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Hexagon launches new financial plan

US: Hexagon launched a new financial plan during its capital markets day in Orlando, Florida in the US. The new plan stretches to 2015 and includes a sales target of 3.5 billion EUR and an EBIT margin target of 25 percent. 
The sales target in the base case scenario is built upon the assumption that the measurement technologies market grows at approximately 8 percent per year over the period up until 2015. Hexagon has more than 30 percent of its sales in emerging markets and about 40 percent of its sales stems from growth technologies and Hexagon will therefore grow faster than its peers in the marketplace. The sales target in the base case will be reached primarily by organic growth, but it also includes an element of acquisitions.
Hexagon has also simulated a more negative scenario as part of the overall planning for the coming 4 year period. In this scenario the world economy is assumed to face a recession during one year where volumes for the Hexagon Group would drop by approximately 20 percent. In this scenario the company would make one or more strategic acquisitions to take advantage of the lower price expectations from potential sellers. Hexagon’s experience is that prices could drop as much as 40 percent in a recession. These acquisitions would compensate for the shortfall in revenue and Hexagon would still reach the targeted sales level of 3.5 billion EUR. The targeted EBIT margin is 25 percent also in this scenario.
The two scenarios that were described at the capital markets day are not the only possible outcomes. Different combinations of the two are conceivable depending on the macro environment.
“The outlook for our markets looks promising for the remainder of 2011 with a continued recovery in mature markets and structural growth in the emerging markets. For 2012 and beyond we will be more dependent on growth in emerging markets, as well as, our own ability to create new business opportunities since one cannot trust the mature markets to grow at similar rates as in the last 18 months. Our base case scenario is continuous growth over the next four years. Hexagon has, however, learnt its lesson from the down-turn in 2009. We will therefore reduce leverage and prepare ourselves to be able to capitalise on any weakening in the marketplace by making strategic acquisitions at favourable price levels”, said Ola Rollén, CEO and President of Hexagon AB.
Source: Hexagon AB