| 4,573.0 | 4,573.0 |
| -47.8 | 207.8 |
| - 5.0 |
5.0 |
| -173.3 | -181.4 |
| 4,356.9 | 4,604.4 |
| -50.3 | 201.5 |
| 2.5 | 6.3 |
| 4,340.7 | 4,592.5 11.9 |
| H1 2018 H1 2017 4,604.4 4,604.4 439.7 -191.0 4,853.1 435.7 4.0 4,838.1 15.0 16.2 |
| 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 | 15,750,000 | 336,924,837 | 352,674,837 |
| Sale of repurchased shares | - | 967,340 | 967,340 |
| New issue, warrants exercised | - | 1,354,800 | 1,354,800 |
| 2013-12-31 Total issued and outstanding | 15,750,000 | 339,246,977 | 354,996,977 |
| New issue, warrants exercised | - | 2,392,236 | 2,392,236 |
| 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 | - | - | - |
| 2018-06-30 Total issued and outstanding 1) | 15,750,000 | 344,693,142 | 360,443,142 |
1) As per 30 June 2018 there were in total 360,443,142 shares in the Company, of which 15,750,000 are of series A with ten votes each and 344,693,142 are of series B with one vote each. Hexagon AB holds no treasury shares. Warrants exercised until 2018-07-13 have resulted in a new share issue in progress of 694,750 new shares of series B. The new share issue will be finalised in the third quarter of 2018.
| MEUR | Q2 2018 | Q2 2017 | H1 2018 | H1 2017 | 2017 |
|---|---|---|---|---|---|
| Cash flow from operations before change in working capital | |||||
| excluding taxes and interest | 294.1 | 240.1 | 548.7 | 471.7 | 1,011.3 |
| Taxes paid | -46.4 | -30.3 | -80.3 | -47.4 | -114.8 |
| Interest received and paid, net | -5.6 | -4.6 | -11.5 | -7.3 | -16.8 |
| Cash flow from operations before change in working capital | 242.1 | 205.2 | 456.9 | 417.0 | 879.7 |
| Cash flow from change in working capital | 1.8 | 0.0 | -35.4 | 4.6 | 27.5 |
| Cash flow from operations | 243.9 | 205.2 | 421.5 | 421.6 | 907.2 |
| Investments tangible assets | -26.7 | -13.4 | -40.8 | -22.4 | -48.8 |
| Investments intangible assets | -55.0 | -57.0 | -110.5 | -112.8 | -226.8 |
| Operating cash flow before non-recurring items | 162.2 | 134.8 | 270.2 | 286.4 | 631.6 |
| Non-recurring cash flow 1) | -5.2 | -7.2 | -10.1 | -15.3 | -28.6 |
| Operating cash flow | 157.0 | 127.6 | 260.1 | 271.1 | 603.0 |
| Cash flow from other investing activities 2) | -42.5 | -796.3 | -96.6 | -804.7 | -928.9 |
| Cash flow after other investing activities | 114.5 | -668.7 | 163.5 | -533.6 | -325.9 |
| Dividends paid | -191.0 | -173.0 | -191.0 | -173.3 | -181.4 |
| Cash flow from other financing activities | 127.6 | 886.8 | 97.0 | 749.9 | 549.9 |
| Cash flow for the period | 51.1 | 45.1 | 69.5 | 43.0 | 42.6 |
| Cash and cash equivalents, beginning of period Effect of translation differences on cash and cash |
317.3 | 282.7 | 309.4 | 284.0 | 284.0 |
| equivalents | 22.7 | -14.7 | 12.2 | -13.9 | -17.2 |
| Cash flow for the period | 51.1 | 45.1 | 69.5 | 43.0 | 42.6 |
| Cash and cash equivalents, end of period | 391.1 | 313.1 | 391.1 | 313.1 | 309.4 |
1) Non-recurring cash flow consists of restructuring costs.
2) Acquisitions and divestments totaled -38.3 MEUR (-792.6) and other was -4.2 MEUR (-3.7) in the second quarter of 2018.
| Q2 2018 | Q2 2017 | H1 2018 | H1 2017 | 2017 | |
|---|---|---|---|---|---|
| Operating margin, % | 24.4 | 23.5 | 24.1 | 23.1 | 24.0 |
| Profit margin before taxes, % | 23.8 | 22.2 | 23.4 | 19.0 | 21.4 |
| Return on shareholders' equity, 12 month average, % | 16.5 | 12.5 | 16.5 | 12.5 | 14.8 |
| Return on capital employed ,12 month average, % | 12.7 | 12.0 | 12.7 | 12.0 | 12.6 |
| Equity ratio, % | 54.1 | 50.7 | 54.1 | 50.7 | 53.5 |
| Net indebtedness | 0.38 | 0.49 | 0.38 | 0.49 | 0.40 |
| Interest coverage ratio | 35.3 | 29.1 | 31.1 | 24.8 | 27.0 |
| Average number of shares, thousands | 360,443 | 360,443 | 360,443 | 360,443 | 360,443 |
| Basic earnings per share excl. non-recurring items, EUR | 0.50 | 0.45 | 0.93 | 0.84 | 1.82 |
| Basic earnings per share, EUR | 0.50 | 0.43 | 0.93 | 0.69 | 1.84 |
| Cash flow per share, EUR | 0.68 | 0.57 | 1.17 | 1.17 | 2.52 |
| Cash flow per share before change in working cap, EUR | 0.67 | 0.57 | 1.27 | 1.16 | 2.44 |
| Share price, SEK | 499.50 | 400.50 | 499.50 | 400.50 | 410.90 |
| Share price, translated to EUR | 47.79 | 41.55 | 47.79 | 41.55 | 41.74 |
| MEUR | Q2 2018 | Q1 2018 | Q4 2017* | Q3 2017* | Q2 2017* | Q1 2017 | 2017* |
|---|---|---|---|---|---|---|---|
| Geospatial Enterprise Solutions | 454.8 | 411.5 | 455.6 | 417.9 | 429.8 | 403.0 | 1,706.3 |
| Industrial Enterprise Solutions | 482.1 | 423.2 | 505.6 | 440.2 | 442.2 | 376.2 | 1,764.2 |
| Group | 936.9 | 834.7 | 961.2 | 858.1 | 872.0 | 779.2 | 3,470.5 |
| MEUR | Q2 2018 | Q1 2018 | Q4 2017 | Q3 2017 | Q2 2017 | Q1 2017 | 2017 |
|---|---|---|---|---|---|---|---|
| Geospatial Enterprise Solutions | 113.7 | 101.4 | 116.7 | 100.2 | 104.0 | 90.9 | 411.8 |
| Industrial Enterprise Solutions | 121.6 | 101.9 | 132.7 | 110.0 | 107.9 | 91.2 | 441.8 |
| Group costs | -7.1 | -5.0 | -3.1 | -5.4 | -6.6 | -5.7 | -20.8 |
| Group | 228.2 | 198.3 | 246.3 | 204.8 | 205.3 | 176.4 | 832.8 |
| Margin, % | 24.4 | 23.8 | 25.6 | 23.9 | 23.5 | 22.6 | 24.0 |
| MEUR | Q2 2018 | Q1 2018 | Q4 2017* | Q3 2017* | Q2 2017* | Q1 2017 | 2017* |
|---|---|---|---|---|---|---|---|
| EMEA | 348.9 | 326.8 | 375.8 | 312.0 | 322.3 | 293.0 | 1,303.1 |
| Americas | 307.5 | 266.4 | 315.9 | 289.6 | 291.7 | 266.2 | 1,163.4 |
| Asia | 280.5 | 241.5 | 269.5 | 256.5 | 258.0 | 220.0 | 1,004.0 |
| Group | 936.9 | 834.7 | 961.2 | 858.1 | 872.0 | 779.2 | 3,470.5 |
| Average | Q2 2018 | Q1 2018 | Q4 2017 | Q3 2017 | Q2 2017 | Q1 2017 | 2017 |
|---|---|---|---|---|---|---|---|
| SEK/EUR | 0.0968 | 0.1004 | 0.1021 | 0.1046 | 0.1033 | 0.1052 | 0.1038 |
| USD/EUR | 0.8389 | 0.8136 | 0.8491 | 0.8517 | 0.9094 | 0.9386 | 0.8864 |
| CNY/EUR | 0.1315 | 0.1280 | 0.1284 | 0.1277 | 0.1325 | 0.1363 | 0.1311 |
| CHF/EUR | 0.8516 | 0.8583 | 0.8604 | 0.8848 | 0.9228 | 0.9347 | 0.9000 |
| Closing | Q2 2018 | Q1 2018 | Q4 2017 | Q3 2017 | Q2 2017 | Q1 2017 | 2017 |
| SEK/EUR | 0.0957 | 0.0972 | 0.1016 | 0.1036 | 0.1037 | 0.1049 | 0.1016 |
| USD/EUR | 0.8578 | 0.8116 | 0.8338 | 0.8470 | 0.8763 | 0.9354 | 0.8338 |
| CNY/EUR | 0.1296 | 0.1291 | 0.1281 | 0.1273 | 0.1292 | 0.1358 | 0.1281 |
* Operating net sales, i.e. excluding revenue adjustment (haircut)
| Acquisitions | ||
|---|---|---|
| MEUR | H1 2018 | H1 2017 |
| Fair value of acquired assets and assumed liabilities | ||
| Intangible fixed assets | 31.4 | 250.1 |
| Other fixed assets | 2.4 | 32.7 |
| Total fixed assets | 33.8 | 282.8 |
| Total current assets | 15.9 | 134.3 |
| Total assets | 49.7 | 417.1 |
| Total long-term liabilities | -3.7 | 94.1 |
| Total current liabilities | 5.6 | 142.5 |
| Total liabilities | 1.9 | 236.6 |
| Fair value of acquired assets and assumed liabilities, net | 47.8 | 180.5 |
| Goodwill | 59.1 | 690.6 |
| Total purchase consideration transferred | 106.9 | 871.1 |
| Less cash and cash equivalents in acquired companies Adjustment for non-paid consideration and considerations paid |
-6.2 | -57.9 |
| for prior years' acquisitions | -9.6 | -13.3 |
| Cash flow from acquisition of companies/businesses | 91.1 | 799.9 |
During the first six months of 2018, Hexagon acquired the following companies:
AGTEK, a US based software company specialising in planning and productivity solutions for the heavy civil construction industry
Acquired business from Geosurf Corporation, a Japanese software developer of a local machine control construction solution
ProCAM, an Italian distributor of CAD CAM solutions and complementary software
NEXTSENSE GmbH, an Austrian based company specialising in non-contact profile measurement and surface inspection 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 64.0 MEUR as of 30 June (88.8), whereof the fair value adjustment in 2018 amounted to 5.6 MEUR. 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.
On 2 June 2018, Hexagon announced that it entered into an agreement to acquire AutonomouStuff, one of the world's leading suppliers of integrated autonomous vehicle solutions. Completion of the transaction (closing) is subject to regulatory approvals, including a voluntary filing to the Committee on Foreign Investment in the United States (CFIUS), and other customary conditions which are expected to be satisfied within 90 days after the acquisition was announced. In 2017 net sales amounted to 45 MUSD. The transaction purchase price will not be publicly disclosed as it's insignificant relative to Hexagon's market capitalisation.
On 15 May 2018, Hexagon acquired NEXTSENSE GmbH, an Austrian-based company specialised in non-contact profile measurement and surface inspection solutions. In 2017 NEXTSENSE generated sales of 12 MEUR.
NEXTSENSE's advanced manual, inline and automated solutions, with the ability to automatically compensate for tilts and rotations during scanning, complement Hexagon's approach to enabling the smart factory vision. Additionally, the acquisition extends Hexagon's breadth of capabilities in automotive fit and finish as well as in industries such as rail and steel, where Hexagon has a comparatively small footprint today. Together, the combination of sensors, software, and advanced analytics from both portfolios will bring added value to all customers while extending the global reach of NEXTSENSE's solutions to new markets and regions
From the date of acquisition, NEXTSENSE has contributed 2.9 MEUR of net sales in 2018. If the acquisition had taken place at the beginning of the year, the contribution to net sales would have been 7.4 MEUR.
| Divestments | ||
|---|---|---|
| MEUR | H1 2018 | H1 2017 |
| Carrying value of divested assets and liabilities, net | ||
| Intangible fixed assets | 3.4 | - |
| Total fixed assets | 3.4 | - |
| Total current assets | 0.1 | - |
| Total assets | 3.5 | - |
| Total current liabilities | 0.1 | - |
| Total liabilities | 0.1 | - |
| Carrying value of divested assets and liabilities, net | 3.4 | - - |
| Capital gain (+) / loss (-) | 0.7 | - |
| Total purchase consideration transferred | 4.1 | - |
| Less cash and cash equivalents in divested companies | -0.1 | - |
| Cash flow from divestment of companies/businesses | 4.0 | - |
| H1 2017 | 2017 | |||||
|---|---|---|---|---|---|---|
| MEUR | According to interim report |
Adjustments | According to IFRS 15 |
According to annual report |
Adjustments | According to IFRS 15 |
| Assets | ||||||
| Intangible fixed assets | 6,479.8 | - | 6,479.8 | 6,408.3 | - | 6,408.3 |
| Tangible fixed assets | 286.9 | - | 286.9 | 281.2 | - | 281.2 |
| Financial fixed assets | 32.8 | - | 32.8 | 40.4 | - | 40.4 |
| Deferred tax assets | 84.4 | -0.6 | 83.8 | 83.9 | -0.2 | 83.7 |
| Current assets | 1,728.4 | -17.7 | 1,710.7 | 1,815.4 | -15.6 | 1,799.8 |
| Total assets | 8,612.3 | -18.3 | 8,594.0 | 8,629.2 | -15.8 | 8,613.4 |
| Equity | ||||||
| Retained earnings | 4,115.1 | -11.5 | 4,103.6 | 3,944.3 | -11.1 | 3,933.2 |
| Income statement | ||||||
| Net sales | 1,643.0 | -0.6 | 1,642.4 | 3,448.4 | -0.3 | 3,448.1 |
| Cost of goods sold | -633.8 | 0.1 | -633.7 | -1,327.2 | -1.8 | -1,329.0 |
| Gross earnings | 1,009.2 | -0.5 | 1,008.7 | 2,121.2 | -2.1 | 2,119.1 |
| Sales expenses | -323.2 | -0.1 | -323.3 | -655.9 | -0.4 | -656.3 |
| Other operating costs | -363.3 | - | -363.3 | -703.2 | - | -703.2 |
| Operating earnings | 322.7 | -0.6 | 322.1 | 762.1 | -2.5 | 759.6 |
| Financial income and expenses | -10.4 | - | -10.4 | -22.7 | - | -22.7 |
| Earnings before tax | 312.3 | -0.6 | 311.7 | 739.4 | -2.5 | 736.9 |
| Tax | -58.7 | 0.3 | -58.4 | -65.6 | -0.1 | -65.7 |
| Net earnings | 253.6 | -0.3 | 253.3 | 673.8 | -2.6 | 671.2 |
| Total equity | 4,368.7 | -11.8 | 4,356.9 | 4,618.1 | -13.7 | 4,604.4 |
| Liabilities | ||||||
| Interest bearing liabilities | 2,321.2 | - | 2,321.2 | 1,960.2 | - | 1,960.2 |
| Other liabilities | 58.1 | - | 58.1 | 48.6 | - | 48.6 |
| Pension liabilities | 126.2 | - | 126.2 | 82.3 | - | 82.3 |
| Deferred tax liability | 529.4 | -4.5 | 524.9 | 446.5 | -3.9 | 442.6 |
| Other provisions | 5.4 | - | 5.4 | 8.5 | - | 8.5 |
| Current liabilities | 1,203.3 | -2.0 | 1,201.3 | 1,465.0 | 1.8 | 1,466.8 |
| Total liabilities | 4,243.6 | -6.5 | 4,237.1 | 4,011.1 | -2.1 | 4,009.0 |
| Total equity and liabilities | 8,612.3 | -18.3 | 8,594.0 | 8,629.2 | -15.8 | 8,613.4 |
| MEUR | Q2 2018 | Q2 2017 | H1 2018 | H1 2017 | 2017 |
|---|---|---|---|---|---|
| Net sales | 3.8 | 5.3 | 7.6 | 10.5 | 18.5 |
| Administration cost | -6.2 | -7.8 | -12.8 | -13.2 | -28.1 |
| Operating earnings | -2.4 | -2.5 | -5.2 | -2.7 | -9.6 |
| Earnings from shares in Group companies | 15.6 | 70.1 | 15.6 | 70.1 | 59.0 |
| Interest income and expenses, net | 56.3 | -40.0 | 48.5 | -32.9 | -40.4 |
| Group contribution | - | - | - | - | 22.7 |
| Earnings before taxes | 69.5 | 27.6 | 58.9 | 34.5 | 31.7 |
| Taxes | -10.2 | 1.3 | -7.9 | - | 5.6 |
| Net earnings | 59.3 | 28.9 | 51.0 | 34.5 | 37.3 |
| MEUR | 30/6 2018 | 30/6 2017 | 31/12 2017 |
|---|---|---|---|
| Total fixed assets | 7,460.0 | 7,904.3 | 7,375.6 |
| Total current receivables | 1,009.5 | 882.6 | 949.4 |
| Cash and cash equivalents | 30.4 | 1.4 | 0.7 |
| Total current assets | 1,039.9 | 884.0 | 950.1 |
| Total assets | 8,499.9 | 8,788.3 | 8,325.7 |
| Total shareholders' equity | 4,434.7 | 4,550.2 | 4,553.0 |
| Total long-term liabilities | 1,866.3 | 2,315.6 | 1,955.2 |
| Total short-term liabilities | 2,198.9 | 1,922.5 | 1,817.5 |
| Total equity and liabilities | 8,499.9 | 8,788.3 | 8,325.7 |
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.
| 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 |
| 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 |
|---|---|
| Capital employed | Total assets less non-interest bearing liabilities |
| Capital turnover rate | Net sales divided by average capital employed |
| 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 |
| Gross margin | Gross earnings divided by operating net sales |
| 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 |
| Non-recurring items | Income and expenses that are not expected to appear on a regular basis and impact comparability between periods |
| Operating earnings (EBIT1) | Operating earnings excluding capital gains on shares in group companies and non-recurring items. Non-recurring items are excluded to facilitate the understanding of the Group´s operational development and to give comparable numbers between periods |
| Operating earnings (EBITDA) | 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 |
| Operating margin | Operating earnings (EBIT1) as a percentage of operating net sales |
| 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 non-recurring items, 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 solutions that create Autonomous Connected Ecosystems (ACE), a state where data is connected seamlessly through the convergence of the physical world with the digital, and intelligence is built-in to all processes. Hexagon's industry-specific solutions leverage domain expertise in sensor technologies, software, and data orchestration to create Smart Digital Realities™ that improve productivity and quality across manufacturing, infrastructure, safety and mobility applications. Hexagon (Nasdaq Stockholm: HEXA B) has approximately 19,000 employees in 50 countries and net sales of approximately 3.5bn EUR. Learn more at hexagon.com.
Hexagon gives financial information at the following occasions:
| Interim report Q3 2018 | 1 November 2018 |
|---|---|
| Year-End report 2018 | 6 February 2019 |
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]
The Interim Report for the second quarter 2018 will be presented on 31 July at 10:00 CET at a telephone conference. Please view instructions at Hexagon's website on how to participate.
Maria Luthström, Investor Relations Manager, Hexagon AB, +46 8 601 26 27, [email protected]
This information is information that Hexagon AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 CET on 31 July 2018.
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.
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