Hexagon: Change in definition of adjusted operating earnings (EBIT1)
Hexagon AB has changed its definition of adjusted operating earnings (EBIT1), with the purpose of bringing greater clarity to the operating result and to increase comparability with industry peers operating under different financial reporting practices. As of the fourth quarter 2021, adjusted operating earnings (EBIT1) will exclude amortisation of surplus values in the purchase price allocation (PPA).
The previously announced financial target of reaching an adjusted operating margin (EBIT1) of over 30 per cent by 2026 will continue to include amortisation of surplus values (PPA), i.e., there has been no change in the target or Hexagon's confidence in reaching it.
Accounting impact of the acquisition of Infor's EAM business
In the fourth quarter of 2021, amortisation of surplus values (PPA) is estimated to amount to approximately 23 MEUR, whereof 9 MEUR relates to the acquisition of Infor's EAM business. In addition, the revenue recognition adjustment of deferred revenue related to the acquisition of Infor's EAM business is estimated to amount to 14 MEUR over the next twelve months, of which 5 MEUR will impact the fourth quarter of 2021. As previously announced, total non-recurring transaction and integration costs, including non-cash impairments related to overlapping technologies, are estimated to amount to around 161 MEUR in the fourth quarter 2021.
Restatement Restated As Restated As Restated As Restated As
of reported reported reported reported
financials
MEUR Q3 2021 Q3 2021 Q2 2021 Q2 2021 Q1 2021 Q1 2021 9M 2021 9M 2021
Net sales 1,077.2 1,077.2 1,075.6 1,075.6 977.9 977.9 3,130.7 3,130.7
Adjusted 692.9 692.9 692.8 692.8 629.6 629.6 2,015.3 2,015.3
gross
earnings
Adjusted 64.3 64.3 64.4 64.4 64.4 64.4 64.4 64.4
gross
margin, %
Adjusted 413.4 413.4 402.8 402.8 366.7 366.7 1,182.9 1,182.9
operating
earnings
(EBITDA)
Adjusted 38.4 38.4 37.4 37.4 37.5 37.5 37.8 37.8
EBITDA
margin, %
Adjusted 310.6 296.8 314.6 301.1 271.3 257.9 896.5 855.8
operating
earnings
(EBIT1)
Adjusted 28.8 27.6 29.2 28.0 27.7 26.4 28.6 27.3
operating
margin, %
Earnings
before
taxes,
excluding
adjustments 304.3 290.5 307.8 294.3 263.7 250.3 875.8 835.1
-Amortisation -13.8 - -13.5 - -13.4 - -40.7 -
surplus
values
(PPA)
-Share -9.4 -9.4 -4.9 -4.9 -4.8 -4.8 -19.1 -19.1
programme
(LTIP)
-Other non - - - - - - - -
-recurring
items
Total -23.2 -9.4 -18.4 -4.9 -18.2 -4.8 -59.8 -19.1
adjustments
(before
taxes)
Earnings 281.1 281.1 289.4 289.4 245.5 245.5 816.0 816.0
before
taxes
Net earnings 230.6 230.6 237.3 237.3 201.3 201.3 669.2 669.2
Net 249.6 238.3 252.5 241.4 216.2 205.2 718.3 684.9
earnings,
excl.
adjustments
Earnings per 8.9 8.9 9.2 9.2 7.8 7.8 25.9 25.9
share, euro
cent
Earnings per
share, excl.
adjustments, 9.6 9.2 9.8 9.3 8.4 7.9 27.8 26.4
euro
cent
Restated As Restated As Restated As Restated As Restated As
reported reported reported reported reported
MEUR Q4 2020 Q4 2020 Q3 2020 Q3 2020 Q2 2020 Q2 2020 Q1 2020 Q1 2020 2020 2020
Operating 1,044.1 1,044.1 939.9 939.9 896.6 896.6 889.9 889.9 3770.5 3,770.5
net
sales
Revenue -6.1 -6.1 - - - - - - -6.1 -6.1
adjustment
Net sales 1,038.0 1,038.0 939.9 939.9 896.6 896.6 889.9 889.9 3764.4 3,764.4
Adjusted 652.3 652.3 599.7 599.7 550.7 550.7 571.6 571.6 2374.3 2,374.3
gross
earnings
Adjusted 62.5 62.5 63.8 63.8 61.4 61.4 64.2 64.2 63.0 63.0
gross
margin, %
Adjusted 414.6 414.6 347.2 347.2 362.6 362.6 287.2 287.2 1411.6 1,411.6
operating
earnings
(EBITDA)
Adjusted 39.7 39.7 36.9 36.9 40.4 40.4 32.3 32.3 37.4 37.4
EBITDA
margin, %
Adjusted 299.7 287.2 263.2 250.1 240.0 226.5 206.6 192.4 1009.5 956.2
operating
earnings
(EBIT1)
Adjusted 28.7 27.5 28.0 26.6 26.8 25.3 23.2 21.6 26.8 25.4
operating
margin, %
Earnings
before
taxes,
excluding
adjustments 292.4 279.9 255.3 242.2 233.6 220.1 200.8 186.6 982.1 928.8
-Amortisation -12.5 - -13.1 - -13.5 - -14.2 - -53.3 -
surplus
values
(PPA)
-Other non -34.2 -34.2 - - -135.0 -135.0 - - -169.2 -169.2
-recurring
items
Total -46.7 -34.2 -13.1 - -148.5 -135.0 -14.2 - -222.5 -169.2
adjustments
(before
taxes)
Earnings 245.7 245.7 242.2 242.2 85.1 85.1 186.6 186.6 759.6 759.6
before
taxes
Net earnings 202.5 202.5 198.6 198.6 70.6 70.6 153.0 153.0 624.7 624.7
Net 239.8 229.5 209.3 198.6 191.6 180.5 164.6 153.0 805.3 761.6
earnings,
excl.
adjustments
Earnings per 7.8 7.8 7.6 7.6 2.7 2.7 5.9 5.9 24.0 24.0
share, euro
cent
Earnings per
share, excl.
adjustments, 9.2 8.8 8.1 7.6 7.4 6.9 6.4 5.9 31.1 29.3
euro
cent
For further information, please contact:
Maria Luthström, Head of Sustainability and Investor Relations, Hexagon AB, +46 8 601 26 27, ir@hexagon.com
Anton Heikenström, Investor Relations and Business Analyst, Hexagon AB, +46 8 601 26 26, ir@hexagon.com