2020

We are paving the way for

connecting the world by excellent

fiber optic technology

ANNUAL AND SUSTAINAB ILIT Y REPOR T

Content

THE BUSINESS

The year in brief

4

Comments by the CEO

6

Offering and business model

8

The Group's offering

10

SUSTAINABILITY REPORT

Six prioritised sustainability areas

28

Governance for increased sustainability

28

How we contribute to Agenda 2030

29

Strong business ethics

30

Sustainable supply chain

31

Low climate impact

32

The market

12

Acquisitions

19

The Hexatronic share and shareholders

24

Good health, safety and working

environment

34

Diversity and gender equality

35

Social involvement

35

Goals and results indicators

36

Auditor's statement

37

BOARD OF DIRECTORS' REPORT

Financial development

38

Board of directors

48

Risks and risk management

44

Executive management

50

CORPORATE GOVERNANCE REPORT 52

FINANCIAL INFORMATION

The Group

58

IFRS and key figures

102

The Parent Company

63

Assurance of the board of directors

103

Notes

68

Auditor's report

104

INFORMATION TO SHAREHOLDERS

Annual General Meeting 2021

108

Financial calendar

109

6.

COMMENTS FROM THE CEO

We look back on 2020 as a year of stronger profitability and growth during the ongoing COVID-19 pandemic. It was also a year of several strategic acquisitions.

15.

THE MARKET

Various reports and national forecasts indicate continued strong demand for FTTH on Hexatronic's strategic growth markets up to 2025-2030.

24. 26.

SHARE AND SHAREHOLDERS

During the financial year, the share price has fluctuated between a minimum of SEK

33.60 on 23 March 2020 and a maximum of SEK 76.40 on 30 December 2020.

SUSTAINABILITY REPORT

A roadmap was drafted during 2020 for the Group's sustainability work up to 2030. It includes objectives for the short and long term, and main activities to focus on for each sustainability area.

38.

FINANCIAL DEVELOPMENT

Net sales during the financial year amounted to MSEK 2,080.8 (1,842.3). Sales increased by 13% for the Group compared to the previous financial year.

108.

ANNUAL GENERAL MEETING

In light of the extraordinary situation that prevails, the Annual General Meeting 2021 will be conducted by mandatory advance voting (postal voting) on the basis of temporary statutory rules.

annual report 2020 | he x atronic

3

THE YEAR IN BRIEF

Hexatronic Companies

Strategic acquisitions and improved profitability

We have had strong profitability and revenue growth this year, and we believe that our efforts and focus have created a good basis for continued growth.

Financial summary

2020

2019

2018

2017

2016

Net sales

2,080.8

1,842.3

1,597.8

1,299.4

1,032.3

Earnings after depreciation of tangible assets (EBITA)

204.8

135.9

114.9

133.4

97.0

EBITA margin

9.8%

7.4%

7.2%

10.3%

9.4%

Operating result (EBIT)

177.3

106.4

92.5

122.3

88.8

Net earnings

126.5

67.1

59.3

90.4

54.1

Total assets

1,953.3

1,497.9

1,303.1

777.1

657.3

Cash flow from operating activities

249.8

173.9

15.6

133.4

33.1

Earnings per share after dilution, SEK

3.37

1.80

1.62

2.38

1.50

4

annual report 2020 | he x atronic

THE YEAR IN BRIEF

The year in brief

  • Hexatronic acquires the UK-bases fiber optic company Tech Optics Ltd.
  • Hexatronic acquries The Light Brigade Inc., an US-based training company.
  • Hexatronic acquires the fiber optic companies Baltronic Group OÜ, based in Estonia and the Canadian company Toronics Inc.
  • Hexatronic acquires 90 percent of the shares in Qubix S.pA., an Italian supplier of structured cabling.
  • Hexatronic wins new submarine cable orders totalling approximately MSEK 155.
  • Hexatronic signs a strategic supply agreement with KCOM in the UK worth up to MSEK 40.
  • Hexatronic enters a global settlement agreement with Emtelle UK Ltd., ending their patent litigation in the UK.
  • Lennart Sparud announces that he is leaving his position as CFO in Hexatronic Group, and Magnus Angermund is appointed as Head of Northern Europe.

Events since the end of the period

  • Hexatronic signs a 3-year exclusive agreement with Centric Fiber in USA, to a value of MUSD 10.
  • Hexatronic acquires 75 percent of the shares in the German engineering company TK-KONTOR-FREITAG GmbH.
  • Hexatronic wins new submarine cable orders totalling approximately MSEK 60.

2,200

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

0

OPERATING MARGIN

9,8%

NET SALES MSEK

2 081

NUMBER OF EMPLOYEES

789

Net sales, MSEK

2,081

1,842

1,598

1,299

1,032

2016

2017

2018

2019

2020

  • Hexatronic signs a strategic supply agreement with Vocus in Australia.

EBITA (MSEK and percent)

• The board adjusts the profitability target

225

EBITA

EBITA-margin

14%

200

205

to 10 percent EBITA (earnings before

12%

175

10,3%

amortisation of intangible assets) on

9,8%

10%

150

rolling 12 months basis (from 9 percent).

9,4%

133

136

125

8%

115

• Pernilla Lindén is appointed CFO and member

97

100

7,2%

7,4%

6%

of the Group Management Team at Hexatronic

75

4%

Group and will take office August 9, 2021.

50

The current CFO, Lennart Sparud, left his

25

2%

position March 31, 2021. In the meanwhile,

0

2016

2017

2018

2019

2020

0%

Svante Godén stepped in as acting CFO.

annual report 2020 | he x atronic

5

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Hexatronic Group AB published this content on 14 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 May 2021 13:11:07 UTC.