Net Sales
Target: Hexagon’s target is to reach net sales of 3.5 billion EUR by the end of 2015. This target is to be achieved through a combination of organic growth and acquisitions.
In 2010, net sales amounted to 1 481.3 MEUR, corresponding to an organic growth of 17 per cent. The sales increase was most significant in China. Metrology was the division that showed the highest organic growth of 30 per cent. Including Intergraph, pro forma sales for 2010 amounted to 2 000.3 MEUR.
Operating Margin
Target: Hexagon’s target is to reach an operating margin of 25 per cent by the end of 2015.
In 2010, the operating margin amounted to 18.4 per cent. This is an increase by 3.3 percentage points compared to last year. Excluding Other Operations the operating margin increased by 3 percentage points to 19 per cent.
Earnings Per Share
Target: Hexagon’s target is to increase earnings per share by at least 15 per cent annually. Hexagon considers strong growth in earnings per share to be the best way to measure shareholder value.
In 2010, earnings per share, excluding nonrecurring items related to the acquisition of Intergraph and impairment in Other Operations, increased by 41 per cent and amounted to 0.69 EUR. This outcome is above target. Including non-recurring items earnings per share amounted to 0.30 EUR.
Equity Ratio
Target: Hexagon’s target is to have an equity ratio of at least 25 per cent. Hexagon aims to minimise the weighted average cost of capital (WACC) for its financing. A strong equity ratio provides opportunities for financing parts of expansion via loans.
At the end of 2010 the equity ratio amounted to 43.4 per cent.
Cash Flow
Target: Hexagon’s target is to have a positive cash flow over a business cycle. A positive cash flow contributes to freedom of action for long-term expansion and allows for a greater degree of loan financing.
In 2010 cash flow from operating activities amounted to 260.4 MEUR. This corresponds to cash flow of 0.86 EUR per share. The operating cash flow after restructuring amounted to 125.4 MEUR.
Return on Capital Employed
Target: The long-term return on capital employed over a business cycle should amount to more than 15 per cent annually. The required return is based on an assumption of a long-term, risk-free interest rate of approximately 5 per cent and a risk premium of 10 per cent.
In 2010, capital employed increased by 69 per cent to 4 208.8 MEUR. Return on average capital employed, excluding nonrecurring items, was 9.3 per cent. The rate has been negatively affected in the short term by the acquisition during the year.