Change in definition of adjusted operating earnings (EBIT1)

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Dec 10, 2021, 02:37 ET

NACKA STRAND, Sweden, Dec. 10, 2021 /PRNewswire/ -- 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 of financials

Restated

As reported

Restated

As reported

Restated

As reported

Restated

As reported

MEUR

Q3 2021

Q2 2021

Q1 2021

9M 2021

Net sales

1,077.2

1,075.6

977.9

3,130.7

Adjusted gross earnings

692.9

692.8

629.6

2,015.3

Adjusted gross margin, %

64.3

64.4

Adjusted operating earnings (EBITDA)

413.4

402.8

366.7

1,182.9

Adjusted EBITDA margin, %

38.4

37.4

37.5

37.8

Adjusted operating earnings (EBIT1)

310.6

296.8

314.6

301.1

271.3

257.9

896.5

855.8

Adjusted operating margin, %

28.8

27.6

29.2

28.0

27.7

26.4

28.6

27.3

Earnings before taxes, excluding

adjustments

304.3

290.5

307.8

294.3

263.7

250.3

875.8

835.1

-Amortisation surplus values (PPA)

-13.8

-13.5

-13.4

-40.7

-Share programme (LTIP)

-9.4

-4.9

-4.8

-19.1

-Other non-recurring items

Total adjustments (before taxes)

-23.2

-9.4

-18.4

-4.9

-18.2

-4.8

-59.8

-19.1

Earnings before taxes

281.1

289.4

245.5

816.0

Net earnings

230.6

237.3

201.3

669.2

Net earnings, excl. adjustments

249.6

238.3

252.5

241.4

216.2

205.2

718.3

684.9

Earnings per share, euro cent

8.9

9.2

7.8

25.9

Earnings per share, excl.

adjustments, euro cent

9.6

9.2

9.8

9.3

8.4

7.9

27.8

26.4

Restated

As reported

Restated

As reported

Restated

As reported

Restated

As reported

Restated

As reported

MEUR

Q4 2020

Q3 2020

Q2 2020

Q1 2020

2020

Operating net sales

1,044.1

939.9

896.6

889.9

3770.5

3,770.5

Revenue adjustment

-6.1

Net sales

1,038.0

939.9

896.6

889.9

3764.4

3,764.4

Adjusted gross earnings

652.3

599.7

550.7

571.6

2374.3

2,374.3

Adjusted gross margin, %

62.5

63.8

61.4

64.2

63.0

Adjusted operating earnings (EBITDA)

414.6

347.2

362.6

287.2

1411.6

1,411.6

Adjusted EBITDA margin, %

39.7

36.9

40.4

32.3

37.4

Adjusted operating earnings (EBIT1)

299.7

287.2

263.2

250.1

240.0

226.5

206.6

192.4

1009.5

956.2

Adjusted operating margin, %

28.7

27.5

28.0

26.6

26.8

25.3

23.2

21.6

26.8

25.4

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 surplus values (PPA)

-12.5

-13.1

-13.5

-14.2

-53.3

-Other non-recurring items

-34.2

-135.0

-169.2

Total adjustments (before taxes)

-46.7

-34.2

-13.1

-148.5

-135.0

-14.2

-222.5

-169.2

Earnings before taxes

245.7

242.2

85.1

186.6

759.6

Net earnings

202.5

198.6

70.6

153.0

624.7

Net earnings, excl. adjustments

239.8

229.5

209.3

198.6

191.6

180.5

164.6

153.0

805.3

761.6

Earnings per share, euro cent

7.8

7.6

2.7

5.9

24.0

Earnings per share, excl.

adjustments, euro cent

9.2

8.8

8.1

7.6

7.4

6.9

6.4

5.9

31.1

29.3

For further information, please contact:
Maria Luthström, Head of Sustainability and Investor Relations, Hexagon AB, +46 8 601 26 27, [email protected]
Anton Heikenström, Investor Relations and Business Analyst, Hexagon AB, +46 8 601 26 26, [email protected]

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Change in definition of adjusted operating earnings (EBIT1)

SOURCE Hexagon