Note 1\tGeneral
Hexagon Composites ASA is a public limited Company with its registered office in NorwayThe company\u2019s head-quarter is at Korsegata 4B, 6002 Aalesund, Norway
The Board of directors authorized the annual report for publication on 20 March 2024.
The Group\u2019s operations are described in note 4.
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2.1 Basis of preparation of annual financial statements
The consolidated annual financial statements of the Group have been prepared in accordance with IFRS\u00ae Accounting Standards adopted by the EU and are mandatory for financial years beginning on or after 1 January 2023, and Norwegian disclosure requirements listed in the Norwegian Accounting Act as of 31 December 2023.
The consolidated financial statements have been prepared on a historical cost basis, with the exception of financial instruments at fair value through profit or loss and fair value through OCI. Furthermore, and as consequence of the deconsolidation and subsequent presentation of Hexagon Purus as discontinued operations on 29 June 2023, historical income statement figures have been re-presented for enhanced comparability of continuing operations.
2.2 Functional currency and presentation currency
The functional currency is determined in each entity in the Group based on the currency within the entity\u2019s primary economic environment. Transactions in foreign currency are translated
to functional currency using the exchange rate at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated using the closing rate, non-monetary items that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction and non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. Changes in the exchange rate are recognized continuously in the accounting period.
The Group\u2019s presentation currency is NOK. This is also the Parent Company\u2019s functional currency. All figures are rounded to the nearest thousand unless otherwise specified. The statement of financial position figures of entities with a different functional currency are translated at the exchange rate prevailing at the end of the reporting period for balance sheet items, including goodwill, and the exchange rate at the date of the transaction for profit and loss items. Monthly average exchange rates are used as approximations for transaction exchange rates. Translation differences are recognized in other comprehensive income (\u201cOCI\u201d). Exchange rates used can be found in note31.
When investments in foreign subsidiaries are sold, the accumulated translation differences relating to the subsidiary attributable to the equity holders of the parent are recognized in the statement of comprehensive income. When a loss of control, significant influence or joint control is present the accumulated exchange differences related to investments allocated to controlled interests are recognized in profit and loss.
When a partial disposal of a subsidiary (not loss of control) is present the proportionate share of the accumulated exchange differences is allocated to non-controlling interests.
2.3 Basis of consolidation
The Group\u2019s consolidated financial statements comprise Hexagon Composites ASA and its subsid-iaries as of 31 December 2023. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. An entity is assessed as being controlled by the Group when the Group is exposed to or have the rights to variable returns from its involvement with the entity and has the ability to use its power over the entity to affect the amount of the Group\u2019s returns.
Thus, the Group controls an entity if and only if the Group has all the following:
\u2022power over the entity;
\u2022exposure, or rights, to variable returns from its involvement with the entity; and
\u2022the ability to use its power over the entity to affect the amount of the group\u2019s returns.
There is a presumption that if the Group has the majority of the voting rights in an entity, the entity is considered as a subsidiary. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over the entity, including ownership interests, voting rights, ownership structure and relative power, as well as options controlled by the Group and shareholder\u2019s agreement or other contractual agreements. Reference is made to note 30which contains a list of the subsidiaries and note 26which lists investments in associated companies.
The assessments are done for each individual investment. The Group re-assesses whether or not it controls an entity if facts and circumstances indicate that there are changes to one or more of the three elements of control. Assets, liabilities, income, and expenses of a subsidiary acquired or disposed during the year are included in the consolidated financial statements from the date the Group obtains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other com-prehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group\u2019s accounting policies. All intra-group assets and liabilities, equity, income, expenses, and cash flows
relating to transactions between entities of the Group are eliminated in full on consolidation.
Non-controlling interests is presented separately as equity in the Group\u2019s balance sheet.
Business combinations and goodwill
Business combinations are accounted for by using the acquisition method. For description of the measurement of non-controlling interest, see below. Acquisition-related costs are expensed in the periods in which the costs are incurred, and the services are received and included in other operating expenses.
The consideration paid in a business combination is measured at fair value at the acquisition date and consists normally of cash, consideration shares, and contingent consideration. Contingent consideration is classified as a liability in accordance with IFRS 9. Subsequent changes in the fair value of such con-tingencies are recognized in profit or loss.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appro-priate classification and designation in accordance with the contractual terms, economic circumstances, and pertinent conditions at the acquisition date. The acquired assets and liabilities are accounted for by using fair value in the opening group balance, unless other measurement principles should be applied in accordance with IFRS 3. The initial accounting for a business combination can be changed if new information about the fair value at the acquisition date is present. The allocation can be amended within 12 months of the acquisition date. The non-controlling interest is set to the
non-controlling interest\u2019s share of identifiable assets and liabilities. The measurement principle is done for each business combination separately.
When the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition-date fair value and the resulting gain or loss, if any, is recognized in profit and loss net after transaction cost.
Goodwill is recognized as the aggregate of the consideration transferred and the amount of any non-controlling interest less the fair value of net identifiable assets acquired as of the acquisition date. Goodwill is not depreciated but is tested at least annually for impairment. In connection with this, goodwill is allocated to cash-generating units or groups of cash-generating units that are expected to benefit from synergies from the busi-ness combination.
Change in ownership without loss of control
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. The consideration is recog-nized at fair value and the difference between the consideration and the carrying amount of the non-controlling interests is recognized in the equity attributable to the parent.
Loss of control
In cases where changes in the ownership interest of a subsidiary results in loss of control, the assets and liabilities of the subsidiary and the carrying amount of any non-controlling interests are derecognized. Any consideration received and any investment
retained in the former subsidiary is recognized at their fair values. The difference between the amounts recognized and derecognized is recog-nized as gain or loss in profit or loss on the date when control is lost.
Amounts recognized in other comprehensive income related to the subsidiary are reclassified to profit or loss or transferred to equity similarly as if the parent had disposed of the assets and liabili-ties directly. Amounts reclassified to profit or loss (including accumulated translation differences) are included in gain or loss on loss of control of subsidi-ary in profit or loss.
Discontinued operations
In the event of a loss of control and a deconsolida-tion of a subsidiary \u2013 if the disposal group being deconsolidated comprises a material business segment or operation, the profit or loss after taxes associated with the disposal group is reported sep-arately as discontinued operations in the statement of income. The previous period\u2019s income statements are re-presented accordingly. Profit after taxes from discontinued operations comprises the discontin-ued operation\u2019s current earnings and the gain or loss from deconsolidation.
For components of the group where control is not lost, the component is presented as discontinued operation if the component is classified as held for sale and if the component represents a material business segment or operation. Components are classified as held for sale if a sale is highly probable, which by the Group is considered a probability greater than 90 per cent.
2.4 Investment in associates
Associates are entities over which the Group has significant influence, but not control or joint control, over financial and operating management (normally a holding of between 20 per cent and 50 per cent).
The considerations made in determining whether the Group has significant influence over an entity are similar to those necessary to determine control over subsidiaries. Associates are accounted for using the equity method from the date when significant influence is achieved until such influence ceases.
Under the equity method, the investments in asso-ciates are initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Group\u2019s share of net assets of the associate since the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is not tested for impairment individually.
The statement of profit or loss reflects the Group\u2019s share of the results of operations of the associate. Any change in OCI of those investees is presented as part of the Group\u2019s OCI. In addition, when there has been a change recognized directly in the equity of the associate, the Group recognizes its share of any changes, when applicable, in the statement of changes in equity. Unrealized gains and losses resulting from transactions between the Group and the associate are eliminated attributable to the interest in the associate.
If the Group\u2019s share of the loss equals or exceeds the carrying amount of the associate, the carrying amount is set to zero and further loss is not recog-nized unless the Group has an obligation to make up for the loss.
If there are objective evidence that the investment in the associate is impaired, the Group will perform an impairment test of the carrying amount of the investment. Further, in relation to share price development of listed associates, a decline in fair value will have to be significant or prolonged to provide evidence of impairment. Hexagon assesses a decline in fair value of 20 per cent to be significant and a decline lasting longer than 9 months to be prolonged.
Impairment losses are recognized if the recoverable amount (highest of value in use and fair value less cost of disposal) is lower than the carrying value. Impairment losses are reversed to the extent that the impairment loss decreases or no longer exists. The Group has made a policy choice to present impairment losses on associates on a separate line in the statement of income.
Upon loss of significant influence over the associate, and as such the equity method ceases, the Group measures and recognizes any retained investment at its fair value. A new measurement of remaining ownership interests will not be performed if the equity method is still applicable, for example by transition from an associate to a joint venture.
2.5 Current versus non-current classification
The Group presents assets and liabilities in the consolidated statement of financial position as either current or non-current.
The Group classifies an asset as current when it:
\u2022Expects to realize the asset, or intends to sell or consume it, in its normal operating cycle
\u2022Holds the asset primarily for the purpose of trading
\u2022Expects to realize the asset within twelve months after the reporting period
Or
\u2022The asset is cash or a cash equivalent, unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current, includ-ing deferred tax assets.
The Group classifies a liability as current when it:
\u2022Expects to settle the liability in its normal operat-ing cycle
\u2022Holds the liability primarily for the purpose of trading
\u2022Is due to be settled within twelve months after the reporting period
Or
\u2022It does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current, including deferred tax liabilities.
2.6 Cash and cash equivalents
Cash consist of cash in hand and at bank. Cash equivalents are short-term liquid investments that can be immediately converted into a known amount of cash and have a maximum term to maturity of three months. Any positive balances against bank overdrafts are included as a component of cash in the cash flow statement. The cash flow statement has been prepared using the indirect method. Bank overdrafts are reported under short-term loans in the balance sheet. Received interest income is classified as investment activities and interest pay-ments is classified as financing activities in the cash flow statement.
2.7 Inventories
Inventories are recognized at the lowest of cost and net selling price. The net selling price is the estimated selling price in the case of ordinary operations minus the estimated completion, marketing and distribution cost. The cost is arrived at using the average cost price, and includes the costs incurred in acquiring the goods and the costs of bringing the goods to their current state and location. Goods produced by the Group itself include variable and fixed costs that can be allocated based on normal capacity utilization.
2.8 Property, plant & equipment
Property, plant and equipment are valued at their cost, less accumulated depreciation and impairment losses. When assets are sold or disposed, the carry-ing amount is derecognized and any gain or loss is recognized in the statement of profit and loss.
The cost of property, plant and equipment includes the purchase price and all costs necessary to bring the asset to working condition for its intended use. Costs incurred after the asset is in use, such as regular maintenance costs, are recognized in the statement of profit and loss, while other costs that are expected to provide future financial benefits are capitalized.
The cost of property, plant & equipment is depreci-ated to the residual value over the asset\u2019s useful life. Depreciation is calculated using the straight-line method over the following useful life:
\u2022Buildings: 10-20 years
\u2022Plant, machinery and equipment: 3-15 years
\u2022Fixtures & fittings and vehicles 3-10 years
If an item of property, plant and equipment has different parts with different useful lives, the parts are depreciated separately if the cost is significant in relation to the total cost of the item.
The depreciation period and method are assessed annually. A residual value is estimated at each year-end, and changes to the estimated residual value is recognized as a change in an estimate. When the carrying amount of property, plant and equipment exceeds the estimated recoverable amount, the value is written down to the recoverable amount.
Assets under construction are classified as prop-erty, plant and equipment and are recognized at cost until the production or development process is completed. Assets under construction are not subject to depreciation until the assets are taken into use.
2.9 Leases
At the inception of a contract, The Group assesses whether the contract is, or contains, a lease. A con-tract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The group as a lessee
For contracts that constitute, or contain a lease, the Group separates lease components if it benefits from the use of each underlying asset either on its own or together with other resources that are readily available, and the underlying asset is neither highly dependent on, nor highly interrelated with, the other underlying assets in the contract. The Group then accounts for each lease component within the contract as a lease separately from non-lease com-ponents of the contract.
At the lease commencement date, the Group recognizes a lease liability and corresponding right-of-use asset for all lease agreements in which it is the lessee, except for the following exemptions applied:
\u2022Short-term leases (lease agreement less than 12 months maturity)
\u2022Low value assets (value of the underlying asset less than NOK 100 thousand)
For these leases, the Group recognizes the lease payments as other operating expenses in the state-ment of income when they incur.
Lease liabilities
The lease liability is recognized at the commence-ment date of the lease. The Group measures the lease liability at the present value of the lease payments for the right to use the underlying asset during the lease term that are not paid at the com-mencement date. The lease term represents the non-cancellable period of the lease, together with periods covered by an option either to extend or to terminate the lease when the Group is reasonably certain to exercise this option. In calculating the present value of lease payments, the Group uses the interest rate implicitly defined in the lease contract if that interest rate is readily determinable, or its incremental borrowing rate in all other cases.
The lease payments included in the measurement comprise of:
\u2022Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable
\u2022Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect adjustments in lease payments due to an adjustment in an index or rate.
The Group does not include variable lease payments in the lease liability. Instead, the Group recognizes these variable lease expenses in profit or loss.
The Group presents its lease liabilities as separate line items in the statement of financial position.
Right-of-use assets
The Group measures the right-of use asset at cost, less any accumulated depreciation and impairment losses, adjusted for any remeasurement of lease lia-bilities. The cost of the right-of-use asset comprise:
\u2022The amount of the initial measurement of the lease liability recognized
\u2022Any initial direct costs incurred by the Group. An estimate of the costs to be incurred by the Group in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inven-tories.
The Group applies the depreciation requirements in IAS 16 Property, Plant and Equipment in depre-ciating the right-of-use asset, except that the right-of-use asset is depreciated from the com-mencement date to the earlier of the lease term and the remaining useful life of the right-of-use asset, unless there is an option to purchase the asset which has been determined to be exercised with reasonably certainty, in which case the right of use asset is depreciated over the expected economic life of the underlying asset.
The Group applies IAS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.
Sale- and leaseback transactions
In the event of sale- and leaseback transactions, the Group first assesses whether transfer of control of the underlying asset represents a sale within the context of IFRS 15. The Group considers several factors for determining whether the buyer has obtained control of the asset, including, but not limited to, the existence of any repurchase options, any beneficial renewal options terms, the length of the lease term including any option periods compared to the expected remaining lifetime of the asset, and the lease liability compared to the market value of the asset.
When the transfer of the asset is determined to be a true sale, the Group measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that related to the right-of-use being retained. The said proportionate share of the asset is derived from the recognized lease liability following the trans-action in percentage of the fair market value of the underlying asset being sold. Effectively, the Group recognizes the amount of a gain or a loss only related to the rights transferred to the buyer-lessor.
In the event the transfer of the underlying asset to the buyer does not represent a true sale, the Group continues to carry the underlying asset and recognizes a financial liability equal to the transfer proceeds.
2.10 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial asset
The Group\u2019s financial assets are derivatives, non-listed equity instruments, loans, trade receivables and cash and cash equivalents.
The classification of financial assets at initial recog-nition depends on the financial asset\u2019s contractual cash flow characteristics and the Group\u2019s business model for managing them. With the exception of trade receivables that do not contain a significant financing component, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
The Group classifies its financial assets in the follow-ing categories:
\u2022Financial assets at amortized cost
\u2022Financial assets at fair value through profit and loss
Financial assets at amortized cost
The Group measures financial assets at amortized cost if both of the following conditions are met:
\u2022The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows and,
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the princi-pal amount outstanding
Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.
The Groups financial assets at amortized cost includes trade receivables and other short-term deposits. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15 Revenue from contracts with customers.
Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss include financial assets mandatorily required to be measured at fair value.
The category includes foreign exchange contracts, interest rate swaps and total return swaps (TRS) in the event that the underlying shares sold in the TRS agreement qualifies as a true sale.
The criteria for a true sale of shares in a TRS agree-ment is considered met when control over the underlying shares is not retained. This is the case when the TRS agreement excludes any buy-back rights or obligations, and when the transferee (i.e., the owners of the shares) have the practical ability to sell the shares and exercise that ability unilaterally without any additional restrictions on the transfer imposed by Hexagon.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022The rights to receive cash flows from the asset have expired, or
\u2022The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through\u2019 arrangement; and
either
1.\tthe Group has transferred substantially all the risks and rewards of the asset, or
2.\tthe Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset
Financial liabilities
Financial liabilities are subsequently recognized at amortized cost, as loans and borrowings and payables. Contingent consideration in business combinations is recognized and measured at fair value and changes in fair value are recognized in the income statement. Derivatives are financial liabilities when the fair value is negative, accounted for similarly as derivatives assets.
Loans, borrowings and payables
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amor-tized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amorti-zation process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit or loss.
Payables are measured at their nominal amount when the effect of discounting is not material.
Derecognition of financial liabilities
A financial liability is derecognized when the obli-gation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecog-nition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
Hedges of a net investment in a foreign operation
A hedge of a net investment in a foreign oper-ation is accounted for in a similar way as a cash flow hedge. Foreign exchange gains or losses on the hedging instruments relating to the effective portion of the hedge are recognized directly in OCI, while any foreign exchange gains and losses related to the ineffective portion are recognized in profit and loss. On disposal of the foreign entity, the cumulative value of foreign exchange gains or losses recognized directly in equity is transferred to profit and loss.
Fair value hedges are not applicable to the group.
Impairment of financial assets
The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognized in two stages. For credit expo-sures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also con-sider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expecta-tion of recovering the contractual cash flows.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
2.11 Intangible assets and goodwill
Intangible assets acquired independently are measured on initial recognition at cost. The cost of intangible assets acquired as part of a business combination is recognized at fair value in the Group\u2019s opening balance at the date of acquisition. Capitalized intangible assets are recognized at cost less any amortization and impairment.
Internally generated intangible assets, with the exception of capitalized development expenses, are not capitalized, but expensed as incurred.
The useful life is either finite or indefinite. Intangible assets with a finite useful life are amortized over their useful economic life and tested for impairment if there are any indications that the intangible asset may be impaired. The amortization method and period are assessed at least once a year. Changes to the amortization method and/or period are accounted for as a change in accounting estimate.
Intangible assets including goodwill with an indefinite economic life are not amortized, but are tested for impairment at least once a year, either individually or as a part of a cash-generating unit. Intangible assets with an indefinite economic life are not amortized. The economic life is assessed annually with regard to whether the assumption of an indefinite economic life can be justified. If it cannot, the change to a definite economic life is made prospectively.
Patents and licenses
Amounts paid for patents and licenses are recog-nized in the balance sheet and are amortized on a straight-line basis over their expected useful life. The expected useful life of patents and licenses varies between 5 and 20 years.
Research and development cost
Expenses relating to research activities are rec-ognized in the income statement as they incur. Expenses relating to development activities (relating to the design and testing of new or improved prod-ucts) are capitalized to the extent that the product or process is technical and commercially viable, and the Group has sufficient resources to complete the development work. Expenses that are capitalized include the costs of materials, direct salary costs and a share of the directly attributable overhead expenses. Capitalized development costs are recog-nized at their cost minus accumulated amortization and impairment losses. Other development costs are recognized in the statement of income as incurred.
Development costs that have previously been expensed are not recognized in subsequent periods. Capitalized development costs are amortized on a straight-line basis over the estimated useful life of the asset.
Customer relationships and technology
Purchased customer contracts and technology have a finite useful life and are recognized at cost less amortization. Customer contracts and technology are amortized using the straight-line method over their estimated useful lives.
2.12 Impairment of non-financial assets
Intangible assets and goodwill with an indefinite useful life are not amortized but tested annually for impairment. Items of property, plant and equipment, right of use assets and intangible assets are tested for impairment if there is reason to believe that future earnings do not justify the asset\u2019s carrying amount. The difference between the carrying amount and the recoverable amount is recognized as an impairment loss. The recoverable amount is the higher of the fair value less costs to sell and the value in use.
When testing for impairment, non-current assets are grouped at the lowest level at which it is possi-ble to distinguish independent cash inflows (cash generating units, CGU). A CGU is the smallest identifiable group of assets that generates cash inflows which are largely independent of the cash inflows from other assets or groups of assets. At each reporting date, the Group considers the possibility of reversing previous impairment losses on non-financial assets (except goodwill and other intangible assets with an indefinite useful life).
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group\u2019s CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. A long-term growth rate is calculated and applied to project future cash flows after the fifth year.
2.13 Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, and it is probable (more likely than not) that a financial settlement will take place as a result of this obligation and the size of the amount can be measured reliably. If the effect is consid-erable, the provision is calculated by discounting estimated future cash flow using a discount rate before tax that reflects the market\u2019s pricing of the time value of money and, if relevant, risks specifi-cally associated with the obligation.
Warranty provisions: The Group provides warran-ties for general repairs of defects that existed at the
time of sale, as required by law. Provisions related to these assurance-type warranties are recognized when the product is sold, or the service is provided to the customer. Initial recognition is based on historical information about warranties and a weighting of possible outcomes according to the likelihood of their occurrence. The initial estimate of warranty-related costs is revised annually.
2.14 Equity
Financial instruments are classified as liabilities or equity in accordance with the underlying economic realities. Interest, dividend, gains and losses relating to a financial instrument classified as a liability will be presented as an expense or income. Amounts distributed to holders of financial instruments that are classified as equity will be recorded directly in equity.
(I) Treasury shares
In the event of a purchase of treasury shares, the purchase price and any directly associated costs are recognized as a change in equity. Treasury shares are presented as a reduction in equity. Gains or losses on transactions involving treasury shares are recognized directly in equity.
(II) Costs arising from equity transactions
Transaction costs directly related to an equity transaction are recognized directly in equity after deducting tax expenses.
(III) Other equity
(a) Translation differences
Translation differences arising in connection with exchange-rate differences on consolidation of
foreign entities are recognized in other compre-hensive income. Exchange-rate differences in monetary amounts (liabilities or receivables) which are in reality a part of a company\u2019s net investment in a foreign entity are also included as translation differences.
If a foreign entity is sold, the accumulated transla-tion differences linked to the entity are reversed and recognized in profit or loss in the same period in which the gain or loss on sale is recognized.
(b) Change in actuarial gains/losses (pension commitments)
Actuarial gains or losses resulting from changes in assumptions and basic data are recognized directly in other comprehensive income.
(c) Dividends
Proposed dividends are classified as other equity until they are approved by the general assembly of Hexagon Composites ASA. Dividends are recog-nized at fair value.
(IV) Other capital reserves \u2013\u00a0share-based payments
The Group has a share-based program for certain employees in senior and key positions. The fair value of the share instruments is measured at the date of the grant using the Black & Scholes model. The fair value of the issued options, performance share units (PSUs) and restricted share units (RSUs) is expensed as an employee cost with a corresponding increase in other paid in capital over the vesting period, which is over the agreed-upon future service time.
2.15 Revenue from contracts with customers
The Group\u2019s main revenues come from the sale of its own mass-produced standard products in the different segments:
1.\tHexagon Agility
2.\tHexagon Ragasco
3.\tHexagon Digital Wave
Revenue from contracts with customers is recog-nized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The products are mainly sold in relation to separately identifiable contracts with customers.
Sale of goods (cylinders, products, systems etc.)
Revenue from sale of goods is recognized at the point in time when control of the asset is trans-ferred to the customer, generally on delivery of the product. There are several credit terms, including upfront payment and secured payment, but normal credit term is 30 to 90 days upon delivery.
The Group considers whether there are other prom-ises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated. In determining the transaction price for the sale of goods, the Group considers the effects of variable consideration and the existence of significant financing components.
(i) Variable consideration
Some contracts with customers provide rights of return, trade discounts or volume rebates. The Group uses the expected value method to estimate
the goods that will not be returned as this best predicts the amount of variable consideration to which the Group will be entitled. For trade discounts and volume rebates the sale of goods are measured at the fair value of the consideration received or receivable, net of allowances for trade discounts and volume rebates. If revenue cannot be reliably meas-ured, the Group defers revenue recognition until the uncertainty is resolved. The Group performs the assessment on individual contracts to determine the estimated variable consideration and related constraints.
(ii) Significant financing component
Generally, the Group receives short-term advances from its customers. Using the practical expedient in IFRS 15, the Group does not adjust the promised amount of consideration for the effects of a signif-icant financing component if it expects, at contract inception, that the period between the transfer of the promised goods or services to the customer and when the customer pays for that goods or services will be one year or less.
(iii) Warranty provision
The Group typically provides warranties for general repairs and does not provide extended warranties or maintenance services in its contracts with customers. Such warranties are evaluated as assurance-type warranties which are accounted for under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. See note 19for an overview of the warranty provision.
Services
To some extent the Group provides other services in relation to reinspection and testing of products and non-recurring engineering and design or development. These services are normally sold on their own and based on relative stand-alone selling prices. The Group recognizes revenue from services at point in time.
Contract balances
(i) Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognized for the earned consid-eration that is conditional.
(ii) Trade receivable
A receivable represents the Group\u2019s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
(iii) Contract liability
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consider-ation is due) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract liability is recog-nized when the payment is made, or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Group fulfils the performance obligation under the contract.
Cost to obtain a contract
The Group has elected to apply the optional prac-tical expedient for costs to obtain a contract which allows the Group to immediately expense such costs when the related revenue is expected to be recognized within one year. When revenue will be recognized over several reporting periods the Group recognizes incremental costs of obtaining a contract with a customer as an asset, provided that the costs are expected to be recovered throughout the con-tract. The costs are amortized on a systematic basis that is consistent with the transfer of the related goods or services to the customer and subsequently re-assessed at the end of each reporting period.
2.16 Employee benefits
Defined benefit pension plans
Defined benefit plans are valued at the present value of accrued future pension benefits at the end of the reporting period. Pension plan assets are valued at their fair value.
The current service cost and net interest income/costs are recognized immediately and is presented as a payroll & social security expense in the income statement. Net interest income/cost is calculated by using the discount rate of the liability at the begin-ning of the period on the net liability. Changes in net pension liabilities as a result of payments of pre-miums and pension payments have been taken into consideration. The difference between the actual return and the accounted return is recognized continuously through other comprehensive income. The pension cost is affecting the payroll & social security costs in the income statement. Actuarial gains and losses, including changes in value, both
for assets and liabilities, are recognized trough other comprehensive income. Actuarial gains and losses are not reclassified over profit and loss.
Multi-employer plans
Some of the Norwegian employees participate in a new AFP pension scheme. The scheme is a defined benefit multi-employer pension plan, funded through premiums that are defined as a percentage of salary. The scheme\u2019s retirement benefit obliga-tion and plan assets cannot be reliably measured and allocated at present. For accounting purposes, the scheme is treated as a defined contribution plan, with premium payments expensed as incurred, and no pension liability recognized.
Defined contribution pension plans
Pension premiums relating to defined contribution plans are recognized as an expense as they are incurred.
Share-based payment
The Group has share-based programs for senior- and key executives. The programs are settled in shares, and consist of share options, performance share units (PSUs) and restricted share units (RSUs). In addition, certain key executives have share based programs settled in cash. The fair value of the share-based programs is expensed over the vesting period which is over the agreed-upon future service period and, where applicable, the performance conditions are fulfilled. The fair value of the share options, PSUs and RSUs is measured at grant date and calculated using the Black & Scholes model.
The cost of the employee share-based transaction is expensed over the vesting period. The value of the issued options, PSUs and RSUs of the transactions that are settled with equity instruments (settled with the company\u2019s own shares) is recognized as salary and personnel cost in profit and loss with a corre-sponding increase in other paid-in capital. The cash settlement options are however recognized with a corresponding change in provisions. Social security tax is recorded as a liability and is recognized over the estimated vesting period.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.
When the terms of an equity-settled award are modified, the minimum expense recognized is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of modification, is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is
cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.
2.17 Income taxes
The tax expense consists of the tax payable and changes to deferred tax. Deferred tax/tax assets are calculated on all differences between the book value and tax value of assets and liabilities, with the exception of:
\u2022temporary differences linked to goodwill that are not tax deductible
\u2022temporary differences related to investments in subsidiaries, associates or joint ventures when the Group controls when the temporary differences are to be reversed and this is not expected to take place in the foreseeable future.
Deferred tax assets are recognized when it is prob-able that the Group will have a sufficient profit for tax purposes in subsequent periods to utilize the tax asset. The Group recognize previously unrecognized deferred tax assets to the extent it has become probable that the Group can utilize the deferred tax asset. Similarly, the Group will reduce a deferred tax asset to the extent that the Group no longer regards it as probable that it can utilize the deferred tax asset.
Deferred tax and deferred tax assets are meas-ured on the basis of the expected future tax rates applicable to the companies in the Group where temporary differences have arisen. Deferred tax assets and liabilities are recognized at their nominal value and classified as non-current assets and non-current liabilities in the balance sheet.
Taxes payable and deferred taxes are recognized directly in equity to the extent that they relate to items recognized directly in equity.
2.18 Segments
For management reporting purposes, the Group is organized into different business areas according to product/service range. The Group\u2019s segment report-ing format is business areas and corresponds to the management structure and the internal reporting to the Group Executive Management and the Board of Directors. Financial information relating to segments and geographical areas is presented in note 4.
2.19 Events after the balance sheet date
New information on the Group\u2019s financial position on the end of the reporting period which becomes known after the reporting period is recorded in the annual accounts. Events after the reporting period that do not affect the Group\u2019s financial position at the end of the reporting period but which will affect the Group\u2019s financial position in the future are disclosed if significant.
2.20 New accounting standards, interpretations and amendments adopted by the group
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2
The amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to
disclose their \u2018significant\u2019 accounting policies with a requirement to disclose their \u2018material\u2019 accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. The amendments have had an impact on the Group\u2019s disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Group\u2019s financial statements.
The Group has not early adopted any standard, interpretation or amendments that has been issued but is not yet effective. Standards, interpretations, and amendments that are issued up to the date of issuance of the consolidated financial statements, but not yet effective are considered not relevant and not to have an impact on the consolidated financial statements of the Group.
2.1 Basis of preparation of annual financial statements
The consolidated annual financial statements of the Group have been prepared in accordance with IFRS\u00ae Accounting Standards adopted by the EU and are mandatory for financial years beginning on or after 1 January 2023, and Norwegian disclosure requirements listed in the Norwegian Accounting Act as of 31 December 2023.
The consolidated financial statements have been prepared on a historical cost basis, with the exception of financial instruments at fair value through profit or loss and fair value through OCI. Furthermore, and as consequence of the deconsolidation and subsequent presentation of Hexagon Purus as discontinued operations on 29 June 2023, historical income statement figures have been re-presented for enhanced comparability of continuing operations.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f51966": { "value": "2.1 Basis of preparation of annual financial statements
The consolidated annual financial statements of the Group have been prepared in accordance with IFRS\u00ae Accounting Standards adopted by the EU and are mandatory for financial years beginning on or after 1 January 2023, and Norwegian disclosure requirements listed in the Norwegian Accounting Act as of 31 December 2023.
", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__19-1": { "value": "2.2 Functional currency and presentation currency
The functional currency is determined in each entity in the Group based on the currency within the entity\u2019s primary economic environment. Transactions in foreign currency are translated
to functional currency using the exchange rate at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated using the closing rate, non-monetary items that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction and non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. Changes in the exchange rate are recognized continuously in the accounting period.
The Group\u2019s presentation currency is NOK. This is also the Parent Company\u2019s functional currency. All figures are rounded to the nearest thousand unless otherwise specified. The statement of financial position figures of entities with a different functional currency are translated at the exchange rate prevailing at the end of the reporting period for balance sheet items, including goodwill, and the exchange rate at the date of the transaction for profit and loss items. Monthly average exchange rates are used as approximations for transaction exchange rates. Translation differences are recognized in other comprehensive income (\u201cOCI\u201d). Exchange rates used can be found in note31.
When investments in foreign subsidiaries are sold, the accumulated translation differences relating to the subsidiary attributable to the equity holders of the parent are recognized in the statement of comprehensive income. When a loss of control, significant influence or joint control is present the accumulated exchange differences related to investments allocated to controlled interests are recognized in profit and loss.
When a partial disposal of a subsidiary (not loss of control) is present the proportionate share of the accumulated exchange differences is allocated to non-controlling interests.
(III) Other equity
(a) Translation differences
Translation differences arising in connection with exchange-rate differences on consolidation of
foreign entities are recognized in other compre-hensive income. Exchange-rate differences in monetary amounts (liabilities or receivables) which are in reality a part of a company\u2019s net investment in a foreign entity are also included as translation differences.
If a foreign entity is sold, the accumulated transla-tion differences linked to the entity are reversed and recognized in profit or loss in the same period in which the gain or loss on sale is recognized.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f52097": { "value": "2.2 Functional currency and presentation currency
The functional currency is determined in each entity in the Group based on the currency within the entity\u2019s primary economic environment. Transactions in foreign currency are translated
to functional currency using the exchange rate at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated using the closing rate, non-monetary items that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction and non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. Changes in the exchange rate are recognized continuously in the accounting period.
The Group\u2019s presentation currency is NOK. This is also the Parent Company\u2019s functional currency. All figures are rounded to the nearest thousand unless otherwise specified. The statement of financial position figures of entities with a different functional currency are translated at the exchange rate prevailing at the end of the reporting period for balance sheet items, including goodwill, and the exchange rate at the date of the transaction for profit and loss items. Monthly average exchange rates are used as approximations for transaction exchange rates. Translation differences are recognized in other comprehensive income (\u201cOCI\u201d). Exchange rates used can be found in note31.
When investments in foreign subsidiaries are sold, the accumulated translation differences relating to the subsidiary attributable to the equity holders of the parent are recognized in the statement of comprehensive income. When a loss of control, significant influence or joint control is present the accumulated exchange differences related to investments allocated to controlled interests are recognized in profit and loss.
When a partial disposal of a subsidiary (not loss of control) is present the proportionate share of the accumulated exchange differences is allocated to non-controlling interests.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f52485": { "value": "2.3 Basis of consolidation
The Group\u2019s consolidated financial statements comprise Hexagon Composites ASA and its subsid-iaries as of 31 December 2023. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. An entity is assessed as being controlled by the Group when the Group is exposed to or have the rights to variable returns from its involvement with the entity and has the ability to use its power over the entity to affect the amount of the Group\u2019s returns.
Thus, the Group controls an entity if and only if the Group has all the following:
\u2022power over the entity;
\u2022exposure, or rights, to variable returns from its involvement with the entity; and
\u2022the ability to use its power over the entity to affect the amount of the group\u2019s returns.
There is a presumption that if the Group has the majority of the voting rights in an entity, the entity is considered as a subsidiary. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over the entity, including ownership interests, voting rights, ownership structure and relative power, as well as options controlled by the Group and shareholder\u2019s agreement or other contractual agreements. Reference is made to note 30which contains a list of the subsidiaries and note 26which lists investments in associated companies.
The assessments are done for each individual investment. The Group re-assesses whether or not it controls an entity if facts and circumstances indicate that there are changes to one or more of the three elements of control. Assets, liabilities, income, and expenses of a subsidiary acquired or disposed during the year are included in the consolidated financial statements from the date the Group obtains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other com-prehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group\u2019s accounting policies. All intra-group assets and liabilities, equity, income, expenses, and cash flows
relating to transactions between entities of the Group are eliminated in full on consolidation.
Non-controlling interests is presented separately as equity in the Group\u2019s balance sheet.
Business combinations and goodwill
Business combinations are accounted for by using the acquisition method. For description of the measurement of non-controlling interest, see below. Acquisition-related costs are expensed in the periods in which the costs are incurred, and the services are received and included in other operating expenses.
The consideration paid in a business combination is measured at fair value at the acquisition date and consists normally of cash, consideration shares, and contingent consideration. Contingent consideration is classified as a liability in accordance with IFRS 9. Subsequent changes in the fair value of such con-tingencies are recognized in profit or loss.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appro-priate classification and designation in accordance with the contractual terms, economic circumstances, and pertinent conditions at the acquisition date. The acquired assets and liabilities are accounted for by using fair value in the opening group balance, unless other measurement principles should be applied in accordance with IFRS 3. The initial accounting for a business combination can be changed if new information about the fair value at the acquisition date is present. The allocation can be amended within 12 months of the acquisition date. The non-controlling interest is set to the
non-controlling interest\u2019s share of identifiable assets and liabilities. The measurement principle is done for each business combination separately.
When the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition-date fair value and the resulting gain or loss, if any, is recognized in profit and loss net after transaction cost.
Goodwill is recognized as the aggregate of the consideration transferred and the amount of any non-controlling interest less the fair value of net identifiable assets acquired as of the acquisition date. Goodwill is not depreciated but is tested at least annually for impairment. In connection with this, goodwill is allocated to cash-generating units or groups of cash-generating units that are expected to benefit from synergies from the busi-ness combination.
Change in ownership without loss of control
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. The consideration is recog-nized at fair value and the difference between the consideration and the carrying amount of the non-controlling interests is recognized in the equity attributable to the parent.
Loss of control
In cases where changes in the ownership interest of a subsidiary results in loss of control, the assets and liabilities of the subsidiary and the carrying amount of any non-controlling interests are derecognized. Any consideration received and any investment
retained in the former subsidiary is recognized at their fair values. The difference between the amounts recognized and derecognized is recog-nized as gain or loss in profit or loss on the date when control is lost.
Amounts recognized in other comprehensive income related to the subsidiary are reclassified to profit or loss or transferred to equity similarly as if the parent had disposed of the assets and liabili-ties directly. Amounts reclassified to profit or loss (including accumulated translation differences) are included in gain or loss on loss of control of subsidi-ary in profit or loss.
Discontinued operations
In the event of a loss of control and a deconsolida-tion of a subsidiary \u2013 if the disposal group being deconsolidated comprises a material business segment or operation, the profit or loss after taxes associated with the disposal group is reported sep-arately as discontinued operations in the statement of income. The previous period\u2019s income statements are re-presented accordingly. Profit after taxes from discontinued operations comprises the discontin-ued operation\u2019s current earnings and the gain or loss from deconsolidation.
For components of the group where control is not lost, the component is presented as discontinued operation if the component is classified as held for sale and if the component represents a material business segment or operation. Components are classified as held for sale if a sale is highly probable, which by the Group is considered a probability greater than 90 per cent.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f52937": { "value": "Business combinations and goodwill
Business combinations are accounted for by using the acquisition method. For description of the measurement of non-controlling interest, see below. Acquisition-related costs are expensed in the periods in which the costs are incurred, and the services are received and included in other operating expenses.
The consideration paid in a business combination is measured at fair value at the acquisition date and consists normally of cash, consideration shares, and contingent consideration. Contingent consideration is classified as a liability in accordance with IFRS 9. Subsequent changes in the fair value of such con-tingencies are recognized in profit or loss.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appro-priate classification and designation in accordance with the contractual terms, economic circumstances, and pertinent conditions at the acquisition date. The acquired assets and liabilities are accounted for by using fair value in the opening group balance, unless other measurement principles should be applied in accordance with IFRS 3. The initial accounting for a business combination can be changed if new information about the fair value at the acquisition date is present. The allocation can be amended within 12 months of the acquisition date. The non-controlling interest is set to the
non-controlling interest\u2019s share of identifiable assets and liabilities. The measurement principle is done for each business combination separately.
When the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition-date fair value and the resulting gain or loss, if any, is recognized in profit and loss net after transaction cost.
Goodwill is recognized as the aggregate of the consideration transferred and the amount of any non-controlling interest less the fair value of net identifiable assets acquired as of the acquisition date. Goodwill is not depreciated but is tested at least annually for impairment. In connection with this, goodwill is allocated to cash-generating units or groups of cash-generating units that are expected to benefit from synergies from the busi-ness combination.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__23-1": { "value": "Business combinations and goodwill
Business combinations are accounted for by using the acquisition method. For description of the measurement of non-controlling interest, see below. Acquisition-related costs are expensed in the periods in which the costs are incurred, and the services are received and included in other operating expenses.
The consideration paid in a business combination is measured at fair value at the acquisition date and consists normally of cash, consideration shares, and contingent consideration. Contingent consideration is classified as a liability in accordance with IFRS 9. Subsequent changes in the fair value of such con-tingencies are recognized in profit or loss.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appro-priate classification and designation in accordance with the contractual terms, economic circumstances, and pertinent conditions at the acquisition date. The acquired assets and liabilities are accounted for by using fair value in the opening group balance, unless other measurement principles should be applied in accordance with IFRS 3. The initial accounting for a business combination can be changed if new information about the fair value at the acquisition date is present. The allocation can be amended within 12 months of the acquisition date. The non-controlling interest is set to the
non-controlling interest\u2019s share of identifiable assets and liabilities. The measurement principle is done for each business combination separately.
When the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition-date fair value and the resulting gain or loss, if any, is recognized in profit and loss net after transaction cost.
Goodwill is recognized as the aggregate of the consideration transferred and the amount of any non-controlling interest less the fair value of net identifiable assets acquired as of the acquisition date. Goodwill is not depreciated but is tested at least annually for impairment. In connection with this, goodwill is allocated to cash-generating units or groups of cash-generating units that are expected to benefit from synergies from the busi-ness combination.
2.11 Intangible assets and goodwill
Intangible assets acquired independently are measured on initial recognition at cost. The cost of intangible assets acquired as part of a business combination is recognized at fair value in the Group\u2019s opening balance at the date of acquisition. Capitalized intangible assets are recognized at cost less any amortization and impairment.
Internally generated intangible assets, with the exception of capitalized development expenses, are not capitalized, but expensed as incurred.
The useful life is either finite or indefinite. Intangible assets with a finite useful life are amortized over their useful economic life and tested for impairment if there are any indications that the intangible asset may be impaired. The amortization method and period are assessed at least once a year. Changes to the amortization method and/or period are accounted for as a change in accounting estimate.
Intangible assets including goodwill with an indefinite economic life are not amortized, but are tested for impairment at least once a year, either individually or as a part of a cash-generating unit. Intangible assets with an indefinite economic life are not amortized. The economic life is assessed annually with regard to whether the assumption of an indefinite economic life can be justified. If it cannot, the change to a definite economic life is made prospectively.
Patents and licenses
Amounts paid for patents and licenses are recog-nized in the balance sheet and are amortized on a straight-line basis over their expected useful life. The expected useful life of patents and licenses varies between 5 and 20 years.
Research and development cost
Expenses relating to research activities are rec-ognized in the income statement as they incur. Expenses relating to development activities (relating to the design and testing of new or improved prod-ucts) are capitalized to the extent that the product or process is technical and commercially viable, and the Group has sufficient resources to complete the development work. Expenses that are capitalized include the costs of materials, direct salary costs and a share of the directly attributable overhead expenses. Capitalized development costs are recog-nized at their cost minus accumulated amortization and impairment losses. Other development costs are recognized in the statement of income as incurred.
Development costs that have previously been expensed are not recognized in subsequent periods. Capitalized development costs are amortized on a straight-line basis over the estimated useful life of the asset.
Customer relationships and technology
Purchased customer contracts and technology have a finite useful life and are recognized at cost less amortization. Customer contracts and technology are amortized using the straight-line method over their estimated useful lives.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f52939": { "value": "Business combinations and goodwill
Business combinations are accounted for by using the acquisition method. For description of the measurement of non-controlling interest, see below. Acquisition-related costs are expensed in the periods in which the costs are incurred, and the services are received and included in other operating expenses.
The consideration paid in a business combination is measured at fair value at the acquisition date and consists normally of cash, consideration shares, and contingent consideration. Contingent consideration is classified as a liability in accordance with IFRS 9. Subsequent changes in the fair value of such con-tingencies are recognized in profit or loss.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appro-priate classification and designation in accordance with the contractual terms, economic circumstances, and pertinent conditions at the acquisition date. The acquired assets and liabilities are accounted for by using fair value in the opening group balance, unless other measurement principles should be applied in accordance with IFRS 3. The initial accounting for a business combination can be changed if new information about the fair value at the acquisition date is present. The allocation can be amended within 12 months of the acquisition date. The non-controlling interest is set to the
non-controlling interest\u2019s share of identifiable assets and liabilities. The measurement principle is done for each business combination separately.
When the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition-date fair value and the resulting gain or loss, if any, is recognized in profit and loss net after transaction cost.
Goodwill is recognized as the aggregate of the consideration transferred and the amount of any non-controlling interest less the fair value of net identifiable assets acquired as of the acquisition date. Goodwill is not depreciated but is tested at least annually for impairment. In connection with this, goodwill is allocated to cash-generating units or groups of cash-generating units that are expected to benefit from synergies from the busi-ness combination.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f52940": { "value": "Business combinations and goodwill
Business combinations are accounted for by using the acquisition method. For description of the measurement of non-controlling interest, see below. Acquisition-related costs are expensed in the periods in which the costs are incurred, and the services are received and included in other operating expenses.
The consideration paid in a business combination is measured at fair value at the acquisition date and consists normally of cash, consideration shares, and contingent consideration. Contingent consideration is classified as a liability in accordance with IFRS 9. Subsequent changes in the fair value of such con-tingencies are recognized in profit or loss.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appro-priate classification and designation in accordance with the contractual terms, economic circumstances, and pertinent conditions at the acquisition date. The acquired assets and liabilities are accounted for by using fair value in the opening group balance, unless other measurement principles should be applied in accordance with IFRS 3. The initial accounting for a business combination can be changed if new information about the fair value at the acquisition date is present. The allocation can be amended within 12 months of the acquisition date. The non-controlling interest is set to the
non-controlling interest\u2019s share of identifiable assets and liabilities. The measurement principle is done for each business combination separately.
When the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition-date fair value and the resulting gain or loss, if any, is recognized in profit and loss net after transaction cost.
Goodwill is recognized as the aggregate of the consideration transferred and the amount of any non-controlling interest less the fair value of net identifiable assets acquired as of the acquisition date. Goodwill is not depreciated but is tested at least annually for impairment. In connection with this, goodwill is allocated to cash-generating units or groups of cash-generating units that are expected to benefit from synergies from the busi-ness combination.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f53282": { "value": "Change in ownership without loss of control
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. The consideration is recog-nized at fair value and the difference between the consideration and the carrying amount of the non-controlling interests is recognized in the equity attributable to the parent.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f53344": { "value": "Loss of control
In cases where changes in the ownership interest of a subsidiary results in loss of control, the assets and liabilities of the subsidiary and the carrying amount of any non-controlling interests are derecognized. Any consideration received and any investment
retained in the former subsidiary is recognized at their fair values. The difference between the amounts recognized and derecognized is recog-nized as gain or loss in profit or loss on the date when control is lost.
Amounts recognized in other comprehensive income related to the subsidiary are reclassified to profit or loss or transferred to equity similarly as if the parent had disposed of the assets and liabili-ties directly. Amounts reclassified to profit or loss (including accumulated translation differences) are included in gain or loss on loss of control of subsidi-ary in profit or loss.
Discontinued operations
In the event of a loss of control and a deconsolida-tion of a subsidiary \u2013 if the disposal group being deconsolidated comprises a material business segment or operation, the profit or loss after taxes associated with the disposal group is reported sep-arately as discontinued operations in the statement of income. The previous period\u2019s income statements are re-presented accordingly. Profit after taxes from discontinued operations comprises the discontin-ued operation\u2019s current earnings and the gain or loss from deconsolidation.
For components of the group where control is not lost, the component is presented as discontinued operation if the component is classified as held for sale and if the component represents a material business segment or operation. Components are classified as held for sale if a sale is highly probable, which by the Group is considered a probability greater than 90 per cent.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f53345": { "value": "Loss of control
In cases where changes in the ownership interest of a subsidiary results in loss of control, the assets and liabilities of the subsidiary and the carrying amount of any non-controlling interests are derecognized. Any consideration received and any investment
retained in the former subsidiary is recognized at their fair values. The difference between the amounts recognized and derecognized is recog-nized as gain or loss in profit or loss on the date when control is lost.
Amounts recognized in other comprehensive income related to the subsidiary are reclassified to profit or loss or transferred to equity similarly as if the parent had disposed of the assets and liabili-ties directly. Amounts reclassified to profit or loss (including accumulated translation differences) are included in gain or loss on loss of control of subsidi-ary in profit or loss.
Discontinued operations
In the event of a loss of control and a deconsolida-tion of a subsidiary \u2013 if the disposal group being deconsolidated comprises a material business segment or operation, the profit or loss after taxes associated with the disposal group is reported sep-arately as discontinued operations in the statement of income. The previous period\u2019s income statements are re-presented accordingly. Profit after taxes from discontinued operations comprises the discontin-ued operation\u2019s current earnings and the gain or loss from deconsolidation.
For components of the group where control is not lost, the component is presented as discontinued operation if the component is classified as held for sale and if the component represents a material business segment or operation. Components are classified as held for sale if a sale is highly probable, which by the Group is considered a probability greater than 90 per cent.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f53694": { "value": "2.4 Investment in associates
Associates are entities over which the Group has significant influence, but not control or joint control, over financial and operating management (normally a holding of between 20 per cent and 50 per cent).
The considerations made in determining whether the Group has significant influence over an entity are similar to those necessary to determine control over subsidiaries. Associates are accounted for using the equity method from the date when significant influence is achieved until such influence ceases.
Under the equity method, the investments in asso-ciates are initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Group\u2019s share of net assets of the associate since the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is not tested for impairment individually.
The statement of profit or loss reflects the Group\u2019s share of the results of operations of the associate. Any change in OCI of those investees is presented as part of the Group\u2019s OCI. In addition, when there has been a change recognized directly in the equity of the associate, the Group recognizes its share of any changes, when applicable, in the statement of changes in equity. Unrealized gains and losses resulting from transactions between the Group and the associate are eliminated attributable to the interest in the associate.
If the Group\u2019s share of the loss equals or exceeds the carrying amount of the associate, the carrying amount is set to zero and further loss is not recog-nized unless the Group has an obligation to make up for the loss.
If there are objective evidence that the investment in the associate is impaired, the Group will perform an impairment test of the carrying amount of the investment. Further, in relation to share price development of listed associates, a decline in fair value will have to be significant or prolonged to provide evidence of impairment. Hexagon assesses a decline in fair value of 20 per cent to be significant and a decline lasting longer than 9 months to be prolonged.
Impairment losses are recognized if the recoverable amount (highest of value in use and fair value less cost of disposal) is lower than the carrying value. Impairment losses are reversed to the extent that the impairment loss decreases or no longer exists. The Group has made a policy choice to present impairment losses on associates on a separate line in the statement of income.
Upon loss of significant influence over the associate, and as such the equity method ceases, the Group measures and recognizes any retained investment at its fair value. A new measurement of remaining ownership interests will not be performed if the equity method is still applicable, for example by transition from an associate to a joint venture.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f53695": { "value": "2.4 Investment in associates
Associates are entities over which the Group has significant influence, but not control or joint control, over financial and operating management (normally a holding of between 20 per cent and 50 per cent).
The considerations made in determining whether the Group has significant influence over an entity are similar to those necessary to determine control over subsidiaries. Associates are accounted for using the equity method from the date when significant influence is achieved until such influence ceases.
Under the equity method, the investments in asso-ciates are initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Group\u2019s share of net assets of the associate since the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is not tested for impairment individually.
The statement of profit or loss reflects the Group\u2019s share of the results of operations of the associate. Any change in OCI of those investees is presented as part of the Group\u2019s OCI. In addition, when there has been a change recognized directly in the equity of the associate, the Group recognizes its share of any changes, when applicable, in the statement of changes in equity. Unrealized gains and losses resulting from transactions between the Group and the associate are eliminated attributable to the interest in the associate.
If the Group\u2019s share of the loss equals or exceeds the carrying amount of the associate, the carrying amount is set to zero and further loss is not recog-nized unless the Group has an obligation to make up for the loss.
If there are objective evidence that the investment in the associate is impaired, the Group will perform an impairment test of the carrying amount of the investment. Further, in relation to share price development of listed associates, a decline in fair value will have to be significant or prolonged to provide evidence of impairment. Hexagon assesses a decline in fair value of 20 per cent to be significant and a decline lasting longer than 9 months to be prolonged.
Impairment losses are recognized if the recoverable amount (highest of value in use and fair value less cost of disposal) is lower than the carrying value. Impairment losses are reversed to the extent that the impairment loss decreases or no longer exists. The Group has made a policy choice to present impairment losses on associates on a separate line in the statement of income.
Upon loss of significant influence over the associate, and as such the equity method ceases, the Group measures and recognizes any retained investment at its fair value. A new measurement of remaining ownership interests will not be performed if the equity method is still applicable, for example by transition from an associate to a joint venture.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__31-1": { "value": "2.5 Current versus non-current classification
The Group presents assets and liabilities in the consolidated statement of financial position as either current or non-current.
The Group classifies an asset as current when it:
\u2022Expects to realize the asset, or intends to sell or consume it, in its normal operating cycle
\u2022Holds the asset primarily for the purpose of trading
\u2022Expects to realize the asset within twelve months after the reporting period
Or
\u2022The asset is cash or a cash equivalent, unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current, includ-ing deferred tax assets.
The Group classifies a liability as current when it:
\u2022Expects to settle the liability in its normal operat-ing cycle
\u2022Holds the liability primarily for the purpose of trading
\u2022Is due to be settled within twelve months after the reporting period
Or
\u2022It does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current, including deferred tax liabilities.
2.14 Equity
Financial instruments are classified as liabilities or equity in accordance with the underlying economic realities. Interest, dividend, gains and losses relating to a financial instrument classified as a liability will be presented as an expense or income. Amounts distributed to holders of financial instruments that are classified as equity will be recorded directly in equity.
2.19 Events after the balance sheet date
New information on the Group\u2019s financial position on the end of the reporting period which becomes known after the reporting period is recorded in the annual accounts. Events after the reporting period that do not affect the Group\u2019s financial position at the end of the reporting period but which will affect the Group\u2019s financial position in the future are disclosed if significant.
", "dimensions": { "concept": "ifrs-full:DescriptionOfOtherAccountingPoliciesRelevantToUnderstandingOfFinancialStatements", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f54450": { "value": "2.6 Cash and cash equivalents
Cash consist of cash in hand and at bank. Cash equivalents are short-term liquid investments that can be immediately converted into a known amount of cash and have a maximum term to maturity of three months. Any positive balances against bank overdrafts are included as a component of cash in the cash flow statement. The cash flow statement has been prepared using the indirect method. Bank overdrafts are reported under short-term loans in the balance sheet. Received interest income is classified as investment activities and interest pay-ments is classified as financing activities in the cash flow statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f54556": { "value": "2.7 Inventories
Inventories are recognized at the lowest of cost and net selling price. The net selling price is the estimated selling price in the case of ordinary operations minus the estimated completion, marketing and distribution cost. The cost is arrived at using the average cost price, and includes the costs incurred in acquiring the goods and the costs of bringing the goods to their current state and location. Goods produced by the Group itself include variable and fixed costs that can be allocated based on normal capacity utilization.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f54648": { "value": "2.8 Property, plant & equipment
Property, plant and equipment are valued at their cost, less accumulated depreciation and impairment losses. When assets are sold or disposed, the carry-ing amount is derecognized and any gain or loss is recognized in the statement of profit and loss.
The cost of property, plant and equipment includes the purchase price and all costs necessary to bring the asset to working condition for its intended use. Costs incurred after the asset is in use, such as regular maintenance costs, are recognized in the statement of profit and loss, while other costs that are expected to provide future financial benefits are capitalized.
The cost of property, plant & equipment is depreci-ated to the residual value over the asset\u2019s useful life. Depreciation is calculated using the straight-line method over the following useful life:
\u2022Buildings: 10-20 years
\u2022Plant, machinery and equipment: 3-15 years
\u2022Fixtures & fittings and vehicles 3-10 years
If an item of property, plant and equipment has different parts with different useful lives, the parts are depreciated separately if the cost is significant in relation to the total cost of the item.
The depreciation period and method are assessed annually. A residual value is estimated at each year-end, and changes to the estimated residual value is recognized as a change in an estimate. When the carrying amount of property, plant and equipment exceeds the estimated recoverable amount, the value is written down to the recoverable amount.
Assets under construction are classified as prop-erty, plant and equipment and are recognized at cost until the production or development process is completed. Assets under construction are not subject to depreciation until the assets are taken into use.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__35-1": { "value": "2.8 Property, plant & equipment
Property, plant and equipment are valued at their cost, less accumulated depreciation and impairment losses. When assets are sold or disposed, the carry-ing amount is derecognized and any gain or loss is recognized in the statement of profit and loss.
The cost of property, plant and equipment includes the purchase price and all costs necessary to bring the asset to working condition for its intended use. Costs incurred after the asset is in use, such as regular maintenance costs, are recognized in the statement of profit and loss, while other costs that are expected to provide future financial benefits are capitalized.
The cost of property, plant & equipment is depreci-ated to the residual value over the asset\u2019s useful life. Depreciation is calculated using the straight-line method over the following useful life:
\u2022Buildings: 10-20 years
\u2022Plant, machinery and equipment: 3-15 years
\u2022Fixtures & fittings and vehicles 3-10 years
If an item of property, plant and equipment has different parts with different useful lives, the parts are depreciated separately if the cost is significant in relation to the total cost of the item.
The depreciation period and method are assessed annually. A residual value is estimated at each year-end, and changes to the estimated residual value is recognized as a change in an estimate. When the carrying amount of property, plant and equipment exceeds the estimated recoverable amount, the value is written down to the recoverable amount.
Assets under construction are classified as prop-erty, plant and equipment and are recognized at cost until the production or development process is completed. Assets under construction are not subject to depreciation until the assets are taken into use.
Right-of-use assets
The Group measures the right-of use asset at cost, less any accumulated depreciation and impairment losses, adjusted for any remeasurement of lease lia-bilities. The cost of the right-of-use asset comprise:
\u2022The amount of the initial measurement of the lease liability recognized
\u2022Any initial direct costs incurred by the Group. An estimate of the costs to be incurred by the Group in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inven-tories.
The Group applies the depreciation requirements in IAS 16 Property, Plant and Equipment in depre-ciating the right-of-use asset, except that the right-of-use asset is depreciated from the com-mencement date to the earlier of the lease term and the remaining useful life of the right-of-use asset, unless there is an option to purchase the asset which has been determined to be exercised with reasonably certainty, in which case the right of use asset is depreciated over the expected economic life of the underlying asset.
The Group applies IAS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.
2.11 Intangible assets and goodwill
Intangible assets acquired independently are measured on initial recognition at cost. The cost of intangible assets acquired as part of a business combination is recognized at fair value in the Group\u2019s opening balance at the date of acquisition. Capitalized intangible assets are recognized at cost less any amortization and impairment.
Internally generated intangible assets, with the exception of capitalized development expenses, are not capitalized, but expensed as incurred.
The useful life is either finite or indefinite. Intangible assets with a finite useful life are amortized over their useful economic life and tested for impairment if there are any indications that the intangible asset may be impaired. The amortization method and period are assessed at least once a year. Changes to the amortization method and/or period are accounted for as a change in accounting estimate.
Intangible assets including goodwill with an indefinite economic life are not amortized, but are tested for impairment at least once a year, either individually or as a part of a cash-generating unit. Intangible assets with an indefinite economic life are not amortized. The economic life is assessed annually with regard to whether the assumption of an indefinite economic life can be justified. If it cannot, the change to a definite economic life is made prospectively.
Patents and licenses
Amounts paid for patents and licenses are recog-nized in the balance sheet and are amortized on a straight-line basis over their expected useful life. The expected useful life of patents and licenses varies between 5 and 20 years.
Research and development cost
Expenses relating to research activities are rec-ognized in the income statement as they incur. Expenses relating to development activities (relating to the design and testing of new or improved prod-ucts) are capitalized to the extent that the product or process is technical and commercially viable, and the Group has sufficient resources to complete the development work. Expenses that are capitalized include the costs of materials, direct salary costs and a share of the directly attributable overhead expenses. Capitalized development costs are recog-nized at their cost minus accumulated amortization and impairment losses. Other development costs are recognized in the statement of income as incurred.
Development costs that have previously been expensed are not recognized in subsequent periods. Capitalized development costs are amortized on a straight-line basis over the estimated useful life of the asset.
Customer relationships and technology
Purchased customer contracts and technology have a finite useful life and are recognized at cost less amortization. Customer contracts and technology are amortized using the straight-line method over their estimated useful lives.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__36-1": { "value": "The cost of property, plant and equipment includes the purchase price and all costs necessary to bring the asset to working condition for its intended use. Costs incurred after the asset is in use, such as regular maintenance costs, are recognized in the statement of profit and loss, while other costs that are expected to provide future financial benefits are capitalized.
The cost of property, plant & equipment is depreci-ated to the residual value over the asset\u2019s useful life. Depreciation is calculated using the straight-line method over the following useful life:
\u2022Buildings: 10-20 years
\u2022Plant, machinery and equipment: 3-15 years
\u2022Fixtures & fittings and vehicles 3-10 years
If an item of property, plant and equipment has different parts with different useful lives, the parts are depreciated separately if the cost is significant in relation to the total cost of the item.
The depreciation period and method are assessed annually. A residual value is estimated at each year-end, and changes to the estimated residual value is recognized as a change in an estimate. When the carrying amount of property, plant and equipment exceeds the estimated recoverable amount, the value is written down to the recoverable amount.
Assets under construction are classified as prop-erty, plant and equipment and are recognized at cost until the production or development process is completed. Assets under construction are not subject to depreciation until the assets are taken into use.
Research and development cost
Expenses relating to research activities are rec-ognized in the income statement as they incur. Expenses relating to development activities (relating to the design and testing of new or improved prod-ucts) are capitalized to the extent that the product or process is technical and commercially viable, and the Group has sufficient resources to complete the development work. Expenses that are capitalized include the costs of materials, direct salary costs and a share of the directly attributable overhead expenses. Capitalized development costs are recog-nized at their cost minus accumulated amortization and impairment losses. Other development costs are recognized in the statement of income as incurred.
Development costs that have previously been expensed are not recognized in subsequent periods. Capitalized development costs are amortized on a straight-line basis over the estimated useful life of the asset.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f54949": { "value": "2.9 Leases
At the inception of a contract, The Group assesses whether the contract is, or contains, a lease. A con-tract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The group as a lessee
For contracts that constitute, or contain a lease, the Group separates lease components if it benefits from the use of each underlying asset either on its own or together with other resources that are readily available, and the underlying asset is neither highly dependent on, nor highly interrelated with, the other underlying assets in the contract. The Group then accounts for each lease component within the contract as a lease separately from non-lease com-ponents of the contract.
At the lease commencement date, the Group recognizes a lease liability and corresponding right-of-use asset for all lease agreements in which it is the lessee, except for the following exemptions applied:
\u2022Short-term leases (lease agreement less than 12 months maturity)
\u2022Low value assets (value of the underlying asset less than NOK 100 thousand)
For these leases, the Group recognizes the lease payments as other operating expenses in the state-ment of income when they incur.
Lease liabilities
The lease liability is recognized at the commence-ment date of the lease. The Group measures the lease liability at the present value of the lease payments for the right to use the underlying asset during the lease term that are not paid at the com-mencement date. The lease term represents the non-cancellable period of the lease, together with periods covered by an option either to extend or to terminate the lease when the Group is reasonably certain to exercise this option. In calculating the present value of lease payments, the Group uses the interest rate implicitly defined in the lease contract if that interest rate is readily determinable, or its incremental borrowing rate in all other cases.
The lease payments included in the measurement comprise of:
\u2022Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable
\u2022Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect adjustments in lease payments due to an adjustment in an index or rate.
The Group does not include variable lease payments in the lease liability. Instead, the Group recognizes these variable lease expenses in profit or loss.
The Group presents its lease liabilities as separate line items in the statement of financial position.
Right-of-use assets
The Group measures the right-of use asset at cost, less any accumulated depreciation and impairment losses, adjusted for any remeasurement of lease lia-bilities. The cost of the right-of-use asset comprise:
\u2022The amount of the initial measurement of the lease liability recognized
\u2022Any initial direct costs incurred by the Group. An estimate of the costs to be incurred by the Group in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inven-tories.
The Group applies the depreciation requirements in IAS 16 Property, Plant and Equipment in depre-ciating the right-of-use asset, except that the right-of-use asset is depreciated from the com-mencement date to the earlier of the lease term and the remaining useful life of the right-of-use asset, unless there is an option to purchase the asset which has been determined to be exercised with reasonably certainty, in which case the right of use asset is depreciated over the expected economic life of the underlying asset.
The Group applies IAS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.
Sale- and leaseback transactions
In the event of sale- and leaseback transactions, the Group first assesses whether transfer of control of the underlying asset represents a sale within the context of IFRS 15. The Group considers several factors for determining whether the buyer has obtained control of the asset, including, but not limited to, the existence of any repurchase options, any beneficial renewal options terms, the length of the lease term including any option periods compared to the expected remaining lifetime of the asset, and the lease liability compared to the market value of the asset.
When the transfer of the asset is determined to be a true sale, the Group measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that related to the right-of-use being retained. The said proportionate share of the asset is derived from the recognized lease liability following the trans-action in percentage of the fair market value of the underlying asset being sold. Effectively, the Group recognizes the amount of a gain or a loss only related to the rights transferred to the buyer-lessor.
In the event the transfer of the underlying asset to the buyer does not represent a true sale, the Group continues to carry the underlying asset and recognizes a financial liability equal to the transfer proceeds.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__39-1": { "value": "2.10 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial asset
The Group\u2019s financial assets are derivatives, non-listed equity instruments, loans, trade receivables and cash and cash equivalents.
The classification of financial assets at initial recog-nition depends on the financial asset\u2019s contractual cash flow characteristics and the Group\u2019s business model for managing them. With the exception of trade receivables that do not contain a significant financing component, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
The Group classifies its financial assets in the follow-ing categories:
\u2022Financial assets at amortized cost
\u2022Financial assets at fair value through profit and loss
Financial assets at amortized cost
The Group measures financial assets at amortized cost if both of the following conditions are met:
\u2022The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows and,
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the princi-pal amount outstanding
Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.
The Groups financial assets at amortized cost includes trade receivables and other short-term deposits. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15 Revenue from contracts with customers.
Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss include financial assets mandatorily required to be measured at fair value.
The category includes foreign exchange contracts, interest rate swaps and total return swaps (TRS) in the event that the underlying shares sold in the TRS agreement qualifies as a true sale.
The criteria for a true sale of shares in a TRS agree-ment is considered met when control over the underlying shares is not retained. This is the case when the TRS agreement excludes any buy-back rights or obligations, and when the transferee (i.e., the owners of the shares) have the practical ability to sell the shares and exercise that ability unilaterally without any additional restrictions on the transfer imposed by Hexagon.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022The rights to receive cash flows from the asset have expired, or
\u2022The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through\u2019 arrangement; and
either
1.\tthe Group has transferred substantially all the risks and rewards of the asset, or
2.\tthe Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset
Financial liabilities
Financial liabilities are subsequently recognized at amortized cost, as loans and borrowings and payables. Contingent consideration in business combinations is recognized and measured at fair value and changes in fair value are recognized in the income statement. Derivatives are financial liabilities when the fair value is negative, accounted for similarly as derivatives assets.
Loans, borrowings and payables
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amor-tized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amorti-zation process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit or loss.
Payables are measured at their nominal amount when the effect of discounting is not material.
Derecognition of financial liabilities
A financial liability is derecognized when the obli-gation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecog-nition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
Hedges of a net investment in a foreign operation
A hedge of a net investment in a foreign oper-ation is accounted for in a similar way as a cash flow hedge. Foreign exchange gains or losses on the hedging instruments relating to the effective portion of the hedge are recognized directly in OCI, while any foreign exchange gains and losses related to the ineffective portion are recognized in profit and loss. On disposal of the foreign entity, the cumulative value of foreign exchange gains or losses recognized directly in equity is transferred to profit and loss.
Fair value hedges are not applicable to the group.
Impairment of financial assets
The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognized in two stages. For credit expo-sures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also con-sider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expecta-tion of recovering the contractual cash flows.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
2.14 Equity
Financial instruments are classified as liabilities or equity in accordance with the underlying economic realities. Interest, dividend, gains and losses relating to a financial instrument classified as a liability will be presented as an expense or income. Amounts distributed to holders of financial instruments that are classified as equity will be recorded directly in equity.
(I) Treasury shares
In the event of a purchase of treasury shares, the purchase price and any directly associated costs are recognized as a change in equity. Treasury shares are presented as a reduction in equity. Gains or losses on transactions involving treasury shares are recognized directly in equity.
(II) Costs arising from equity transactions
Transaction costs directly related to an equity transaction are recognized directly in equity after deducting tax expenses.
(III) Other equity
(a) Translation differences
Translation differences arising in connection with exchange-rate differences on consolidation of
foreign entities are recognized in other compre-hensive income. Exchange-rate differences in monetary amounts (liabilities or receivables) which are in reality a part of a company\u2019s net investment in a foreign entity are also included as translation differences.
If a foreign entity is sold, the accumulated transla-tion differences linked to the entity are reversed and recognized in profit or loss in the same period in which the gain or loss on sale is recognized.
(b) Change in actuarial gains/losses (pension commitments)
Actuarial gains or losses resulting from changes in assumptions and basic data are recognized directly in other comprehensive income.
(c) Dividends
Proposed dividends are classified as other equity until they are approved by the general assembly of Hexagon Composites ASA. Dividends are recog-nized at fair value.
(IV) Other capital reserves \u2013\u00a0share-based payments
The Group has a share-based program for certain employees in senior and key positions. The fair value of the share instruments is measured at the date of the grant using the Black & Scholes model. The fair value of the issued options, performance share units (PSUs) and restricted share units (RSUs) is expensed as an employee cost with a corresponding increase in other paid in capital over the vesting period, which is over the agreed-upon future service time.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__40-1": { "value": "2.10 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial asset
The Group\u2019s financial assets are derivatives, non-listed equity instruments, loans, trade receivables and cash and cash equivalents.
The classification of financial assets at initial recog-nition depends on the financial asset\u2019s contractual cash flow characteristics and the Group\u2019s business model for managing them. With the exception of trade receivables that do not contain a significant financing component, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
The Group classifies its financial assets in the follow-ing categories:
\u2022Financial assets at amortized cost
\u2022Financial assets at fair value through profit and loss
Financial assets at amortized cost
The Group measures financial assets at amortized cost if both of the following conditions are met:
\u2022The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows and,
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the princi-pal amount outstanding
Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.
The Groups financial assets at amortized cost includes trade receivables and other short-term deposits. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15 Revenue from contracts with customers.
Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss include financial assets mandatorily required to be measured at fair value.
The category includes foreign exchange contracts, interest rate swaps and total return swaps (TRS) in the event that the underlying shares sold in the TRS agreement qualifies as a true sale.
The criteria for a true sale of shares in a TRS agree-ment is considered met when control over the underlying shares is not retained. This is the case when the TRS agreement excludes any buy-back rights or obligations, and when the transferee (i.e., the owners of the shares) have the practical ability to sell the shares and exercise that ability unilaterally without any additional restrictions on the transfer imposed by Hexagon.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022The rights to receive cash flows from the asset have expired, or
\u2022The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through\u2019 arrangement; and
either
1.\tthe Group has transferred substantially all the risks and rewards of the asset, or
2.\tthe Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset
Impairment of financial assets
The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognized in two stages. For credit expo-sures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also con-sider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expecta-tion of recovering the contractual cash flows.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__41-1": { "value": "2.10 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial liabilities
Financial liabilities are subsequently recognized at amortized cost, as loans and borrowings and payables. Contingent consideration in business combinations is recognized and measured at fair value and changes in fair value are recognized in the income statement. Derivatives are financial liabilities when the fair value is negative, accounted for similarly as derivatives assets.
Loans, borrowings and payables
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amor-tized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amorti-zation process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit or loss.
Payables are measured at their nominal amount when the effect of discounting is not material.
Derecognition of financial liabilities
A financial liability is derecognized when the obli-gation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecog-nition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__42-1": { "value": "Financial asset
The Group\u2019s financial assets are derivatives, non-listed equity instruments, loans, trade receivables and cash and cash equivalents.
The classification of financial assets at initial recog-nition depends on the financial asset\u2019s contractual cash flow characteristics and the Group\u2019s business model for managing them. With the exception of trade receivables that do not contain a significant financing component, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
The Group classifies its financial assets in the follow-ing categories:
\u2022Financial assets at amortized cost
\u2022Financial assets at fair value through profit and loss
Financial assets at amortized cost
The Group measures financial assets at amortized cost if both of the following conditions are met:
\u2022The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows and,
\u2022The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the princi-pal amount outstanding
Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.
The Groups financial assets at amortized cost includes trade receivables and other short-term deposits. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15 Revenue from contracts with customers.
Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss include financial assets mandatorily required to be measured at fair value.
The category includes foreign exchange contracts, interest rate swaps and total return swaps (TRS) in the event that the underlying shares sold in the TRS agreement qualifies as a true sale.
The criteria for a true sale of shares in a TRS agree-ment is considered met when control over the underlying shares is not retained. This is the case when the TRS agreement excludes any buy-back rights or obligations, and when the transferee (i.e., the owners of the shares) have the practical ability to sell the shares and exercise that ability unilaterally without any additional restrictions on the transfer imposed by Hexagon.
Financial liabilities
Financial liabilities are subsequently recognized at amortized cost, as loans and borrowings and payables. Contingent consideration in business combinations is recognized and measured at fair value and changes in fair value are recognized in the income statement. Derivatives are financial liabilities when the fair value is negative, accounted for similarly as derivatives assets.
Loans, borrowings and payables
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amor-tized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amorti-zation process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit or loss.
Payables are measured at their nominal amount when the effect of discounting is not material.
Hedges of a net investment in a foreign operation
A hedge of a net investment in a foreign oper-ation is accounted for in a similar way as a cash flow hedge. Foreign exchange gains or losses on the hedging instruments relating to the effective portion of the hedge are recognized directly in OCI, while any foreign exchange gains and losses related to the ineffective portion are recognized in profit and loss. On disposal of the foreign entity, the cumulative value of foreign exchange gains or losses recognized directly in equity is transferred to profit and loss.
Fair value hedges are not applicable to the group.
(b) Change in actuarial gains/losses (pension commitments)
Actuarial gains or losses resulting from changes in assumptions and basic data are recognized directly in other comprehensive income.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f56269": { "value": "Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss include financial assets mandatorily required to be measured at fair value.
The category includes foreign exchange contracts, interest rate swaps and total return swaps (TRS) in the event that the underlying shares sold in the TRS agreement qualifies as a true sale.
The criteria for a true sale of shares in a TRS agree-ment is considered met when control over the underlying shares is not retained. This is the case when the TRS agreement excludes any buy-back rights or obligations, and when the transferee (i.e., the owners of the shares) have the practical ability to sell the shares and exercise that ability unilaterally without any additional restrictions on the transfer imposed by Hexagon.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__44-1": { "value": "Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognized (i.e., removed from the Group\u2019s consolidated statement of financial position) when:
\u2022The rights to receive cash flows from the asset have expired, or
\u2022The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \u2018pass-through\u2019 arrangement; and
either
1.\tthe Group has transferred substantially all the risks and rewards of the asset, or
2.\tthe Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset
Derecognition of financial liabilities
A financial liability is derecognized when the obli-gation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecog-nition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f56858": { "value": "Hedges of a net investment in a foreign operation
A hedge of a net investment in a foreign oper-ation is accounted for in a similar way as a cash flow hedge. Foreign exchange gains or losses on the hedging instruments relating to the effective portion of the hedge are recognized directly in OCI, while any foreign exchange gains and losses related to the ineffective portion are recognized in profit and loss. On disposal of the foreign entity, the cumulative value of foreign exchange gains or losses recognized directly in equity is transferred to profit and loss.
Fair value hedges are not applicable to the group.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f56970": { "value": "Impairment of financial assets
The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognized in two stages. For credit expo-sures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also con-sider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expecta-tion of recovering the contractual cash flows.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__52-1": { "value": "Impairment of financial assets
The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognized in two stages. For credit expo-sures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also con-sider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expecta-tion of recovering the contractual cash flows.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
2.11 Intangible assets and goodwill
Intangible assets acquired independently are measured on initial recognition at cost. The cost of intangible assets acquired as part of a business combination is recognized at fair value in the Group\u2019s opening balance at the date of acquisition. Capitalized intangible assets are recognized at cost less any amortization and impairment.
Internally generated intangible assets, with the exception of capitalized development expenses, are not capitalized, but expensed as incurred.
The useful life is either finite or indefinite. Intangible assets with a finite useful life are amortized over their useful economic life and tested for impairment if there are any indications that the intangible asset may be impaired. The amortization method and period are assessed at least once a year. Changes to the amortization method and/or period are accounted for as a change in accounting estimate.
Intangible assets including goodwill with an indefinite economic life are not amortized, but are tested for impairment at least once a year, either individually or as a part of a cash-generating unit. Intangible assets with an indefinite economic life are not amortized. The economic life is assessed annually with regard to whether the assumption of an indefinite economic life can be justified. If it cannot, the change to a definite economic life is made prospectively.
Patents and licenses
Amounts paid for patents and licenses are recog-nized in the balance sheet and are amortized on a straight-line basis over their expected useful life. The expected useful life of patents and licenses varies between 5 and 20 years.
Research and development cost
Expenses relating to research activities are rec-ognized in the income statement as they incur. Expenses relating to development activities (relating to the design and testing of new or improved prod-ucts) are capitalized to the extent that the product or process is technical and commercially viable, and the Group has sufficient resources to complete the development work. Expenses that are capitalized include the costs of materials, direct salary costs and a share of the directly attributable overhead expenses. Capitalized development costs are recog-nized at their cost minus accumulated amortization and impairment losses. Other development costs are recognized in the statement of income as incurred.
Development costs that have previously been expensed are not recognized in subsequent periods. Capitalized development costs are amortized on a straight-line basis over the estimated useful life of the asset.
Customer relationships and technology
Purchased customer contracts and technology have a finite useful life and are recognized at cost less amortization. Customer contracts and technology are amortized using the straight-line method over their estimated useful lives.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f57334": { "value": "2.11 Intangible assets and goodwill
Intangible assets acquired independently are measured on initial recognition at cost. The cost of intangible assets acquired as part of a business combination is recognized at fair value in the Group\u2019s opening balance at the date of acquisition. Capitalized intangible assets are recognized at cost less any amortization and impairment.
Internally generated intangible assets, with the exception of capitalized development expenses, are not capitalized, but expensed as incurred.
The useful life is either finite or indefinite. Intangible assets with a finite useful life are amortized over their useful economic life and tested for impairment if there are any indications that the intangible asset may be impaired. The amortization method and period are assessed at least once a year. Changes to the amortization method and/or period are accounted for as a change in accounting estimate.
Intangible assets including goodwill with an indefinite economic life are not amortized, but are tested for impairment at least once a year, either individually or as a part of a cash-generating unit. Intangible assets with an indefinite economic life are not amortized. The economic life is assessed annually with regard to whether the assumption of an indefinite economic life can be justified. If it cannot, the change to a definite economic life is made prospectively.
Patents and licenses
Amounts paid for patents and licenses are recog-nized in the balance sheet and are amortized on a straight-line basis over their expected useful life. The expected useful life of patents and licenses varies between 5 and 20 years.
Research and development cost
Expenses relating to research activities are rec-ognized in the income statement as they incur. Expenses relating to development activities (relating to the design and testing of new or improved prod-ucts) are capitalized to the extent that the product or process is technical and commercially viable, and the Group has sufficient resources to complete the development work. Expenses that are capitalized include the costs of materials, direct salary costs and a share of the directly attributable overhead expenses. Capitalized development costs are recog-nized at their cost minus accumulated amortization and impairment losses. Other development costs are recognized in the statement of income as incurred.
Development costs that have previously been expensed are not recognized in subsequent periods. Capitalized development costs are amortized on a straight-line basis over the estimated useful life of the asset.
Customer relationships and technology
Purchased customer contracts and technology have a finite useful life and are recognized at cost less amortization. Customer contracts and technology are amortized using the straight-line method over their estimated useful lives.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f57658": { "value": "Research and development cost
Expenses relating to research activities are rec-ognized in the income statement as they incur. Expenses relating to development activities (relating to the design and testing of new or improved prod-ucts) are capitalized to the extent that the product or process is technical and commercially viable, and the Group has sufficient resources to complete the development work. Expenses that are capitalized include the costs of materials, direct salary costs and a share of the directly attributable overhead expenses. Capitalized development costs are recog-nized at their cost minus accumulated amortization and impairment losses. Other development costs are recognized in the statement of income as incurred.
Development costs that have previously been expensed are not recognized in subsequent periods. Capitalized development costs are amortized on a straight-line basis over the estimated useful life of the asset.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f57842": { "value": "2.12 Impairment of non-financial assets
Intangible assets and goodwill with an indefinite useful life are not amortized but tested annually for impairment. Items of property, plant and equipment, right of use assets and intangible assets are tested for impairment if there is reason to believe that future earnings do not justify the asset\u2019s carrying amount. The difference between the carrying amount and the recoverable amount is recognized as an impairment loss. The recoverable amount is the higher of the fair value less costs to sell and the value in use.
When testing for impairment, non-current assets are grouped at the lowest level at which it is possi-ble to distinguish independent cash inflows (cash generating units, CGU). A CGU is the smallest identifiable group of assets that generates cash inflows which are largely independent of the cash inflows from other assets or groups of assets. At each reporting date, the Group considers the possibility of reversing previous impairment losses on non-financial assets (except goodwill and other intangible assets with an indefinite useful life).
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group\u2019s CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. A long-term growth rate is calculated and applied to project future cash flows after the fifth year.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__60-1": { "value": "2.13 Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, and it is probable (more likely than not) that a financial settlement will take place as a result of this obligation and the size of the amount can be measured reliably. If the effect is consid-erable, the provision is calculated by discounting estimated future cash flow using a discount rate before tax that reflects the market\u2019s pricing of the time value of money and, if relevant, risks specifi-cally associated with the obligation.
Warranty provisions: The Group provides warran-ties for general repairs of defects that existed at the
time of sale, as required by law. Provisions related to these assurance-type warranties are recognized when the product is sold, or the service is provided to the customer. Initial recognition is based on historical information about warranties and a weighting of possible outcomes according to the likelihood of their occurrence. The initial estimate of warranty-related costs is revised annually.
(iii) Warranty provision
The Group typically provides warranties for general repairs and does not provide extended warranties or maintenance services in its contracts with customers. Such warranties are evaluated as assurance-type warranties which are accounted for under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. See note 19for an overview of the warranty provision.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f58404": { "value": "(I) Treasury shares
In the event of a purchase of treasury shares, the purchase price and any directly associated costs are recognized as a change in equity. Treasury shares are presented as a reduction in equity. Gains or losses on transactions involving treasury shares are recognized directly in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f58663": { "value": "(c) Dividends
Proposed dividends are classified as other equity until they are approved by the general assembly of Hexagon Composites ASA. Dividends are recog-nized at fair value.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__67-1": { "value": "(IV) Other capital reserves \u2013\u00a0share-based payments
The Group has a share-based program for certain employees in senior and key positions. The fair value of the share instruments is measured at the date of the grant using the Black & Scholes model. The fair value of the issued options, performance share units (PSUs) and restricted share units (RSUs) is expensed as an employee cost with a corresponding increase in other paid in capital over the vesting period, which is over the agreed-upon future service time.
Share-based payment
The Group has share-based programs for senior- and key executives. The programs are settled in shares, and consist of share options, performance share units (PSUs) and restricted share units (RSUs). In addition, certain key executives have share based programs settled in cash. The fair value of the share-based programs is expensed over the vesting period which is over the agreed-upon future service period and, where applicable, the performance conditions are fulfilled. The fair value of the share options, PSUs and RSUs is measured at grant date and calculated using the Black & Scholes model.
The cost of the employee share-based transaction is expensed over the vesting period. The value of the issued options, PSUs and RSUs of the transactions that are settled with equity instruments (settled with the company\u2019s own shares) is recognized as salary and personnel cost in profit and loss with a corre-sponding increase in other paid-in capital. The cash settlement options are however recognized with a corresponding change in provisions. Social security tax is recorded as a liability and is recognized over the estimated vesting period.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.
When the terms of an equity-settled award are modified, the minimum expense recognized is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of modification, is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is
cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f58781": { "value": "2.15 Revenue from contracts with customers
The Group\u2019s main revenues come from the sale of its own mass-produced standard products in the different segments:
1.\tHexagon Agility
2.\tHexagon Ragasco
3.\tHexagon Digital Wave
Revenue from contracts with customers is recog-nized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The products are mainly sold in relation to separately identifiable contracts with customers.
Sale of goods (cylinders, products, systems etc.)
Revenue from sale of goods is recognized at the point in time when control of the asset is trans-ferred to the customer, generally on delivery of the product. There are several credit terms, including upfront payment and secured payment, but normal credit term is 30 to 90 days upon delivery.
The Group considers whether there are other prom-ises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated. In determining the transaction price for the sale of goods, the Group considers the effects of variable consideration and the existence of significant financing components.
(i) Variable consideration
Some contracts with customers provide rights of return, trade discounts or volume rebates. The Group uses the expected value method to estimate
the goods that will not be returned as this best predicts the amount of variable consideration to which the Group will be entitled. For trade discounts and volume rebates the sale of goods are measured at the fair value of the consideration received or receivable, net of allowances for trade discounts and volume rebates. If revenue cannot be reliably meas-ured, the Group defers revenue recognition until the uncertainty is resolved. The Group performs the assessment on individual contracts to determine the estimated variable consideration and related constraints.
(ii) Significant financing component
Generally, the Group receives short-term advances from its customers. Using the practical expedient in IFRS 15, the Group does not adjust the promised amount of consideration for the effects of a signif-icant financing component if it expects, at contract inception, that the period between the transfer of the promised goods or services to the customer and when the customer pays for that goods or services will be one year or less.
(iii) Warranty provision
The Group typically provides warranties for general repairs and does not provide extended warranties or maintenance services in its contracts with customers. Such warranties are evaluated as assurance-type warranties which are accounted for under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. See note 19for an overview of the warranty provision.
Services
To some extent the Group provides other services in relation to reinspection and testing of products and non-recurring engineering and design or development. These services are normally sold on their own and based on relative stand-alone selling prices. The Group recognizes revenue from services at point in time.
Contract balances
(i) Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognized for the earned consid-eration that is conditional.
(ii) Trade receivable
A receivable represents the Group\u2019s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
(iii) Contract liability
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consider-ation is due) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract liability is recog-nized when the payment is made, or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Group fulfils the performance obligation under the contract.
Cost to obtain a contract
The Group has elected to apply the optional prac-tical expedient for costs to obtain a contract which allows the Group to immediately expense such costs when the related revenue is expected to be recognized within one year. When revenue will be recognized over several reporting periods the Group recognizes incremental costs of obtaining a contract with a customer as an asset, provided that the costs are expected to be recovered throughout the con-tract. The costs are amortized on a systematic basis that is consistent with the transfer of the related goods or services to the customer and subsequently re-assessed at the end of each reporting period.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f59358": { "value": "(ii) Trade receivable
A receivable represents the Group\u2019s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f59649": { "value": "2.16 Employee benefits
Defined benefit pension plans
Defined benefit plans are valued at the present value of accrued future pension benefits at the end of the reporting period. Pension plan assets are valued at their fair value.
The current service cost and net interest income/costs are recognized immediately and is presented as a payroll & social security expense in the income statement. Net interest income/cost is calculated by using the discount rate of the liability at the begin-ning of the period on the net liability. Changes in net pension liabilities as a result of payments of pre-miums and pension payments have been taken into consideration. The difference between the actual return and the accounted return is recognized continuously through other comprehensive income. The pension cost is affecting the payroll & social security costs in the income statement. Actuarial gains and losses, including changes in value, both
for assets and liabilities, are recognized trough other comprehensive income. Actuarial gains and losses are not reclassified over profit and loss.
Multi-employer plans
Some of the Norwegian employees participate in a new AFP pension scheme. The scheme is a defined benefit multi-employer pension plan, funded through premiums that are defined as a percentage of salary. The scheme\u2019s retirement benefit obliga-tion and plan assets cannot be reliably measured and allocated at present. For accounting purposes, the scheme is treated as a defined contribution plan, with premium payments expensed as incurred, and no pension liability recognized.
Defined contribution pension plans
Pension premiums relating to defined contribution plans are recognized as an expense as they are incurred.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f60311": { "value": "2.17 Income taxes
The tax expense consists of the tax payable and changes to deferred tax. Deferred tax/tax assets are calculated on all differences between the book value and tax value of assets and liabilities, with the exception of:
\u2022temporary differences linked to goodwill that are not tax deductible
\u2022temporary differences related to investments in subsidiaries, associates or joint ventures when the Group controls when the temporary differences are to be reversed and this is not expected to take place in the foreseeable future.
Deferred tax assets are recognized when it is prob-able that the Group will have a sufficient profit for tax purposes in subsequent periods to utilize the tax asset. The Group recognize previously unrecognized deferred tax assets to the extent it has become probable that the Group can utilize the deferred tax asset. Similarly, the Group will reduce a deferred tax asset to the extent that the Group no longer regards it as probable that it can utilize the deferred tax asset.
Deferred tax and deferred tax assets are meas-ured on the basis of the expected future tax rates applicable to the companies in the Group where temporary differences have arisen. Deferred tax assets and liabilities are recognized at their nominal value and classified as non-current assets and non-current liabilities in the balance sheet.
Taxes payable and deferred taxes are recognized directly in equity to the extent that they relate to items recognized directly in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f60312": { "value": "2.17 Income taxes
The tax expense consists of the tax payable and changes to deferred tax. Deferred tax/tax assets are calculated on all differences between the book value and tax value of assets and liabilities, with the exception of:
\u2022temporary differences linked to goodwill that are not tax deductible
\u2022temporary differences related to investments in subsidiaries, associates or joint ventures when the Group controls when the temporary differences are to be reversed and this is not expected to take place in the foreseeable future.
Deferred tax assets are recognized when it is prob-able that the Group will have a sufficient profit for tax purposes in subsequent periods to utilize the tax asset. The Group recognize previously unrecognized deferred tax assets to the extent it has become probable that the Group can utilize the deferred tax asset. Similarly, the Group will reduce a deferred tax asset to the extent that the Group no longer regards it as probable that it can utilize the deferred tax asset.
Deferred tax and deferred tax assets are meas-ured on the basis of the expected future tax rates applicable to the companies in the Group where temporary differences have arisen. Deferred tax assets and liabilities are recognized at their nominal value and classified as non-current assets and non-current liabilities in the balance sheet.
Taxes payable and deferred taxes are recognized directly in equity to the extent that they relate to items recognized directly in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f60620": { "value": "2.18 Segments
For management reporting purposes, the Group is organized into different business areas according to product/service range. The Group\u2019s segment report-ing format is business areas and corresponds to the management structure and the internal reporting to the Group Executive Management and the Board of Directors. Financial information relating to segments and geographical areas is presented in note 4.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f60758": { "value": "2.20 New accounting standards, interpretations and amendments adopted by the group
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2
The amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to
disclose their \u2018significant\u2019 accounting policies with a requirement to disclose their \u2018material\u2019 accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. The amendments have had an impact on the Group\u2019s disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Group\u2019s financial statements.
The Group has not early adopted any standard, interpretation or amendments that has been issued but is not yet effective. Standards, interpretations, and amendments that are issued up to the date of issuance of the consolidated financial statements, but not yet effective are considered not relevant and not to have an impact on the consolidated financial statements of the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f60759": { "value": "2.20 New accounting standards, interpretations and amendments adopted by the group
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2
The amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to
disclose their \u2018significant\u2019 accounting policies with a requirement to disclose their \u2018material\u2019 accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. The amendments have had an impact on the Group\u2019s disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Group\u2019s financial statements.
The Group has not early adopted any standard, interpretation or amendments that has been issued but is not yet effective. Standards, interpretations, and amendments that are issued up to the date of issuance of the consolidated financial statements, but not yet effective are considered not relevant and not to have an impact on the consolidated financial statements of the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f61009": { "value": "Note 3\tEstimation uncertainty and significant judgments
The management has used estimates and assump-tions that have affected assets, liabilities, income, expenses and information on potential liabilities. This particularly applies to the depreciation of tangible and intangible fixed assets, impairment of goodwill and associates and evaluations related to acquisitions. Future events may lead to these estimates being changed. Estimates and their underlying assumptions are reviewed on a regular basis and are based on best estimates and historical experience and other factors, including forecast events that are considered probable under current circumstances. Changes in accounting estimates are recognized during the period when the changes take place. If the changes also apply to future periods, the effect is divided among the present and future periods.
The Group prepares estimates and makes assump-tions about the future. The accounting estimates based on this process are, by definition, rarely com-pletely in line with the final outcome. Estimates and assumptions represent a risk of material changes in the reported amounts of revenues, expenses, assets, liabilities and equity over the next financial year.
The Group\u2019s most important accounting estimates are related to the following items:
\u2022Fair value recognition of associated companies
\u2022Impairment testing of associates
\u2022Impairment testing of goodwill
\u2022Leases
\u2022Capitalized development cost
Fair value recognition of associates
Upon initial recognition of an associate, the Group is required to determine the consideration of the associate to the assets and liabilities assumed based on their estimated fair values. Although the fair value of the assets and liabilities assumed are not separately recognized in the statement of financial position, but inherently included in the initial recog-nized value of the associate, any difference between the fair value of the net assets assumed and the associates\u2019 net book values are to be separately accounted for.
Following the deconsolidation of Hexagon Purus as a subsidiary, and the Group\u2019s reclassification of Hexagon Purus as an associate at fair value on 29 June 2023, the Group engaged a third-party appraisal firm to assist the Group in determining the fair values of the assets acquired and liabilities assumed.
Significant fair values implicitly reflected in the initial recognition of Hexagon Purus as of 29 June 2023 included technology and customer relation-ships. Critical estimates in the evaluations for these intangible assets include, but are not limited to;
\u2022For Technologies (by use of a relief from royalty method)
\u2013Estimated future revenues and growth rates for the said technologies.
\u2013Estimated churn rates/attrition rates for the technologies
\u2013Estimated appropriate royalty rates
\u2013Estimated appropriate discount rates / cost of capital
\u2013Estimated useful lifetime of the said technologies
\u2022For Customer Relationships (by use of a Multi Period Excess Earnings Method)
\u2013Estimated future revenues and growth rates from the said customer relationships
\u2013Estimated customer churn rates / attrition rates
\u2013Estimated profit margins towards the said customer relationships
\u2013Estimated appropriate discount rates / cost of capital
\u2013Estimated useful lifetime of the said customer relationships
Management\u2019s estimates of fair value and useful lives are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Management\u2019s fair value estimates are based on reasonable, but not entirely certain, assumptions. See also note 26for the pur-chase price allocation of Hexagon Purus upon first time recognition as an associated company.
Impairment testing of associates
In the event of objective evidence of impairment in an associate, the Group determines the asso-ciate\u2019s recoverable amount by carrying out an impairment test which involves several assumptions and estimates related to the future cash flows of the associate, which are inherently uncertain, and
similar to the uncertainties pertaining to impairment testing of goodwill described in the section below.
The value in use calculation related to Hexagon\u2019s investment in its associated company, Hexagon Purus, is particularly sensitive to revenue growth rates and timing of the expected ramp-up in activity within the hydrogen and battery electric mobility sector. See also note 26for further information on impairment testing of Hexagon Purus.
Impairment testing of goodwill
Recognized goodwill is assessed at least annu-ally for impairment. Recoverable amounts from cash-generating units are calculated based on their value in use. There is uncertainty associated with the assumptions used as a basis in the preparation of budgets for the calculation of value in use. These calculations require the use of estimates and assumptions about future income and expense trends which is inherently uncertain. The risk of changes in expected cash flows that affect the financial statements will naturally be higher in markets in an early phase and be more limited in established markets. Furthermore, the risk of changes will be significantly higher in periods with uncertain macroeconomic prognosis. Climate related risks have been considered when preparing projections and growth assumptions applied for impairment testing. Hexagon is only to a limited extent considered to be directly exposed to climate related risks as the Group have limited physical infrastructure severe climate exposed locations but
could be affected by changes in customer behav-iour and changes in the regulatory environment. Hexagon has however experienced a favorable environmental regulatory environment in recent years which is expected to continue in the years ahead. This trend has implicitly been factored into the future cash flow forecasts used in the impair-ment testing. For impairment testing purposes, any uncertainty related to the present value of future cash flows is reflected in the cash flow projections, while discount rates have been determined based on appropriate market conditions.
The value in use calculations are sensitive to the dis-count rate used for the discounted cash flow model as well as the expected future cash-inflows and the growth rate. See also note 11for further information on impairment testing of goodwill.
Leases \u2013 Significant judgement in determining the lease term of contracts with renewal options and incremental borrowing rate
The group has several offices and other facilities leases with options to extend the lease. Renewal options are included in the calculation of the lease liability if management is reasonably certain to exer-cise the option to renew the contract. Management has used judgment when considering all relevant factors that create an economic incentive to extend the lease. In this assessment Management has considered the original lease term and the signifi-cance of the underlying assets, i.e. the offices and other facilities.
In the event the Group cannot readily determine the interest rate implicit in the lease, the Group uses
the incremental borrowing rate (IBR) to measure the lease liability. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic envi-ronment. The IBR therefore reflects what the Group \u2018would have to pay\u2019, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions). The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary\u2019s stand-alone credit rating). See also note 24Leases.
Capitalized development costs
The Group capitalizes development costs for a project in accordance with the Groups accounting policy. Initial capitalization of costs is based on management\u2019s judgement that technological and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to project plan. In determining the amounts to be capitalized, management makes assumptions regarding the expected future cash generation of the project, discount rates to be applied and the expected period of benefits. For criteria for recognition, see note 2.12and note11.
There is uncertainty about the date for when the criteria for recognition of intangible assets are satisfied and there is uncertainty associated with the valuation and allocation of the cost of acquisition for intangible assets.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__80-1": { "value": "Note 4\tOperating segment and revenue breakdown
Following the deconsolidation of Hexagon Purus as of 29 June 2023 (see also note 5), the Group\u2019s opera-tions are divided into three strategic business areas, which are organized and managed separately. These three business areas are also defined as the group\u2019s reportable operating segments as the different business areas sell different products, have separate management bodies, address different customer groups and have different risk profiles. The consoli-dated statement of income for 2022 is re-presented to reflect the continuing operating segments.
The Hexagon Composites group is divided into the following reportable operating segments
a.\tHexagon Agility - a global provider of clean fuel solutions for commercial vehicles and gas storage- and transportation solutions
b.\tHexagon Ragasco - the world\u2019s leading manufac-turer of composite liquified petroleum gas (LPG) cylinders for leisure, household, and industrial application
c.\tHexagon Digital Wave - global leader in innova-tive cylinder testing and monitoring technology that reduce down-time and inspection costs while improving inspection accuracy
The executive management group is the Chief Operating Decision Makers (CODMs) and monitor the operating results of their respective business areas separately for the purpose of making deci-sions about resource allocation and performance assessment.
No operating segments have been aggregated to form the above reportable operating segments. Transactions between the segments are based on arm\u2019s length basis.
Other information
The Group\u2019s customer base is relatively fragmented in terms of size and concentration such that it is not dependent upon any one single customer. No customer or customer group exceeded 10 per cent of annual sales in the group in 2023 and 2022.
Geographical segments
The Group\u2019s activities are divided into the following regions: Europe, North America, South-East Asia, Africa, Oceania and Norway.
Intra-segment sales and transactions have been eliminated.
Business segment data 2023 (NOK 1\u00a0000) | Hexagon Agility | Hexagon Ragasco | Hexagon Digital Wave | Corporate / elimination | Hexagon Purus (equity method) | Hexagon Group (continuing operations) | Hexagon Purus (discontinued) | Hexagon Group 2023 |
Revenue from external customers: | ||||||||
Sale of cylinders and equipment (at a point in time) | 3\u00a0885\u00a0528 | 675\u00a0084 | 160\u00a0893 | - | 4\u00a0721\u00a0505 | 4\u00a0721\u00a0505 | ||
Sale to group companies and associates | 428\u00a0174 | 3\u00a0399 | 15\u00a0485 | 8\u00a0075 | 455\u00a0132 | 455\u00a0132 | ||
Other operating income | 2\u00a0700 | 220 | 2\u00a0340 | 27 | 5\u00a0286 | 5\u00a0286 | ||
Total revenue from contract with customers | 4\u00a0316\u00a0402 | 678\u00a0703 | 178\u00a0718 | 8\u00a0102 | 5\u00a0181\u00a0924 | 5\u00a0181\u00a0924 | ||
Rental income | 4\u00a0102 | - | - | 281 | 4\u00a0383 | 4\u00a0383 | ||
Total revenue | 4\u00a0320\u00a0503 | 678\u00a0703 | 178\u00a0718 | 8\u00a0383 | 5\u00a0186\u00a0307 | 5\u00a0186\u00a0307 | ||
Operating profit for segment before depreciation/amortization (EBITDA) | 380\u00a0903 | 114\u00a0209 | 7\u00a0813 | (23\u00a0191) | 479\u00a0734 | 479\u00a0734 | ||
Operating profit for segment (EBIT) | 181\u00a0586 | 75\u00a0576 | 1\u00a0044 | (37\u00a0047) | 221\u00a0159 | 221\u00a0159 | ||
Profit/loss from associates | (20\u00a0606) | - | - | - | (857\u00a0968) | (878\u00a0574) | (878\u00a0574) | |
Net financial items | (58\u00a0005) | 7\u00a0206 | (1\u00a0171) | (223\u00a0592) | (275\u00a0562) | (275\u00a0562) | ||
Tax expense | 21\u00a0066 | 9\u00a0697 | 77 | (22\u00a0634) | 8\u00a0205 | 8\u00a0205 | ||
Profit/loss for the year | 81\u00a0908 | 73\u00a0085 | (204) | (238\u00a0004) | (857\u00a0968) | (941\u00a0182) | (941\u00a0182) | |
Profit after taxes from discontinued operations (Hexagon Purus) | - | - | - | - | - | 2\u00a0049\u00a0703 | 2\u00a0049\u00a0703 | |
Profit/loss for the year | 81\u00a0908 | 73\u00a0085 | (204) | (238\u00a0004) | (857\u00a0968) | (941\u00a0182) | 2\u00a0049\u00a0703 | 1\u00a0108\u00a0520 |
Segment assets | 4\u00a0166\u00a0566 | 568\u00a0928 | 122\u00a0689 | 1\u00a0569\u00a0912 | 6\u00a0428\u00a0096 | 6\u00a0428\u00a0096 | ||
Segment liabilities | 1\u00a0596\u00a0489 | 318\u00a0431 | 57\u00a0427 | 1\u00a0241\u00a0716 | 3\u00a0214\u00a0063 | 3\u00a0214\u00a0063 | ||
Investments in property, plant & equipment for the year | 160\u00a0085 | 53\u00a0778 | 13\u00a0975 | 698 | 228\u00a0535 | 195\u00a0510 | 424\u00a0045 | |
Depreciation and impairment | 92\u00a0629 | 29\u00a0418 | 2\u00a0979 | 1\u00a0065 | 126\u00a0091 | 21\u00a0103 | 147\u00a0194 | |
Investments in intangible assets for the year | 29\u00a0511 | 2\u00a0316 | - | (7\u00a0435) | 24\u00a0392 | 18\u00a0803 | 43\u00a0195 | |
Amortization and impairment | 52\u00a0130 | 55 | - | 10\u00a0988 | 63\u00a0173 | 23\u00a0772 | 86\u00a0945 | |
Additions of right-of-use assets for the year | 81\u00a0407 | 13\u00a0530 | - | 9\u00a0993 | 104\u00a0930 | 9\u00a0270 | 114\u00a0200 | |
Depreciation and impairment | 54\u00a0558 | 9\u00a0160 | 3\u00a0790 | 1\u00a0803 | 69\u00a0311 | 13\u00a0881 | 83\u00a0192 |
Geographical information 2023 (continuing operations) (NOK 1\u00a0000) | Europe | North America | South America | South-East Asia | Africa | Oceania | Norway | Consolidated 2023 |
Revenue divided among customer locations from external customers | 1\u00a0262\u00a0632 | 3\u00a0582\u00a0345 | 23\u00a0784 | 169\u00a0831 | 60\u00a0008 | 33\u00a0730 | 53\u00a0977 | 5\u00a0186\u00a0307 |
Non current assets\u200c1 | 202\u00a0448 | 2\u00a0530\u00a0847 | 365\u00a0872 | 3\u00a0099\u00a0168 | ||||
Investments in property, plant & equipment for the year | 21\u00a0311 | 152\u00a0749 | 54\u00a0476 | 228\u00a0535 | ||||
Investments in intangible assets for the year | 1\u00a0625 | 27\u00a0886 | (5\u00a0119) | 24\u00a0392 |
1Non-current assets for this purpose consists of property, plant & equipment, right-of-use assets and intangible assets
Business segment data 2022 (NOK 1\u00a0000) | Hexagon Agility | Hexagon Ragasco | Hexagon Digital Wave | Corporate / elimination | Hexagon Group (continuing operations) | Hexagon Purus (discontinued) | Elimination | Hexagon Group 2022 |
Revenue from external customers: | ||||||||
Sale of cylinders and equipment (at a point in time) | 3\u00a0204\u00a0885 | 701\u00a0029 | 89\u00a0297 | 3\u00a0141 | 3\u00a0998\u00a0352 | 3\u00a0998\u00a0352 | ||
Sale to group companies and associates | 260\u00a0981 | 4\u00a0977 | 24\u00a0679 | (1\u00a0601) | 289\u00a0036 | 289\u00a0036 | ||
Other operating income | 8\u00a0093 | 210 | 2\u00a0025 | 10\u00a0327 | 10\u00a0327 | |||
Total revenue from contract with customers | 3\u00a0473\u00a0959 | 706\u00a0216 | 116\u00a0001 | 1\u00a0540 | 4\u00a0297\u00a0716 | 4\u00a0297\u00a0716 | ||
Rental income | 3\u00a0919 | - | - | 1\u00a0107 | 5\u00a0027 | 5\u00a0027 | ||
Total revenue | 3\u00a0477\u00a0878 | 706\u00a0216 | 116\u00a0001 | 2\u00a0648 | 4\u00a0302\u00a0743 | 4\u00a0302\u00a0743 | ||
Operating profit for segment before depreciation/amortization (EBITDA) | 208\u00a0988 | 123\u00a0256 | 6\u00a0715 | 8\u00a0709 | 347\u00a0667 | 347\u00a0667 | ||
Operating profit for segment (EBIT) | 28\u00a0186 | 86\u00a0362 | 1\u00a0193 | (9\u00a0907) | 105\u00a0834 | 105\u00a0834 | ||
Profit/loss from associates | (3\u00a0571) | - | - | - | (3\u00a0571) | (3\u00a0571) | ||
Net financial items | (56\u00a0880) | (301) | (6\u00a0166) | (15\u00a0136) | (78\u00a0482) | (78\u00a0482) | ||
Tax expense | 12\u00a0691 | 16\u00a0685 | 258 | (11\u00a0394) | 18\u00a0240 | 18\u00a0240 | ||
Profit/loss for the year | (44\u00a0956) | 69\u00a0376 | (5\u00a0231) | (13\u00a0649) | 5\u00a0541 | 5\u00a0541 | ||
Profit after taxes from discontinued operations (Hexagon Purus) | - | - | - | - | - | (431\u00a0518) | (431\u00a0518) | |
Profit/loss for the year | (44\u00a0956) | 69\u00a0376 | (5\u00a0231) | (13\u00a0649) | 5\u00a0541 | (431\u00a0518) | (425\u00a0977) | |
Segment assets | 4\u00a0550\u00a0321 | 581\u00a0399 | 109\u00a0677 | 1\u00a0750\u00a0450 | 6\u00a0991\u00a0847 | 2\u00a0654\u00a0903 | (1\u00a0743\u00a0009) | 7\u00a0903\u00a0742 |
Segment liabilities | 2\u00a0104\u00a0101 | 391\u00a0626 | 46\u00a0015 | 1\u00a0077\u00a0791 | 3\u00a0619\u00a0533 | 967\u00a0282 | (151\u00a0880) | 4\u00a0434\u00a0935 |
Investments in property, plant & equipment for the year | 213\u00a0979 | 38\u00a0352 | 1\u00a0825 | 13\u00a0022 | 267\u00a0180 | 240\u00a0030 | 507\u00a0210 | |
Depreciation and impairment | 91\u00a0911 | 29\u00a0252 | 2\u00a0109 | 2\u00a0534 | 125\u00a0806 | 33\u00a0779 | 159\u00a0585 | |
Investments in intangible assets for the year | 4\u00a0940 | - | - | 18\u00a0164 | 23\u00a0104 | 52\u00a0625 | 75\u00a0729 | |
Amortization and impairment | 46\u00a0344 | - | - | 12\u00a0812 | 59\u00a0156 | 36\u00a0906 | 96\u00a0062 | |
Additions of right-of-use assets for the year | 121\u00a0532 | - | 293 | 1\u00a0695 | 123\u00a0520 | 122\u00a0472 | 245\u00a0992 | |
Depreciation and impairment | 42\u00a0546 | 7\u00a0642 | 3\u00a0413 | 3\u00a0270 | 56\u00a0871 | 24\u00a0404 | 81\u00a0275 |
Geographical information 2022 (continuing operations) (NOK 1\u00a0000) | Europe | North America | South America | South-East Asia | Africa | Oceania | Norway | Consolidated 2022 |
Revenue divided among customer locations from external customers | 1\u00a0214\u00a0990 | 2\u00a0861\u00a0760 | 90\u00a0831 | 54\u00a0809 | 26\u00a0849 | 1\u00a0488 | 52\u00a0016 | 4\u00a0302\u00a0743 |
Non current assets\u200c1 | 189\u00a0982 | 2\u00a0369\u00a0091 | 371\u00a0375 | 2\u00a0930\u00a0449 | ||||
Investments in property, plant & equipment for the year | 24\u00a0329 | 204\u00a0521 | 38\u00a0329 | 267\u00a0180 | ||||
Investments in intangible assets for the year | 421 | 4\u00a0519 | 18\u00a0164 | 23\u00a0104 |
1Non-current assets for this purpose consists of property, plant & equipment, right-of-use assets and intangible assets
Note 4\tOperating segment and revenue breakdown
Following the deconsolidation of Hexagon Purus as of 29 June 2023 (see also note 5), the Group\u2019s opera-tions are divided into three strategic business areas, which are organized and managed separately. These three business areas are also defined as the group\u2019s reportable operating segments as the different business areas sell different products, have separate management bodies, address different customer groups and have different risk profiles. The consoli-dated statement of income for 2022 is re-presented to reflect the continuing operating segments.
The Hexagon Composites group is divided into the following reportable operating segments
a.\tHexagon Agility - a global provider of clean fuel solutions for commercial vehicles and gas storage- and transportation solutions
b.\tHexagon Ragasco - the world\u2019s leading manufac-turer of composite liquified petroleum gas (LPG) cylinders for leisure, household, and industrial application
c.\tHexagon Digital Wave - global leader in innova-tive cylinder testing and monitoring technology that reduce down-time and inspection costs while improving inspection accuracy
The executive management group is the Chief Operating Decision Makers (CODMs) and monitor the operating results of their respective business areas separately for the purpose of making deci-sions about resource allocation and performance assessment.
No operating segments have been aggregated to form the above reportable operating segments. Transactions between the segments are based on arm\u2019s length basis.
Other information
The Group\u2019s customer base is relatively fragmented in terms of size and concentration such that it is not dependent upon any one single customer. No customer or customer group exceeded 10 per cent of annual sales in the group in 2023 and 2022.
Geographical segments
The Group\u2019s activities are divided into the following regions: Europe, North America, South-East Asia, Africa, Oceania and Norway.
Intra-segment sales and transactions have been eliminated.
Business segment data 2023 (NOK 1\u00a0000) | Hexagon Agility | Hexagon Ragasco | Hexagon Digital Wave | Corporate / elimination | Hexagon Purus (equity method) | Hexagon Group (continuing operations) | Hexagon Purus (discontinued) | Hexagon Group 2023 |
Revenue from external customers: | ||||||||
Sale of cylinders and equipment (at a point in time) | 3\u00a0885\u00a0528 | 675\u00a0084 | 160\u00a0893 | - | 4\u00a0721\u00a0505 | 4\u00a0721\u00a0505 | ||
Sale to group companies and associates | 428\u00a0174 | 3\u00a0399 | 15\u00a0485 | 8\u00a0075 | 455\u00a0132 | 455\u00a0132 | ||
Other operating income | 2\u00a0700 | 220 | 2\u00a0340 | 27 | 5\u00a0286 | 5\u00a0286 | ||
Total revenue from contract with customers | 4\u00a0316\u00a0402 | 678\u00a0703 | 178\u00a0718 | 8\u00a0102 | 5\u00a0181\u00a0924 | 5\u00a0181\u00a0924 | ||
Rental income | 4\u00a0102 | - | - | 281 | 4\u00a0383 | 4\u00a0383 | ||
Total revenue | 4\u00a0320\u00a0503 | 678\u00a0703 | 178\u00a0718 | 8\u00a0383 | 5\u00a0186\u00a0307 | 5\u00a0186\u00a0307 | ||
Operating profit for segment before depreciation/amortization (EBITDA) | 380\u00a0903 | 114\u00a0209 | 7\u00a0813 | (23\u00a0191) | 479\u00a0734 | 479\u00a0734 | ||
Operating profit for segment (EBIT) | 181\u00a0586 | 75\u00a0576 | 1\u00a0044 | (37\u00a0047) | 221\u00a0159 | 221\u00a0159 | ||
Profit/loss from associates | (20\u00a0606) | - | - | - | (857\u00a0968) | (878\u00a0574) | (878\u00a0574) | |
Net financial items | (58\u00a0005) | 7\u00a0206 | (1\u00a0171) | (223\u00a0592) | (275\u00a0562) | (275\u00a0562) | ||
Tax expense | 21\u00a0066 | 9\u00a0697 | 77 | (22\u00a0634) | 8\u00a0205 | 8\u00a0205 | ||
Profit/loss for the year | 81\u00a0908 | 73\u00a0085 | (204) | (238\u00a0004) | (857\u00a0968) | (941\u00a0182) | (941\u00a0182) | |
Profit after taxes from discontinued operations (Hexagon Purus) | - | - | - | - | - | 2\u00a0049\u00a0703 | 2\u00a0049\u00a0703 | |
Profit/loss for the year | 81\u00a0908 | 73\u00a0085 | (204) | (238\u00a0004) | (857\u00a0968) | (941\u00a0182) | 2\u00a0049\u00a0703 | 1\u00a0108\u00a0520 |
Segment assets | 4\u00a0166\u00a0566 | 568\u00a0928 | 122\u00a0689 | 1\u00a0569\u00a0912 | 6\u00a0428\u00a0096 | 6\u00a0428\u00a0096 | ||
Segment liabilities | 1\u00a0596\u00a0489 | 318\u00a0431 | 57\u00a0427 | 1\u00a0241\u00a0716 | 3\u00a0214\u00a0063 | 3\u00a0214\u00a0063 | ||
Investments in property, plant & equipment for the year | 160\u00a0085 | 53\u00a0778 | 13\u00a0975 | 698 | 228\u00a0535 | 195\u00a0510 | 424\u00a0045 | |
Depreciation and impairment | 92\u00a0629 | 29\u00a0418 | 2\u00a0979 | 1\u00a0065 | 126\u00a0091 | 21\u00a0103 | 147\u00a0194 | |
Investments in intangible assets for the year | 29\u00a0511 | 2\u00a0316 | - | (7\u00a0435) | 24\u00a0392 | 18\u00a0803 | 43\u00a0195 | |
Amortization and impairment | 52\u00a0130 | 55 | - | 10\u00a0988 | 63\u00a0173 | 23\u00a0772 | 86\u00a0945 | |
Additions of right-of-use assets for the year | 81\u00a0407 | 13\u00a0530 | - | 9\u00a0993 | 104\u00a0930 | 9\u00a0270 | 114\u00a0200 | |
Depreciation and impairment | 54\u00a0558 | 9\u00a0160 | 3\u00a0790 | 1\u00a0803 | 69\u00a0311 | 13\u00a0881 | 83\u00a0192 |
Geographical information 2023 (continuing operations) (NOK 1\u00a0000) | Europe | North America | South America | South-East Asia | Africa | Oceania | Norway | Consolidated 2023 |
Revenue divided among customer locations from external customers | 1\u00a0262\u00a0632 | 3\u00a0582\u00a0345 | 23\u00a0784 | 169\u00a0831 | 60\u00a0008 | 33\u00a0730 | 53\u00a0977 | 5\u00a0186\u00a0307 |
Non current assets\u200c1 | 202\u00a0448 | 2\u00a0530\u00a0847 | 365\u00a0872 | 3\u00a0099\u00a0168 | ||||
Investments in property, plant & equipment for the year | 21\u00a0311 | 152\u00a0749 | 54\u00a0476 | 228\u00a0535 | ||||
Investments in intangible assets for the year | 1\u00a0625 | 27\u00a0886 | (5\u00a0119) | 24\u00a0392 |
1Non-current assets for this purpose consists of property, plant & equipment, right-of-use assets and intangible assets
Business segment data 2022 (NOK 1\u00a0000) | Hexagon Agility | Hexagon Ragasco | Hexagon Digital Wave | Corporate / elimination | Hexagon Group (continuing operations) | Hexagon Purus (discontinued) | Elimination | Hexagon Group 2022 |
Revenue from external customers: | ||||||||
Sale of cylinders and equipment (at a point in time) | 3\u00a0204\u00a0885 | 701\u00a0029 | 89\u00a0297 | 3\u00a0141 | 3\u00a0998\u00a0352 | 3\u00a0998\u00a0352 | ||
Sale to group companies and associates | 260\u00a0981 | 4\u00a0977 | 24\u00a0679 | (1\u00a0601) | 289\u00a0036 | 289\u00a0036 | ||
Other operating income | 8\u00a0093 | 210 | 2\u00a0025 | 10\u00a0327 | 10\u00a0327 | |||
Total revenue from contract with customers | 3\u00a0473\u00a0959 | 706\u00a0216 | 116\u00a0001 | 1\u00a0540 | 4\u00a0297\u00a0716 | 4\u00a0297\u00a0716 | ||
Rental income | 3\u00a0919 | - | - | 1\u00a0107 | 5\u00a0027 | 5\u00a0027 | ||
Total revenue | 3\u00a0477\u00a0878 | 706\u00a0216 | 116\u00a0001 | 2\u00a0648 | 4\u00a0302\u00a0743 | 4\u00a0302\u00a0743 | ||
Operating profit for segment before depreciation/amortization (EBITDA) | 208\u00a0988 | 123\u00a0256 | 6\u00a0715 | 8\u00a0709 | 347\u00a0667 | 347\u00a0667 | ||
Operating profit for segment (EBIT) | 28\u00a0186 | 86\u00a0362 | 1\u00a0193 | (9\u00a0907) | 105\u00a0834 | 105\u00a0834 | ||
Profit/loss from associates | (3\u00a0571) | - | - | - | (3\u00a0571) | (3\u00a0571) | ||
Net financial items | (56\u00a0880) | (301) | (6\u00a0166) | (15\u00a0136) | (78\u00a0482) | (78\u00a0482) | ||
Tax expense | 12\u00a0691 | 16\u00a0685 | 258 | (11\u00a0394) | 18\u00a0240 | 18\u00a0240 | ||
Profit/loss for the year | (44\u00a0956) | 69\u00a0376 | (5\u00a0231) | (13\u00a0649) | 5\u00a0541 | 5\u00a0541 | ||
Profit after taxes from discontinued operations (Hexagon Purus) | - | - | - | - | - | (431\u00a0518) | (431\u00a0518) | |
Profit/loss for the year | (44\u00a0956) | 69\u00a0376 | (5\u00a0231) | (13\u00a0649) | 5\u00a0541 | (431\u00a0518) | (425\u00a0977) | |
Segment assets | 4\u00a0550\u00a0321 | 581\u00a0399 | 109\u00a0677 | 1\u00a0750\u00a0450 | 6\u00a0991\u00a0847 | 2\u00a0654\u00a0903 | (1\u00a0743\u00a0009) | 7\u00a0903\u00a0742 |
Segment liabilities | 2\u00a0104\u00a0101 | 391\u00a0626 | 46\u00a0015 | 1\u00a0077\u00a0791 | 3\u00a0619\u00a0533 | 967\u00a0282 | (151\u00a0880) | 4\u00a0434\u00a0935 |
Investments in property, plant & equipment for the year | 213\u00a0979 | 38\u00a0352 | 1\u00a0825 | 13\u00a0022 | 267\u00a0180 | 240\u00a0030 | 507\u00a0210 | |
Depreciation and impairment | 91\u00a0911 | 29\u00a0252 | 2\u00a0109 | 2\u00a0534 | 125\u00a0806 | 33\u00a0779 | 159\u00a0585 | |
Investments in intangible assets for the year | 4\u00a0940 | - | - | 18\u00a0164 | 23\u00a0104 | 52\u00a0625 | 75\u00a0729 | |
Amortization and impairment | 46\u00a0344 | - | - | 12\u00a0812 | 59\u00a0156 | 36\u00a0906 | 96\u00a0062 | |
Additions of right-of-use assets for the year | 121\u00a0532 | - | 293 | 1\u00a0695 | 123\u00a0520 | 122\u00a0472 | 245\u00a0992 | |
Depreciation and impairment | 42\u00a0546 | 7\u00a0642 | 3\u00a0413 | 3\u00a0270 | 56\u00a0871 | 24\u00a0404 | 81\u00a0275 |
Geographical information 2022 (continuing operations) (NOK 1\u00a0000) | Europe | North America | South America | South-East Asia | Africa | Oceania | Norway | Consolidated 2022 |
Revenue divided among customer locations from external customers | 1\u00a0214\u00a0990 | 2\u00a0861\u00a0760 | 90\u00a0831 | 54\u00a0809 | 26\u00a0849 | 1\u00a0488 | 52\u00a0016 | 4\u00a0302\u00a0743 |
Non current assets\u200c1 | 189\u00a0982 | 2\u00a0369\u00a0091 | 371\u00a0375 | 2\u00a0930\u00a0449 | ||||
Investments in property, plant & equipment for the year | 24\u00a0329 | 204\u00a0521 | 38\u00a0329 | 267\u00a0180 | ||||
Investments in intangible assets for the year | 421 | 4\u00a0519 | 18\u00a0164 | 23\u00a0104 |
1Non-current assets for this purpose consists of property, plant & equipment, right-of-use assets and intangible assets
Note 4\tOperating segment and revenue breakdown
Following the deconsolidation of Hexagon Purus as of 29 June 2023 (see also note 5), the Group\u2019s opera-tions are divided into three strategic business areas, which are organized and managed separately. These three business areas are also defined as the group\u2019s reportable operating segments as the different business areas sell different products, have separate management bodies, address different customer groups and have different risk profiles. The consoli-dated statement of income for 2022 is re-presented to reflect the continuing operating segments.
The Hexagon Composites group is divided into the following reportable operating segments
a.\tHexagon Agility - a global provider of clean fuel solutions for commercial vehicles and gas storage- and transportation solutions
b.\tHexagon Ragasco - the world\u2019s leading manufac-turer of composite liquified petroleum gas (LPG) cylinders for leisure, household, and industrial application
c.\tHexagon Digital Wave - global leader in innova-tive cylinder testing and monitoring technology that reduce down-time and inspection costs while improving inspection accuracy
The executive management group is the Chief Operating Decision Makers (CODMs) and monitor the operating results of their respective business areas separately for the purpose of making deci-sions about resource allocation and performance assessment.
No operating segments have been aggregated to form the above reportable operating segments. Transactions between the segments are based on arm\u2019s length basis.
Other information
The Group\u2019s customer base is relatively fragmented in terms of size and concentration such that it is not dependent upon any one single customer. No customer or customer group exceeded 10 per cent of annual sales in the group in 2023 and 2022.
Geographical segments
The Group\u2019s activities are divided into the following regions: Europe, North America, South-East Asia, Africa, Oceania and Norway.
Intra-segment sales and transactions have been eliminated.
Business segment data 2023 (NOK 1\u00a0000) | Hexagon Agility | Hexagon Ragasco | Hexagon Digital Wave | Corporate / elimination | Hexagon Purus (equity method) | Hexagon Group (continuing operations) | Hexagon Purus (discontinued) | Hexagon Group 2023 |
Revenue from external customers: | ||||||||
Sale of cylinders and equipment (at a point in time) | 3\u00a0885\u00a0528 | 675\u00a0084 | 160\u00a0893 | - | 4\u00a0721\u00a0505 | 4\u00a0721\u00a0505 | ||
Sale to group companies and associates | 428\u00a0174 | 3\u00a0399 | 15\u00a0485 | 8\u00a0075 | 455\u00a0132 | 455\u00a0132 | ||
Other operating income | 2\u00a0700 | 220 | 2\u00a0340 | 27 | 5\u00a0286 | 5\u00a0286 | ||
Total revenue from contract with customers | 4\u00a0316\u00a0402 | 678\u00a0703 | 178\u00a0718 | 8\u00a0102 | 5\u00a0181\u00a0924 | 5\u00a0181\u00a0924 | ||
Rental income | 4\u00a0102 | - | - | 281 | 4\u00a0383 | 4\u00a0383 | ||
Total revenue | 4\u00a0320\u00a0503 | 678\u00a0703 | 178\u00a0718 | 8\u00a0383 | 5\u00a0186\u00a0307 | 5\u00a0186\u00a0307 | ||
Operating profit for segment before depreciation/amortization (EBITDA) | 380\u00a0903 | 114\u00a0209 | 7\u00a0813 | (23\u00a0191) | 479\u00a0734 | 479\u00a0734 | ||
Operating profit for segment (EBIT) | 181\u00a0586 | 75\u00a0576 | 1\u00a0044 | (37\u00a0047) | 221\u00a0159 | 221\u00a0159 | ||
Profit/loss from associates | (20\u00a0606) | - | - | - | (857\u00a0968) | (878\u00a0574) | (878\u00a0574) | |
Net financial items | (58\u00a0005) | 7\u00a0206 | (1\u00a0171) | (223\u00a0592) | (275\u00a0562) | (275\u00a0562) | ||
Tax expense | 21\u00a0066 | 9\u00a0697 | 77 | (22\u00a0634) | 8\u00a0205 | 8\u00a0205 | ||
Profit/loss for the year | 81\u00a0908 | 73\u00a0085 | (204) | (238\u00a0004) | (857\u00a0968) | (941\u00a0182) | (941\u00a0182) | |
Profit after taxes from discontinued operations (Hexagon Purus) | - | - | - | - | - | 2\u00a0049\u00a0703 | 2\u00a0049\u00a0703 | |
Profit/loss for the year | 81\u00a0908 | 73\u00a0085 | (204) | (238\u00a0004) | (857\u00a0968) | (941\u00a0182) | 2\u00a0049\u00a0703 | 1\u00a0108\u00a0520 |
Segment assets | 4\u00a0166\u00a0566 | 568\u00a0928 | 122\u00a0689 | 1\u00a0569\u00a0912 | 6\u00a0428\u00a0096 | 6\u00a0428\u00a0096 | ||
Segment liabilities | 1\u00a0596\u00a0489 | 318\u00a0431 | 57\u00a0427 | 1\u00a0241\u00a0716 | 3\u00a0214\u00a0063 | 3\u00a0214\u00a0063 | ||
Investments in property, plant & equipment for the year | 160\u00a0085 | 53\u00a0778 | 13\u00a0975 | 698 | 228\u00a0535 | 195\u00a0510 | 424\u00a0045 | |
Depreciation and impairment | 92\u00a0629 | 29\u00a0418 | 2\u00a0979 | 1\u00a0065 | 126\u00a0091 | 21\u00a0103 | 147\u00a0194 | |
Investments in intangible assets for the year | 29\u00a0511 | 2\u00a0316 | - | (7\u00a0435) | 24\u00a0392 | 18\u00a0803 | 43\u00a0195 | |
Amortization and impairment | 52\u00a0130 | 55 | - | 10\u00a0988 | 63\u00a0173 | 23\u00a0772 | 86\u00a0945 | |
Additions of right-of-use assets for the year | 81\u00a0407 | 13\u00a0530 | - | 9\u00a0993 | 104\u00a0930 | 9\u00a0270 | 114\u00a0200 | |
Depreciation and impairment | 54\u00a0558 | 9\u00a0160 | 3\u00a0790 | 1\u00a0803 | 69\u00a0311 | 13\u00a0881 | 83\u00a0192 |
Geographical information 2023 (continuing operations) (NOK 1\u00a0000) | Europe | North America | South America | South-East Asia | Africa | Oceania | Norway | Consolidated 2023 |
Revenue divided among customer locations from external customers | 1\u00a0262\u00a0632 | 3\u00a0582\u00a0345 | 23\u00a0784 | 169\u00a0831 | 60\u00a0008 | 33\u00a0730 | 53\u00a0977 | 5\u00a0186\u00a0307 |
Non current assets\u200c1 | 202\u00a0448 | 2\u00a0530\u00a0847 | 365\u00a0872 | 3\u00a0099\u00a0168 | ||||
Investments in property, plant & equipment for the year | 21\u00a0311 | 152\u00a0749 | 54\u00a0476 | 228\u00a0535 | ||||
Investments in intangible assets for the year | 1\u00a0625 | 27\u00a0886 | (5\u00a0119) | 24\u00a0392 |
1Non-current assets for this purpose consists of property, plant & equipment, right-of-use assets and intangible assets
Contract balances | 2\u00a0023 | 2\u00a0022 |
Trade receivables | 551\u00a0356 | 865\u00a0403 |
Contract assets | - | 9\u00a0488 |
Contract liabilitites | 332\u00a0658 | 548\u00a0643 |
Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days. In 2023, TNOK 8\u00a0454 (2022 TNOK 13\u00a0165) was recognized as provision for doubtful debtors on trade receivables. Contract assets are initially recognized for revenue earned from installation and project services as receipt of consideration is conditional on successful completion of installation or project. Upon comple-tion and acceptance by the customer, the amounts recognized as contract assets are reclassified to trade receivables. As of 31 December 2023, the Group does not have any contract assets. Contract liabilities include short-term advances received for funded services & development and paid not delivered goods to external customers. The entire contract liabilities were recognized in the subse-quent period.
Performance obligations
Information related to the Group\u00b4s performance obligations and related revenue recognition is summarized below:
Sale of goods
The performance obligation is generally satisfied upon delivery of cylinders and other equipment. The normal credit term is 30 to 90 days upon delivery. Recognition of revenue at the point of delivery is only recognized for an amount of the consideration that reflects the estimated variable consideration the Group is expected to ultimately be entitled. The variable consideration is re-assessed at the end of each reporting period and recognized as (or when) the uncertainty is subsequently resolved and is estimated based on the expected value approach.
Sale of services
The Group provides services in relation to reinspec-tion and testing of products and non-recurring engineering and design or development. These are normally sold on their own and based on relative stand-alone prices. The Group recognize revenue from services at point in time.
Business segment data 2022 (NOK 1\u00a0000) | Hexagon Agility | Hexagon Ragasco | Hexagon Digital Wave | Corporate / elimination | Hexagon Group (continuing operations) | Hexagon Purus (discontinued) | Elimination | Hexagon Group 2022 |
Revenue from external customers: | ||||||||
Sale of cylinders and equipment (at a point in time) | 3\u00a0204\u00a0885 | 701\u00a0029 | 89\u00a0297 | 3\u00a0141 | 3\u00a0998\u00a0352 | 3\u00a0998\u00a0352 | ||
Sale to group companies and associates | 260\u00a0981 | 4\u00a0977 | 24\u00a0679 | (1\u00a0601) | 289\u00a0036 | 289\u00a0036 | ||
Other operating income | 8\u00a0093 | 210 | 2\u00a0025 | 10\u00a0327 | 10\u00a0327 | |||
Total revenue from contract with customers | 3\u00a0473\u00a0959 | 706\u00a0216 | 116\u00a0001 | 1\u00a0540 | 4\u00a0297\u00a0716 | 4\u00a0297\u00a0716 | ||
Rental income | 3\u00a0919 | - | - | 1\u00a0107 | 5\u00a0027 | 5\u00a0027 | ||
Total revenue | 3\u00a0477\u00a0878 | 706\u00a0216 | 116\u00a0001 | 2\u00a0648 | 4\u00a0302\u00a0743 | 4\u00a0302\u00a0743 | ||
Operating profit for segment before depreciation/amortization (EBITDA) | 208\u00a0988 | 123\u00a0256 | 6\u00a0715 | 8\u00a0709 | 347\u00a0667 | 347\u00a0667 | ||
Operating profit for segment (EBIT) | 28\u00a0186 | 86\u00a0362 | 1\u00a0193 | (9\u00a0907) | 105\u00a0834 | 105\u00a0834 | ||
Profit/loss from associates | (3\u00a0571) | - | - | - | (3\u00a0571) | (3\u00a0571) | ||
Net financial items | (56\u00a0880) | (301) | (6\u00a0166) | (15\u00a0136) | (78\u00a0482) | (78\u00a0482) | ||
Tax expense | 12\u00a0691 | 16\u00a0685 | 258 | (11\u00a0394) | 18\u00a0240 | 18\u00a0240 | ||
Profit/loss for the year | (44\u00a0956) | 69\u00a0376 | (5\u00a0231) | (13\u00a0649) | 5\u00a0541 | 5\u00a0541 | ||
Profit after taxes from discontinued operations (Hexagon Purus) | - | - | - | - | - | (431\u00a0518) | (431\u00a0518) | |
Profit/loss for the year | (44\u00a0956) | 69\u00a0376 | (5\u00a0231) | (13\u00a0649) | 5\u00a0541 | (431\u00a0518) | (425\u00a0977) | |
Segment assets | 4\u00a0550\u00a0321 | 581\u00a0399 | 109\u00a0677 | 1\u00a0750\u00a0450 | 6\u00a0991\u00a0847 | 2\u00a0654\u00a0903 | (1\u00a0743\u00a0009) | 7\u00a0903\u00a0742 |
Segment liabilities | 2\u00a0104\u00a0101 | 391\u00a0626 | 46\u00a0015 | 1\u00a0077\u00a0791 | 3\u00a0619\u00a0533 | 967\u00a0282 | (151\u00a0880) | 4\u00a0434\u00a0935 |
Investments in property, plant & equipment for the year | 213\u00a0979 | 38\u00a0352 | 1\u00a0825 | 13\u00a0022 | 267\u00a0180 | 240\u00a0030 | 507\u00a0210 | |
Depreciation and impairment | 91\u00a0911 | 29\u00a0252 | 2\u00a0109 | 2\u00a0534 | 125\u00a0806 | 33\u00a0779 | 159\u00a0585 | |
Investments in intangible assets for the year | 4\u00a0940 | - | - | 18\u00a0164 | 23\u00a0104 | 52\u00a0625 | 75\u00a0729 | |
Amortization and impairment | 46\u00a0344 | - | - | 12\u00a0812 | 59\u00a0156 | 36\u00a0906 | 96\u00a0062 | |
Additions of right-of-use assets for the year | 121\u00a0532 | - | 293 | 1\u00a0695 | 123\u00a0520 | 122\u00a0472 | 245\u00a0992 | |
Depreciation and impairment | 42\u00a0546 | 7\u00a0642 | 3\u00a0413 | 3\u00a0270 | 56\u00a0871 | 24\u00a0404 | 81\u00a0275 |
Geographical information 2022 (continuing operations) (NOK 1\u00a0000) | Europe | North America | South America | South-East Asia | Africa | Oceania | Norway | Consolidated 2022 |
Revenue divided among customer locations from external customers | 1\u00a0214\u00a0990 | 2\u00a0861\u00a0760 | 90\u00a0831 | 54\u00a0809 | 26\u00a0849 | 1\u00a0488 | 52\u00a0016 | 4\u00a0302\u00a0743 |
Non current assets\u200c1 | 189\u00a0982 | 2\u00a0369\u00a0091 | 371\u00a0375 | 2\u00a0930\u00a0449 | ||||
Investments in property, plant & equipment for the year | 24\u00a0329 | 204\u00a0521 | 38\u00a0329 | 267\u00a0180 | ||||
Investments in intangible assets for the year | 421 | 4\u00a0519 | 18\u00a0164 | 23\u00a0104 |
1Non-current assets for this purpose consists of property, plant & equipment, right-of-use assets and intangible assets
Note 4\tOperating segment and revenue breakdown
Following the deconsolidation of Hexagon Purus as of 29 June 2023 (see also note 5), the Group\u2019s opera-tions are divided into three strategic business areas, which are organized and managed separately. These three business areas are also defined as the group\u2019s reportable operating segments as the different business areas sell different products, have separate management bodies, address different customer groups and have different risk profiles. The consoli-dated statement of income for 2022 is re-presented to reflect the continuing operating segments.
The Hexagon Composites group is divided into the following reportable operating segments
a.\tHexagon Agility - a global provider of clean fuel solutions for commercial vehicles and gas storage- and transportation solutions
b.\tHexagon Ragasco - the world\u2019s leading manufac-turer of composite liquified petroleum gas (LPG) cylinders for leisure, household, and industrial application
c.\tHexagon Digital Wave - global leader in innova-tive cylinder testing and monitoring technology that reduce down-time and inspection costs while improving inspection accuracy
The executive management group is the Chief Operating Decision Makers (CODMs) and monitor the operating results of their respective business areas separately for the purpose of making deci-sions about resource allocation and performance assessment.
No operating segments have been aggregated to form the above reportable operating segments. Transactions between the segments are based on arm\u2019s length basis.
Other information
The Group\u2019s customer base is relatively fragmented in terms of size and concentration such that it is not dependent upon any one single customer. No customer or customer group exceeded 10 per cent of annual sales in the group in 2023 and 2022.
Geographical segments
The Group\u2019s activities are divided into the following regions: Europe, North America, South-East Asia, Africa, Oceania and Norway.
Intra-segment sales and transactions have been eliminated.
Business segment data 2023 (NOK 1\u00a0000) | Hexagon Agility | Hexagon Ragasco | Hexagon Digital Wave | Corporate / elimination | Hexagon Purus (equity method) | Hexagon Group (continuing operations) | Hexagon Purus (discontinued) | Hexagon Group 2023 |
Revenue from external customers: | ||||||||
Sale of cylinders and equipment (at a point in time) | 3\u00a0885\u00a0528 | 675\u00a0084 | 160\u00a0893 | - | 4\u00a0721\u00a0505 | 4\u00a0721\u00a0505 | ||
Sale to group companies and associates | 428\u00a0174 | 3\u00a0399 | 15\u00a0485 | 8\u00a0075 | 455\u00a0132 | 455\u00a0132 | ||
Other operating income | 2\u00a0700 | 220 | 2\u00a0340 | 27 | 5\u00a0286 | 5\u00a0286 | ||
Total revenue from contract with customers | 4\u00a0316\u00a0402 | 678\u00a0703 | 178\u00a0718 | 8\u00a0102 | 5\u00a0181\u00a0924 | 5\u00a0181\u00a0924 | ||
Rental income | 4\u00a0102 | - | - | 281 | 4\u00a0383 | 4\u00a0383 | ||
Total revenue | 4\u00a0320\u00a0503 | 678\u00a0703 | 178\u00a0718 | 8\u00a0383 | 5\u00a0186\u00a0307 | 5\u00a0186\u00a0307 | ||
Operating profit for segment before depreciation/amortization (EBITDA) | 380\u00a0903 | 114\u00a0209 | 7\u00a0813 | (23\u00a0191) | 479\u00a0734 | 479\u00a0734 | ||
Operating profit for segment (EBIT) | 181\u00a0586 | 75\u00a0576 | 1\u00a0044 | (37\u00a0047) | 221\u00a0159 | 221\u00a0159 | ||
Profit/loss from associates | (20\u00a0606) | - | - | - | (857\u00a0968) | (878\u00a0574) | (878\u00a0574) | |
Net financial items | (58\u00a0005) | 7\u00a0206 | (1\u00a0171) | (223\u00a0592) | (275\u00a0562) | (275\u00a0562) | ||
Tax expense | 21\u00a0066 | 9\u00a0697 | 77 | (22\u00a0634) | 8\u00a0205 | 8\u00a0205 | ||
Profit/loss for the year | 81\u00a0908 | 73\u00a0085 | (204) | (238\u00a0004) | (857\u00a0968) | (941\u00a0182) | (941\u00a0182) | |
Profit after taxes from discontinued operations (Hexagon Purus) | - | - | - | - | - | 2\u00a0049\u00a0703 | 2\u00a0049\u00a0703 | |
Profit/loss for the year | 81\u00a0908 | 73\u00a0085 | (204) | (238\u00a0004) | (857\u00a0968) | (941\u00a0182) | 2\u00a0049\u00a0703 | 1\u00a0108\u00a0520 |
Segment assets | 4\u00a0166\u00a0566 | 568\u00a0928 | 122\u00a0689 | 1\u00a0569\u00a0912 | 6\u00a0428\u00a0096 | 6\u00a0428\u00a0096 | ||
Segment liabilities | 1\u00a0596\u00a0489 | 318\u00a0431 | 57\u00a0427 | 1\u00a0241\u00a0716 | 3\u00a0214\u00a0063 | 3\u00a0214\u00a0063 | ||
Investments in property, plant & equipment for the year | 160\u00a0085 | 53\u00a0778 | 13\u00a0975 | 698 | 228\u00a0535 | 195\u00a0510 | 424\u00a0045 | |
Depreciation and impairment | 92\u00a0629 | 29\u00a0418 | 2\u00a0979 | 1\u00a0065 | 126\u00a0091 | 21\u00a0103 | 147\u00a0194 | |
Investments in intangible assets for the year | 29\u00a0511 | 2\u00a0316 | - | (7\u00a0435) | 24\u00a0392 | 18\u00a0803 | 43\u00a0195 | |
Amortization and impairment | 52\u00a0130 | 55 | - | 10\u00a0988 | 63\u00a0173 | 23\u00a0772 | 86\u00a0945 | |
Additions of right-of-use assets for the year | 81\u00a0407 | 13\u00a0530 | - | 9\u00a0993 | 104\u00a0930 | 9\u00a0270 | 114\u00a0200 | |
Depreciation and impairment | 54\u00a0558 | 9\u00a0160 | 3\u00a0790 | 1\u00a0803 | 69\u00a0311 | 13\u00a0881 | 83\u00a0192 |
Geographical information 2023 (continuing operations) (NOK 1\u00a0000) | Europe | North America | South America | South-East Asia | Africa | Oceania | Norway | Consolidated 2023 |
Revenue divided among customer locations from external customers | 1\u00a0262\u00a0632 | 3\u00a0582\u00a0345 | 23\u00a0784 | 169\u00a0831 | 60\u00a0008 | 33\u00a0730 | 53\u00a0977 | 5\u00a0186\u00a0307 |
Non current assets\u200c1 | 202\u00a0448 | 2\u00a0530\u00a0847 | 365\u00a0872 | 3\u00a0099\u00a0168 | ||||
Investments in property, plant & equipment for the year | 21\u00a0311 | 152\u00a0749 | 54\u00a0476 | 228\u00a0535 | ||||
Investments in intangible assets for the year | 1\u00a0625 | 27\u00a0886 | (5\u00a0119) | 24\u00a0392 |
1Non-current assets for this purpose consists of property, plant & equipment, right-of-use assets and intangible assets
Contract balances | 2\u00a0023 | 2\u00a0022 |
Trade receivables | 551\u00a0356 | 865\u00a0403 |
Contract assets | - | 9\u00a0488 |
Contract liabilitites | 332\u00a0658 | 548\u00a0643 |
Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days. In 2023, TNOK 8\u00a0454 (2022 TNOK 13\u00a0165) was recognized as provision for doubtful debtors on trade receivables. Contract assets are initially recognized for revenue earned from installation and project services as receipt of consideration is conditional on successful completion of installation or project. Upon comple-tion and acceptance by the customer, the amounts recognized as contract assets are reclassified to trade receivables. As of 31 December 2023, the Group does not have any contract assets. Contract liabilities include short-term advances received for funded services & development and paid not delivered goods to external customers. The entire contract liabilities were recognized in the subse-quent period.
Performance obligations
Information related to the Group\u00b4s performance obligations and related revenue recognition is summarized below:
Sale of goods
The performance obligation is generally satisfied upon delivery of cylinders and other equipment. The normal credit term is 30 to 90 days upon delivery. Recognition of revenue at the point of delivery is only recognized for an amount of the consideration that reflects the estimated variable consideration the Group is expected to ultimately be entitled. The variable consideration is re-assessed at the end of each reporting period and recognized as (or when) the uncertainty is subsequently resolved and is estimated based on the expected value approach.
Sale of services
The Group provides services in relation to reinspec-tion and testing of products and non-recurring engineering and design or development. These are normally sold on their own and based on relative stand-alone prices. The Group recognize revenue from services at point in time.
Business segment data 2022 (NOK 1\u00a0000) | Hexagon Agility | Hexagon Ragasco | Hexagon Digital Wave | Corporate / elimination | Hexagon Group (continuing operations) | Hexagon Purus (discontinued) | Elimination | Hexagon Group 2022 |
Revenue from external customers: | ||||||||
Sale of cylinders and equipment (at a point in time) | 3\u00a0204\u00a0885 | 701\u00a0029 | 89\u00a0297 | 3\u00a0141 | 3\u00a0998\u00a0352 | 3\u00a0998\u00a0352 | ||
Sale to group companies and associates | 260\u00a0981 | 4\u00a0977 | 24\u00a0679 | (1\u00a0601) | 289\u00a0036 | 289\u00a0036 | ||
Other operating income | 8\u00a0093 | 210 | 2\u00a0025 | 10\u00a0327 | 10\u00a0327 | |||
Total revenue from contract with customers | 3\u00a0473\u00a0959 | 706\u00a0216 | 116\u00a0001 | 1\u00a0540 | 4\u00a0297\u00a0716 | 4\u00a0297\u00a0716 | ||
Rental income | 3\u00a0919 | - | - | 1\u00a0107 | 5\u00a0027 | 5\u00a0027 | ||
Total revenue | 3\u00a0477\u00a0878 | 706\u00a0216 | 116\u00a0001 | 2\u00a0648 | 4\u00a0302\u00a0743 | 4\u00a0302\u00a0743 | ||
Operating profit for segment before depreciation/amortization (EBITDA) | 208\u00a0988 | 123\u00a0256 | 6\u00a0715 | 8\u00a0709 | 347\u00a0667 | 347\u00a0667 | ||
Operating profit for segment (EBIT) | 28\u00a0186 | 86\u00a0362 | 1\u00a0193 | (9\u00a0907) | 105\u00a0834 | 105\u00a0834 | ||
Profit/loss from associates | (3\u00a0571) | - | - | - | (3\u00a0571) | (3\u00a0571) | ||
Net financial items | (56\u00a0880) | (301) | (6\u00a0166) | (15\u00a0136) | (78\u00a0482) | (78\u00a0482) | ||
Tax expense | 12\u00a0691 | 16\u00a0685 | 258 | (11\u00a0394) | 18\u00a0240 | 18\u00a0240 | ||
Profit/loss for the year | (44\u00a0956) | 69\u00a0376 | (5\u00a0231) | (13\u00a0649) | 5\u00a0541 | 5\u00a0541 | ||
Profit after taxes from discontinued operations (Hexagon Purus) | - | - | - | - | - | (431\u00a0518) | (431\u00a0518) | |
Profit/loss for the year | (44\u00a0956) | 69\u00a0376 | (5\u00a0231) | (13\u00a0649) | 5\u00a0541 | (431\u00a0518) | (425\u00a0977) | |
Segment assets | 4\u00a0550\u00a0321 | 581\u00a0399 | 109\u00a0677 | 1\u00a0750\u00a0450 | 6\u00a0991\u00a0847 | 2\u00a0654\u00a0903 | (1\u00a0743\u00a0009) | 7\u00a0903\u00a0742 |
Segment liabilities | 2\u00a0104\u00a0101 | 391\u00a0626 | 46\u00a0015 | 1\u00a0077\u00a0791 | 3\u00a0619\u00a0533 | 967\u00a0282 | (151\u00a0880) | 4\u00a0434\u00a0935 |
Investments in property, plant & equipment for the year | 213\u00a0979 | 38\u00a0352 | 1\u00a0825 | 13\u00a0022 | 267\u00a0180 | 240\u00a0030 | 507\u00a0210 | |
Depreciation and impairment | 91\u00a0911 | 29\u00a0252 | 2\u00a0109 | 2\u00a0534 | 125\u00a0806 | 33\u00a0779 | 159\u00a0585 | |
Investments in intangible assets for the year | 4\u00a0940 | - | - | 18\u00a0164 | 23\u00a0104 | 52\u00a0625 | 75\u00a0729 | |
Amortization and impairment | 46\u00a0344 | - | - | 12\u00a0812 | 59\u00a0156 | 36\u00a0906 | 96\u00a0062 | |
Additions of right-of-use assets for the year | 121\u00a0532 | - | 293 | 1\u00a0695 | 123\u00a0520 | 122\u00a0472 | 245\u00a0992 | |
Depreciation and impairment | 42\u00a0546 | 7\u00a0642 | 3\u00a0413 | 3\u00a0270 | 56\u00a0871 | 24\u00a0404 | 81\u00a0275 |
Geographical information 2022 (continuing operations) (NOK 1\u00a0000) | Europe | North America | South America | South-East Asia | Africa | Oceania | Norway | Consolidated 2022 |
Revenue divided among customer locations from external customers | 1\u00a0214\u00a0990 | 2\u00a0861\u00a0760 | 90\u00a0831 | 54\u00a0809 | 26\u00a0849 | 1\u00a0488 | 52\u00a0016 | 4\u00a0302\u00a0743 |
Non current assets\u200c1 | 189\u00a0982 | 2\u00a0369\u00a0091 | 371\u00a0375 | 2\u00a0930\u00a0449 | ||||
Investments in property, plant & equipment for the year | 24\u00a0329 | 204\u00a0521 | 38\u00a0329 | 267\u00a0180 | ||||
Investments in intangible assets for the year | 421 | 4\u00a0519 | 18\u00a0164 | 23\u00a0104 |
1Non-current assets for this purpose consists of property, plant & equipment, right-of-use assets and intangible assets
Note 5\tDiscontinued operations and changes in the Group`s structure
Deconsolidation of Hexagon Purus on 29 June 2023
On 29 June 2023, the Board of Hexagon Composites decided to use its mandate from the extraordinary general meeting on 28 June, to distribute 69.2 million shares in Hexagon Purus ASA (\u201cHexagon Purus\u201d) as dividend in kind to its shareholders. The distribution represented 25 per cent of the total outstanding shares in Hexagon Purus and effectively reduced Hexagon\u2019s ownership in Hexagon Purus from 68.4 per cent to 43.4 per cent. On the same day and subsequent of the Board meeting, Hexagon sold, and entered into a total return swap (TRS) agreements with its Nordic Banking Partners, representing 5 per cent of the total outstanding shares in Hexagon Purus, or 13.8 million shares. Since 29 June, Hexagon has held 38.4 per cent of the voting rights (106.3 million shares) in Hexagon Purus and a total return swap of 5 per cent (13.8 million shares). Following the above-men-tioned events, Hexagon management made a reassessment of its control consideration in Hexagon Purus, and after considering all relevant facts and circumstances, management concluded that control was lost as of 29 June 2023. Key factors pertaining to this conclusion were the reduced voting right in itself coupled with an irrevocable public statement from the Board of Hexagon Composites which effectively limits Hexagon\u2019s Board influence and power in the Board of Purus to a non-controlling party for the foreseeable future. See the full statement from the Board of Hexagon Composites in the stock exchange announcement from 29 June, https://newsweb.oslobors.no/message/594467) As a result of the loss of control in Hexagon Purus, Hexagon derecognized all assets and lia-bilities, including non-controlling interests, associated with Hexagon Purus as of 29 June. The table below shows derivation the one-off accounting gain resulting from the deconsolidation of Hexagon Purus on 29 June 2023.
Gain from deconsolidation of Hexagon Purus
(NOK 1\u00a0000) | ||
Fair value of dividend in kind (69\u00a0164\u00a0402 shares \u200cx NOK 19.80 per share) | 1\u00a0369\u00a0455 | |
Fair value recognition of remaining Hexagon Purus shares as associated company (120\u00a0136\u00a0095 shares \u200cx NOK 19.80 per share) | 2\u00a0378\u00a0695 | |
a) | Total consideration of Hexagon Composites\u2019 share in Hexagon Purus per 29 June 2023 | 3\u00a0748\u00a0150 |
Derecognition book value of net assets in Hexagon Purus | 2\u00a0348\u00a0204 | |
Derecognition book value of non-controlling interests related to Hexagon Purus | (834\u00a0841) | |
b) | Total book values of Hexagon Composites\u2019 share in Hexagon Purus derecognized per 29 June 2023 | 1\u00a0513\u00a0363 |
c) | Reclassification of translation differences from OCI related to Hexagon Purus per 29 June 2023 | 118\u00a0307 |
a-b+c) | Gain from deconsolidation of Hexagon Purus | 2\u00a0353\u00a0094 |
Transaction costs related to deconsolidation of Hexagon Purus | 1\u00a0792 | |
Net gain from deconsolidation of Hexagon Purus | 2\u00a0351\u00a0302 |
Hexagon Purus discontinued operations since 29 June 2023
As Hexagon Purus represented a separate major line of business and a separate segment within the Hexagon Group prior to deconsolidation, the component represents a discontinued operation and has since 29 June 2023 been presented as such. Consequently, Hexagon Group\u2019s consolidated statement of income for 2022 has been re-presented for enhanced comparability and in line with IAS 5 Non-current Assets Held for Sale and Discontinued Operations. Continuing operations thus comprise the Hexagon Agility, Hexagon Ragasco and Hexagon Digital Wave segments. Profit/loss after taxes from discontinued operations (Hexagon Purus) as incor-porated in Hexagon\u2019s group accounts is shown in the overview below:
Profit/loss after taxes from discontinued operations (Hexagon Purus)
(NOK 1\u00a0000) | 2023(up to 29 June 2023) | 2\u00a0022 |
Revenue from contracts with customers | 570 353 | 958\u00a0636 |
Other operating income | 2 562 | 4\u00a0034 |
Rental income | 629 | 1\u00a0255 |
Total revenue | 573\u00a0544 | 963\u00a0925 |
Cost of materials | 334\u00a0830 | 588\u00a0525 |
Payroll and social security expenses | 295\u00a0899 | 443\u00a0496 |
Other operating expenses | 143\u00a0846 | 337\u00a0408 |
Total operating expenses before depreciation | 774\u00a0575 | 1\u00a0369\u00a0430 |
Operating profit before depreciation (EBITDA) | (201\u00a0031) | (405\u00a0505) |
Depreciation, amortization and impairment | 58\u00a0756 | 95\u00a0089 |
Operating profit (EBIT) | (259\u00a0787) | (500\u00a0594) |
Share of profit/loss of investments in associated companies | (4\u00a0402) | 51\u00a0888 |
Other financial items (net) | (40\u00a0395) | 7\u00a0808 |
Profit/loss before taxes | (304\u00a0584) | (440\u00a0898) |
Income tax expenses | (2\u00a0984) | (9\u00a0380) |
Profit/loss after taxes from discontinued operations | (301\u00a0600) | (431\u00a0518) |
Gain from deconsolidation of Hexagon Purus before taxes | 2\u00a0351\u00a0302 | - |
Income tax on gain from deconsolidation of Hexagon Purus | - | - |
Gain from deconsolidation of subsidiary Hexagon Purus after taxes | 2\u00a0351\u00a0302 | - |
Profit/loss after taxes from discontinued operations according to income statement | 2\u00a0049\u00a0703 | (431\u00a0518) |
Note 26\tInvestments in associated companies
Companies | Country | Business segment | Ownership 31 December 2022 | Ownership 31 December 2023 | Accounting method |
Hexagon Purus ASA\u200c1 | Norway | Other | 73.0% | 38.4% | Equity method |
Cryoshelter BioLNG GmbH\u200c2 | Austria | Hexagon Agility | 40.0% | 40.0% | Equity method |
1Hexagon Purus ASA classified as an associated company as of 29.06.23 following loss of control and deconsolidation effective on the same date. See also note 5for further information.
2Acquired on 01.08.2022 and classified as an associated companies effective from the same date
Income statement reconciliation | Hexagon Purus ASA | Cryoshelter BioLNG GmbH | Total | |||
(NOK 1000) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Share of profit after tax | (143\u00a0520) | - | (17 949) | (2\u00a0579) | (161 469) | (2\u00a0579) |
PPA amortizations associated companies | (12\u00a0448) | - | (2\u00a0657) | (992) | (15\u00a0105) | (992) |
Impairment | (702\u00a0000) | - | - | - | (702\u00a0000) | - |
Gain on loss of significant influence | - | - | - | - | - | - |
Total profit/loss from investments in associated companies as per 31 December | (857\u00a0968) | - | (20\u00a0606) | (3\u00a0571) | (878\u00a0574) | (3\u00a0571) |
Balance sheet reconciliation | Hexagon Purus ASA | Cryoshelter BioLNG GmbH | Other associates\u200c1 | Total | ||||
(NOK 1000) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Carrying value as at 1 January | - | - | 20\u00a0243 | - | 33\u00a0029 | 7\u00a0024 | 53\u00a0272 | 7\u00a0024 |
Share of profit after tax incl. PPA amortizations | (155\u00a0968) | - | (20\u00a0606) | (3\u00a0571) | - | - | (176\u00a0574) | (3\u00a0571) |
Share of other comprehensive income | (21\u00a0590) | - | - | - | - | - | (21\u00a0590) | - |
Share of profit after tax incl. PPA amortizations from discontinued operations | - | - | - | - | (4\u00a0402) | (11\u00a0271) | (4\u00a0402) | (11\u00a0271) |
Purchase of shares | - | - | - | 23\u00a0898 | - | 33\u00a0738 | - | 57\u00a0636 |
Share capital contribution | - | - | - | - | 29\u00a0305 | 7\u00a0743 | 29\u00a0305 | 7\u00a0743 |
Initial recognition at fair value following deconsolidation as subsidiary | 2\u00a0378\u00a0695 | - | - | - | - | - | 2\u00a0378\u00a0695 | - |
Sale of shares | (274\u00a0029) | - | - | - | - | - | (274\u00a0029) | - |
Derecognition - loss of significant influence | - | - | - | - | - | (4\u00a0179) | - | (4\u00a0179) |
Derecognition of associates following deconsolidation of subsidiary | - | - | - | - | (57\u00a0804) | - | (57\u00a0804) | - |
Impairment | (702\u00a0000) | - | - | - | - | - | (702\u00a0000) | - |
Currency translation effects | - | - | 363 | (84) | (128) | (25) | 235 | (110) |
Carrying value as per 31 December | 1\u00a0225\u00a0107 | - | - | 20\u00a0243 | - | 33\u00a0029 | 1\u00a0225\u00a0107 | 53\u00a0272 |
1Other associates relate to associated companies of Hexagon Purus. As a result of the deconsolidation of Hexagon Purus effective 29 June 2023, these associated companies were derecognized from the group accounts of Hexagon Composites. The total carrying amount derecognized amounted to NOK 57.8 million.
The following table sets forth summarized financial information for the Group\u2019s material associate, Hexagon Purus.
Companies (NOK 1000) | Hexagon Purus ASA | |
2023 (Full year) | 2023 (29 June to 31 Dec) | |
Interest held as per 31 December | 38.40% | |
Income statement and statement of comprehensive income of the associate | ||
Revenues | 1\u00a0319\u00a0614 | 746\u00a0070 |
EBITDA | (445\u00a0473) | (244\u00a0442) |
EBIT | (595\u00a0258) | (335\u00a0471) |
Profit/loss before taxes | (691\u00a0310) | (386\u00a0726) |
Profit/loss after taxes | (683\u00a0517) | (381\u00a0918) |
- hereof attributable to equity holders of the parent | (672\u00a0703) | (373\u00a0750) |
Other comprehensive income | 44\u00a0157 | (61\u00a0936) |
- hereof attributable to equity holders of the parent | 49\u00a0813 | (56\u00a0224) |
Total comprehensive income | (639\u00a0360) | (443\u00a0854) |
- hereof attributable to equity holders of the parent | (622\u00a0890) | (429\u00a0974) |
Hexagon\u2019s share of profit/loss of the associate | (143\u00a0520) | |
Hexagon\u2019s share of other comprehensive income of the associate | (21\u00a0590) | |
Hexagon\u2019s share of total comprehensive income of the associate | (165\u00a0110) | |
Companies (NOK 1000) | ||
Hexagon Purus ASA | ||
2023 (Full year) | 2023 (29 June to 31 Dec) | |
Other effects related to the associate | ||
PPA amortizations relates to implicit intangible assets of the associate | (12\u00a0448) | |
Impairment loss on the associate | (702\u00a0000) | |
Total effect in Hexagon\u2019s comprehensive income related to the associate | (879\u00a0558) | |
Balance sheet as per 31 December | ||
Non-current assets | 2\u00a0467\u00a0210 | 2\u00a0467\u00a0210 |
Current assets | 1\u00a0305\u00a0797 | 1\u00a0305\u00a0797 |
Non-current liabilities | 1\u00a0154\u00a0847 | 1\u00a0154\u00a0847 |
Current liabilities | 699\u00a0032 | 699\u00a0032 |
Net assets / equity | 1\u00a0919\u00a0128 | 1\u00a0919\u00a0128 |
Hexagon\u2019s share of net assets | 736\u00a0945 | |
Intangible assets | 286\u00a0106 | |
Goodwilll | 904\u00a0056 | |
Impairment | (702\u00a0000) | |
Carrying value as per 31 December | 1\u00a0225\u00a0107 | |
Fair value (if there is a quoted market) as per 31 December | 1\u00a0184\u00a0171 |
Hexagon Purus ASA - initial recognition as associated company in Q2 2023
Following loss of control and deconsolidation of Hexagon Purus as a subsidiary effective from 29 June 2023, Hexagon Composites\u2019 investment in Hexagon Purus is being accounted for as an associated company applying the equity method. On 29 June 2023, following the dividend-in-kind decision, Hexagon Composites\u2019 ownership in Hexagon Purus was effectively reduced to 43.4 per cent. The initial recognition and measurement of Hexagon Purus under the equity method amounted to NOK 2\u00a0379 million, representing 43.4 per cent of the fair market value of Hexagon Purus on 29 June. Furthermore, on 29 June, Hexagon Composites sold 13.8 million Hexagon Purus shares and simultaneously entered into a total return swap (TRS) representing 5 per cent of the total out-standing shares in Hexagon Purus. The transaction was closed at NOK 19.80 per share for a total consideration of
NOK 274 million. Based on the substance of the agreements and the circumstances for the sale, the sale of shares associated with the TRS agreements was accounted for as a reduction in ownership of an associate. Since the sale of shares under the TRS agreement was made subsequently on the same date as the loss-of-control event, the sale represented a zero-gain transaction. From 29 June and onwards, Hexagon Composites has accounted for 38.4 per cent of the profits/losses in Hexagon Purus via the equity method in addition to amortizations of fair value/PPA-adjustments. See also note 5for further information related to the deconsolidation of Hexagon Purus. The table below shows the purchase price allocation of Hexagon Purus as of 29 June 2023.
Purchase price allocation Hexagon Purus as of 29 June 2023 (NOK 1000) | Hexagon Purus 100% basis | Hexagon Composites share |
Ownership share | 38.4% | |
Number of shares | 276\u00a0797\u00a0456 | 106\u00a0296\u00a0223 |
Share price (NOK / share) | 19.80 | 19.80 |
Market value of equity as of 29 June 2023 | 5\u00a0480\u00a0590 | 2\u00a0104\u00a0665 |
Book values as of recognition date / acquisition date | ||
Non-current assets | 1\u00a0917\u00a0324 | 736\u00a0294 |
Current assets | 1\u00a0900\u00a0183 | 729\u00a0712 |
Non-current liabilities | 738\u00a0189 | 283\u00a0481 |
Current liabilities | 731\u00a0115 | 280\u00a0764 |
Book value of equity as of 29 June 2023 | 2\u00a0348\u00a0204 | 901\u00a0761 |
Fair value / PPA adjustments | 3\u00a0132\u00a0386 | 1\u00a0202\u00a0904 |
- hereof intangible assets | 778\u00a0206 | 298\u00a0848 |
- hereof goodwill | 2\u00a0354\u00a0180 | 904\u00a0056 |
Note 5\tDiscontinued operations and changes in the Group`s structure
Deconsolidation of Hexagon Purus on 29 June 2023
On 29 June 2023, the Board of Hexagon Composites decided to use its mandate from the extraordinary general meeting on 28 June, to distribute 69.2 million shares in Hexagon Purus ASA (\u201cHexagon Purus\u201d) as dividend in kind to its shareholders. The distribution represented 25 per cent of the total outstanding shares in Hexagon Purus and effectively reduced Hexagon\u2019s ownership in Hexagon Purus from 68.4 per cent to 43.4 per cent. On the same day and subsequent of the Board meeting, Hexagon sold, and entered into a total return swap (TRS) agreements with its Nordic Banking Partners, representing 5 per cent of the total outstanding shares in Hexagon Purus, or 13.8 million shares. Since 29 June, Hexagon has held 38.4 per cent of the voting rights (106.3 million shares) in Hexagon Purus and a total return swap of 5 per cent (13.8 million shares). Following the above-men-tioned events, Hexagon management made a reassessment of its control consideration in Hexagon Purus, and after considering all relevant facts and circumstances, management concluded that control was lost as of 29 June 2023. Key factors pertaining to this conclusion were the reduced voting right in itself coupled with an irrevocable public statement from the Board of Hexagon Composites which effectively limits Hexagon\u2019s Board influence and power in the Board of Purus to a non-controlling party for the foreseeable future. See the full statement from the Board of Hexagon Composites in the stock exchange announcement from 29 June, https://newsweb.oslobors.no/message/594467) As a result of the loss of control in Hexagon Purus, Hexagon derecognized all assets and lia-bilities, including non-controlling interests, associated with Hexagon Purus as of 29 June. The table below shows derivation the one-off accounting gain resulting from the deconsolidation of Hexagon Purus on 29 June 2023.
Gain from deconsolidation of Hexagon Purus
(NOK 1\u00a0000) | ||
Fair value of dividend in kind (69\u00a0164\u00a0402 shares \u200cx NOK 19.80 per share) | 1\u00a0369\u00a0455 | |
Fair value recognition of remaining Hexagon Purus shares as associated company (120\u00a0136\u00a0095 shares \u200cx NOK 19.80 per share) | 2\u00a0378\u00a0695 | |
a) | Total consideration of Hexagon Composites\u2019 share in Hexagon Purus per 29 June 2023 | 3\u00a0748\u00a0150 |
Derecognition book value of net assets in Hexagon Purus | 2\u00a0348\u00a0204 | |
Derecognition book value of non-controlling interests related to Hexagon Purus | (834\u00a0841) | |
b) | Total book values of Hexagon Composites\u2019 share in Hexagon Purus derecognized per 29 June 2023 | 1\u00a0513\u00a0363 |
c) | Reclassification of translation differences from OCI related to Hexagon Purus per 29 June 2023 | 118\u00a0307 |
a-b+c) | Gain from deconsolidation of Hexagon Purus | 2\u00a0353\u00a0094 |
Transaction costs related to deconsolidation of Hexagon Purus | 1\u00a0792 | |
Net gain from deconsolidation of Hexagon Purus | 2\u00a0351\u00a0302 |
Hexagon Purus discontinued operations since 29 June 2023
As Hexagon Purus represented a separate major line of business and a separate segment within the Hexagon Group prior to deconsolidation, the component represents a discontinued operation and has since 29 June 2023 been presented as such. Consequently, Hexagon Group\u2019s consolidated statement of income for 2022 has been re-presented for enhanced comparability and in line with IAS 5 Non-current Assets Held for Sale and Discontinued Operations. Continuing operations thus comprise the Hexagon Agility, Hexagon Ragasco and Hexagon Digital Wave segments. Profit/loss after taxes from discontinued operations (Hexagon Purus) as incor-porated in Hexagon\u2019s group accounts is shown in the overview below:
Profit/loss after taxes from discontinued operations (Hexagon Purus)
(NOK 1\u00a0000) | 2023(up to 29 June 2023) | 2\u00a0022 |
Revenue from contracts with customers | 570 353 | 958\u00a0636 |
Other operating income | 2 562 | 4\u00a0034 |
Rental income | 629 | 1\u00a0255 |
Total revenue | 573\u00a0544 | 963\u00a0925 |
Cost of materials | 334\u00a0830 | 588\u00a0525 |
Payroll and social security expenses | 295\u00a0899 | 443\u00a0496 |
Other operating expenses | 143\u00a0846 | 337\u00a0408 |
Total operating expenses before depreciation | 774\u00a0575 | 1\u00a0369\u00a0430 |
Operating profit before depreciation (EBITDA) | (201\u00a0031) | (405\u00a0505) |
Depreciation, amortization and impairment | 58\u00a0756 | 95\u00a0089 |
Operating profit (EBIT) | (259\u00a0787) | (500\u00a0594) |
Share of profit/loss of investments in associated companies | (4\u00a0402) | 51\u00a0888 |
Other financial items (net) | (40\u00a0395) | 7\u00a0808 |
Profit/loss before taxes | (304\u00a0584) | (440\u00a0898) |
Income tax expenses | (2\u00a0984) | (9\u00a0380) |
Profit/loss after taxes from discontinued operations | (301\u00a0600) | (431\u00a0518) |
Gain from deconsolidation of Hexagon Purus before taxes | 2\u00a0351\u00a0302 | - |
Income tax on gain from deconsolidation of Hexagon Purus | - | - |
Gain from deconsolidation of subsidiary Hexagon Purus after taxes | 2\u00a0351\u00a0302 | - |
Profit/loss after taxes from discontinued operations according to income statement | 2\u00a0049\u00a0703 | (431\u00a0518) |
Note 26\tInvestments in associated companies
Companies | Country | Business segment | Ownership 31 December 2022 | Ownership 31 December 2023 | Accounting method |
Hexagon Purus ASA\u200c1 | Norway | Other | 73.0% | 38.4% | Equity method |
Cryoshelter BioLNG GmbH\u200c2 | Austria | Hexagon Agility | 40.0% | 40.0% | Equity method |
1Hexagon Purus ASA classified as an associated company as of 29.06.23 following loss of control and deconsolidation effective on the same date. See also note 5for further information.
2Acquired on 01.08.2022 and classified as an associated companies effective from the same date
Income statement reconciliation | Hexagon Purus ASA | Cryoshelter BioLNG GmbH | Total | |||
(NOK 1000) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Share of profit after tax | (143\u00a0520) | - | (17 949) | (2\u00a0579) | (161 469) | (2\u00a0579) |
PPA amortizations associated companies | (12\u00a0448) | - | (2\u00a0657) | (992) | (15\u00a0105) | (992) |
Impairment | (702\u00a0000) | - | - | - | (702\u00a0000) | - |
Gain on loss of significant influence | - | - | - | - | - | - |
Total profit/loss from investments in associated companies as per 31 December | (857\u00a0968) | - | (20\u00a0606) | (3\u00a0571) | (878\u00a0574) | (3\u00a0571) |
Balance sheet reconciliation | Hexagon Purus ASA | Cryoshelter BioLNG GmbH | Other associates\u200c1 | Total | ||||
(NOK 1000) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Carrying value as at 1 January | - | - | 20\u00a0243 | - | 33\u00a0029 | 7\u00a0024 | 53\u00a0272 | 7\u00a0024 |
Share of profit after tax incl. PPA amortizations | (155\u00a0968) | - | (20\u00a0606) | (3\u00a0571) | - | - | (176\u00a0574) | (3\u00a0571) |
Share of other comprehensive income | (21\u00a0590) | - | - | - | - | - | (21\u00a0590) | - |
Share of profit after tax incl. PPA amortizations from discontinued operations | - | - | - | - | (4\u00a0402) | (11\u00a0271) | (4\u00a0402) | (11\u00a0271) |
Purchase of shares | - | - | - | 23\u00a0898 | - | 33\u00a0738 | - | 57\u00a0636 |
Share capital contribution | - | - | - | - | 29\u00a0305 | 7\u00a0743 | 29\u00a0305 | 7\u00a0743 |
Initial recognition at fair value following deconsolidation as subsidiary | 2\u00a0378\u00a0695 | - | - | - | - | - | 2\u00a0378\u00a0695 | - |
Sale of shares | (274\u00a0029) | - | - | - | - | - | (274\u00a0029) | - |
Derecognition - loss of significant influence | - | - | - | - | - | (4\u00a0179) | - | (4\u00a0179) |
Derecognition of associates following deconsolidation of subsidiary | - | - | - | - | (57\u00a0804) | - | (57\u00a0804) | - |
Impairment | (702\u00a0000) | - | - | - | - | - | (702\u00a0000) | - |
Currency translation effects | - | - | 363 | (84) | (128) | (25) | 235 | (110) |
Carrying value as per 31 December | 1\u00a0225\u00a0107 | - | - | 20\u00a0243 | - | 33\u00a0029 | 1\u00a0225\u00a0107 | 53\u00a0272 |
1Other associates relate to associated companies of Hexagon Purus. As a result of the deconsolidation of Hexagon Purus effective 29 June 2023, these associated companies were derecognized from the group accounts of Hexagon Composites. The total carrying amount derecognized amounted to NOK 57.8 million.
The following table sets forth summarized financial information for the Group\u2019s material associate, Hexagon Purus.
Companies (NOK 1000) | Hexagon Purus ASA | |
2023 (Full year) | 2023 (29 June to 31 Dec) | |
Interest held as per 31 December | 38.40% | |
Income statement and statement of comprehensive income of the associate | ||
Revenues | 1\u00a0319\u00a0614 | 746\u00a0070 |
EBITDA | (445\u00a0473) | (244\u00a0442) |
EBIT | (595\u00a0258) | (335\u00a0471) |
Profit/loss before taxes | (691\u00a0310) | (386\u00a0726) |
Profit/loss after taxes | (683\u00a0517) | (381\u00a0918) |
- hereof attributable to equity holders of the parent | (672\u00a0703) | (373\u00a0750) |
Other comprehensive income | 44\u00a0157 | (61\u00a0936) |
- hereof attributable to equity holders of the parent | 49\u00a0813 | (56\u00a0224) |
Total comprehensive income | (639\u00a0360) | (443\u00a0854) |
- hereof attributable to equity holders of the parent | (622\u00a0890) | (429\u00a0974) |
Hexagon\u2019s share of profit/loss of the associate | (143\u00a0520) | |
Hexagon\u2019s share of other comprehensive income of the associate | (21\u00a0590) | |
Hexagon\u2019s share of total comprehensive income of the associate | (165\u00a0110) | |
Companies (NOK 1000) | ||
Hexagon Purus ASA | ||
2023 (Full year) | 2023 (29 June to 31 Dec) | |
Other effects related to the associate | ||
PPA amortizations relates to implicit intangible assets of the associate | (12\u00a0448) | |
Impairment loss on the associate | (702\u00a0000) | |
Total effect in Hexagon\u2019s comprehensive income related to the associate | (879\u00a0558) | |
Balance sheet as per 31 December | ||
Non-current assets | 2\u00a0467\u00a0210 | 2\u00a0467\u00a0210 |
Current assets | 1\u00a0305\u00a0797 | 1\u00a0305\u00a0797 |
Non-current liabilities | 1\u00a0154\u00a0847 | 1\u00a0154\u00a0847 |
Current liabilities | 699\u00a0032 | 699\u00a0032 |
Net assets / equity | 1\u00a0919\u00a0128 | 1\u00a0919\u00a0128 |
Hexagon\u2019s share of net assets | 736\u00a0945 | |
Intangible assets | 286\u00a0106 | |
Goodwilll | 904\u00a0056 | |
Impairment | (702\u00a0000) | |
Carrying value as per 31 December | 1\u00a0225\u00a0107 | |
Fair value (if there is a quoted market) as per 31 December | 1\u00a0184\u00a0171 |
Hexagon Purus ASA - initial recognition as associated company in Q2 2023
Following loss of control and deconsolidation of Hexagon Purus as a subsidiary effective from 29 June 2023, Hexagon Composites\u2019 investment in Hexagon Purus is being accounted for as an associated company applying the equity method. On 29 June 2023, following the dividend-in-kind decision, Hexagon Composites\u2019 ownership in Hexagon Purus was effectively reduced to 43.4 per cent. The initial recognition and measurement of Hexagon Purus under the equity method amounted to NOK 2\u00a0379 million, representing 43.4 per cent of the fair market value of Hexagon Purus on 29 June. Furthermore, on 29 June, Hexagon Composites sold 13.8 million Hexagon Purus shares and simultaneously entered into a total return swap (TRS) representing 5 per cent of the total out-standing shares in Hexagon Purus. The transaction was closed at NOK 19.80 per share for a total consideration of
NOK 274 million. Based on the substance of the agreements and the circumstances for the sale, the sale of shares associated with the TRS agreements was accounted for as a reduction in ownership of an associate. Since the sale of shares under the TRS agreement was made subsequently on the same date as the loss-of-control event, the sale represented a zero-gain transaction. From 29 June and onwards, Hexagon Composites has accounted for 38.4 per cent of the profits/losses in Hexagon Purus via the equity method in addition to amortizations of fair value/PPA-adjustments. See also note 5for further information related to the deconsolidation of Hexagon Purus. The table below shows the purchase price allocation of Hexagon Purus as of 29 June 2023.
Purchase price allocation Hexagon Purus as of 29 June 2023 (NOK 1000) | Hexagon Purus 100% basis | Hexagon Composites share |
Ownership share | 38.4% | |
Number of shares | 276\u00a0797\u00a0456 | 106\u00a0296\u00a0223 |
Share price (NOK / share) | 19.80 | 19.80 |
Market value of equity as of 29 June 2023 | 5\u00a0480\u00a0590 | 2\u00a0104\u00a0665 |
Book values as of recognition date / acquisition date | ||
Non-current assets | 1\u00a0917\u00a0324 | 736\u00a0294 |
Current assets | 1\u00a0900\u00a0183 | 729\u00a0712 |
Non-current liabilities | 738\u00a0189 | 283\u00a0481 |
Current liabilities | 731\u00a0115 | 280\u00a0764 |
Book value of equity as of 29 June 2023 | 2\u00a0348\u00a0204 | 901\u00a0761 |
Fair value / PPA adjustments | 3\u00a0132\u00a0386 | 1\u00a0202\u00a0904 |
- hereof intangible assets | 778\u00a0206 | 298\u00a0848 |
- hereof goodwill | 2\u00a0354\u00a0180 | 904\u00a0056 |
Hexagon Purus ASA - impairment testing in Q4 2024
During the second half of 2023, Hexagon Purus experienced a significant decline in its market value and closed at NOK 11.14/share as of 31 December 2023, translating to a fair value of Hexagon\u2019s shares in Hexagon Purus of NOK 1\u00a0184 million. Compared to the share price as of the date of Hexagon\u2019s initial fair value recognition of Hexagon Purus as an associated company of NOK 19.80/share, this represents a 44 per cent decline in fair value. Comparable peer companies within the hydrogen and battery sector experienced similar share price develop-ments in the same period. The significant decline in the fair value of Hexagon Purus and peers caused Hexagon to perform an impairment test of its investment, which resulted in an impairment of NOK 702 million and an adjusted carrying value of NOK 1\u00a0225 million as per 31 December 2023.
The key assumptions for calculating value in use are related to estimates for revenues, EBITDA margins, discount rates and growth rates beyond the forecast period. A 7-year forecast period until 2030 with an extrapolation towards 2033 (total of 10 years) has been used, concurrent with the forecast period used in the determination of intangible assets and goodwill in the purchase price allocation of Hexagon Purus as of 29 June 2023. Hexagon Purus\u2019 business plan projections imply significant growth. However, as a reflection of the overall equity market\u2019s increased implicit risk towards Hexagon Purus during the second half of 2023, Hexagon has for impairment test
purposes per 31 December 2023 incorporated somewhat higher risk factors to Hexagon Purus\u2019 revenue growth rates towards 2030 both within the hydrogen and the battery electric mobility sector, as well as somewhat lower profit margins in the same forecast period. For subsequent periods beyond the 7-year forecast horizon, the Group has prudently phased in a declining growth rate towards an expected average growth rate for the economy in general. A weighted average cost of capital (post-tax) of 10.8 per cent has been used as discount rate of free cash flows.
Although the Company expects to break-even at EBITDA level during 2025, free cash flows are still expected to be negative a couple of years beyond 2025 due to capital expenditures and working capital requirements. As such, a significant portion of the estimated value-in-use amount lies in the terminal value which is dependent upon the size of the company and its free cash flow generation at the end of the forecast period. Despite future cash flows are inherently uncertain, Hexagon management expects Hexagon Purus will capitalize and deliver on its business plan, and that a value-in-use of NOK 1\u00a0225 million represents the best estimate based on known economic con-ditions that will exist in the period including prudent risk adjustments.
Cryoshelter BioLNG GmbH
On 1 August 2022, Hexagon Composites made a EUR 2.4 (NOK 24) million investment and acquired 40 per cent of the shares in Cryoshelter Bio-LNG GmbH, with options to acquire the remaining shares over the next 3-10 years. As of 31 December 2023, the carrying value of Group\u2019s investment in Cryoshelter BioLNG is zero. Furthermore, Hexagon has a convertible loan investment in Cryoshelter of NOK 100.1 million classified as other non-current financial assets. See also note12.
Note 30\tList of subsidiaries and associates
The following companies are included in the consolidated financial statements
Company | Home Country | Registeredoffice | Businesssegment | Owner-ship | Votes |
Subsidiaries | |||||
Hexagon Ragasco AS | Norway | Raufoss | Hexagon Ragasco | 100% | 100% |
Hexagon Ragasco NA Inc. | USA | Lincoln, NE | Hexagon Ragasco | 100% | 100% |
Composite Scandinavia AB | Sweden | Pite\u00e5 | Hexagon Ragasco | 100% | 100% |
Hexagon Composites India Pvt. Ltd. | India | Bangalore | Hexagon Ragasco | 100% | 100% |
Hexagon Composites Russia LLC | Russia | Nizhny Novgorod | Hexagon Ragasco | 100% | 100% |
Hexagon USA Holdings Inc. | USA | Lincoln, NE | Unallocated | 100% | 100% |
Hexagon Digital Wave LLC | USA | Centennial, CO | Digital Wave | 100% | 100% |
Hexagon R&D Services LLC | USA | Lincoln, NE | Hexagon Agility | 100% | 100% |
Hexagon Agility Inc. | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility Fuel Solutions LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility Fuel Systems LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility California LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility Canada ULC | Canada | Kelowna, BC | Hexagon Agility | 100% | 100% |
Agility Fuel Solutions UK Ltd | UK | London | Hexagon Agility | 100% | 100% |
Agility North Carolina LLC | USA | Salisbury, NC | Hexagon Agility | 100% | 100% |
AFS Salisbury LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility Cylinders, LLC | USA | Lincoln, NE | Hexagon Agility | 100% | 100% |
Agility Powertrain Systems, LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility India Private Ltd | India | Bangalore | Hexagon Agility | 100% | 100% |
Agility Fuel Solutions Norway AS | Norway | Raufoss | Hexagon Agility | 100% | 100% |
Hexagon Lincoln LLC | USA | Lincoln, NE | Hexagon Agility | 100% | 100% |
Hexagon Technical Services LLC | USA | Lincoln, NE | Hexagon Agility | 100% | 100% |
Company | Home Country | Registeredoffice | Businesssegment | Owner-ship | |
Votes | |||||
Hexagon Mobile Pipeline GmbH | Germany | Kassel | Hexagon Agility | 100% | 100% |
Hexagon Agility GmbH | Germany | Kassel | Hexagon Agility | 100% | 100% |
Hexagon Operations GmbH | Germany | Kassel | Hexagon Agility | 100% | 100% |
Hexagon Raufoss AS | Norway | Raufoss | Unallocated | 100% | 100% |
Hexagon Technology AS | Norway | Aalesund | Unallocated | 100% | 100% |
Hexagon Cylinders India Pvt. Ltd. | India | Unallocated | 100% | 100% | |
Associates owned by Hexagon Composites ASA | |||||
Hexagon Purus ASA | Norway | Aalesund | Hexagon Purus | 38% | 38% |
Cryoshelter BioLNG GmbH | Austria | Hexagon Agility | 40% | 40% |
Note 5\tDiscontinued operations and changes in the Group`s structure
Deconsolidation of Hexagon Purus on 29 June 2023
On 29 June 2023, the Board of Hexagon Composites decided to use its mandate from the extraordinary general meeting on 28 June, to distribute 69.2 million shares in Hexagon Purus ASA (\u201cHexagon Purus\u201d) as dividend in kind to its shareholders. The distribution represented 25 per cent of the total outstanding shares in Hexagon Purus and effectively reduced Hexagon\u2019s ownership in Hexagon Purus from 68.4 per cent to 43.4 per cent. On the same day and subsequent of the Board meeting, Hexagon sold, and entered into a total return swap (TRS) agreements with its Nordic Banking Partners, representing 5 per cent of the total outstanding shares in Hexagon Purus, or 13.8 million shares. Since 29 June, Hexagon has held 38.4 per cent of the voting rights (106.3 million shares) in Hexagon Purus and a total return swap of 5 per cent (13.8 million shares). Following the above-men-tioned events, Hexagon management made a reassessment of its control consideration in Hexagon Purus, and after considering all relevant facts and circumstances, management concluded that control was lost as of 29 June 2023. Key factors pertaining to this conclusion were the reduced voting right in itself coupled with an irrevocable public statement from the Board of Hexagon Composites which effectively limits Hexagon\u2019s Board influence and power in the Board of Purus to a non-controlling party for the foreseeable future. See the full statement from the Board of Hexagon Composites in the stock exchange announcement from 29 June, https://newsweb.oslobors.no/message/594467) As a result of the loss of control in Hexagon Purus, Hexagon derecognized all assets and lia-bilities, including non-controlling interests, associated with Hexagon Purus as of 29 June. The table below shows derivation the one-off accounting gain resulting from the deconsolidation of Hexagon Purus on 29 June 2023.
Gain from deconsolidation of Hexagon Purus
(NOK 1\u00a0000) | ||
Fair value of dividend in kind (69\u00a0164\u00a0402 shares \u200cx NOK 19.80 per share) | 1\u00a0369\u00a0455 | |
Fair value recognition of remaining Hexagon Purus shares as associated company (120\u00a0136\u00a0095 shares \u200cx NOK 19.80 per share) | 2\u00a0378\u00a0695 | |
a) | Total consideration of Hexagon Composites\u2019 share in Hexagon Purus per 29 June 2023 | 3\u00a0748\u00a0150 |
Derecognition book value of net assets in Hexagon Purus | 2\u00a0348\u00a0204 | |
Derecognition book value of non-controlling interests related to Hexagon Purus | (834\u00a0841) | |
b) | Total book values of Hexagon Composites\u2019 share in Hexagon Purus derecognized per 29 June 2023 | 1\u00a0513\u00a0363 |
c) | Reclassification of translation differences from OCI related to Hexagon Purus per 29 June 2023 | 118\u00a0307 |
a-b+c) | Gain from deconsolidation of Hexagon Purus | 2\u00a0353\u00a0094 |
Transaction costs related to deconsolidation of Hexagon Purus | 1\u00a0792 | |
Net gain from deconsolidation of Hexagon Purus | 2\u00a0351\u00a0302 |
Hexagon Purus discontinued operations since 29 June 2023
As Hexagon Purus represented a separate major line of business and a separate segment within the Hexagon Group prior to deconsolidation, the component represents a discontinued operation and has since 29 June 2023 been presented as such. Consequently, Hexagon Group\u2019s consolidated statement of income for 2022 has been re-presented for enhanced comparability and in line with IAS 5 Non-current Assets Held for Sale and Discontinued Operations. Continuing operations thus comprise the Hexagon Agility, Hexagon Ragasco and Hexagon Digital Wave segments. Profit/loss after taxes from discontinued operations (Hexagon Purus) as incor-porated in Hexagon\u2019s group accounts is shown in the overview below:
Profit/loss after taxes from discontinued operations (Hexagon Purus)
(NOK 1\u00a0000) | 2023(up to 29 June 2023) | 2\u00a0022 |
Revenue from contracts with customers | 570 353 | 958\u00a0636 |
Other operating income | 2 562 | 4\u00a0034 |
Rental income | 629 | 1\u00a0255 |
Total revenue | 573\u00a0544 | 963\u00a0925 |
Cost of materials | 334\u00a0830 | 588\u00a0525 |
Payroll and social security expenses | 295\u00a0899 | 443\u00a0496 |
Other operating expenses | 143\u00a0846 | 337\u00a0408 |
Total operating expenses before depreciation | 774\u00a0575 | 1\u00a0369\u00a0430 |
Operating profit before depreciation (EBITDA) | (201\u00a0031) | (405\u00a0505) |
Depreciation, amortization and impairment | 58\u00a0756 | 95\u00a0089 |
Operating profit (EBIT) | (259\u00a0787) | (500\u00a0594) |
Share of profit/loss of investments in associated companies | (4\u00a0402) | 51\u00a0888 |
Other financial items (net) | (40\u00a0395) | 7\u00a0808 |
Profit/loss before taxes | (304\u00a0584) | (440\u00a0898) |
Income tax expenses | (2\u00a0984) | (9\u00a0380) |
Profit/loss after taxes from discontinued operations | (301\u00a0600) | (431\u00a0518) |
Gain from deconsolidation of Hexagon Purus before taxes | 2\u00a0351\u00a0302 | - |
Income tax on gain from deconsolidation of Hexagon Purus | - | - |
Gain from deconsolidation of subsidiary Hexagon Purus after taxes | 2\u00a0351\u00a0302 | - |
Profit/loss after taxes from discontinued operations according to income statement | 2\u00a0049\u00a0703 | (431\u00a0518) |
Note 10\tProperty, plant & equipment
(NOK 1\u00a0000) | Land andbuildings | Plant and equipment | Fixtures &fittings, vehicles | Assets under construction | 2023 Total |
Cost of acquisition | |||||
Cost of acquisition 1 January 2023 | 214\u00a0445 | 1\u00a0334\u00a0359 | 261\u00a0045 | 488\u00a0683 | 2\u00a0298\u00a0532 |
Additions continuing operations | 11\u00a0839 | 16\u00a0374 | 17\u00a0918 | 182\u00a0405 | 228\u00a0535 |
Additions discontinuing operations | 7\u00a0973 | 7\u00a0529 | 13\u00a0058 | 166\u00a0950 | 195\u00a0510 |
Transfer from assets under construction | 68\u00a0021 | 46\u00a0863 | 13\u00a0234 | (128\u00a0118) | - |
Disposals/scrap continuing operations | (1\u00a0606) | (37\u00a0501) | (15\u00a0802) | (13\u00a0756) | (68\u00a0664) |
Disposals/scrap discontinuing operations | (6\u00a0524) | - | (2\u00a0727) | - | (9\u00a0251) |
Derecognition from deconsolidation of subsidiary | (184\u00a0598) | (196\u00a0482) | (84\u00a0165) | (383\u00a0846) | (849\u00a0092) |
Translation differences | 14\u00a0302 | 35\u00a0674 | 19\u00a0121 | 29\u00a0855 | 98\u00a0952 |
Cost of acquisition 31 December 2023 | 123\u00a0851 | 1\u00a0206\u00a0816 | 221\u00a0681 | 342\u00a0173 | 1\u00a0894\u00a0521 |
Accumulated depreciation and impairment | |||||
Accumulated depreciation 1 January 2023 | 60\u00a0738 | 774\u00a0968 | 126\u00a0520 | - | 962\u00a0226 |
Depreciation for the year from continuing operations | 9\u00a0968 | 98\u00a0734 | 17\u00a0389 | - | 126\u00a0091 |
Depreciation for the year from discontinuing operations | 3\u00a0821 | 9\u00a0273 | 8\u00a0009 | - | 21\u00a0103 |
Impairment | - | - | - | - | - |
Disposals/scrap continuing operations | (1\u00a0606) | (35\u00a0899) | (15\u00a0410) | - | (52\u00a0914) |
Disposals/scrap discontinuing operations | (6\u00a0524) | - | (2\u00a0138) | - | (8\u00a0661) |
Derecognition from deconsolidation of subsidiary | (19\u00a0112) | (93\u00a0913) | (10\u00a0289) | (123\u00a0314) | |
Translation differences | 1\u00a0681 | 11\u00a0842 | 8\u00a0531 | - | 22\u00a0054 |
Accumulated depreciation and impairment 31 December 2023 | 48\u00a0965 | 765\u00a0006 | 132\u00a0612 | - | 946\u00a0584 |
Net carrying amount as of 31 December 2023 | 74\u00a0886 | 441\u00a0810 | 89\u00a0069 | 342\u00a0172 | 947\u00a0938 |
Of which pledged | - | ||||
Useful life | 10\u201320 years | 3\u201315 years | 3\u201310 years | ||
Depreciation method | Straight-line | Straight-line | Straight-line |
Discontinued operations
On 29 June 2023, Hexagon Purus was effectively deconsolidated from the group accounts of Hexagon Composites, see also note 5.Due this, Hexagon Purus\u2019 figures up to and including 29 June 2023, have been presented separately as discontinued operations
(NOK 1\u00a0000) | Land andbuildings | Plant and equipment | Fixtures &fittings, vehicles | Assets under construction | 2022 Total |
Cost of acquisition | |||||
Cost of acquisition 1 January 2022 | 296\u00a0549 | 1\u00a0079\u00a0970 | 218\u00a0274 | 234\u00a0686 | 1\u00a0829\u00a0479 |
Additions continuing operations | 232 | 6\u00a0294 | 4\u00a0855 | 255\u00a0798 | 267\u00a0180 |
Additions discontinuing operations | 1\u00a0033 | 26\u00a0953 | 38\u00a0859 | 173\u00a0185 | 240\u00a0030 |
Transfer from assets under construction | 12\u00a0918 | 157\u00a0128 | 19\u00a0383 | (189\u00a0429) | - |
Disposals/scrap continuing operations\u200c1 | (113\u00a0674) | - | (27\u00a0081) | (7\u00a0548) | (148\u00a0303) |
Disposals/scrap discontinuing operations | (218) | (3\u00a0055) | (14\u00a0761) | - | (18\u00a0033) |
Translation differences | 17\u00a0605 | 67\u00a0068 | 21\u00a0515 | 21\u00a0992 | 128\u00a0179 |
Cost of acquisition 31 December 2022 | 214\u00a0445 | 1\u00a0334\u00a0359 | 261\u00a0045 | 488\u00a0683 | 2\u00a0298\u00a0532 |
Accumulated depreciation and impairment | |||||
Accumulated depreciation 1 January 2022 | 67\u00a0896 | 645\u00a0665 | 105\u00a0293 | - | 818\u00a0855 |
Depreciation for the year from continuing operations | 13\u00a0866 | 92\u00a0396 | 18\u00a0950 | - | 125\u00a0212 |
Depreciation for the year from discontinuing operations | 7\u00a0610 | 11\u00a0161 | 14\u00a0859 | - | 33\u00a0630 |
Impairment for the year from continuing operations | - | - | 594 | - | 594 |
Impairment for the year from discontinuing operations | - | - | 149 | 149 | |
Disposals/scrap continuing operations\u200c1 | (31\u00a0203) | - | (9\u00a0912) | - | (41\u00a0115) |
Disposals/scrap discontinuing operations | (217) | (1\u00a0709) | (13\u00a0301) | (15\u00a0226) | |
Translation differences | 2\u00a0786 | 27\u00a0455 | 9\u00a0887 | - | 40\u00a0127 |
Accumulated depreciation and impairment 31 December 2022 | 60\u00a0738 | 774\u00a0968 | 126\u00a0520 | - | 962\u00a0225 |
Net carrying amount as of 31 December 2022 | 153\u00a0707 | 559\u00a0391 | 134\u00a0525 | 488\u00a0683 | 1\u00a0336\u00a0307 |
Of which pledged | - | ||||
Useful life | 10\u201320 years | 3\u201315 years | 3\u201310 years | ||
Depreciation method | Straight-line | Straight-line | Straight-line |
1On 31 December 2022, Agility North Carolina LLC, a wholly owned subsidiary of Hexagon within the Hexagon Agility segment, affected a sale- and leaseback transaction of its facility in Salisbury, North Carolina. The net carrying amount was MUSD 8.7 and is presented as disposals. See note 24for more information.
Note 11\tIntangible assets and goodwill
Hexagon Composites ASA has the following purchased and own-developed intangible assets
(NOK 1\u00a0000) | Goodwill | Patents andlicences | Technology-development | Customer relationships | 2023 Total |
Cost price | |||||
Opening balance 1 January 2023 | 1\u00a0717\u00a0097 | 276\u00a0081 | 428\u00a0180 | 558\u00a0874 | 2\u00a0980\u00a0232 |
Additions continuing operations | - | 9\u00a0932 | 14\u00a0460 | - | 24\u00a0392 |
Additions discontinued operations | - | 334 | 18\u00a0469 | - | 18\u00a0803 |
Disposals continuing operations | - | (1\u00a0015) | (1\u00a0603) | - | (2\u00a0617) |
Disposals discontinuing operations | - | (1\u00a0917) | - | - | (1\u00a0917) |
Derecognition from deconsolidation of subsidiary | (583\u00a0031) | (13\u00a0817) | (233\u00a0474) | (177\u00a0978) | (1\u00a0008\u00a0300) |
Translation differences | 98\u00a0814 | 8\u00a0563 | 8\u00a0976 | 32\u00a0405 | 148\u00a0757 |
Cost of acquisition 31 December 2023 | 1\u00a0232\u00a0880 | 278\u00a0161 | 235\u00a0009 | 413\u00a0301 | 2\u00a0159\u00a0351 |
Accumulated amortization and impairment | |||||
Opening balance 1 January 2023 | - | 70\u00a0757 | 143\u00a0672 | 194\u00a0950 | 409\u00a0379 |
Amortization for the year from continuing operation | - | 16\u00a0799 | 16\u00a0221 | 30\u00a0152 | 63\u00a0173 |
Amortization for the year from discontinuing operation | - | 2\u00a0616 | 10\u00a0419 | 10\u00a0737 | 23\u00a0772 |
Impairment | - | - | - | - | - |
Disposals continuing operations | - | (965) | (1\u00a0603) | - | (2\u00a0568) |
Disposals discontinuing operations | - | (1\u00a0614) | - | - | (1\u00a0614) |
Derecognition from deconsolidation of subsidiary | - | (8\u00a0906) | (37\u00a0424) | (87\u00a0425) | (133\u00a0755) |
Translation differences | - | 1\u00a0506 | 1\u00a0412 | 12\u00a0440 | 15\u00a0358 |
Accumulated amortization and impairment 31 December 2023 | - | 80\u00a0193 | 132\u00a0698 | 160\u00a0853 | 373\u00a0744 |
Net carrying amount 31 December 2023 | 1\u00a0232\u00a0880 | 197\u00a0968 | 102\u00a0311 | 252\u00a0447 | 1\u00a0785\u00a0606 |
Useful life | Indefinite | 3\u201317 years | 5\u201320 years | 7\u201315 years | |
Amortization method | None | Straight-line | Straight-line | Straight-line |
Discontinued operations
On 29 June 2023, Hexagon Purus was effectively deconsolidated from the group accounts of Hexagon Composites, see also note 5.Due this, Hexagon Purus\u2019 figures up to and including 29 June 2023, have been presented separately as discontinued operations
Hexagon Composites ASA has the following purchased and own-developed intangible assets
(NOK 1\u00a0000) | Goodwill | Patents andlicences | Technology-development | Customer relationships | 2022 Total |
Cost price | |||||
Opening balance 1 January 2022 | 1\u00a0573\u00a0061 | 239\u00a0453 | 354\u00a0061 | 540\u00a0994 | 2\u00a0707\u00a0569 |
Additions continuing operations | - | 12\u00a0427 | 10\u00a0676 | - | 23\u00a0104 |
Additions discontinued operations | - | 1\u00a0294 | 51\u00a0331 | - | 52\u00a0625 |
Disposals continuing operations | - | (82) | - | - | (82) |
Disposals discontinuing operations | - | (262) | (74) | (336) | |
Translation differences | 144\u00a0036 | 23\u00a0250 | 12\u00a0186 | 17\u00a0880 | 197\u00a0351 |
Cost of acquisition 31 December 2022 | 1\u00a0717\u00a0097 | 276\u00a0081 | 428\u00a0180 | 558\u00a0874 | 2\u00a0980\u00a0232 |
Accumulated amortization and impairment | |||||
Opening balance 1 January 2022 | 274 | 51\u00a0279 | 118\u00a0270 | 153\u00a0221 | 323\u00a0045 |
Amortization for the year from continuing operation | - | 14\u00a0278 | 16\u00a0424 | 28\u00a0453 | 59\u00a0156 |
Amortization for the year from discontinuing operation | - | 2\u00a0923 | 14\u00a0820 | 19\u00a0163 | 36\u00a0906 |
Impairment | - | - | - | - | - |
Disposals continuing operations | - | - | - | - | - |
Disposals discontinuing operations | - | (261) | (74) | - | (336) |
Translation differences | (274) | 2\u00a0538 | (5\u00a0769) | (5\u00a0888) | (9\u00a0393) |
Accumulated amortization and impairment 31 December 2022 | - | 70\u00a0757 | 143\u00a0672 | 194\u00a0950 | 409\u00a0379 |
Net carrying amount 31 December 2022 | 1\u00a0717\u00a0097 | 205\u00a0324 | 284\u00a0508 | 363\u00a0924 | 2\u00a0570\u00a0853 |
Useful life | Indefinite | 3\u201317 years | 5\u201320 years | 7\u201315 years | |
Amortization method | None | Straight-line | Straight-line | Straight-line |
Research & development costs totalling MNOK 38.0 (MNOK 50.0) were expensed in 2023. The Group has received government grants of MNOK 6.7 (MNOK 7.3) in 2023. MNOK 6.7 (MNOK 7.3) has been offset against research and development costs.
The Group has recognized goodwill as a result of several acquisitions of business enterprises. Each goodwill item is linked to a cash generating unit (CGU). When the acquired business enterprise is maintained as an independent business enterprise it is, as a starting point, the CGU. Entities that have con-siderable synergies and for which the type of activity is the same, are considered to be a unified CGU. This applies when acquired business enterprises are integrated with an existing Hexagon Composites company or the acquired business enterprise is, in operative terms, closely linked together with existing Hexagon Composites businesses. In these instances, it is the linking enterprise that is the level of the CGU where goodwill is measured and followed up. As of the end of 2023, the Group has three CGU\u2019s where capitalized goodwill has been allocated to, which are similar to the operating segments disclosed and pre-sented in note 4. Last year, the Group had four CGU\u2019s and four operating segments, including Hexagon Purus - which was deconsolidated and presented as discontinued operations on 29 June 2023.
Goodwill impairment testing
Goodwill is not depreciated but is subject to impair-ment testing in the fourth quarter each year. If there are particular indications of possible impairment, the impairment test is carried out on a quarterly basis. The impairment test is carried out by the cal-culated recoverable amount being compared with
invested capital for the unit in question. When the recoverable amount exceeds invested capital, capi-talized goodwill is maintained. When the recoverable amount is lower than invested capital, capitalized goodwill is written down to its recoverable amount. Invested capital consists of the units\u2019 total assets less interest-free current liabilities and interest-free non-current liabilities. The recoverable amount is based on expected future cash flows for the relevant unit based on the management\u2019s approved budget and strategy figures for the next five years. These are estimated based on current sales and margins and the expected market development. For subsequent periods it is assumed that there will be an increase in the cash flows equivalent to expected general growth within the various business areas.
The expected future investment requirements for the units are reflected in the calculations. These are in accordance with the management\u2019s approved budget and strategy. For the period beyond the next five years, it is assumed that the re-investment requirement will be equivalent to expected depreciation. Changes in working capital have been assessed and adjusted in accordance with expected developments.
When there are indications that a company\u2019s assets (including goodwill) may be impaired, an impairment test is conducted using the company\u2019s weighted average capital cost (WACC) as an esti-mate for the discount rate (= return on assets ratio). Correspondingly, WACC is also used for annual impairment testing. The WACC rate which is used to discount future cash flows is derived by the weighted average of the company\u2019s cost of equity and cost of debt, taking into account the 10-year risk-free interest
rates in the market, beta factor, market risk premium, the company\u2019s interest rate, and equity ratio.
Value in use is calculated by discounting future cash flows. Present value calculations are based on expected future cash flows for the different cash-gen-erating units, as described above and the units are not expected to have a finite useful life. The projections take into account appropriate and typically modest forms of growth in the cash flows into perpetuity.
Key assumptions used in value in use calculations
The most important assumptions for calculating value in use are related to estimates for operating revenues, EBITDA margins, discount rates and growth rates beyond the forecast period of 5 years. Discount rates have used have been matched and reflective of the currency of the cash flows being tested. The table below shows WACC rates used.
WACC rates used in impairment testing
Currency | 2023 | 2022 | ||
Post-tax | Pre-tax | Post-tax | Pre-tax | |
USD | 10.1% | 12.9% | 11.9% | 15.3% |
NOK | 9.6% | 12.3% | 11.4% | 14.6% |
The main reason for the lower WACC rates in 2023 compared to 2022 is related to exclusion of liquidity- and size premiums in determining cost of equity in 2023, as these premiums have been deemed no longer relevant for Hexagon.
All operating revenues and EBITDA margins are based on the stated forecast periods, past perfor-mance and management expectations of market
development for the future. Growth rates are consistent with industry and market forecasts except where conservatively applied outside the primary forecast periods.
Hexagon\u2019s primary forecast horizon is 5 years from 2024 to 2028 and from which projections are made, on a rolling 5 year basis, using prudently conserva-tive growth rates which collectively approximate to 15 per cent. Hexagon collectively employs targets of:
\u2022At least 15 per cent annual operating revenue growth
\u2022Attaining 15 per cent EBITDA margin
The differing CGUs within Hexagon may have differing revenue growth and EBITDA margins at differing periods of time, but collectively are expected to attain the Hexagon targets within the primary forecast horizon. Hexagon Digital Wave is in the middle of a transformational business plan, through digitalization, incorporating opex invest-ments over the next couple of years which weigh on positive margins short-term and increase growth in revenues and margins longer-term. The assump-tions used per CGU in relation to the Hexagon proforma targets are as follows:
\u2022Hexagon Agility attaining > target revenue growth and > target EBITDA margin
\u2022Hexagon Ragasco attaining < target revenue growth and > target EBITDA margin
\u2022Hexagon Digital Wave > target revenue growth and > target EBITDA margin
Growth beyond the forecast horizon are deter-mined based on general economic growth rates in the geographical markets Hexagon\u2019s businesses operate in.
The goodwill items of the following cash generating units have been subject to impairment testing
2023 | 2022 | |
Hexagon Agility | 1\u00a0162\u00a0713 | 1\u00a0124\u00a0360 |
Hexagon Digital Wave | 37\u00a0817 | 36\u00a0646 |
Hexagon Purus | - | 523\u00a0741 |
Hexagon Ragasco | 32\u00a0350 | 32\u00a0350 |
Total goodwill | 1\u00a0232\u00a0880 | 1\u00a0717\u00a0097 |
The assumptions that were used as a basis for the calculations made at the end of 2023 resulted in comfortable headroom for all of the above. Following the deconsolidation of Hexagon Purus as a subsidiary on 29 June 2023, the goodwill associated with Hexagon Purus was effectively derecognized on the same date, and has thus not been subject to goodwill impairment testing in 2023. See note 26for the Group\u2019s equity-accounted investment in Hexagon Purus and impairment assessments made for this investment specifically.
Other assumptions for the impairment testing of goodwill
The recoverable amount is calculated based on the general assumptions referred to above. The calcu-lations do not assume major changes in the nature of business activities compared with 2023. In the prognosis period, an increase in the operating profit equal to the general growth in the economy is, at a minimum, expected. The impairment testing is per-formed in the functional geographic currency of the CGU being USD for Hexagon Agility and Hexagon Digital Wave, and NOK for Hexagon Ragasco.
Sensitivity analyses for the goodwill
In connection with the impairment testing of good-will, the Group has carried out sensitivity analyses. These sensitivity analyses are carried out for each cash-generating unit. The present value of the cash flow in the calculations made is, among other things, sensitive to changes in the discount rate. The sensitivity analysis uses the economic assumptions referred to above as its starting point. Calculations have been made based on one of the estimated economic assumptions being changed and in which the other economic assumptions remain unchanged.
The sensitivity analyses for the CGU demonstrate that recoverable amounts of Hexagon Agility, Hexagon Ragasco and Hexagon Digital Wave good-will exceed the recognized value by a good margin, and a reasonable change in key assumption (+ 1.0 per cent for WACC and - 2.0 per cent on EBITDA margin) would not cause the carrying amount to exceed value in use.
Note 24\tLeases
Right of use assets (NOK 1\u00a0000) | Land and buildings | Plant and equipment | Fixtures\u00a0& fittings, vehicles | 2023Total |
At cost | ||||
Cost of acquisition 1 January | 592\u00a0722 | 83\u00a0951 | 9\u00a0102 | 685\u00a0775 |
Additions continuing operations | 98\u00a0052 | - | 6\u00a0878 | 104\u00a0930 |
Additions discontinued operations | 6\u00a0384 | 1\u00a0497 | 1\u00a0388 | 9\u00a0270 |
Expirations at maturity continuing operations | (12\u00a0603) | - | (958) | (13\u00a0560) |
Expirations at maturity discontinued operations | (35\u00a0296) | (304) | (782) | (36\u00a0382) |
Derecognition from deconsolidation of subsidiary | (175\u00a0106) | (24\u00a0447) | (6\u00a0956) | (206\u00a0508) |
Translation differences | 23\u00a0704 | 6\u00a0176 | 486 | 30\u00a0366 |
Cost of acquisition 31 December | 497\u00a0858 | 66\u00a0873 | 9\u00a0159 | 573\u00a0890 |
Accumulated depreciation and impairment | ||||
Accumulated depreciation and impairment 1 January | 158\u00a0230 | 49\u00a0208 | 5\u00a0105 | 212\u00a0542 |
Depreciations continuing operations | 59\u00a0098 | 8\u00a0880 | 1\u00a0333 | 69\u00a0311 |
Depreciations discontinued operations | 10\u00a0694 | 2\u00a0464 | 723 | 13\u00a0881 |
Expirations at maturity continuing operations | (8 522) | - | (958) | (9 479) |
Expirations at maturity discontinued operations | (35 296) | (304) | (782) | (36 383) |
Derecognition from deconsolidation of subsidiary | (35\u00a0029) | (8\u00a0472) | (3\u00a0715) | (47\u00a0216) |
Translation differences | 1\u00a0944 | 3\u00a0370 | 296 | 5\u00a0610 |
Accumulated depreciation and impairment | 151\u00a0119 | 55\u00a0145 | 2\u00a0002 | 208\u00a0266 |
Carrying amount as of 31 December | 346\u00a0739 | 11\u00a0728 | 7\u00a0157 | 365\u00a0624 |
Useful life | 3\u201317 years | 3\u20137 years | 2\u20135 years | |
Depreciation method | Straight-line | Straight-line | Straight-line |
Discontinued operations
On 29 June 2023, Hexagon Purus was effectively deconsolidated from the group accounts of Hexagon Composites, see also note 5. Due this, Hexagon Purus\u2019 figures up to and including 29 June 2023, have been presented separately as discontinued operations
Right of use assets (NOK 1\u00a0000) | Land and buildings | Plant and equipment | Fixtures\u00a0& fittings, vehicles | 2022Total |
At cost | ||||
Cost of acquisition 1 January | 373\u00a0042 | 78\u00a0270 | 5\u00a0537 | 456\u00a0849 |
Additions continuing operations | 122\u00a0154 | - | 1\u00a0366 | 123\u00a0520 |
Additions discontinued operations | 118\u00a0929 | 1\u00a0505 | 2\u00a0038 | 122\u00a0472 |
Expirations at maturity continuing operations | (52\u00a0166) | - | (262) | (52\u00a0428) |
Expirations at maturity discontinued operations | - | - | - | - |
Translation differences | 30\u00a0763 | 4\u00a0175 | 424 | 35\u00a0362 |
Cost of acquisition 31 December | 592\u00a0722 | 83\u00a0951 | 9\u00a0102 | 685\u00a0775 |
Accumulated depreciation and impairment | ||||
Accumulated depreciation and impairment 1 January | 136\u00a0613 | 34\u00a0391 | 3\u00a0536 | 174\u00a0540 |
Depreciations continuing operations | 48\u00a0486 | 7\u00a0838 | 547 | 56\u00a0871 |
Depreciations discontinued operations | 18\u00a0387 | 4\u00a0937 | 1\u00a0079 | 24\u00a0404 |
Expirations at maturity continuing operations | (52\u00a0166) | - | (262) | (52\u00a0428) |
Expirations at maturity discontinued operations | - | |||
Translation differences | 6\u00a0909 | 2\u00a0041 | 205 | 9\u00a0156 |
Accumulated depreciation and impairment | 158\u00a0230 | 49\u00a0208 | 5\u00a0105 | 212\u00a0542 |
Carrying amount as of 31 December | 434\u00a0492 | 34\u00a0743 | 3\u00a0998 | 473\u00a0233 |
Useful life | 3\u201317 years | 3\u20137 years | 2\u20135 years | |
Depreciation method | Straight-line | Straight-line | Straight-line |
Note 5\tDiscontinued operations and changes in the Group`s structure
Deconsolidation of Hexagon Purus on 29 June 2023
On 29 June 2023, the Board of Hexagon Composites decided to use its mandate from the extraordinary general meeting on 28 June, to distribute 69.2 million shares in Hexagon Purus ASA (\u201cHexagon Purus\u201d) as dividend in kind to its shareholders. The distribution represented 25 per cent of the total outstanding shares in Hexagon Purus and effectively reduced Hexagon\u2019s ownership in Hexagon Purus from 68.4 per cent to 43.4 per cent. On the same day and subsequent of the Board meeting, Hexagon sold, and entered into a total return swap (TRS) agreements with its Nordic Banking Partners, representing 5 per cent of the total outstanding shares in Hexagon Purus, or 13.8 million shares. Since 29 June, Hexagon has held 38.4 per cent of the voting rights (106.3 million shares) in Hexagon Purus and a total return swap of 5 per cent (13.8 million shares). Following the above-men-tioned events, Hexagon management made a reassessment of its control consideration in Hexagon Purus, and after considering all relevant facts and circumstances, management concluded that control was lost as of 29 June 2023. Key factors pertaining to this conclusion were the reduced voting right in itself coupled with an irrevocable public statement from the Board of Hexagon Composites which effectively limits Hexagon\u2019s Board influence and power in the Board of Purus to a non-controlling party for the foreseeable future. See the full statement from the Board of Hexagon Composites in the stock exchange announcement from 29 June, https://newsweb.oslobors.no/message/594467) As a result of the loss of control in Hexagon Purus, Hexagon derecognized all assets and lia-bilities, including non-controlling interests, associated with Hexagon Purus as of 29 June. The table below shows derivation the one-off accounting gain resulting from the deconsolidation of Hexagon Purus on 29 June 2023.
Gain from deconsolidation of Hexagon Purus
(NOK 1\u00a0000) | ||
Fair value of dividend in kind (69\u00a0164\u00a0402 shares \u200cx NOK 19.80 per share) | 1\u00a0369\u00a0455 | |
Fair value recognition of remaining Hexagon Purus shares as associated company (120\u00a0136\u00a0095 shares \u200cx NOK 19.80 per share) | 2\u00a0378\u00a0695 | |
a) | Total consideration of Hexagon Composites\u2019 share in Hexagon Purus per 29 June 2023 | 3\u00a0748\u00a0150 |
Derecognition book value of net assets in Hexagon Purus | 2\u00a0348\u00a0204 | |
Derecognition book value of non-controlling interests related to Hexagon Purus | (834\u00a0841) | |
b) | Total book values of Hexagon Composites\u2019 share in Hexagon Purus derecognized per 29 June 2023 | 1\u00a0513\u00a0363 |
c) | Reclassification of translation differences from OCI related to Hexagon Purus per 29 June 2023 | 118\u00a0307 |
a-b+c) | Gain from deconsolidation of Hexagon Purus | 2\u00a0353\u00a0094 |
Transaction costs related to deconsolidation of Hexagon Purus | 1\u00a0792 | |
Net gain from deconsolidation of Hexagon Purus | 2\u00a0351\u00a0302 |
Hexagon Purus discontinued operations since 29 June 2023
As Hexagon Purus represented a separate major line of business and a separate segment within the Hexagon Group prior to deconsolidation, the component represents a discontinued operation and has since 29 June 2023 been presented as such. Consequently, Hexagon Group\u2019s consolidated statement of income for 2022 has been re-presented for enhanced comparability and in line with IAS 5 Non-current Assets Held for Sale and Discontinued Operations. Continuing operations thus comprise the Hexagon Agility, Hexagon Ragasco and Hexagon Digital Wave segments. Profit/loss after taxes from discontinued operations (Hexagon Purus) as incor-porated in Hexagon\u2019s group accounts is shown in the overview below:
Profit/loss after taxes from discontinued operations (Hexagon Purus)
(NOK 1\u00a0000) | 2023(up to 29 June 2023) | 2\u00a0022 |
Revenue from contracts with customers | 570 353 | 958\u00a0636 |
Other operating income | 2 562 | 4\u00a0034 |
Rental income | 629 | 1\u00a0255 |
Total revenue | 573\u00a0544 | 963\u00a0925 |
Cost of materials | 334\u00a0830 | 588\u00a0525 |
Payroll and social security expenses | 295\u00a0899 | 443\u00a0496 |
Other operating expenses | 143\u00a0846 | 337\u00a0408 |
Total operating expenses before depreciation | 774\u00a0575 | 1\u00a0369\u00a0430 |
Operating profit before depreciation (EBITDA) | (201\u00a0031) | (405\u00a0505) |
Depreciation, amortization and impairment | 58\u00a0756 | 95\u00a0089 |
Operating profit (EBIT) | (259\u00a0787) | (500\u00a0594) |
Share of profit/loss of investments in associated companies | (4\u00a0402) | 51\u00a0888 |
Other financial items (net) | (40\u00a0395) | 7\u00a0808 |
Profit/loss before taxes | (304\u00a0584) | (440\u00a0898) |
Income tax expenses | (2\u00a0984) | (9\u00a0380) |
Profit/loss after taxes from discontinued operations | (301\u00a0600) | (431\u00a0518) |
Gain from deconsolidation of Hexagon Purus before taxes | 2\u00a0351\u00a0302 | - |
Income tax on gain from deconsolidation of Hexagon Purus | - | - |
Gain from deconsolidation of subsidiary Hexagon Purus after taxes | 2\u00a0351\u00a0302 | - |
Profit/loss after taxes from discontinued operations according to income statement | 2\u00a0049\u00a0703 | (431\u00a0518) |
Note 26\tInvestments in associated companies
Companies | Country | Business segment | Ownership 31 December 2022 | Ownership 31 December 2023 | Accounting method |
Hexagon Purus ASA\u200c1 | Norway | Other | 73.0% | 38.4% | Equity method |
Cryoshelter BioLNG GmbH\u200c2 | Austria | Hexagon Agility | 40.0% | 40.0% | Equity method |
1Hexagon Purus ASA classified as an associated company as of 29.06.23 following loss of control and deconsolidation effective on the same date. See also note 5for further information.
2Acquired on 01.08.2022 and classified as an associated companies effective from the same date
Income statement reconciliation | Hexagon Purus ASA | Cryoshelter BioLNG GmbH | Total | |||
(NOK 1000) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Share of profit after tax | (143\u00a0520) | - | (17 949) | (2\u00a0579) | (161 469) | (2\u00a0579) |
PPA amortizations associated companies | (12\u00a0448) | - | (2\u00a0657) | (992) | (15\u00a0105) | (992) |
Impairment | (702\u00a0000) | - | - | - | (702\u00a0000) | - |
Gain on loss of significant influence | - | - | - | - | - | - |
Total profit/loss from investments in associated companies as per 31 December | (857\u00a0968) | - | (20\u00a0606) | (3\u00a0571) | (878\u00a0574) | (3\u00a0571) |
Balance sheet reconciliation | Hexagon Purus ASA | Cryoshelter BioLNG GmbH | Other associates\u200c1 | Total | ||||
(NOK 1000) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Carrying value as at 1 January | - | - | 20\u00a0243 | - | 33\u00a0029 | 7\u00a0024 | 53\u00a0272 | 7\u00a0024 |
Share of profit after tax incl. PPA amortizations | (155\u00a0968) | - | (20\u00a0606) | (3\u00a0571) | - | - | (176\u00a0574) | (3\u00a0571) |
Share of other comprehensive income | (21\u00a0590) | - | - | - | - | - | (21\u00a0590) | - |
Share of profit after tax incl. PPA amortizations from discontinued operations | - | - | - | - | (4\u00a0402) | (11\u00a0271) | (4\u00a0402) | (11\u00a0271) |
Purchase of shares | - | - | - | 23\u00a0898 | - | 33\u00a0738 | - | 57\u00a0636 |
Share capital contribution | - | - | - | - | 29\u00a0305 | 7\u00a0743 | 29\u00a0305 | 7\u00a0743 |
Initial recognition at fair value following deconsolidation as subsidiary | 2\u00a0378\u00a0695 | - | - | - | - | - | 2\u00a0378\u00a0695 | - |
Sale of shares | (274\u00a0029) | - | - | - | - | - | (274\u00a0029) | - |
Derecognition - loss of significant influence | - | - | - | - | - | (4\u00a0179) | - | (4\u00a0179) |
Derecognition of associates following deconsolidation of subsidiary | - | - | - | - | (57\u00a0804) | - | (57\u00a0804) | - |
Impairment | (702\u00a0000) | - | - | - | - | - | (702\u00a0000) | - |
Currency translation effects | - | - | 363 | (84) | (128) | (25) | 235 | (110) |
Carrying value as per 31 December | 1\u00a0225\u00a0107 | - | - | 20\u00a0243 | - | 33\u00a0029 | 1\u00a0225\u00a0107 | 53\u00a0272 |
1Other associates relate to associated companies of Hexagon Purus. As a result of the deconsolidation of Hexagon Purus effective 29 June 2023, these associated companies were derecognized from the group accounts of Hexagon Composites. The total carrying amount derecognized amounted to NOK 57.8 million.
The following table sets forth summarized financial information for the Group\u2019s material associate, Hexagon Purus.
Companies (NOK 1000) | Hexagon Purus ASA | |
2023 (Full year) | 2023 (29 June to 31 Dec) | |
Interest held as per 31 December | 38.40% | |
Income statement and statement of comprehensive income of the associate | ||
Revenues | 1\u00a0319\u00a0614 | 746\u00a0070 |
EBITDA | (445\u00a0473) | (244\u00a0442) |
EBIT | (595\u00a0258) | (335\u00a0471) |
Profit/loss before taxes | (691\u00a0310) | (386\u00a0726) |
Profit/loss after taxes | (683\u00a0517) | (381\u00a0918) |
- hereof attributable to equity holders of the parent | (672\u00a0703) | (373\u00a0750) |
Other comprehensive income | 44\u00a0157 | (61\u00a0936) |
- hereof attributable to equity holders of the parent | 49\u00a0813 | (56\u00a0224) |
Total comprehensive income | (639\u00a0360) | (443\u00a0854) |
- hereof attributable to equity holders of the parent | (622\u00a0890) | (429\u00a0974) |
Hexagon\u2019s share of profit/loss of the associate | (143\u00a0520) | |
Hexagon\u2019s share of other comprehensive income of the associate | (21\u00a0590) | |
Hexagon\u2019s share of total comprehensive income of the associate | (165\u00a0110) | |
Companies (NOK 1000) | ||
Hexagon Purus ASA | ||
2023 (Full year) | 2023 (29 June to 31 Dec) | |
Other effects related to the associate | ||
PPA amortizations relates to implicit intangible assets of the associate | (12\u00a0448) | |
Impairment loss on the associate | (702\u00a0000) | |
Total effect in Hexagon\u2019s comprehensive income related to the associate | (879\u00a0558) | |
Balance sheet as per 31 December | ||
Non-current assets | 2\u00a0467\u00a0210 | 2\u00a0467\u00a0210 |
Current assets | 1\u00a0305\u00a0797 | 1\u00a0305\u00a0797 |
Non-current liabilities | 1\u00a0154\u00a0847 | 1\u00a0154\u00a0847 |
Current liabilities | 699\u00a0032 | 699\u00a0032 |
Net assets / equity | 1\u00a0919\u00a0128 | 1\u00a0919\u00a0128 |
Hexagon\u2019s share of net assets | 736\u00a0945 | |
Intangible assets | 286\u00a0106 | |
Goodwilll | 904\u00a0056 | |
Impairment | (702\u00a0000) | |
Carrying value as per 31 December | 1\u00a0225\u00a0107 | |
Fair value (if there is a quoted market) as per 31 December | 1\u00a0184\u00a0171 |
Hexagon Purus ASA - initial recognition as associated company in Q2 2023
Following loss of control and deconsolidation of Hexagon Purus as a subsidiary effective from 29 June 2023, Hexagon Composites\u2019 investment in Hexagon Purus is being accounted for as an associated company applying the equity method. On 29 June 2023, following the dividend-in-kind decision, Hexagon Composites\u2019 ownership in Hexagon Purus was effectively reduced to 43.4 per cent. The initial recognition and measurement of Hexagon Purus under the equity method amounted to NOK 2\u00a0379 million, representing 43.4 per cent of the fair market value of Hexagon Purus on 29 June. Furthermore, on 29 June, Hexagon Composites sold 13.8 million Hexagon Purus shares and simultaneously entered into a total return swap (TRS) representing 5 per cent of the total out-standing shares in Hexagon Purus. The transaction was closed at NOK 19.80 per share for a total consideration of
NOK 274 million. Based on the substance of the agreements and the circumstances for the sale, the sale of shares associated with the TRS agreements was accounted for as a reduction in ownership of an associate. Since the sale of shares under the TRS agreement was made subsequently on the same date as the loss-of-control event, the sale represented a zero-gain transaction. From 29 June and onwards, Hexagon Composites has accounted for 38.4 per cent of the profits/losses in Hexagon Purus via the equity method in addition to amortizations of fair value/PPA-adjustments. See also note 5for further information related to the deconsolidation of Hexagon Purus. The table below shows the purchase price allocation of Hexagon Purus as of 29 June 2023.
Purchase price allocation Hexagon Purus as of 29 June 2023 (NOK 1000) | Hexagon Purus 100% basis | Hexagon Composites share |
Ownership share | 38.4% | |
Number of shares | 276\u00a0797\u00a0456 | 106\u00a0296\u00a0223 |
Share price (NOK / share) | 19.80 | 19.80 |
Market value of equity as of 29 June 2023 | 5\u00a0480\u00a0590 | 2\u00a0104\u00a0665 |
Book values as of recognition date / acquisition date | ||
Non-current assets | 1\u00a0917\u00a0324 | 736\u00a0294 |
Current assets | 1\u00a0900\u00a0183 | 729\u00a0712 |
Non-current liabilities | 738\u00a0189 | 283\u00a0481 |
Current liabilities | 731\u00a0115 | 280\u00a0764 |
Book value of equity as of 29 June 2023 | 2\u00a0348\u00a0204 | 901\u00a0761 |
Fair value / PPA adjustments | 3\u00a0132\u00a0386 | 1\u00a0202\u00a0904 |
- hereof intangible assets | 778\u00a0206 | 298\u00a0848 |
- hereof goodwill | 2\u00a0354\u00a0180 | 904\u00a0056 |
Hexagon Purus ASA - impairment testing in Q4 2024
During the second half of 2023, Hexagon Purus experienced a significant decline in its market value and closed at NOK 11.14/share as of 31 December 2023, translating to a fair value of Hexagon\u2019s shares in Hexagon Purus of NOK 1\u00a0184 million. Compared to the share price as of the date of Hexagon\u2019s initial fair value recognition of Hexagon Purus as an associated company of NOK 19.80/share, this represents a 44 per cent decline in fair value. Comparable peer companies within the hydrogen and battery sector experienced similar share price develop-ments in the same period. The significant decline in the fair value of Hexagon Purus and peers caused Hexagon to perform an impairment test of its investment, which resulted in an impairment of NOK 702 million and an adjusted carrying value of NOK 1\u00a0225 million as per 31 December 2023.
The key assumptions for calculating value in use are related to estimates for revenues, EBITDA margins, discount rates and growth rates beyond the forecast period. A 7-year forecast period until 2030 with an extrapolation towards 2033 (total of 10 years) has been used, concurrent with the forecast period used in the determination of intangible assets and goodwill in the purchase price allocation of Hexagon Purus as of 29 June 2023. Hexagon Purus\u2019 business plan projections imply significant growth. However, as a reflection of the overall equity market\u2019s increased implicit risk towards Hexagon Purus during the second half of 2023, Hexagon has for impairment test
purposes per 31 December 2023 incorporated somewhat higher risk factors to Hexagon Purus\u2019 revenue growth rates towards 2030 both within the hydrogen and the battery electric mobility sector, as well as somewhat lower profit margins in the same forecast period. For subsequent periods beyond the 7-year forecast horizon, the Group has prudently phased in a declining growth rate towards an expected average growth rate for the economy in general. A weighted average cost of capital (post-tax) of 10.8 per cent has been used as discount rate of free cash flows.
Although the Company expects to break-even at EBITDA level during 2025, free cash flows are still expected to be negative a couple of years beyond 2025 due to capital expenditures and working capital requirements. As such, a significant portion of the estimated value-in-use amount lies in the terminal value which is dependent upon the size of the company and its free cash flow generation at the end of the forecast period. Despite future cash flows are inherently uncertain, Hexagon management expects Hexagon Purus will capitalize and deliver on its business plan, and that a value-in-use of NOK 1\u00a0225 million represents the best estimate based on known economic con-ditions that will exist in the period including prudent risk adjustments.
Cryoshelter BioLNG GmbH
On 1 August 2022, Hexagon Composites made a EUR 2.4 (NOK 24) million investment and acquired 40 per cent of the shares in Cryoshelter Bio-LNG GmbH, with options to acquire the remaining shares over the next 3-10 years. As of 31 December 2023, the carrying value of Group\u2019s investment in Cryoshelter BioLNG is zero. Furthermore, Hexagon has a convertible loan investment in Cryoshelter of NOK 100.1 million classified as other non-current financial assets. See also note12.
Note 30\tList of subsidiaries and associates
The following companies are included in the consolidated financial statements
Company | Home Country | Registeredoffice | Businesssegment | Owner-ship | Votes |
Subsidiaries | |||||
Hexagon Ragasco AS | Norway | Raufoss | Hexagon Ragasco | 100% | 100% |
Hexagon Ragasco NA Inc. | USA | Lincoln, NE | Hexagon Ragasco | 100% | 100% |
Composite Scandinavia AB | Sweden | Pite\u00e5 | Hexagon Ragasco | 100% | 100% |
Hexagon Composites India Pvt. Ltd. | India | Bangalore | Hexagon Ragasco | 100% | 100% |
Hexagon Composites Russia LLC | Russia | Nizhny Novgorod | Hexagon Ragasco | 100% | 100% |
Hexagon USA Holdings Inc. | USA | Lincoln, NE | Unallocated | 100% | 100% |
Hexagon Digital Wave LLC | USA | Centennial, CO | Digital Wave | 100% | 100% |
Hexagon R&D Services LLC | USA | Lincoln, NE | Hexagon Agility | 100% | 100% |
Hexagon Agility Inc. | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility Fuel Solutions LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility Fuel Systems LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility California LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility Canada ULC | Canada | Kelowna, BC | Hexagon Agility | 100% | 100% |
Agility Fuel Solutions UK Ltd | UK | London | Hexagon Agility | 100% | 100% |
Agility North Carolina LLC | USA | Salisbury, NC | Hexagon Agility | 100% | 100% |
AFS Salisbury LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility Cylinders, LLC | USA | Lincoln, NE | Hexagon Agility | 100% | 100% |
Agility Powertrain Systems, LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility India Private Ltd | India | Bangalore | Hexagon Agility | 100% | 100% |
Agility Fuel Solutions Norway AS | Norway | Raufoss | Hexagon Agility | 100% | 100% |
Hexagon Lincoln LLC | USA | Lincoln, NE | Hexagon Agility | 100% | 100% |
Hexagon Technical Services LLC | USA | Lincoln, NE | Hexagon Agility | 100% | 100% |
Company | Home Country | Registeredoffice | Businesssegment | Owner-ship | |
Votes | |||||
Hexagon Mobile Pipeline GmbH | Germany | Kassel | Hexagon Agility | 100% | 100% |
Hexagon Agility GmbH | Germany | Kassel | Hexagon Agility | 100% | 100% |
Hexagon Operations GmbH | Germany | Kassel | Hexagon Agility | 100% | 100% |
Hexagon Raufoss AS | Norway | Raufoss | Unallocated | 100% | 100% |
Hexagon Technology AS | Norway | Aalesund | Unallocated | 100% | 100% |
Hexagon Cylinders India Pvt. Ltd. | India | Unallocated | 100% | 100% | |
Associates owned by Hexagon Composites ASA | |||||
Hexagon Purus ASA | Norway | Aalesund | Hexagon Purus | 38% | 38% |
Cryoshelter BioLNG GmbH | Austria | Hexagon Agility | 40% | 40% |
Dividend in kind NOK 1 369 million represents fair value of 69 164 402 shares in Hexagon Purus ASA distributed 29 June 2023 (see note 5). The Board proposes to the general assembly that there will be no further dividend to be paid for the fiscal year 2023.
Dividends are included as allocations to the owners in the period in which they are paid.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f66186": { "value": "Note 6\tNet financial items
(NOK 1\u00a0000) | 2023 | 2022 |
Interest income | 19\u00a0301 | 8\u00a0075 |
Unrealized gains from forward exchange contracts | 8\u00a0567 | 26\u00a0523 |
Foreign exchange items | 129\u00a0902 | 200\u00a0798 |
Other finance income | - | - |
Total finance income | 157\u00a0769 | 235\u00a0396 |
Loss on exchange items | 76\u00a0048 | 74\u00a0304 |
Unrealized loss on forward exchange contracts and interest rate swaps | 47\u00a0068 | 137\u00a0747 |
Unrealized loss on total return swap (TRS) | 124\u00a0609 | - |
Interest expenses | 161\u00a0157 | 91\u00a0749 |
Interest expenses on lease liabilities | 22\u00a0850 | 7\u00a0067 |
Other finance expense | 1\u00a0599 | 3\u00a0011 |
Total finance expense | 433\u00a0331 | 313\u00a0878 |
Net financial items | (275\u00a0562) | (78\u00a0482) |
Note 6\tNet financial items
(NOK 1\u00a0000) | 2023 | 2022 |
Interest income | 19\u00a0301 | 8\u00a0075 |
Unrealized gains from forward exchange contracts | 8\u00a0567 | 26\u00a0523 |
Foreign exchange items | 129\u00a0902 | 200\u00a0798 |
Other finance income | - | - |
Total finance income | 157\u00a0769 | 235\u00a0396 |
Loss on exchange items | 76\u00a0048 | 74\u00a0304 |
Unrealized loss on forward exchange contracts and interest rate swaps | 47\u00a0068 | 137\u00a0747 |
Unrealized loss on total return swap (TRS) | 124\u00a0609 | - |
Interest expenses | 161\u00a0157 | 91\u00a0749 |
Interest expenses on lease liabilities | 22\u00a0850 | 7\u00a0067 |
Other finance expense | 1\u00a0599 | 3\u00a0011 |
Total finance expense | 433\u00a0331 | 313\u00a0878 |
Net financial items | (275\u00a0562) | (78\u00a0482) |
Note 6\tNet financial items
(NOK 1\u00a0000) | 2023 | 2022 |
Interest income | 19\u00a0301 | 8\u00a0075 |
Unrealized gains from forward exchange contracts | 8\u00a0567 | 26\u00a0523 |
Foreign exchange items | 129\u00a0902 | 200\u00a0798 |
Other finance income | - | - |
Total finance income | 157\u00a0769 | 235\u00a0396 |
Loss on exchange items | 76\u00a0048 | 74\u00a0304 |
Unrealized loss on forward exchange contracts and interest rate swaps | 47\u00a0068 | 137\u00a0747 |
Unrealized loss on total return swap (TRS) | 124\u00a0609 | - |
Interest expenses | 161\u00a0157 | 91\u00a0749 |
Interest expenses on lease liabilities | 22\u00a0850 | 7\u00a0067 |
Other finance expense | 1\u00a0599 | 3\u00a0011 |
Total finance expense | 433\u00a0331 | 313\u00a0878 |
Net financial items | (275\u00a0562) | (78\u00a0482) |
Note 7\tTax
Tax expense
(NOK 1000) | Note | 2023 | 2022 |
Income tax payable in the income statement | 60 469 | 63\u00a0056 | |
Change in deferred tax in income statement | (52 264) | (44\u00a0816) | |
Effect of changes in tax rate | - | - | |
Tax expense continuing operations | 8 205 | 18\u00a0240 |
Reconciliation of tax payable in the balance sheet to income tax payable in the income statement
(NOK 1000) | Note | 2023 | 2022 |
Income tax payable in the balance sheet | 65 835 | 53\u00a0057 | |
Income tax receivable in the balance sheet | 15 | (30\u00a0343) | (1\u00a0992) |
Net income tax payable (+) / receivable (-) in the balance sheet | 35 492 | 51\u00a0065 | |
- excluding discontinued operations | (3\u00a0290) | ||
Net income tax payable (+) / receivable (-) in the balance sheet continuing operations | 35 492 | 47\u00a0775 | |
Prepaid taxes | 28\u00a0755 | 38\u00a0466 | |
Settled taxes not paid | (252) | (1\u00a0367) | |
Effect on tax payable of group contributions in Norway | - | 534 | |
FX translation effects | (3\u00a0525) | (22\u00a0353) | |
Total income tax payable in the income statement | 60 469 | 63\u00a0056 |
The relationship between tax expense and the accounting profit (loss) before taxes
(NOK 1000) | Note | 2023 | 2022 |
Profit before tax continuing operations | (932\u00a0977) | 23\u00a0781 | |
Tax based on nominal tax rate in Norway (22%) | (205\u00a0255) | 5\u00a0232 | |
Adjusted for tax effects of: | |||
Varying foreign tax rates vs. Norwegian tax rate | 1\u00a0789 | (7\u00a0046) | |
Current period unrecognized deferred tax assets | 2\u00a0024 | 26\u00a0866 | |
Re-assessment of previously unrecognized deferred tax assets | (19\u00a0747) | - | |
Tax effects related to share of profit/loss from associates | 38\u00a0890 | 786 | |
Tax effects related to impairment loss of associates | 154\u00a0440 | - | |
Tax effect of other permanent differences | 42 543 | 100 | |
Other differences relating to foreign subsidiaries | (6\u00a0916) | (7\u00a0918) | |
FX translation effects | 438 | 221 | |
Tax expense continuing operations | 8 205 | 18\u00a0240 |
Profit/loss before taxes were negatively impacted by share of losses from associated companies and the impairment loss of the investment in Hexagon Purus. See also note 26Investments in associated companies for further information.
Tax effect of other permanent differences include share-based payment expenses, tax-free dividends and other non-deductible operating expenses.
Deferred tax assets and deferred tax liabilities
Balance sheet | Change in deferred tax in income statement | |||
(NOK 1\u00a0000) | 2023 | 2022 | 2023 | 2022 |
Deferred tax positions continuing operations | ||||
Loss carryforwards | (42\u00a0635) | (40\u00a0427) | (2\u00a0207) | (15\u00a0714) |
Interest deduction limitation reserve | (38\u00a0790) | (28\u00a0038) | (10\u00a0753) | (28\u00a0038) |
Pension | (330) | (10) | (320) | 175 |
Property, plant & equipment | 70\u00a0369 | 73\u00a0171 | (2\u00a0802) | 8\u00a0528 |
Intangible assets | 58\u00a0702 | 63\u00a0491 | (4\u00a0790) | (4\u00a0911) |
Inventories and trade receivables | (14\u00a0979) | (24\u00a0257) | 9\u00a0278 | (19\u00a0554) |
Derivatives | (51 068) | (42\u00a0437) | (8 630) | (24\u00a0316) |
Provisions for liabilities/other current liabilities | (28\u00a0998) | (28\u00a0035) | (963) | (6\u00a0176) |
Other | 118\u00a0830 | 146\u00a0873 | (28\u00a0043) | 53\u00a0063 |
Deferred tax assets (-) / liabilities (+) net | 71 101 | 120\u00a0330 | (49 229) | (36\u00a0942) |
Reduction of tax assets due to uncertainty | 40\u00a0904 | 40\u00a0497 | 407 | 16\u00a0518 |
Deferred tax assets (-) / liabilities (+) net carrying amount | 112 005 | 160\u00a0827 | (48 822) | (20\u00a0424) |
Change in deferred tax from purchase of companies | - | - | ||
Change in deferred tax from group contributions in Norway | - | 534 | ||
Change in deferred tax due to OCI | (404) | (139) | ||
Change in deferred tax on FX translation | 3\u00a0846 | 23\u00a0996 | ||
Net change in deferred tax in income statement | (52 264) | (44\u00a0816) |
Carrying amounts of deferred taxes
(NOK 1\u00a0000) | 2023 | 2022 |
Deferred tax asset - continuing operations | (19 013) | - |
Deferred tax liabilities - continuing operations | 131\u00a0018 | 160\u00a0827 |
Net recognized deferred tax assets (-) / deferred tax liabilities (+) continuing operations | 112 005 | 160\u00a0827 |
Deferred tax asset - discontinued operations | - | |
Deferred tax liabilities - discontinued operations | 45\u00a0543 | |
Net recognized deferred tax assets (-) / deferred tax liabilities (+) | 112 005 | 206\u00a0370 |
Deferred tax recognized in the statement of comprehensive income is as follows:
(NOK 1\u00a0000) | 2023 | 2022 |
Deferred tax asset | - | - |
Deferred tax liabilities | 404 | 139 |
Total | 404 | 139 |
Overview of tax losses carried forward
(NOK 1\u00a0000) | 2023 | 2022 |
Norway | 92 | - |
North America | 69\u00a0356 | 64\u00a0868 |
Europe | 149\u00a0475 | 154\u00a0629 |
Total tax losses carried forward - continuing operations | 218\u00a0922 | 219\u00a0496 |
Tax losses carried forward discontinued operations | 1\u00a0171\u00a0304 | |
Total tax losses carried forward | 218\u00a0922 | 1\u00a0390\u00a0801 |
The losses are carried forward indefinitely.
Deferred tax assets are recognized when it is probable that the Group will have sufficient taxable profit in subsequent periods to utilize the tax assets.
Note 7\tTax
Tax expense
(NOK 1000) | Note | 2023 | 2022 |
Income tax payable in the income statement | 60 469 | 63\u00a0056 | |
Change in deferred tax in income statement | (52 264) | (44\u00a0816) | |
Effect of changes in tax rate | - | - | |
Tax expense continuing operations | 8 205 | 18\u00a0240 |
Reconciliation of tax payable in the balance sheet to income tax payable in the income statement
(NOK 1000) | Note | 2023 | 2022 |
Income tax payable in the balance sheet | 65 835 | 53\u00a0057 | |
Income tax receivable in the balance sheet | 15 | (30\u00a0343) | (1\u00a0992) |
Net income tax payable (+) / receivable (-) in the balance sheet | 35 492 | 51\u00a0065 | |
- excluding discontinued operations | (3\u00a0290) | ||
Net income tax payable (+) / receivable (-) in the balance sheet continuing operations | 35 492 | 47\u00a0775 | |
Prepaid taxes | 28\u00a0755 | 38\u00a0466 | |
Settled taxes not paid | (252) | (1\u00a0367) | |
Effect on tax payable of group contributions in Norway | - | 534 | |
FX translation effects | (3\u00a0525) | (22\u00a0353) | |
Total income tax payable in the income statement | 60 469 | 63\u00a0056 |
The relationship between tax expense and the accounting profit (loss) before taxes
(NOK 1000) | Note | 2023 | 2022 |
Profit before tax continuing operations | (932\u00a0977) | 23\u00a0781 | |
Tax based on nominal tax rate in Norway (22%) | (205\u00a0255) | 5\u00a0232 | |
Adjusted for tax effects of: | |||
Varying foreign tax rates vs. Norwegian tax rate | 1\u00a0789 | (7\u00a0046) | |
Current period unrecognized deferred tax assets | 2\u00a0024 | 26\u00a0866 | |
Re-assessment of previously unrecognized deferred tax assets | (19\u00a0747) | - | |
Tax effects related to share of profit/loss from associates | 38\u00a0890 | 786 | |
Tax effects related to impairment loss of associates | 154\u00a0440 | - | |
Tax effect of other permanent differences | 42 543 | 100 | |
Other differences relating to foreign subsidiaries | (6\u00a0916) | (7\u00a0918) | |
FX translation effects | 438 | 221 | |
Tax expense continuing operations | 8 205 | 18\u00a0240 |
Profit/loss before taxes were negatively impacted by share of losses from associated companies and the impairment loss of the investment in Hexagon Purus. See also note 26Investments in associated companies for further information.
Tax effect of other permanent differences include share-based payment expenses, tax-free dividends and other non-deductible operating expenses.
Deferred tax assets and deferred tax liabilities
Balance sheet | Change in deferred tax in income statement | |||
(NOK 1\u00a0000) | 2023 | 2022 | 2023 | 2022 |
Deferred tax positions continuing operations | ||||
Loss carryforwards | (42\u00a0635) | (40\u00a0427) | (2\u00a0207) | (15\u00a0714) |
Interest deduction limitation reserve | (38\u00a0790) | (28\u00a0038) | (10\u00a0753) | (28\u00a0038) |
Pension | (330) | (10) | (320) | 175 |
Property, plant & equipment | 70\u00a0369 | 73\u00a0171 | (2\u00a0802) | 8\u00a0528 |
Intangible assets | 58\u00a0702 | 63\u00a0491 | (4\u00a0790) | (4\u00a0911) |
Inventories and trade receivables | (14\u00a0979) | (24\u00a0257) | 9\u00a0278 | (19\u00a0554) |
Derivatives | (51 068) | (42\u00a0437) | (8 630) | (24\u00a0316) |
Provisions for liabilities/other current liabilities | (28\u00a0998) | (28\u00a0035) | (963) | (6\u00a0176) |
Other | 118\u00a0830 | 146\u00a0873 | (28\u00a0043) | 53\u00a0063 |
Deferred tax assets (-) / liabilities (+) net | 71 101 | 120\u00a0330 | (49 229) | (36\u00a0942) |
Reduction of tax assets due to uncertainty | 40\u00a0904 | 40\u00a0497 | 407 | 16\u00a0518 |
Deferred tax assets (-) / liabilities (+) net carrying amount | 112 005 | 160\u00a0827 | (48 822) | (20\u00a0424) |
Change in deferred tax from purchase of companies | - | - | ||
Change in deferred tax from group contributions in Norway | - | 534 | ||
Change in deferred tax due to OCI | (404) | (139) | ||
Change in deferred tax on FX translation | 3\u00a0846 | 23\u00a0996 | ||
Net change in deferred tax in income statement | (52 264) | (44\u00a0816) |
Carrying amounts of deferred taxes
(NOK 1\u00a0000) | 2023 | 2022 |
Deferred tax asset - continuing operations | (19 013) | - |
Deferred tax liabilities - continuing operations | 131\u00a0018 | 160\u00a0827 |
Net recognized deferred tax assets (-) / deferred tax liabilities (+) continuing operations | 112 005 | 160\u00a0827 |
Deferred tax asset - discontinued operations | - | |
Deferred tax liabilities - discontinued operations | 45\u00a0543 | |
Net recognized deferred tax assets (-) / deferred tax liabilities (+) | 112 005 | 206\u00a0370 |
Deferred tax recognized in the statement of comprehensive income is as follows:
(NOK 1\u00a0000) | 2023 | 2022 |
Deferred tax asset | - | - |
Deferred tax liabilities | 404 | 139 |
Total | 404 | 139 |
Overview of tax losses carried forward
(NOK 1\u00a0000) | 2023 | 2022 |
Norway | 92 | - |
North America | 69\u00a0356 | 64\u00a0868 |
Europe | 149\u00a0475 | 154\u00a0629 |
Total tax losses carried forward - continuing operations | 218\u00a0922 | 219\u00a0496 |
Tax losses carried forward discontinued operations | 1\u00a0171\u00a0304 | |
Total tax losses carried forward | 218\u00a0922 | 1\u00a0390\u00a0801 |
The losses are carried forward indefinitely.
Deferred tax assets are recognized when it is probable that the Group will have sufficient taxable profit in subsequent periods to utilize the tax assets.
Note 7\tTax
Tax expense
(NOK 1000) | Note | 2023 | 2022 |
Income tax payable in the income statement | 60 469 | 63\u00a0056 | |
Change in deferred tax in income statement | (52 264) | (44\u00a0816) | |
Effect of changes in tax rate | - | - | |
Tax expense continuing operations | 8 205 | 18\u00a0240 |
Reconciliation of tax payable in the balance sheet to income tax payable in the income statement
(NOK 1000) | Note | 2023 | 2022 |
Income tax payable in the balance sheet | 65 835 | 53\u00a0057 | |
Income tax receivable in the balance sheet | 15 | (30\u00a0343) | (1\u00a0992) |
Net income tax payable (+) / receivable (-) in the balance sheet | 35 492 | 51\u00a0065 | |
- excluding discontinued operations | (3\u00a0290) | ||
Net income tax payable (+) / receivable (-) in the balance sheet continuing operations | 35 492 | 47\u00a0775 | |
Prepaid taxes | 28\u00a0755 | 38\u00a0466 | |
Settled taxes not paid | (252) | (1\u00a0367) | |
Effect on tax payable of group contributions in Norway | - | 534 | |
FX translation effects | (3\u00a0525) | (22\u00a0353) | |
Total income tax payable in the income statement | 60 469 | 63\u00a0056 |
The relationship between tax expense and the accounting profit (loss) before taxes
(NOK 1000) | Note | 2023 | 2022 |
Profit before tax continuing operations | (932\u00a0977) | 23\u00a0781 | |
Tax based on nominal tax rate in Norway (22%) | (205\u00a0255) | 5\u00a0232 | |
Adjusted for tax effects of: | |||
Varying foreign tax rates vs. Norwegian tax rate | 1\u00a0789 | (7\u00a0046) | |
Current period unrecognized deferred tax assets | 2\u00a0024 | 26\u00a0866 | |
Re-assessment of previously unrecognized deferred tax assets | (19\u00a0747) | - | |
Tax effects related to share of profit/loss from associates | 38\u00a0890 | 786 | |
Tax effects related to impairment loss of associates | 154\u00a0440 | - | |
Tax effect of other permanent differences | 42 543 | 100 | |
Other differences relating to foreign subsidiaries | (6\u00a0916) | (7\u00a0918) | |
FX translation effects | 438 | 221 | |
Tax expense continuing operations | 8 205 | 18\u00a0240 |
Profit/loss before taxes were negatively impacted by share of losses from associated companies and the impairment loss of the investment in Hexagon Purus. See also note 26Investments in associated companies for further information.
Tax effect of other permanent differences include share-based payment expenses, tax-free dividends and other non-deductible operating expenses.
Deferred tax assets and deferred tax liabilities
Balance sheet | Change in deferred tax in income statement | |||
(NOK 1\u00a0000) | 2023 | 2022 | 2023 | 2022 |
Deferred tax positions continuing operations | ||||
Loss carryforwards | (42\u00a0635) | (40\u00a0427) | (2\u00a0207) | (15\u00a0714) |
Interest deduction limitation reserve | (38\u00a0790) | (28\u00a0038) | (10\u00a0753) | (28\u00a0038) |
Pension | (330) | (10) | (320) | 175 |
Property, plant & equipment | 70\u00a0369 | 73\u00a0171 | (2\u00a0802) | 8\u00a0528 |
Intangible assets | 58\u00a0702 | 63\u00a0491 | (4\u00a0790) | (4\u00a0911) |
Inventories and trade receivables | (14\u00a0979) | (24\u00a0257) | 9\u00a0278 | (19\u00a0554) |
Derivatives | (51 068) | (42\u00a0437) | (8 630) | (24\u00a0316) |
Provisions for liabilities/other current liabilities | (28\u00a0998) | (28\u00a0035) | (963) | (6\u00a0176) |
Other | 118\u00a0830 | 146\u00a0873 | (28\u00a0043) | 53\u00a0063 |
Deferred tax assets (-) / liabilities (+) net | 71 101 | 120\u00a0330 | (49 229) | (36\u00a0942) |
Reduction of tax assets due to uncertainty | 40\u00a0904 | 40\u00a0497 | 407 | 16\u00a0518 |
Deferred tax assets (-) / liabilities (+) net carrying amount | 112 005 | 160\u00a0827 | (48 822) | (20\u00a0424) |
Change in deferred tax from purchase of companies | - | - | ||
Change in deferred tax from group contributions in Norway | - | 534 | ||
Change in deferred tax due to OCI | (404) | (139) | ||
Change in deferred tax on FX translation | 3\u00a0846 | 23\u00a0996 | ||
Net change in deferred tax in income statement | (52 264) | (44\u00a0816) |
Carrying amounts of deferred taxes
(NOK 1\u00a0000) | 2023 | 2022 |
Deferred tax asset - continuing operations | (19 013) | - |
Deferred tax liabilities - continuing operations | 131\u00a0018 | 160\u00a0827 |
Net recognized deferred tax assets (-) / deferred tax liabilities (+) continuing operations | 112 005 | 160\u00a0827 |
Deferred tax asset - discontinued operations | - | |
Deferred tax liabilities - discontinued operations | 45\u00a0543 | |
Net recognized deferred tax assets (-) / deferred tax liabilities (+) | 112 005 | 206\u00a0370 |
Deferred tax recognized in the statement of comprehensive income is as follows:
(NOK 1\u00a0000) | 2023 | 2022 |
Deferred tax asset | - | - |
Deferred tax liabilities | 404 | 139 |
Total | 404 | 139 |
Overview of tax losses carried forward
(NOK 1\u00a0000) | 2023 | 2022 |
Norway | 92 | - |
North America | 69\u00a0356 | 64\u00a0868 |
Europe | 149\u00a0475 | 154\u00a0629 |
Total tax losses carried forward - continuing operations | 218\u00a0922 | 219\u00a0496 |
Tax losses carried forward discontinued operations | 1\u00a0171\u00a0304 | |
Total tax losses carried forward | 218\u00a0922 | 1\u00a0390\u00a0801 |
The losses are carried forward indefinitely.
Deferred tax assets are recognized when it is probable that the Group will have sufficient taxable profit in subsequent periods to utilize the tax assets.
Note 8\tEarnings per share
Earnings per share is calculated by dividing profit for the year by the weighted average number of shares out-standing.
To calculate diluted earnings per share, the profit and weighted average number of shares outstanding is adjusted to accommodate all dilution effects associated with share options. All share options are taken into con-sideration in the \u201cdenominator\u201d, and adjustments are made for recognized option expenses in the numerator. There are 9 000 964 (5 363 364) instruments that could potentially dilute basic earnings per share in the future. These are not included in the calculation of the diluted earnings per share because they are antidilutive for the periods presented. See note 27for further specification type of instruments.
(NOK 1\u00a0000) | Note | 2023 | 2022 |
Profit/loss for the year flowing to holders of ordinary shares | |||
Profit/loss for the year | (941 182) | 5\u00a0541 | |
Profit/loss for discontinued operations | 2\u00a0049\u00a0703 | (431\u00a0518) | |
Profit/loss for the year | 1 108 520 | (425\u00a0977) | |
Weighted average number of shares outstanding 31 December | 17 | ||
Ordinary shares issued 1 January | 201\u00a0619\u00a0712 | 201\u00a0619\u00a0712 | |
Treasury shares | (1\u00a0379\u00a0854) | (650\u00a0418) | |
Issued new shares | - | - | |
Outstanding number of shares 31 December | 200\u00a0239\u00a0858 | 200\u00a0969\u00a0294 | |
Weighted average number of shares outstanding 31 December | 200\u00a0604\u00a0576 | 200\u00a0870\u00a0857 | |
Profit/loss per share for continuing operations | (4.69) | 0.03 | |
Profit/loss per share | 5.53 | (2.12) | |
Diluted number of shares outstanding 31 December | 17 | ||
Ordinary shares issued 1 January | 201\u00a0619\u00a0712 | 201\u00a0619\u00a0712 | |
Treasury shares | (1\u00a0379\u00a0854) | (650\u00a0418) | |
Issued new shares | - | - | |
Effect of employee options issued | 9 000 964 | 5 363 364 | |
Outstanding shares 31 December adjusted for dilution effects | 209 240 822 | 206 332 658 | |
Weighted average number of shares outstanding 31 December adjusted for dilution effects | 207 786 740 | 206 234 221 | |
Diluted profit/loss per share continuing operations | (4.69) | 0.03 | |
Diluted profit/loss per share | 5.33 | (2.12) |
Note 8\tEarnings per share
Earnings per share is calculated by dividing profit for the year by the weighted average number of shares out-standing.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__99-1": { "value": "Note 9\tPayroll expenses and number of employees
The Group - payroll costs
(NOK 1\u00a0000) | Note | 2023 | 2022 |
Salaries/fees\u200c1 | 1 042 888 | 881\u00a0978 | |
Bonuses and share-based payments | 120\u00a0119 | 72\u00a0455 | |
Pension expense, defined-benefit plans | 18 | 1\u00a0188 | (1\u00a0482) |
Pension expense, defined-contribution plans | 18 | 42\u00a0992 | 42\u00a0002 |
Other social security expenses | 73\u00a0829 | 56\u00a0809 | |
Payroll and social security expenses | 1 281 017 | 1\u00a0051\u00a0763 |
1Capitalized payroll expenses related to technology development projects amounted to MNOK 5.8 in 2023 and MNOK 2.6 in 2022.
2023 | 2022 | |
Average number of full-time equivalents: | 1\u00a0164 | 1\u00a0132 |
Corporate management, R&D and support | ||
Norway | 15 | 15 |
North America | 14 | 27 |
Hexagon Agility | ||
North America | 727 | 731 |
Norway | 24 | 34 |
Germany | 176 | 175 |
Hexagon Digital Wave | ||
North America | 66 | 52 |
Hexagon Ragasco | ||
Norway | 128 | 128 |
North America | 4 | 4 |
Russia | 2 | 5 |
Total number of employees 31 December | 1\u00a0156 | 1\u00a0171 |
Note 18\tPension and other non-current employee benefits
The Norwegian companies in the Group are legally obliged to have occupational pension arrangements under the Norwegian Mandatory Occupational Pension act. The Norwegian pension arrangements satisfy the require-ments of this act. Plans in other jurisdictions follows local requirements and agreements. Below is a summary table of the pension cost in the Group for the various pension plans. Further details on the various plans are provided below:
(NOK 1\u00a0000) | 2023 | 2022 |
Defined contribution pension plan | 40\u00a0660 | 39\u00a0830 |
Defined benefit pension plan | 1\u00a0188 | (1\u00a0482) |
Multi-employer pension plan in Norway (new AFP) | 2\u00a0333 | 2\u00a0172 |
Total | 44\u00a0181 | 40\u00a0520 |
Defined contribution plans in the Group:
The defined contribution pension plans in the Norwegian companies have contribution rates from 7 per cent for salaries in the range of 0 to 7.1 times the national insurance base rate (G) and from 8 per cent for salaries in the range from 7.1 G to 12 G. As of 31 December 2023 the Norwegian defined contribution pension plans had 167 (177) members.
Our subsidiaries in the US and Canada offer defined contribution plans subject to US and Canadian statutory requirements. The defined contribution plans cover full-time employees and employer contributions range up to 6 per cent of defined compensation subject to employee contributions. For some of the plans, there can also be an additional payment at the end of the year in accordance with the terms of the defined contribution plan. As of 31 December 2023, 811 (814) members were covered by the plan. There are no defined contribution pension plan in Germany.
The table below provides a split of expenses in the defined contribution plans:
(NOK 1\u00a0000) | 2023 | 2022 |
Defined contribution pension plans - Norway | 9\u00a0873 | 12\u00a0856 |
Defined contribution pension plans - USA / Canada | 30\u00a0787 | 26\u00a0974 |
Total | 40\u00a0660 | 39\u00a0830 |
Defined benefit plans in the Group:
There are historical defined benefit plans in Norway and Germany with a very limited participation. The obligation for the defined benefit pension plans is calculated on a straight-line basis. Unrealized gains and losses resulting from changes in actuarial assumptions are recognized in other comprehensive income. There are 6 active and 9 retired in the pension plans. The pension liabilities and assets are calculated by actuaries and presented below. Based on the limited participation, assets and liabilities, the plans are considered of low materiality and significance.
(NOK 1\u00a0000) | 2023 | 2022 |
Pension assets | - | 402 |
Pension liabilities | 1\u00a0591 | 2\u00a0321 |
Multi-employer pension plan in Norway
128 (126) of the Norwegian employees is a member of a new \u201cagreement-based early retirement plan\u201d (new AFP). The AFP plan is a lifelong supplement to the regular pension. Employees can take the new AFP scheme from the age of 62 or remain in employment and earn further benefits until the standard retirement age of 67. The AFP pension scheme is a defined benefit multi-employer pension plan, funded through premiums that are defined as a percentage of salary. The scheme\u2019s retirement benefit obligation and plan assets cannot be reliably meas-ured and allocated at present. For accounting purposes, the scheme is treated as a defined contribution plan, with premium payments expensed as incurred, and no obligation recognized in the balance sheet. Premiums are 2.5 per cent (2.5 per cent in 2022) for salaries in the range 1.0 - 7.1 times the national insurance base rate (G) and is expected to increase in the coming years. Total contribution for the arrangement was NOK 2\u00a0333 thousand in 2023 and NOK 2\u00a0172 thousand in 2022. Expected premium for 2024 is NOK 2\u00a0414 thousand.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f68333": { "value": "Note 9\tPayroll expenses and number of employees
The Group - payroll costs
(NOK 1\u00a0000) | Note | 2023 | 2022 |
Salaries/fees\u200c1 | 1 042 888 | 881\u00a0978 | |
Bonuses and share-based payments | 120\u00a0119 | 72\u00a0455 | |
Pension expense, defined-benefit plans | 18 | 1\u00a0188 | (1\u00a0482) |
Pension expense, defined-contribution plans | 18 | 42\u00a0992 | 42\u00a0002 |
Other social security expenses | 73\u00a0829 | 56\u00a0809 | |
Payroll and social security expenses | 1 281 017 | 1\u00a0051\u00a0763 |
1Capitalized payroll expenses related to technology development projects amounted to MNOK 5.8 in 2023 and MNOK 2.6 in 2022.
2023 | 2022 | |
Average number of full-time equivalents: | 1\u00a0164 | 1\u00a0132 |
Corporate management, R&D and support | ||
Norway | 15 | 15 |
North America | 14 | 27 |
Hexagon Agility | ||
North America | 727 | 731 |
Norway | 24 | 34 |
Germany | 176 | 175 |
Hexagon Digital Wave | ||
North America | 66 | 52 |
Hexagon Ragasco | ||
Norway | 128 | 128 |
North America | 4 | 4 |
Russia | 2 | 5 |
Total number of employees 31 December | 1\u00a0156 | 1\u00a0171 |
Note 10\tProperty, plant & equipment
(NOK 1\u00a0000) | Land andbuildings | Plant and equipment | Fixtures &fittings, vehicles | Assets under construction | 2023 Total |
Cost of acquisition | |||||
Cost of acquisition 1 January 2023 | 214\u00a0445 | 1\u00a0334\u00a0359 | 261\u00a0045 | 488\u00a0683 | 2\u00a0298\u00a0532 |
Additions continuing operations | 11\u00a0839 | 16\u00a0374 | 17\u00a0918 | 182\u00a0405 | 228\u00a0535 |
Additions discontinuing operations | 7\u00a0973 | 7\u00a0529 | 13\u00a0058 | 166\u00a0950 | 195\u00a0510 |
Transfer from assets under construction | 68\u00a0021 | 46\u00a0863 | 13\u00a0234 | (128\u00a0118) | - |
Disposals/scrap continuing operations | (1\u00a0606) | (37\u00a0501) | (15\u00a0802) | (13\u00a0756) | (68\u00a0664) |
Disposals/scrap discontinuing operations | (6\u00a0524) | - | (2\u00a0727) | - | (9\u00a0251) |
Derecognition from deconsolidation of subsidiary | (184\u00a0598) | (196\u00a0482) | (84\u00a0165) | (383\u00a0846) | (849\u00a0092) |
Translation differences | 14\u00a0302 | 35\u00a0674 | 19\u00a0121 | 29\u00a0855 | 98\u00a0952 |
Cost of acquisition 31 December 2023 | 123\u00a0851 | 1\u00a0206\u00a0816 | 221\u00a0681 | 342\u00a0173 | 1\u00a0894\u00a0521 |
Accumulated depreciation and impairment | |||||
Accumulated depreciation 1 January 2023 | 60\u00a0738 | 774\u00a0968 | 126\u00a0520 | - | 962\u00a0226 |
Depreciation for the year from continuing operations | 9\u00a0968 | 98\u00a0734 | 17\u00a0389 | - | 126\u00a0091 |
Depreciation for the year from discontinuing operations | 3\u00a0821 | 9\u00a0273 | 8\u00a0009 | - | 21\u00a0103 |
Impairment | - | - | - | - | - |
Disposals/scrap continuing operations | (1\u00a0606) | (35\u00a0899) | (15\u00a0410) | - | (52\u00a0914) |
Disposals/scrap discontinuing operations | (6\u00a0524) | - | (2\u00a0138) | - | (8\u00a0661) |
Derecognition from deconsolidation of subsidiary | (19\u00a0112) | (93\u00a0913) | (10\u00a0289) | (123\u00a0314) | |
Translation differences | 1\u00a0681 | 11\u00a0842 | 8\u00a0531 | - | 22\u00a0054 |
Accumulated depreciation and impairment 31 December 2023 | 48\u00a0965 | 765\u00a0006 | 132\u00a0612 | - | 946\u00a0584 |
Net carrying amount as of 31 December 2023 | 74\u00a0886 | 441\u00a0810 | 89\u00a0069 | 342\u00a0172 | 947\u00a0938 |
Of which pledged | - | ||||
Useful life | 10\u201320 years | 3\u201315 years | 3\u201310 years | ||
Depreciation method | Straight-line | Straight-line | Straight-line |
Discontinued operations
On 29 June 2023, Hexagon Purus was effectively deconsolidated from the group accounts of Hexagon Composites, see also note 5.Due this, Hexagon Purus\u2019 figures up to and including 29 June 2023, have been presented separately as discontinued operations
(NOK 1\u00a0000) | Land andbuildings | Plant and equipment | Fixtures &fittings, vehicles | Assets under construction | 2022 Total |
Cost of acquisition | |||||
Cost of acquisition 1 January 2022 | 296\u00a0549 | 1\u00a0079\u00a0970 | 218\u00a0274 | 234\u00a0686 | 1\u00a0829\u00a0479 |
Additions continuing operations | 232 | 6\u00a0294 | 4\u00a0855 | 255\u00a0798 | 267\u00a0180 |
Additions discontinuing operations | 1\u00a0033 | 26\u00a0953 | 38\u00a0859 | 173\u00a0185 | 240\u00a0030 |
Transfer from assets under construction | 12\u00a0918 | 157\u00a0128 | 19\u00a0383 | (189\u00a0429) | - |
Disposals/scrap continuing operations\u200c1 | (113\u00a0674) | - | (27\u00a0081) | (7\u00a0548) | (148\u00a0303) |
Disposals/scrap discontinuing operations | (218) | (3\u00a0055) | (14\u00a0761) | - | (18\u00a0033) |
Translation differences | 17\u00a0605 | 67\u00a0068 | 21\u00a0515 | 21\u00a0992 | 128\u00a0179 |
Cost of acquisition 31 December 2022 | 214\u00a0445 | 1\u00a0334\u00a0359 | 261\u00a0045 | 488\u00a0683 | 2\u00a0298\u00a0532 |
Accumulated depreciation and impairment | |||||
Accumulated depreciation 1 January 2022 | 67\u00a0896 | 645\u00a0665 | 105\u00a0293 | - | 818\u00a0855 |
Depreciation for the year from continuing operations | 13\u00a0866 | 92\u00a0396 | 18\u00a0950 | - | 125\u00a0212 |
Depreciation for the year from discontinuing operations | 7\u00a0610 | 11\u00a0161 | 14\u00a0859 | - | 33\u00a0630 |
Impairment for the year from continuing operations | - | - | 594 | - | 594 |
Impairment for the year from discontinuing operations | - | - | 149 | 149 | |
Disposals/scrap continuing operations\u200c1 | (31\u00a0203) | - | (9\u00a0912) | - | (41\u00a0115) |
Disposals/scrap discontinuing operations | (217) | (1\u00a0709) | (13\u00a0301) | (15\u00a0226) | |
Translation differences | 2\u00a0786 | 27\u00a0455 | 9\u00a0887 | - | 40\u00a0127 |
Accumulated depreciation and impairment 31 December 2022 | 60\u00a0738 | 774\u00a0968 | 126\u00a0520 | - | 962\u00a0225 |
Net carrying amount as of 31 December 2022 | 153\u00a0707 | 559\u00a0391 | 134\u00a0525 | 488\u00a0683 | 1\u00a0336\u00a0307 |
Of which pledged | - | ||||
Useful life | 10\u201320 years | 3\u201315 years | 3\u201310 years | ||
Depreciation method | Straight-line | Straight-line | Straight-line |
1On 31 December 2022, Agility North Carolina LLC, a wholly owned subsidiary of Hexagon within the Hexagon Agility segment, affected a sale- and leaseback transaction of its facility in Salisbury, North Carolina. The net carrying amount was MUSD 8.7 and is presented as disposals. See note 24for more information.
Note 10\tProperty, plant & equipment
(NOK 1\u00a0000) | Land andbuildings | Plant and equipment | Fixtures &fittings, vehicles | Assets under construction | 2023 Total |
Cost of acquisition | |||||
Cost of acquisition 1 January 2023 | 214\u00a0445 | 1\u00a0334\u00a0359 | 261\u00a0045 | 488\u00a0683 | 2\u00a0298\u00a0532 |
Additions continuing operations | 11\u00a0839 | 16\u00a0374 | 17\u00a0918 | 182\u00a0405 | 228\u00a0535 |
Additions discontinuing operations | 7\u00a0973 | 7\u00a0529 | 13\u00a0058 | 166\u00a0950 | 195\u00a0510 |
Transfer from assets under construction | 68\u00a0021 | 46\u00a0863 | 13\u00a0234 | (128\u00a0118) | - |
Disposals/scrap continuing operations | (1\u00a0606) | (37\u00a0501) | (15\u00a0802) | (13\u00a0756) | (68\u00a0664) |
Disposals/scrap discontinuing operations | (6\u00a0524) | - | (2\u00a0727) | - | (9\u00a0251) |
Derecognition from deconsolidation of subsidiary | (184\u00a0598) | (196\u00a0482) | (84\u00a0165) | (383\u00a0846) | (849\u00a0092) |
Translation differences | 14\u00a0302 | 35\u00a0674 | 19\u00a0121 | 29\u00a0855 | 98\u00a0952 |
Cost of acquisition 31 December 2023 | 123\u00a0851 | 1\u00a0206\u00a0816 | 221\u00a0681 | 342\u00a0173 | 1\u00a0894\u00a0521 |
Accumulated depreciation and impairment | |||||
Accumulated depreciation 1 January 2023 | 60\u00a0738 | 774\u00a0968 | 126\u00a0520 | - | 962\u00a0226 |
Depreciation for the year from continuing operations | 9\u00a0968 | 98\u00a0734 | 17\u00a0389 | - | 126\u00a0091 |
Depreciation for the year from discontinuing operations | 3\u00a0821 | 9\u00a0273 | 8\u00a0009 | - | 21\u00a0103 |
Impairment | - | - | - | - | - |
Disposals/scrap continuing operations | (1\u00a0606) | (35\u00a0899) | (15\u00a0410) | - | (52\u00a0914) |
Disposals/scrap discontinuing operations | (6\u00a0524) | - | (2\u00a0138) | - | (8\u00a0661) |
Derecognition from deconsolidation of subsidiary | (19\u00a0112) | (93\u00a0913) | (10\u00a0289) | (123\u00a0314) | |
Translation differences | 1\u00a0681 | 11\u00a0842 | 8\u00a0531 | - | 22\u00a0054 |
Accumulated depreciation and impairment 31 December 2023 | 48\u00a0965 | 765\u00a0006 | 132\u00a0612 | - | 946\u00a0584 |
Net carrying amount as of 31 December 2023 | 74\u00a0886 | 441\u00a0810 | 89\u00a0069 | 342\u00a0172 | 947\u00a0938 |
Of which pledged | - | ||||
Useful life | 10\u201320 years | 3\u201315 years | 3\u201310 years | ||
Depreciation method | Straight-line | Straight-line | Straight-line |
Discontinued operations
On 29 June 2023, Hexagon Purus was effectively deconsolidated from the group accounts of Hexagon Composites, see also note 5.Due this, Hexagon Purus\u2019 figures up to and including 29 June 2023, have been presented separately as discontinued operations
(NOK 1\u00a0000) | Land andbuildings | Plant and equipment | Fixtures &fittings, vehicles | Assets under construction | 2022 Total |
Cost of acquisition | |||||
Cost of acquisition 1 January 2022 | 296\u00a0549 | 1\u00a0079\u00a0970 | 218\u00a0274 | 234\u00a0686 | 1\u00a0829\u00a0479 |
Additions continuing operations | 232 | 6\u00a0294 | 4\u00a0855 | 255\u00a0798 | 267\u00a0180 |
Additions discontinuing operations | 1\u00a0033 | 26\u00a0953 | 38\u00a0859 | 173\u00a0185 | 240\u00a0030 |
Transfer from assets under construction | 12\u00a0918 | 157\u00a0128 | 19\u00a0383 | (189\u00a0429) | - |
Disposals/scrap continuing operations\u200c1 | (113\u00a0674) | - | (27\u00a0081) | (7\u00a0548) | (148\u00a0303) |
Disposals/scrap discontinuing operations | (218) | (3\u00a0055) | (14\u00a0761) | - | (18\u00a0033) |
Translation differences | 17\u00a0605 | 67\u00a0068 | 21\u00a0515 | 21\u00a0992 | 128\u00a0179 |
Cost of acquisition 31 December 2022 | 214\u00a0445 | 1\u00a0334\u00a0359 | 261\u00a0045 | 488\u00a0683 | 2\u00a0298\u00a0532 |
Accumulated depreciation and impairment | |||||
Accumulated depreciation 1 January 2022 | 67\u00a0896 | 645\u00a0665 | 105\u00a0293 | - | 818\u00a0855 |
Depreciation for the year from continuing operations | 13\u00a0866 | 92\u00a0396 | 18\u00a0950 | - | 125\u00a0212 |
Depreciation for the year from discontinuing operations | 7\u00a0610 | 11\u00a0161 | 14\u00a0859 | - | 33\u00a0630 |
Impairment for the year from continuing operations | - | - | 594 | - | 594 |
Impairment for the year from discontinuing operations | - | - | 149 | 149 | |
Disposals/scrap continuing operations\u200c1 | (31\u00a0203) | - | (9\u00a0912) | - | (41\u00a0115) |
Disposals/scrap discontinuing operations | (217) | (1\u00a0709) | (13\u00a0301) | (15\u00a0226) | |
Translation differences | 2\u00a0786 | 27\u00a0455 | 9\u00a0887 | - | 40\u00a0127 |
Accumulated depreciation and impairment 31 December 2022 | 60\u00a0738 | 774\u00a0968 | 126\u00a0520 | - | 962\u00a0225 |
Net carrying amount as of 31 December 2022 | 153\u00a0707 | 559\u00a0391 | 134\u00a0525 | 488\u00a0683 | 1\u00a0336\u00a0307 |
Of which pledged | - | ||||
Useful life | 10\u201320 years | 3\u201315 years | 3\u201310 years | ||
Depreciation method | Straight-line | Straight-line | Straight-line |
1On 31 December 2022, Agility North Carolina LLC, a wholly owned subsidiary of Hexagon within the Hexagon Agility segment, affected a sale- and leaseback transaction of its facility in Salisbury, North Carolina. The net carrying amount was MUSD 8.7 and is presented as disposals. See note 24for more information.
Note 11\tIntangible assets and goodwill
Hexagon Composites ASA has the following purchased and own-developed intangible assets
(NOK 1\u00a0000) | Goodwill | Patents andlicences | Technology-development | Customer relationships | 2023 Total |
Cost price | |||||
Opening balance 1 January 2023 | 1\u00a0717\u00a0097 | 276\u00a0081 | 428\u00a0180 | 558\u00a0874 | 2\u00a0980\u00a0232 |
Additions continuing operations | - | 9\u00a0932 | 14\u00a0460 | - | 24\u00a0392 |
Additions discontinued operations | - | 334 | 18\u00a0469 | - | 18\u00a0803 |
Disposals continuing operations | - | (1\u00a0015) | (1\u00a0603) | - | (2\u00a0617) |
Disposals discontinuing operations | - | (1\u00a0917) | - | - | (1\u00a0917) |
Derecognition from deconsolidation of subsidiary | (583\u00a0031) | (13\u00a0817) | (233\u00a0474) | (177\u00a0978) | (1\u00a0008\u00a0300) |
Translation differences | 98\u00a0814 | 8\u00a0563 | 8\u00a0976 | 32\u00a0405 | 148\u00a0757 |
Cost of acquisition 31 December 2023 | 1\u00a0232\u00a0880 | 278\u00a0161 | 235\u00a0009 | 413\u00a0301 | 2\u00a0159\u00a0351 |
Accumulated amortization and impairment | |||||
Opening balance 1 January 2023 | - | 70\u00a0757 | 143\u00a0672 | 194\u00a0950 | 409\u00a0379 |
Amortization for the year from continuing operation | - | 16\u00a0799 | 16\u00a0221 | 30\u00a0152 | 63\u00a0173 |
Amortization for the year from discontinuing operation | - | 2\u00a0616 | 10\u00a0419 | 10\u00a0737 | 23\u00a0772 |
Impairment | - | - | - | - | - |
Disposals continuing operations | - | (965) | (1\u00a0603) | - | (2\u00a0568) |
Disposals discontinuing operations | - | (1\u00a0614) | - | - | (1\u00a0614) |
Derecognition from deconsolidation of subsidiary | - | (8\u00a0906) | (37\u00a0424) | (87\u00a0425) | (133\u00a0755) |
Translation differences | - | 1\u00a0506 | 1\u00a0412 | 12\u00a0440 | 15\u00a0358 |
Accumulated amortization and impairment 31 December 2023 | - | 80\u00a0193 | 132\u00a0698 | 160\u00a0853 | 373\u00a0744 |
Net carrying amount 31 December 2023 | 1\u00a0232\u00a0880 | 197\u00a0968 | 102\u00a0311 | 252\u00a0447 | 1\u00a0785\u00a0606 |
Useful life | Indefinite | 3\u201317 years | 5\u201320 years | 7\u201315 years | |
Amortization method | None | Straight-line | Straight-line | Straight-line |
Discontinued operations
On 29 June 2023, Hexagon Purus was effectively deconsolidated from the group accounts of Hexagon Composites, see also note 5.Due this, Hexagon Purus\u2019 figures up to and including 29 June 2023, have been presented separately as discontinued operations
Hexagon Composites ASA has the following purchased and own-developed intangible assets
(NOK 1\u00a0000) | Goodwill | Patents andlicences | Technology-development | Customer relationships | 2022 Total |
Cost price | |||||
Opening balance 1 January 2022 | 1\u00a0573\u00a0061 | 239\u00a0453 | 354\u00a0061 | 540\u00a0994 | 2\u00a0707\u00a0569 |
Additions continuing operations | - | 12\u00a0427 | 10\u00a0676 | - | 23\u00a0104 |
Additions discontinued operations | - | 1\u00a0294 | 51\u00a0331 | - | 52\u00a0625 |
Disposals continuing operations | - | (82) | - | - | (82) |
Disposals discontinuing operations | - | (262) | (74) | (336) | |
Translation differences | 144\u00a0036 | 23\u00a0250 | 12\u00a0186 | 17\u00a0880 | 197\u00a0351 |
Cost of acquisition 31 December 2022 | 1\u00a0717\u00a0097 | 276\u00a0081 | 428\u00a0180 | 558\u00a0874 | 2\u00a0980\u00a0232 |
Accumulated amortization and impairment | |||||
Opening balance 1 January 2022 | 274 | 51\u00a0279 | 118\u00a0270 | 153\u00a0221 | 323\u00a0045 |
Amortization for the year from continuing operation | - | 14\u00a0278 | 16\u00a0424 | 28\u00a0453 | 59\u00a0156 |
Amortization for the year from discontinuing operation | - | 2\u00a0923 | 14\u00a0820 | 19\u00a0163 | 36\u00a0906 |
Impairment | - | - | - | - | - |
Disposals continuing operations | - | - | - | - | - |
Disposals discontinuing operations | - | (261) | (74) | - | (336) |
Translation differences | (274) | 2\u00a0538 | (5\u00a0769) | (5\u00a0888) | (9\u00a0393) |
Accumulated amortization and impairment 31 December 2022 | - | 70\u00a0757 | 143\u00a0672 | 194\u00a0950 | 409\u00a0379 |
Net carrying amount 31 December 2022 | 1\u00a0717\u00a0097 | 205\u00a0324 | 284\u00a0508 | 363\u00a0924 | 2\u00a0570\u00a0853 |
Useful life | Indefinite | 3\u201317 years | 5\u201320 years | 7\u201315 years | |
Amortization method | None | Straight-line | Straight-line | Straight-line |
Research & development costs totalling MNOK 38.0 (MNOK 50.0) were expensed in 2023. The Group has received government grants of MNOK 6.7 (MNOK 7.3) in 2023. MNOK 6.7 (MNOK 7.3) has been offset against research and development costs.
The Group has recognized goodwill as a result of several acquisitions of business enterprises. Each goodwill item is linked to a cash generating unit (CGU). When the acquired business enterprise is maintained as an independent business enterprise it is, as a starting point, the CGU. Entities that have con-siderable synergies and for which the type of activity is the same, are considered to be a unified CGU. This applies when acquired business enterprises are integrated with an existing Hexagon Composites company or the acquired business enterprise is, in operative terms, closely linked together with existing Hexagon Composites businesses. In these instances, it is the linking enterprise that is the level of the CGU where goodwill is measured and followed up. As of the end of 2023, the Group has three CGU\u2019s where capitalized goodwill has been allocated to, which are similar to the operating segments disclosed and pre-sented in note 4. Last year, the Group had four CGU\u2019s and four operating segments, including Hexagon Purus - which was deconsolidated and presented as discontinued operations on 29 June 2023.
Goodwill impairment testing
Goodwill is not depreciated but is subject to impair-ment testing in the fourth quarter each year. If there are particular indications of possible impairment, the impairment test is carried out on a quarterly basis. The impairment test is carried out by the cal-culated recoverable amount being compared with
invested capital for the unit in question. When the recoverable amount exceeds invested capital, capi-talized goodwill is maintained. When the recoverable amount is lower than invested capital, capitalized goodwill is written down to its recoverable amount. Invested capital consists of the units\u2019 total assets less interest-free current liabilities and interest-free non-current liabilities. The recoverable amount is based on expected future cash flows for the relevant unit based on the management\u2019s approved budget and strategy figures for the next five years. These are estimated based on current sales and margins and the expected market development. For subsequent periods it is assumed that there will be an increase in the cash flows equivalent to expected general growth within the various business areas.
The expected future investment requirements for the units are reflected in the calculations. These are in accordance with the management\u2019s approved budget and strategy. For the period beyond the next five years, it is assumed that the re-investment requirement will be equivalent to expected depreciation. Changes in working capital have been assessed and adjusted in accordance with expected developments.
When there are indications that a company\u2019s assets (including goodwill) may be impaired, an impairment test is conducted using the company\u2019s weighted average capital cost (WACC) as an esti-mate for the discount rate (= return on assets ratio). Correspondingly, WACC is also used for annual impairment testing. The WACC rate which is used to discount future cash flows is derived by the weighted average of the company\u2019s cost of equity and cost of debt, taking into account the 10-year risk-free interest
rates in the market, beta factor, market risk premium, the company\u2019s interest rate, and equity ratio.
Value in use is calculated by discounting future cash flows. Present value calculations are based on expected future cash flows for the different cash-gen-erating units, as described above and the units are not expected to have a finite useful life. The projections take into account appropriate and typically modest forms of growth in the cash flows into perpetuity.
Key assumptions used in value in use calculations
The most important assumptions for calculating value in use are related to estimates for operating revenues, EBITDA margins, discount rates and growth rates beyond the forecast period of 5 years. Discount rates have used have been matched and reflective of the currency of the cash flows being tested. The table below shows WACC rates used.
WACC rates used in impairment testing
Currency | 2023 | 2022 | ||
Post-tax | Pre-tax | Post-tax | Pre-tax | |
USD | 10.1% | 12.9% | 11.9% | 15.3% |
NOK | 9.6% | 12.3% | 11.4% | 14.6% |
The main reason for the lower WACC rates in 2023 compared to 2022 is related to exclusion of liquidity- and size premiums in determining cost of equity in 2023, as these premiums have been deemed no longer relevant for Hexagon.
All operating revenues and EBITDA margins are based on the stated forecast periods, past perfor-mance and management expectations of market
development for the future. Growth rates are consistent with industry and market forecasts except where conservatively applied outside the primary forecast periods.
Hexagon\u2019s primary forecast horizon is 5 years from 2024 to 2028 and from which projections are made, on a rolling 5 year basis, using prudently conserva-tive growth rates which collectively approximate to 15 per cent. Hexagon collectively employs targets of:
\u2022At least 15 per cent annual operating revenue growth
\u2022Attaining 15 per cent EBITDA margin
The differing CGUs within Hexagon may have differing revenue growth and EBITDA margins at differing periods of time, but collectively are expected to attain the Hexagon targets within the primary forecast horizon. Hexagon Digital Wave is in the middle of a transformational business plan, through digitalization, incorporating opex invest-ments over the next couple of years which weigh on positive margins short-term and increase growth in revenues and margins longer-term. The assump-tions used per CGU in relation to the Hexagon proforma targets are as follows:
\u2022Hexagon Agility attaining > target revenue growth and > target EBITDA margin
\u2022Hexagon Ragasco attaining < target revenue growth and > target EBITDA margin
\u2022Hexagon Digital Wave > target revenue growth and > target EBITDA margin
Growth beyond the forecast horizon are deter-mined based on general economic growth rates in the geographical markets Hexagon\u2019s businesses operate in.
The goodwill items of the following cash generating units have been subject to impairment testing
2023 | 2022 | |
Hexagon Agility | 1\u00a0162\u00a0713 | 1\u00a0124\u00a0360 |
Hexagon Digital Wave | 37\u00a0817 | 36\u00a0646 |
Hexagon Purus | - | 523\u00a0741 |
Hexagon Ragasco | 32\u00a0350 | 32\u00a0350 |
Total goodwill | 1\u00a0232\u00a0880 | 1\u00a0717\u00a0097 |
The assumptions that were used as a basis for the calculations made at the end of 2023 resulted in comfortable headroom for all of the above. Following the deconsolidation of Hexagon Purus as a subsidiary on 29 June 2023, the goodwill associated with Hexagon Purus was effectively derecognized on the same date, and has thus not been subject to goodwill impairment testing in 2023. See note 26for the Group\u2019s equity-accounted investment in Hexagon Purus and impairment assessments made for this investment specifically.
Other assumptions for the impairment testing of goodwill
The recoverable amount is calculated based on the general assumptions referred to above. The calcu-lations do not assume major changes in the nature of business activities compared with 2023. In the prognosis period, an increase in the operating profit equal to the general growth in the economy is, at a minimum, expected. The impairment testing is per-formed in the functional geographic currency of the CGU being USD for Hexagon Agility and Hexagon Digital Wave, and NOK for Hexagon Ragasco.
Sensitivity analyses for the goodwill
In connection with the impairment testing of good-will, the Group has carried out sensitivity analyses. These sensitivity analyses are carried out for each cash-generating unit. The present value of the cash flow in the calculations made is, among other things, sensitive to changes in the discount rate. The sensitivity analysis uses the economic assumptions referred to above as its starting point. Calculations have been made based on one of the estimated economic assumptions being changed and in which the other economic assumptions remain unchanged.
The sensitivity analyses for the CGU demonstrate that recoverable amounts of Hexagon Agility, Hexagon Ragasco and Hexagon Digital Wave good-will exceed the recognized value by a good margin, and a reasonable change in key assumption (+ 1.0 per cent for WACC and - 2.0 per cent on EBITDA margin) would not cause the carrying amount to exceed value in use.
Note 24\tLeases
Right of use assets (NOK 1\u00a0000) | Land and buildings | Plant and equipment | Fixtures\u00a0& fittings, vehicles | 2023Total |
At cost | ||||
Cost of acquisition 1 January | 592\u00a0722 | 83\u00a0951 | 9\u00a0102 | 685\u00a0775 |
Additions continuing operations | 98\u00a0052 | - | 6\u00a0878 | 104\u00a0930 |
Additions discontinued operations | 6\u00a0384 | 1\u00a0497 | 1\u00a0388 | 9\u00a0270 |
Expirations at maturity continuing operations | (12\u00a0603) | - | (958) | (13\u00a0560) |
Expirations at maturity discontinued operations | (35\u00a0296) | (304) | (782) | (36\u00a0382) |
Derecognition from deconsolidation of subsidiary | (175\u00a0106) | (24\u00a0447) | (6\u00a0956) | (206\u00a0508) |
Translation differences | 23\u00a0704 | 6\u00a0176 | 486 | 30\u00a0366 |
Cost of acquisition 31 December | 497\u00a0858 | 66\u00a0873 | 9\u00a0159 | 573\u00a0890 |
Accumulated depreciation and impairment | ||||
Accumulated depreciation and impairment 1 January | 158\u00a0230 | 49\u00a0208 | 5\u00a0105 | 212\u00a0542 |
Depreciations continuing operations | 59\u00a0098 | 8\u00a0880 | 1\u00a0333 | 69\u00a0311 |
Depreciations discontinued operations | 10\u00a0694 | 2\u00a0464 | 723 | 13\u00a0881 |
Expirations at maturity continuing operations | (8 522) | - | (958) | (9 479) |
Expirations at maturity discontinued operations | (35 296) | (304) | (782) | (36 383) |
Derecognition from deconsolidation of subsidiary | (35\u00a0029) | (8\u00a0472) | (3\u00a0715) | (47\u00a0216) |
Translation differences | 1\u00a0944 | 3\u00a0370 | 296 | 5\u00a0610 |
Accumulated depreciation and impairment | 151\u00a0119 | 55\u00a0145 | 2\u00a0002 | 208\u00a0266 |
Carrying amount as of 31 December | 346\u00a0739 | 11\u00a0728 | 7\u00a0157 | 365\u00a0624 |
Useful life | 3\u201317 years | 3\u20137 years | 2\u20135 years | |
Depreciation method | Straight-line | Straight-line | Straight-line |
Discontinued operations
On 29 June 2023, Hexagon Purus was effectively deconsolidated from the group accounts of Hexagon Composites, see also note 5. Due this, Hexagon Purus\u2019 figures up to and including 29 June 2023, have been presented separately as discontinued operations
Right of use assets (NOK 1\u00a0000) | Land and buildings | Plant and equipment | Fixtures\u00a0& fittings, vehicles | 2022Total |
At cost | ||||
Cost of acquisition 1 January | 373\u00a0042 | 78\u00a0270 | 5\u00a0537 | 456\u00a0849 |
Additions continuing operations | 122\u00a0154 | - | 1\u00a0366 | 123\u00a0520 |
Additions discontinued operations | 118\u00a0929 | 1\u00a0505 | 2\u00a0038 | 122\u00a0472 |
Expirations at maturity continuing operations | (52\u00a0166) | - | (262) | (52\u00a0428) |
Expirations at maturity discontinued operations | - | - | - | - |
Translation differences | 30\u00a0763 | 4\u00a0175 | 424 | 35\u00a0362 |
Cost of acquisition 31 December | 592\u00a0722 | 83\u00a0951 | 9\u00a0102 | 685\u00a0775 |
Accumulated depreciation and impairment | ||||
Accumulated depreciation and impairment 1 January | 136\u00a0613 | 34\u00a0391 | 3\u00a0536 | 174\u00a0540 |
Depreciations continuing operations | 48\u00a0486 | 7\u00a0838 | 547 | 56\u00a0871 |
Depreciations discontinued operations | 18\u00a0387 | 4\u00a0937 | 1\u00a0079 | 24\u00a0404 |
Expirations at maturity continuing operations | (52\u00a0166) | - | (262) | (52\u00a0428) |
Expirations at maturity discontinued operations | - | |||
Translation differences | 6\u00a0909 | 2\u00a0041 | 205 | 9\u00a0156 |
Accumulated depreciation and impairment | 158\u00a0230 | 49\u00a0208 | 5\u00a0105 | 212\u00a0542 |
Carrying amount as of 31 December | 434\u00a0492 | 34\u00a0743 | 3\u00a0998 | 473\u00a0233 |
Useful life | 3\u201317 years | 3\u20137 years | 2\u20135 years | |
Depreciation method | Straight-line | Straight-line | Straight-line |
Note 10\tProperty, plant & equipment
(NOK 1\u00a0000) | Land andbuildings | Plant and equipment | Fixtures &fittings, vehicles | Assets under construction | 2023 Total |
Cost of acquisition | |||||
Cost of acquisition 1 January 2023 | 214\u00a0445 | 1\u00a0334\u00a0359 | 261\u00a0045 | 488\u00a0683 | 2\u00a0298\u00a0532 |
Additions continuing operations | 11\u00a0839 | 16\u00a0374 | 17\u00a0918 | 182\u00a0405 | 228\u00a0535 |
Additions discontinuing operations | 7\u00a0973 | 7\u00a0529 | 13\u00a0058 | 166\u00a0950 | 195\u00a0510 |
Transfer from assets under construction | 68\u00a0021 | 46\u00a0863 | 13\u00a0234 | (128\u00a0118) | - |
Disposals/scrap continuing operations | (1\u00a0606) | (37\u00a0501) | (15\u00a0802) | (13\u00a0756) | (68\u00a0664) |
Disposals/scrap discontinuing operations | (6\u00a0524) | - | (2\u00a0727) | - | (9\u00a0251) |
Derecognition from deconsolidation of subsidiary | (184\u00a0598) | (196\u00a0482) | (84\u00a0165) | (383\u00a0846) | (849\u00a0092) |
Translation differences | 14\u00a0302 | 35\u00a0674 | 19\u00a0121 | 29\u00a0855 | 98\u00a0952 |
Cost of acquisition 31 December 2023 | 123\u00a0851 | 1\u00a0206\u00a0816 | 221\u00a0681 | 342\u00a0173 | 1\u00a0894\u00a0521 |
Accumulated depreciation and impairment | |||||
Accumulated depreciation 1 January 2023 | 60\u00a0738 | 774\u00a0968 | 126\u00a0520 | - | 962\u00a0226 |
Depreciation for the year from continuing operations | 9\u00a0968 | 98\u00a0734 | 17\u00a0389 | - | 126\u00a0091 |
Depreciation for the year from discontinuing operations | 3\u00a0821 | 9\u00a0273 | 8\u00a0009 | - | 21\u00a0103 |
Impairment | - | - | - | - | - |
Disposals/scrap continuing operations | (1\u00a0606) | (35\u00a0899) | (15\u00a0410) | - | (52\u00a0914) |
Disposals/scrap discontinuing operations | (6\u00a0524) | - | (2\u00a0138) | - | (8\u00a0661) |
Derecognition from deconsolidation of subsidiary | (19\u00a0112) | (93\u00a0913) | (10\u00a0289) | (123\u00a0314) | |
Translation differences | 1\u00a0681 | 11\u00a0842 | 8\u00a0531 | - | 22\u00a0054 |
Accumulated depreciation and impairment 31 December 2023 | 48\u00a0965 | 765\u00a0006 | 132\u00a0612 | - | 946\u00a0584 |
Net carrying amount as of 31 December 2023 | 74\u00a0886 | 441\u00a0810 | 89\u00a0069 | 342\u00a0172 | 947\u00a0938 |
Of which pledged | - | ||||
Useful life | 10\u201320 years | 3\u201315 years | 3\u201310 years | ||
Depreciation method | Straight-line | Straight-line | Straight-line |
Discontinued operations
On 29 June 2023, Hexagon Purus was effectively deconsolidated from the group accounts of Hexagon Composites, see also note 5.Due this, Hexagon Purus\u2019 figures up to and including 29 June 2023, have been presented separately as discontinued operations
(NOK 1\u00a0000) | Land andbuildings | Plant and equipment | Fixtures &fittings, vehicles | Assets under construction | 2022 Total |
Cost of acquisition | |||||
Cost of acquisition 1 January 2022 | 296\u00a0549 | 1\u00a0079\u00a0970 | 218\u00a0274 | 234\u00a0686 | 1\u00a0829\u00a0479 |
Additions continuing operations | 232 | 6\u00a0294 | 4\u00a0855 | 255\u00a0798 | 267\u00a0180 |
Additions discontinuing operations | 1\u00a0033 | 26\u00a0953 | 38\u00a0859 | 173\u00a0185 | 240\u00a0030 |
Transfer from assets under construction | 12\u00a0918 | 157\u00a0128 | 19\u00a0383 | (189\u00a0429) | - |
Disposals/scrap continuing operations\u200c1 | (113\u00a0674) | - | (27\u00a0081) | (7\u00a0548) | (148\u00a0303) |
Disposals/scrap discontinuing operations | (218) | (3\u00a0055) | (14\u00a0761) | - | (18\u00a0033) |
Translation differences | 17\u00a0605 | 67\u00a0068 | 21\u00a0515 | 21\u00a0992 | 128\u00a0179 |
Cost of acquisition 31 December 2022 | 214\u00a0445 | 1\u00a0334\u00a0359 | 261\u00a0045 | 488\u00a0683 | 2\u00a0298\u00a0532 |
Accumulated depreciation and impairment | |||||
Accumulated depreciation 1 January 2022 | 67\u00a0896 | 645\u00a0665 | 105\u00a0293 | - | 818\u00a0855 |
Depreciation for the year from continuing operations | 13\u00a0866 | 92\u00a0396 | 18\u00a0950 | - | 125\u00a0212 |
Depreciation for the year from discontinuing operations | 7\u00a0610 | 11\u00a0161 | 14\u00a0859 | - | 33\u00a0630 |
Impairment for the year from continuing operations | - | - | 594 | - | 594 |
Impairment for the year from discontinuing operations | - | - | 149 | 149 | |
Disposals/scrap continuing operations\u200c1 | (31\u00a0203) | - | (9\u00a0912) | - | (41\u00a0115) |
Disposals/scrap discontinuing operations | (217) | (1\u00a0709) | (13\u00a0301) | (15\u00a0226) | |
Translation differences | 2\u00a0786 | 27\u00a0455 | 9\u00a0887 | - | 40\u00a0127 |
Accumulated depreciation and impairment 31 December 2022 | 60\u00a0738 | 774\u00a0968 | 126\u00a0520 | - | 962\u00a0225 |
Net carrying amount as of 31 December 2022 | 153\u00a0707 | 559\u00a0391 | 134\u00a0525 | 488\u00a0683 | 1\u00a0336\u00a0307 |
Of which pledged | - | ||||
Useful life | 10\u201320 years | 3\u201315 years | 3\u201310 years | ||
Depreciation method | Straight-line | Straight-line | Straight-line |
1On 31 December 2022, Agility North Carolina LLC, a wholly owned subsidiary of Hexagon within the Hexagon Agility segment, affected a sale- and leaseback transaction of its facility in Salisbury, North Carolina. The net carrying amount was MUSD 8.7 and is presented as disposals. See note 24for more information.
Note 11\tIntangible assets and goodwill
Hexagon Composites ASA has the following purchased and own-developed intangible assets
(NOK 1\u00a0000) | Goodwill | Patents andlicences | Technology-development | Customer relationships | 2023 Total |
Cost price | |||||
Opening balance 1 January 2023 | 1\u00a0717\u00a0097 | 276\u00a0081 | 428\u00a0180 | 558\u00a0874 | 2\u00a0980\u00a0232 |
Additions continuing operations | - | 9\u00a0932 | 14\u00a0460 | - | 24\u00a0392 |
Additions discontinued operations | - | 334 | 18\u00a0469 | - | 18\u00a0803 |
Disposals continuing operations | - | (1\u00a0015) | (1\u00a0603) | - | (2\u00a0617) |
Disposals discontinuing operations | - | (1\u00a0917) | - | - | (1\u00a0917) |
Derecognition from deconsolidation of subsidiary | (583\u00a0031) | (13\u00a0817) | (233\u00a0474) | (177\u00a0978) | (1\u00a0008\u00a0300) |
Translation differences | 98\u00a0814 | 8\u00a0563 | 8\u00a0976 | 32\u00a0405 | 148\u00a0757 |
Cost of acquisition 31 December 2023 | 1\u00a0232\u00a0880 | 278\u00a0161 | 235\u00a0009 | 413\u00a0301 | 2\u00a0159\u00a0351 |
Accumulated amortization and impairment | |||||
Opening balance 1 January 2023 | - | 70\u00a0757 | 143\u00a0672 | 194\u00a0950 | 409\u00a0379 |
Amortization for the year from continuing operation | - | 16\u00a0799 | 16\u00a0221 | 30\u00a0152 | 63\u00a0173 |
Amortization for the year from discontinuing operation | - | 2\u00a0616 | 10\u00a0419 | 10\u00a0737 | 23\u00a0772 |
Impairment | - | - | - | - | - |
Disposals continuing operations | - | (965) | (1\u00a0603) | - | (2\u00a0568) |
Disposals discontinuing operations | - | (1\u00a0614) | - | - | (1\u00a0614) |
Derecognition from deconsolidation of subsidiary | - | (8\u00a0906) | (37\u00a0424) | (87\u00a0425) | (133\u00a0755) |
Translation differences | - | 1\u00a0506 | 1\u00a0412 | 12\u00a0440 | 15\u00a0358 |
Accumulated amortization and impairment 31 December 2023 | - | 80\u00a0193 | 132\u00a0698 | 160\u00a0853 | 373\u00a0744 |
Net carrying amount 31 December 2023 | 1\u00a0232\u00a0880 | 197\u00a0968 | 102\u00a0311 | 252\u00a0447 | 1\u00a0785\u00a0606 |
Useful life | Indefinite | 3\u201317 years | 5\u201320 years | 7\u201315 years | |
Amortization method | None | Straight-line | Straight-line | Straight-line |
Discontinued operations
On 29 June 2023, Hexagon Purus was effectively deconsolidated from the group accounts of Hexagon Composites, see also note 5.Due this, Hexagon Purus\u2019 figures up to and including 29 June 2023, have been presented separately as discontinued operations
Hexagon Composites ASA has the following purchased and own-developed intangible assets
(NOK 1\u00a0000) | Goodwill | Patents andlicences | Technology-development | Customer relationships | 2022 Total |
Cost price | |||||
Opening balance 1 January 2022 | 1\u00a0573\u00a0061 | 239\u00a0453 | 354\u00a0061 | 540\u00a0994 | 2\u00a0707\u00a0569 |
Additions continuing operations | - | 12\u00a0427 | 10\u00a0676 | - | 23\u00a0104 |
Additions discontinued operations | - | 1\u00a0294 | 51\u00a0331 | - | 52\u00a0625 |
Disposals continuing operations | - | (82) | - | - | (82) |
Disposals discontinuing operations | - | (262) | (74) | (336) | |
Translation differences | 144\u00a0036 | 23\u00a0250 | 12\u00a0186 | 17\u00a0880 | 197\u00a0351 |
Cost of acquisition 31 December 2022 | 1\u00a0717\u00a0097 | 276\u00a0081 | 428\u00a0180 | 558\u00a0874 | 2\u00a0980\u00a0232 |
Accumulated amortization and impairment | |||||
Opening balance 1 January 2022 | 274 | 51\u00a0279 | 118\u00a0270 | 153\u00a0221 | 323\u00a0045 |
Amortization for the year from continuing operation | - | 14\u00a0278 | 16\u00a0424 | 28\u00a0453 | 59\u00a0156 |
Amortization for the year from discontinuing operation | - | 2\u00a0923 | 14\u00a0820 | 19\u00a0163 | 36\u00a0906 |
Impairment | - | - | - | - | - |
Disposals continuing operations | - | - | - | - | - |
Disposals discontinuing operations | - | (261) | (74) | - | (336) |
Translation differences | (274) | 2\u00a0538 | (5\u00a0769) | (5\u00a0888) | (9\u00a0393) |
Accumulated amortization and impairment 31 December 2022 | - | 70\u00a0757 | 143\u00a0672 | 194\u00a0950 | 409\u00a0379 |
Net carrying amount 31 December 2022 | 1\u00a0717\u00a0097 | 205\u00a0324 | 284\u00a0508 | 363\u00a0924 | 2\u00a0570\u00a0853 |
Useful life | Indefinite | 3\u201317 years | 5\u201320 years | 7\u201315 years | |
Amortization method | None | Straight-line | Straight-line | Straight-line |
Research & development costs totalling MNOK 38.0 (MNOK 50.0) were expensed in 2023. The Group has received government grants of MNOK 6.7 (MNOK 7.3) in 2023. MNOK 6.7 (MNOK 7.3) has been offset against research and development costs.
The Group has recognized goodwill as a result of several acquisitions of business enterprises. Each goodwill item is linked to a cash generating unit (CGU). When the acquired business enterprise is maintained as an independent business enterprise it is, as a starting point, the CGU. Entities that have con-siderable synergies and for which the type of activity is the same, are considered to be a unified CGU. This applies when acquired business enterprises are integrated with an existing Hexagon Composites company or the acquired business enterprise is, in operative terms, closely linked together with existing Hexagon Composites businesses. In these instances, it is the linking enterprise that is the level of the CGU where goodwill is measured and followed up. As of the end of 2023, the Group has three CGU\u2019s where capitalized goodwill has been allocated to, which are similar to the operating segments disclosed and pre-sented in note 4. Last year, the Group had four CGU\u2019s and four operating segments, including Hexagon Purus - which was deconsolidated and presented as discontinued operations on 29 June 2023.
Goodwill impairment testing
Goodwill is not depreciated but is subject to impair-ment testing in the fourth quarter each year. If there are particular indications of possible impairment, the impairment test is carried out on a quarterly basis. The impairment test is carried out by the cal-culated recoverable amount being compared with
invested capital for the unit in question. When the recoverable amount exceeds invested capital, capi-talized goodwill is maintained. When the recoverable amount is lower than invested capital, capitalized goodwill is written down to its recoverable amount. Invested capital consists of the units\u2019 total assets less interest-free current liabilities and interest-free non-current liabilities. The recoverable amount is based on expected future cash flows for the relevant unit based on the management\u2019s approved budget and strategy figures for the next five years. These are estimated based on current sales and margins and the expected market development. For subsequent periods it is assumed that there will be an increase in the cash flows equivalent to expected general growth within the various business areas.
The expected future investment requirements for the units are reflected in the calculations. These are in accordance with the management\u2019s approved budget and strategy. For the period beyond the next five years, it is assumed that the re-investment requirement will be equivalent to expected depreciation. Changes in working capital have been assessed and adjusted in accordance with expected developments.
When there are indications that a company\u2019s assets (including goodwill) may be impaired, an impairment test is conducted using the company\u2019s weighted average capital cost (WACC) as an esti-mate for the discount rate (= return on assets ratio). Correspondingly, WACC is also used for annual impairment testing. The WACC rate which is used to discount future cash flows is derived by the weighted average of the company\u2019s cost of equity and cost of debt, taking into account the 10-year risk-free interest
rates in the market, beta factor, market risk premium, the company\u2019s interest rate, and equity ratio.
Value in use is calculated by discounting future cash flows. Present value calculations are based on expected future cash flows for the different cash-gen-erating units, as described above and the units are not expected to have a finite useful life. The projections take into account appropriate and typically modest forms of growth in the cash flows into perpetuity.
Key assumptions used in value in use calculations
The most important assumptions for calculating value in use are related to estimates for operating revenues, EBITDA margins, discount rates and growth rates beyond the forecast period of 5 years. Discount rates have used have been matched and reflective of the currency of the cash flows being tested. The table below shows WACC rates used.
WACC rates used in impairment testing
Currency | 2023 | 2022 | ||
Post-tax | Pre-tax | Post-tax | Pre-tax | |
USD | 10.1% | 12.9% | 11.9% | 15.3% |
NOK | 9.6% | 12.3% | 11.4% | 14.6% |
The main reason for the lower WACC rates in 2023 compared to 2022 is related to exclusion of liquidity- and size premiums in determining cost of equity in 2023, as these premiums have been deemed no longer relevant for Hexagon.
All operating revenues and EBITDA margins are based on the stated forecast periods, past perfor-mance and management expectations of market
development for the future. Growth rates are consistent with industry and market forecasts except where conservatively applied outside the primary forecast periods.
Hexagon\u2019s primary forecast horizon is 5 years from 2024 to 2028 and from which projections are made, on a rolling 5 year basis, using prudently conserva-tive growth rates which collectively approximate to 15 per cent. Hexagon collectively employs targets of:
\u2022At least 15 per cent annual operating revenue growth
\u2022Attaining 15 per cent EBITDA margin
The differing CGUs within Hexagon may have differing revenue growth and EBITDA margins at differing periods of time, but collectively are expected to attain the Hexagon targets within the primary forecast horizon. Hexagon Digital Wave is in the middle of a transformational business plan, through digitalization, incorporating opex invest-ments over the next couple of years which weigh on positive margins short-term and increase growth in revenues and margins longer-term. The assump-tions used per CGU in relation to the Hexagon proforma targets are as follows:
\u2022Hexagon Agility attaining > target revenue growth and > target EBITDA margin
\u2022Hexagon Ragasco attaining < target revenue growth and > target EBITDA margin
\u2022Hexagon Digital Wave > target revenue growth and > target EBITDA margin
Growth beyond the forecast horizon are deter-mined based on general economic growth rates in the geographical markets Hexagon\u2019s businesses operate in.
The goodwill items of the following cash generating units have been subject to impairment testing
2023 | 2022 | |
Hexagon Agility | 1\u00a0162\u00a0713 | 1\u00a0124\u00a0360 |
Hexagon Digital Wave | 37\u00a0817 | 36\u00a0646 |
Hexagon Purus | - | 523\u00a0741 |
Hexagon Ragasco | 32\u00a0350 | 32\u00a0350 |
Total goodwill | 1\u00a0232\u00a0880 | 1\u00a0717\u00a0097 |
The assumptions that were used as a basis for the calculations made at the end of 2023 resulted in comfortable headroom for all of the above. Following the deconsolidation of Hexagon Purus as a subsidiary on 29 June 2023, the goodwill associated with Hexagon Purus was effectively derecognized on the same date, and has thus not been subject to goodwill impairment testing in 2023. See note 26for the Group\u2019s equity-accounted investment in Hexagon Purus and impairment assessments made for this investment specifically.
Other assumptions for the impairment testing of goodwill
The recoverable amount is calculated based on the general assumptions referred to above. The calcu-lations do not assume major changes in the nature of business activities compared with 2023. In the prognosis period, an increase in the operating profit equal to the general growth in the economy is, at a minimum, expected. The impairment testing is per-formed in the functional geographic currency of the CGU being USD for Hexagon Agility and Hexagon Digital Wave, and NOK for Hexagon Ragasco.
Sensitivity analyses for the goodwill
In connection with the impairment testing of good-will, the Group has carried out sensitivity analyses. These sensitivity analyses are carried out for each cash-generating unit. The present value of the cash flow in the calculations made is, among other things, sensitive to changes in the discount rate. The sensitivity analysis uses the economic assumptions referred to above as its starting point. Calculations have been made based on one of the estimated economic assumptions being changed and in which the other economic assumptions remain unchanged.
The sensitivity analyses for the CGU demonstrate that recoverable amounts of Hexagon Agility, Hexagon Ragasco and Hexagon Digital Wave good-will exceed the recognized value by a good margin, and a reasonable change in key assumption (+ 1.0 per cent for WACC and - 2.0 per cent on EBITDA margin) would not cause the carrying amount to exceed value in use.
Note 24\tLeases
Right of use assets (NOK 1\u00a0000) | Land and buildings | Plant and equipment | Fixtures\u00a0& fittings, vehicles | 2023Total |
At cost | ||||
Cost of acquisition 1 January | 592\u00a0722 | 83\u00a0951 | 9\u00a0102 | 685\u00a0775 |
Additions continuing operations | 98\u00a0052 | - | 6\u00a0878 | 104\u00a0930 |
Additions discontinued operations | 6\u00a0384 | 1\u00a0497 | 1\u00a0388 | 9\u00a0270 |
Expirations at maturity continuing operations | (12\u00a0603) | - | (958) | (13\u00a0560) |
Expirations at maturity discontinued operations | (35\u00a0296) | (304) | (782) | (36\u00a0382) |
Derecognition from deconsolidation of subsidiary | (175\u00a0106) | (24\u00a0447) | (6\u00a0956) | (206\u00a0508) |
Translation differences | 23\u00a0704 | 6\u00a0176 | 486 | 30\u00a0366 |
Cost of acquisition 31 December | 497\u00a0858 | 66\u00a0873 | 9\u00a0159 | 573\u00a0890 |
Accumulated depreciation and impairment | ||||
Accumulated depreciation and impairment 1 January | 158\u00a0230 | 49\u00a0208 | 5\u00a0105 | 212\u00a0542 |
Depreciations continuing operations | 59\u00a0098 | 8\u00a0880 | 1\u00a0333 | 69\u00a0311 |
Depreciations discontinued operations | 10\u00a0694 | 2\u00a0464 | 723 | 13\u00a0881 |
Expirations at maturity continuing operations | (8 522) | - | (958) | (9 479) |
Expirations at maturity discontinued operations | (35 296) | (304) | (782) | (36 383) |
Derecognition from deconsolidation of subsidiary | (35\u00a0029) | (8\u00a0472) | (3\u00a0715) | (47\u00a0216) |
Translation differences | 1\u00a0944 | 3\u00a0370 | 296 | 5\u00a0610 |
Accumulated depreciation and impairment | 151\u00a0119 | 55\u00a0145 | 2\u00a0002 | 208\u00a0266 |
Carrying amount as of 31 December | 346\u00a0739 | 11\u00a0728 | 7\u00a0157 | 365\u00a0624 |
Useful life | 3\u201317 years | 3\u20137 years | 2\u20135 years | |
Depreciation method | Straight-line | Straight-line | Straight-line |
Discontinued operations
On 29 June 2023, Hexagon Purus was effectively deconsolidated from the group accounts of Hexagon Composites, see also note 5. Due this, Hexagon Purus\u2019 figures up to and including 29 June 2023, have been presented separately as discontinued operations
Right of use assets (NOK 1\u00a0000) | Land and buildings | Plant and equipment | Fixtures\u00a0& fittings, vehicles | 2022Total |
At cost | ||||
Cost of acquisition 1 January | 373\u00a0042 | 78\u00a0270 | 5\u00a0537 | 456\u00a0849 |
Additions continuing operations | 122\u00a0154 | - | 1\u00a0366 | 123\u00a0520 |
Additions discontinued operations | 118\u00a0929 | 1\u00a0505 | 2\u00a0038 | 122\u00a0472 |
Expirations at maturity continuing operations | (52\u00a0166) | - | (262) | (52\u00a0428) |
Expirations at maturity discontinued operations | - | - | - | - |
Translation differences | 30\u00a0763 | 4\u00a0175 | 424 | 35\u00a0362 |
Cost of acquisition 31 December | 592\u00a0722 | 83\u00a0951 | 9\u00a0102 | 685\u00a0775 |
Accumulated depreciation and impairment | ||||
Accumulated depreciation and impairment 1 January | 136\u00a0613 | 34\u00a0391 | 3\u00a0536 | 174\u00a0540 |
Depreciations continuing operations | 48\u00a0486 | 7\u00a0838 | 547 | 56\u00a0871 |
Depreciations discontinued operations | 18\u00a0387 | 4\u00a0937 | 1\u00a0079 | 24\u00a0404 |
Expirations at maturity continuing operations | (52\u00a0166) | - | (262) | (52\u00a0428) |
Expirations at maturity discontinued operations | - | |||
Translation differences | 6\u00a0909 | 2\u00a0041 | 205 | 9\u00a0156 |
Accumulated depreciation and impairment | 158\u00a0230 | 49\u00a0208 | 5\u00a0105 | 212\u00a0542 |
Carrying amount as of 31 December | 434\u00a0492 | 34\u00a0743 | 3\u00a0998 | 473\u00a0233 |
Useful life | 3\u201317 years | 3\u20137 years | 2\u20135 years | |
Depreciation method | Straight-line | Straight-line | Straight-line |
Hexagon Purus ASA - impairment testing in Q4 2024
During the second half of 2023, Hexagon Purus experienced a significant decline in its market value and closed at NOK 11.14/share as of 31 December 2023, translating to a fair value of Hexagon\u2019s shares in Hexagon Purus of NOK 1\u00a0184 million. Compared to the share price as of the date of Hexagon\u2019s initial fair value recognition of Hexagon Purus as an associated company of NOK 19.80/share, this represents a 44 per cent decline in fair value. Comparable peer companies within the hydrogen and battery sector experienced similar share price develop-ments in the same period. The significant decline in the fair value of Hexagon Purus and peers caused Hexagon to perform an impairment test of its investment, which resulted in an impairment of NOK 702 million and an adjusted carrying value of NOK 1\u00a0225 million as per 31 December 2023.
The key assumptions for calculating value in use are related to estimates for revenues, EBITDA margins, discount rates and growth rates beyond the forecast period. A 7-year forecast period until 2030 with an extrapolation towards 2033 (total of 10 years) has been used, concurrent with the forecast period used in the determination of intangible assets and goodwill in the purchase price allocation of Hexagon Purus as of 29 June 2023. Hexagon Purus\u2019 business plan projections imply significant growth. However, as a reflection of the overall equity market\u2019s increased implicit risk towards Hexagon Purus during the second half of 2023, Hexagon has for impairment test
purposes per 31 December 2023 incorporated somewhat higher risk factors to Hexagon Purus\u2019 revenue growth rates towards 2030 both within the hydrogen and the battery electric mobility sector, as well as somewhat lower profit margins in the same forecast period. For subsequent periods beyond the 7-year forecast horizon, the Group has prudently phased in a declining growth rate towards an expected average growth rate for the economy in general. A weighted average cost of capital (post-tax) of 10.8 per cent has been used as discount rate of free cash flows.
Although the Company expects to break-even at EBITDA level during 2025, free cash flows are still expected to be negative a couple of years beyond 2025 due to capital expenditures and working capital requirements. As such, a significant portion of the estimated value-in-use amount lies in the terminal value which is dependent upon the size of the company and its free cash flow generation at the end of the forecast period. Despite future cash flows are inherently uncertain, Hexagon management expects Hexagon Purus will capitalize and deliver on its business plan, and that a value-in-use of NOK 1\u00a0225 million represents the best estimate based on known economic con-ditions that will exist in the period including prudent risk adjustments.
", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f69953": { "value": "Note 11\tIntangible assets and goodwill
Hexagon Composites ASA has the following purchased and own-developed intangible assets
(NOK 1\u00a0000) | Goodwill | Patents andlicences | Technology-development | Customer relationships | 2023 Total |
Cost price | |||||
Opening balance 1 January 2023 | 1\u00a0717\u00a0097 | 276\u00a0081 | 428\u00a0180 | 558\u00a0874 | 2\u00a0980\u00a0232 |
Additions continuing operations | - | 9\u00a0932 | 14\u00a0460 | - | 24\u00a0392 |
Additions discontinued operations | - | 334 | 18\u00a0469 | - | 18\u00a0803 |
Disposals continuing operations | - | (1\u00a0015) | (1\u00a0603) | - | (2\u00a0617) |
Disposals discontinuing operations | - | (1\u00a0917) | - | - | (1\u00a0917) |
Derecognition from deconsolidation of subsidiary | (583\u00a0031) | (13\u00a0817) | (233\u00a0474) | (177\u00a0978) | (1\u00a0008\u00a0300) |
Translation differences | 98\u00a0814 | 8\u00a0563 | 8\u00a0976 | 32\u00a0405 | 148\u00a0757 |
Cost of acquisition 31 December 2023 | 1\u00a0232\u00a0880 | 278\u00a0161 | 235\u00a0009 | 413\u00a0301 | 2\u00a0159\u00a0351 |
Accumulated amortization and impairment | |||||
Opening balance 1 January 2023 | - | 70\u00a0757 | 143\u00a0672 | 194\u00a0950 | 409\u00a0379 |
Amortization for the year from continuing operation | - | 16\u00a0799 | 16\u00a0221 | 30\u00a0152 | 63\u00a0173 |
Amortization for the year from discontinuing operation | - | 2\u00a0616 | 10\u00a0419 | 10\u00a0737 | 23\u00a0772 |
Impairment | - | - | - | - | - |
Disposals continuing operations | - | (965) | (1\u00a0603) | - | (2\u00a0568) |
Disposals discontinuing operations | - | (1\u00a0614) | - | - | (1\u00a0614) |
Derecognition from deconsolidation of subsidiary | - | (8\u00a0906) | (37\u00a0424) | (87\u00a0425) | (133\u00a0755) |
Translation differences | - | 1\u00a0506 | 1\u00a0412 | 12\u00a0440 | 15\u00a0358 |
Accumulated amortization and impairment 31 December 2023 | - | 80\u00a0193 | 132\u00a0698 | 160\u00a0853 | 373\u00a0744 |
Net carrying amount 31 December 2023 | 1\u00a0232\u00a0880 | 197\u00a0968 | 102\u00a0311 | 252\u00a0447 | 1\u00a0785\u00a0606 |
Useful life | Indefinite | 3\u201317 years | 5\u201320 years | 7\u201315 years | |
Amortization method | None | Straight-line | Straight-line | Straight-line |
Discontinued operations
On 29 June 2023, Hexagon Purus was effectively deconsolidated from the group accounts of Hexagon Composites, see also note 5.Due this, Hexagon Purus\u2019 figures up to and including 29 June 2023, have been presented separately as discontinued operations
Hexagon Composites ASA has the following purchased and own-developed intangible assets
(NOK 1\u00a0000) | Goodwill | Patents andlicences | Technology-development | Customer relationships | 2022 Total |
Cost price | |||||
Opening balance 1 January 2022 | 1\u00a0573\u00a0061 | 239\u00a0453 | 354\u00a0061 | 540\u00a0994 | 2\u00a0707\u00a0569 |
Additions continuing operations | - | 12\u00a0427 | 10\u00a0676 | - | 23\u00a0104 |
Additions discontinued operations | - | 1\u00a0294 | 51\u00a0331 | - | 52\u00a0625 |
Disposals continuing operations | - | (82) | - | - | (82) |
Disposals discontinuing operations | - | (262) | (74) | (336) | |
Translation differences | 144\u00a0036 | 23\u00a0250 | 12\u00a0186 | 17\u00a0880 | 197\u00a0351 |
Cost of acquisition 31 December 2022 | 1\u00a0717\u00a0097 | 276\u00a0081 | 428\u00a0180 | 558\u00a0874 | 2\u00a0980\u00a0232 |
Accumulated amortization and impairment | |||||
Opening balance 1 January 2022 | 274 | 51\u00a0279 | 118\u00a0270 | 153\u00a0221 | 323\u00a0045 |
Amortization for the year from continuing operation | - | 14\u00a0278 | 16\u00a0424 | 28\u00a0453 | 59\u00a0156 |
Amortization for the year from discontinuing operation | - | 2\u00a0923 | 14\u00a0820 | 19\u00a0163 | 36\u00a0906 |
Impairment | - | - | - | - | - |
Disposals continuing operations | - | - | - | - | - |
Disposals discontinuing operations | - | (261) | (74) | - | (336) |
Translation differences | (274) | 2\u00a0538 | (5\u00a0769) | (5\u00a0888) | (9\u00a0393) |
Accumulated amortization and impairment 31 December 2022 | - | 70\u00a0757 | 143\u00a0672 | 194\u00a0950 | 409\u00a0379 |
Net carrying amount 31 December 2022 | 1\u00a0717\u00a0097 | 205\u00a0324 | 284\u00a0508 | 363\u00a0924 | 2\u00a0570\u00a0853 |
Useful life | Indefinite | 3\u201317 years | 5\u201320 years | 7\u201315 years | |
Amortization method | None | Straight-line | Straight-line | Straight-line |
Research & development costs totalling MNOK 38.0 (MNOK 50.0) were expensed in 2023. The Group has received government grants of MNOK 6.7 (MNOK 7.3) in 2023. MNOK 6.7 (MNOK 7.3) has been offset against research and development costs.
The Group has recognized goodwill as a result of several acquisitions of business enterprises. Each goodwill item is linked to a cash generating unit (CGU). When the acquired business enterprise is maintained as an independent business enterprise it is, as a starting point, the CGU. Entities that have con-siderable synergies and for which the type of activity is the same, are considered to be a unified CGU. This applies when acquired business enterprises are integrated with an existing Hexagon Composites company or the acquired business enterprise is, in operative terms, closely linked together with existing Hexagon Composites businesses. In these instances, it is the linking enterprise that is the level of the CGU where goodwill is measured and followed up. As of the end of 2023, the Group has three CGU\u2019s where capitalized goodwill has been allocated to, which are similar to the operating segments disclosed and pre-sented in note 4. Last year, the Group had four CGU\u2019s and four operating segments, including Hexagon Purus - which was deconsolidated and presented as discontinued operations on 29 June 2023.
Goodwill impairment testing
Goodwill is not depreciated but is subject to impair-ment testing in the fourth quarter each year. If there are particular indications of possible impairment, the impairment test is carried out on a quarterly basis. The impairment test is carried out by the cal-culated recoverable amount being compared with
invested capital for the unit in question. When the recoverable amount exceeds invested capital, capi-talized goodwill is maintained. When the recoverable amount is lower than invested capital, capitalized goodwill is written down to its recoverable amount. Invested capital consists of the units\u2019 total assets less interest-free current liabilities and interest-free non-current liabilities. The recoverable amount is based on expected future cash flows for the relevant unit based on the management\u2019s approved budget and strategy figures for the next five years. These are estimated based on current sales and margins and the expected market development. For subsequent periods it is assumed that there will be an increase in the cash flows equivalent to expected general growth within the various business areas.
The expected future investment requirements for the units are reflected in the calculations. These are in accordance with the management\u2019s approved budget and strategy. For the period beyond the next five years, it is assumed that the re-investment requirement will be equivalent to expected depreciation. Changes in working capital have been assessed and adjusted in accordance with expected developments.
When there are indications that a company\u2019s assets (including goodwill) may be impaired, an impairment test is conducted using the company\u2019s weighted average capital cost (WACC) as an esti-mate for the discount rate (= return on assets ratio). Correspondingly, WACC is also used for annual impairment testing. The WACC rate which is used to discount future cash flows is derived by the weighted average of the company\u2019s cost of equity and cost of debt, taking into account the 10-year risk-free interest
rates in the market, beta factor, market risk premium, the company\u2019s interest rate, and equity ratio.
Value in use is calculated by discounting future cash flows. Present value calculations are based on expected future cash flows for the different cash-gen-erating units, as described above and the units are not expected to have a finite useful life. The projections take into account appropriate and typically modest forms of growth in the cash flows into perpetuity.
Key assumptions used in value in use calculations
The most important assumptions for calculating value in use are related to estimates for operating revenues, EBITDA margins, discount rates and growth rates beyond the forecast period of 5 years. Discount rates have used have been matched and reflective of the currency of the cash flows being tested. The table below shows WACC rates used.
WACC rates used in impairment testing
Currency | 2023 | 2022 | ||
Post-tax | Pre-tax | Post-tax | Pre-tax | |
USD | 10.1% | 12.9% | 11.9% | 15.3% |
NOK | 9.6% | 12.3% | 11.4% | 14.6% |
The main reason for the lower WACC rates in 2023 compared to 2022 is related to exclusion of liquidity- and size premiums in determining cost of equity in 2023, as these premiums have been deemed no longer relevant for Hexagon.
All operating revenues and EBITDA margins are based on the stated forecast periods, past perfor-mance and management expectations of market
development for the future. Growth rates are consistent with industry and market forecasts except where conservatively applied outside the primary forecast periods.
Hexagon\u2019s primary forecast horizon is 5 years from 2024 to 2028 and from which projections are made, on a rolling 5 year basis, using prudently conserva-tive growth rates which collectively approximate to 15 per cent. Hexagon collectively employs targets of:
\u2022At least 15 per cent annual operating revenue growth
\u2022Attaining 15 per cent EBITDA margin
The differing CGUs within Hexagon may have differing revenue growth and EBITDA margins at differing periods of time, but collectively are expected to attain the Hexagon targets within the primary forecast horizon. Hexagon Digital Wave is in the middle of a transformational business plan, through digitalization, incorporating opex invest-ments over the next couple of years which weigh on positive margins short-term and increase growth in revenues and margins longer-term. The assump-tions used per CGU in relation to the Hexagon proforma targets are as follows:
\u2022Hexagon Agility attaining > target revenue growth and > target EBITDA margin
\u2022Hexagon Ragasco attaining < target revenue growth and > target EBITDA margin
\u2022Hexagon Digital Wave > target revenue growth and > target EBITDA margin
Growth beyond the forecast horizon are deter-mined based on general economic growth rates in the geographical markets Hexagon\u2019s businesses operate in.
The goodwill items of the following cash generating units have been subject to impairment testing
2023 | 2022 | |
Hexagon Agility | 1\u00a0162\u00a0713 | 1\u00a0124\u00a0360 |
Hexagon Digital Wave | 37\u00a0817 | 36\u00a0646 |
Hexagon Purus | - | 523\u00a0741 |
Hexagon Ragasco | 32\u00a0350 | 32\u00a0350 |
Total goodwill | 1\u00a0232\u00a0880 | 1\u00a0717\u00a0097 |
The assumptions that were used as a basis for the calculations made at the end of 2023 resulted in comfortable headroom for all of the above. Following the deconsolidation of Hexagon Purus as a subsidiary on 29 June 2023, the goodwill associated with Hexagon Purus was effectively derecognized on the same date, and has thus not been subject to goodwill impairment testing in 2023. See note 26for the Group\u2019s equity-accounted investment in Hexagon Purus and impairment assessments made for this investment specifically.
Other assumptions for the impairment testing of goodwill
The recoverable amount is calculated based on the general assumptions referred to above. The calcu-lations do not assume major changes in the nature of business activities compared with 2023. In the prognosis period, an increase in the operating profit equal to the general growth in the economy is, at a minimum, expected. The impairment testing is per-formed in the functional geographic currency of the CGU being USD for Hexagon Agility and Hexagon Digital Wave, and NOK for Hexagon Ragasco.
Sensitivity analyses for the goodwill
In connection with the impairment testing of good-will, the Group has carried out sensitivity analyses. These sensitivity analyses are carried out for each cash-generating unit. The present value of the cash flow in the calculations made is, among other things, sensitive to changes in the discount rate. The sensitivity analysis uses the economic assumptions referred to above as its starting point. Calculations have been made based on one of the estimated economic assumptions being changed and in which the other economic assumptions remain unchanged.
The sensitivity analyses for the CGU demonstrate that recoverable amounts of Hexagon Agility, Hexagon Ragasco and Hexagon Digital Wave good-will exceed the recognized value by a good margin, and a reasonable change in key assumption (+ 1.0 per cent for WACC and - 2.0 per cent on EBITDA margin) would not cause the carrying amount to exceed value in use.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f69954": { "value": "Note 11\tIntangible assets and goodwill
Hexagon Composites ASA has the following purchased and own-developed intangible assets
(NOK 1\u00a0000) | Goodwill | Patents andlicences | Technology-development | Customer relationships | 2023 Total |
Cost price | |||||
Opening balance 1 January 2023 | 1\u00a0717\u00a0097 | 276\u00a0081 | 428\u00a0180 | 558\u00a0874 | 2\u00a0980\u00a0232 |
Additions continuing operations | - | 9\u00a0932 | 14\u00a0460 | - | 24\u00a0392 |
Additions discontinued operations | - | 334 | 18\u00a0469 | - | 18\u00a0803 |
Disposals continuing operations | - | (1\u00a0015) | (1\u00a0603) | - | (2\u00a0617) |
Disposals discontinuing operations | - | (1\u00a0917) | - | - | (1\u00a0917) |
Derecognition from deconsolidation of subsidiary | (583\u00a0031) | (13\u00a0817) | (233\u00a0474) | (177\u00a0978) | (1\u00a0008\u00a0300) |
Translation differences | 98\u00a0814 | 8\u00a0563 | 8\u00a0976 | 32\u00a0405 | 148\u00a0757 |
Cost of acquisition 31 December 2023 | 1\u00a0232\u00a0880 | 278\u00a0161 | 235\u00a0009 | 413\u00a0301 | 2\u00a0159\u00a0351 |
Accumulated amortization and impairment | |||||
Opening balance 1 January 2023 | - | 70\u00a0757 | 143\u00a0672 | 194\u00a0950 | 409\u00a0379 |
Amortization for the year from continuing operation | - | 16\u00a0799 | 16\u00a0221 | 30\u00a0152 | 63\u00a0173 |
Amortization for the year from discontinuing operation | - | 2\u00a0616 | 10\u00a0419 | 10\u00a0737 | 23\u00a0772 |
Impairment | - | - | - | - | - |
Disposals continuing operations | - | (965) | (1\u00a0603) | - | (2\u00a0568) |
Disposals discontinuing operations | - | (1\u00a0614) | - | - | (1\u00a0614) |
Derecognition from deconsolidation of subsidiary | - | (8\u00a0906) | (37\u00a0424) | (87\u00a0425) | (133\u00a0755) |
Translation differences | - | 1\u00a0506 | 1\u00a0412 | 12\u00a0440 | 15\u00a0358 |
Accumulated amortization and impairment 31 December 2023 | - | 80\u00a0193 | 132\u00a0698 | 160\u00a0853 | 373\u00a0744 |
Net carrying amount 31 December 2023 | 1\u00a0232\u00a0880 | 197\u00a0968 | 102\u00a0311 | 252\u00a0447 | 1\u00a0785\u00a0606 |
Useful life | Indefinite | 3\u201317 years | 5\u201320 years | 7\u201315 years | |
Amortization method | None | Straight-line | Straight-line | Straight-line |
Discontinued operations
On 29 June 2023, Hexagon Purus was effectively deconsolidated from the group accounts of Hexagon Composites, see also note 5.Due this, Hexagon Purus\u2019 figures up to and including 29 June 2023, have been presented separately as discontinued operations
Hexagon Composites ASA has the following purchased and own-developed intangible assets
(NOK 1\u00a0000) | Goodwill | Patents andlicences | Technology-development | Customer relationships | 2022 Total |
Cost price | |||||
Opening balance 1 January 2022 | 1\u00a0573\u00a0061 | 239\u00a0453 | 354\u00a0061 | 540\u00a0994 | 2\u00a0707\u00a0569 |
Additions continuing operations | - | 12\u00a0427 | 10\u00a0676 | - | 23\u00a0104 |
Additions discontinued operations | - | 1\u00a0294 | 51\u00a0331 | - | 52\u00a0625 |
Disposals continuing operations | - | (82) | - | - | (82) |
Disposals discontinuing operations | - | (262) | (74) | (336) | |
Translation differences | 144\u00a0036 | 23\u00a0250 | 12\u00a0186 | 17\u00a0880 | 197\u00a0351 |
Cost of acquisition 31 December 2022 | 1\u00a0717\u00a0097 | 276\u00a0081 | 428\u00a0180 | 558\u00a0874 | 2\u00a0980\u00a0232 |
Accumulated amortization and impairment | |||||
Opening balance 1 January 2022 | 274 | 51\u00a0279 | 118\u00a0270 | 153\u00a0221 | 323\u00a0045 |
Amortization for the year from continuing operation | - | 14\u00a0278 | 16\u00a0424 | 28\u00a0453 | 59\u00a0156 |
Amortization for the year from discontinuing operation | - | 2\u00a0923 | 14\u00a0820 | 19\u00a0163 | 36\u00a0906 |
Impairment | - | - | - | - | - |
Disposals continuing operations | - | - | - | - | - |
Disposals discontinuing operations | - | (261) | (74) | - | (336) |
Translation differences | (274) | 2\u00a0538 | (5\u00a0769) | (5\u00a0888) | (9\u00a0393) |
Accumulated amortization and impairment 31 December 2022 | - | 70\u00a0757 | 143\u00a0672 | 194\u00a0950 | 409\u00a0379 |
Net carrying amount 31 December 2022 | 1\u00a0717\u00a0097 | 205\u00a0324 | 284\u00a0508 | 363\u00a0924 | 2\u00a0570\u00a0853 |
Useful life | Indefinite | 3\u201317 years | 5\u201320 years | 7\u201315 years | |
Amortization method | None | Straight-line | Straight-line | Straight-line |
Research & development costs totalling MNOK 38.0 (MNOK 50.0) were expensed in 2023. The Group has received government grants of MNOK 6.7 (MNOK 7.3) in 2023. MNOK 6.7 (MNOK 7.3) has been offset against research and development costs.
The Group has recognized goodwill as a result of several acquisitions of business enterprises. Each goodwill item is linked to a cash generating unit (CGU). When the acquired business enterprise is maintained as an independent business enterprise it is, as a starting point, the CGU. Entities that have con-siderable synergies and for which the type of activity is the same, are considered to be a unified CGU. This applies when acquired business enterprises are integrated with an existing Hexagon Composites company or the acquired business enterprise is, in operative terms, closely linked together with existing Hexagon Composites businesses. In these instances, it is the linking enterprise that is the level of the CGU where goodwill is measured and followed up. As of the end of 2023, the Group has three CGU\u2019s where capitalized goodwill has been allocated to, which are similar to the operating segments disclosed and pre-sented in note 4. Last year, the Group had four CGU\u2019s and four operating segments, including Hexagon Purus - which was deconsolidated and presented as discontinued operations on 29 June 2023.
Goodwill impairment testing
Goodwill is not depreciated but is subject to impair-ment testing in the fourth quarter each year. If there are particular indications of possible impairment, the impairment test is carried out on a quarterly basis. The impairment test is carried out by the cal-culated recoverable amount being compared with
invested capital for the unit in question. When the recoverable amount exceeds invested capital, capi-talized goodwill is maintained. When the recoverable amount is lower than invested capital, capitalized goodwill is written down to its recoverable amount. Invested capital consists of the units\u2019 total assets less interest-free current liabilities and interest-free non-current liabilities. The recoverable amount is based on expected future cash flows for the relevant unit based on the management\u2019s approved budget and strategy figures for the next five years. These are estimated based on current sales and margins and the expected market development. For subsequent periods it is assumed that there will be an increase in the cash flows equivalent to expected general growth within the various business areas.
The expected future investment requirements for the units are reflected in the calculations. These are in accordance with the management\u2019s approved budget and strategy. For the period beyond the next five years, it is assumed that the re-investment requirement will be equivalent to expected depreciation. Changes in working capital have been assessed and adjusted in accordance with expected developments.
When there are indications that a company\u2019s assets (including goodwill) may be impaired, an impairment test is conducted using the company\u2019s weighted average capital cost (WACC) as an esti-mate for the discount rate (= return on assets ratio). Correspondingly, WACC is also used for annual impairment testing. The WACC rate which is used to discount future cash flows is derived by the weighted average of the company\u2019s cost of equity and cost of debt, taking into account the 10-year risk-free interest
rates in the market, beta factor, market risk premium, the company\u2019s interest rate, and equity ratio.
Value in use is calculated by discounting future cash flows. Present value calculations are based on expected future cash flows for the different cash-gen-erating units, as described above and the units are not expected to have a finite useful life. The projections take into account appropriate and typically modest forms of growth in the cash flows into perpetuity.
Key assumptions used in value in use calculations
The most important assumptions for calculating value in use are related to estimates for operating revenues, EBITDA margins, discount rates and growth rates beyond the forecast period of 5 years. Discount rates have used have been matched and reflective of the currency of the cash flows being tested. The table below shows WACC rates used.
WACC rates used in impairment testing
Currency | 2023 | 2022 | ||
Post-tax | Pre-tax | Post-tax | Pre-tax | |
USD | 10.1% | 12.9% | 11.9% | 15.3% |
NOK | 9.6% | 12.3% | 11.4% | 14.6% |
The main reason for the lower WACC rates in 2023 compared to 2022 is related to exclusion of liquidity- and size premiums in determining cost of equity in 2023, as these premiums have been deemed no longer relevant for Hexagon.
All operating revenues and EBITDA margins are based on the stated forecast periods, past perfor-mance and management expectations of market
development for the future. Growth rates are consistent with industry and market forecasts except where conservatively applied outside the primary forecast periods.
Hexagon\u2019s primary forecast horizon is 5 years from 2024 to 2028 and from which projections are made, on a rolling 5 year basis, using prudently conserva-tive growth rates which collectively approximate to 15 per cent. Hexagon collectively employs targets of:
\u2022At least 15 per cent annual operating revenue growth
\u2022Attaining 15 per cent EBITDA margin
The differing CGUs within Hexagon may have differing revenue growth and EBITDA margins at differing periods of time, but collectively are expected to attain the Hexagon targets within the primary forecast horizon. Hexagon Digital Wave is in the middle of a transformational business plan, through digitalization, incorporating opex invest-ments over the next couple of years which weigh on positive margins short-term and increase growth in revenues and margins longer-term. The assump-tions used per CGU in relation to the Hexagon proforma targets are as follows:
\u2022Hexagon Agility attaining > target revenue growth and > target EBITDA margin
\u2022Hexagon Ragasco attaining < target revenue growth and > target EBITDA margin
\u2022Hexagon Digital Wave > target revenue growth and > target EBITDA margin
Growth beyond the forecast horizon are deter-mined based on general economic growth rates in the geographical markets Hexagon\u2019s businesses operate in.
The goodwill items of the following cash generating units have been subject to impairment testing
2023 | 2022 | |
Hexagon Agility | 1\u00a0162\u00a0713 | 1\u00a0124\u00a0360 |
Hexagon Digital Wave | 37\u00a0817 | 36\u00a0646 |
Hexagon Purus | - | 523\u00a0741 |
Hexagon Ragasco | 32\u00a0350 | 32\u00a0350 |
Total goodwill | 1\u00a0232\u00a0880 | 1\u00a0717\u00a0097 |
The assumptions that were used as a basis for the calculations made at the end of 2023 resulted in comfortable headroom for all of the above. Following the deconsolidation of Hexagon Purus as a subsidiary on 29 June 2023, the goodwill associated with Hexagon Purus was effectively derecognized on the same date, and has thus not been subject to goodwill impairment testing in 2023. See note 26for the Group\u2019s equity-accounted investment in Hexagon Purus and impairment assessments made for this investment specifically.
Other assumptions for the impairment testing of goodwill
The recoverable amount is calculated based on the general assumptions referred to above. The calcu-lations do not assume major changes in the nature of business activities compared with 2023. In the prognosis period, an increase in the operating profit equal to the general growth in the economy is, at a minimum, expected. The impairment testing is per-formed in the functional geographic currency of the CGU being USD for Hexagon Agility and Hexagon Digital Wave, and NOK for Hexagon Ragasco.
Sensitivity analyses for the goodwill
In connection with the impairment testing of good-will, the Group has carried out sensitivity analyses. These sensitivity analyses are carried out for each cash-generating unit. The present value of the cash flow in the calculations made is, among other things, sensitive to changes in the discount rate. The sensitivity analysis uses the economic assumptions referred to above as its starting point. Calculations have been made based on one of the estimated economic assumptions being changed and in which the other economic assumptions remain unchanged.
The sensitivity analyses for the CGU demonstrate that recoverable amounts of Hexagon Agility, Hexagon Ragasco and Hexagon Digital Wave good-will exceed the recognized value by a good margin, and a reasonable change in key assumption (+ 1.0 per cent for WACC and - 2.0 per cent on EBITDA margin) would not cause the carrying amount to exceed value in use.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f69955": { "value": "Note 11\tIntangible assets and goodwill
Hexagon Composites ASA has the following purchased and own-developed intangible assets
(NOK 1\u00a0000) | Goodwill | Patents andlicences | Technology-development | Customer relationships | 2023 Total |
Cost price | |||||
Opening balance 1 January 2023 | 1\u00a0717\u00a0097 | 276\u00a0081 | 428\u00a0180 | 558\u00a0874 | 2\u00a0980\u00a0232 |
Additions continuing operations | - | 9\u00a0932 | 14\u00a0460 | - | 24\u00a0392 |
Additions discontinued operations | - | 334 | 18\u00a0469 | - | 18\u00a0803 |
Disposals continuing operations | - | (1\u00a0015) | (1\u00a0603) | - | (2\u00a0617) |
Disposals discontinuing operations | - | (1\u00a0917) | - | - | (1\u00a0917) |
Derecognition from deconsolidation of subsidiary | (583\u00a0031) | (13\u00a0817) | (233\u00a0474) | (177\u00a0978) | (1\u00a0008\u00a0300) |
Translation differences | 98\u00a0814 | 8\u00a0563 | 8\u00a0976 | 32\u00a0405 | 148\u00a0757 |
Cost of acquisition 31 December 2023 | 1\u00a0232\u00a0880 | 278\u00a0161 | 235\u00a0009 | 413\u00a0301 | 2\u00a0159\u00a0351 |
Accumulated amortization and impairment | |||||
Opening balance 1 January 2023 | - | 70\u00a0757 | 143\u00a0672 | 194\u00a0950 | 409\u00a0379 |
Amortization for the year from continuing operation | - | 16\u00a0799 | 16\u00a0221 | 30\u00a0152 | 63\u00a0173 |
Amortization for the year from discontinuing operation | - | 2\u00a0616 | 10\u00a0419 | 10\u00a0737 | 23\u00a0772 |
Impairment | - | - | - | - | - |
Disposals continuing operations | - | (965) | (1\u00a0603) | - | (2\u00a0568) |
Disposals discontinuing operations | - | (1\u00a0614) | - | - | (1\u00a0614) |
Derecognition from deconsolidation of subsidiary | - | (8\u00a0906) | (37\u00a0424) | (87\u00a0425) | (133\u00a0755) |
Translation differences | - | 1\u00a0506 | 1\u00a0412 | 12\u00a0440 | 15\u00a0358 |
Accumulated amortization and impairment 31 December 2023 | - | 80\u00a0193 | 132\u00a0698 | 160\u00a0853 | 373\u00a0744 |
Net carrying amount 31 December 2023 | 1\u00a0232\u00a0880 | 197\u00a0968 | 102\u00a0311 | 252\u00a0447 | 1\u00a0785\u00a0606 |
Useful life | Indefinite | 3\u201317 years | 5\u201320 years | 7\u201315 years | |
Amortization method | None | Straight-line | Straight-line | Straight-line |
Discontinued operations
On 29 June 2023, Hexagon Purus was effectively deconsolidated from the group accounts of Hexagon Composites, see also note 5.Due this, Hexagon Purus\u2019 figures up to and including 29 June 2023, have been presented separately as discontinued operations
Hexagon Composites ASA has the following purchased and own-developed intangible assets
(NOK 1\u00a0000) | Goodwill | Patents andlicences | Technology-development | Customer relationships | 2022 Total |
Cost price | |||||
Opening balance 1 January 2022 | 1\u00a0573\u00a0061 | 239\u00a0453 | 354\u00a0061 | 540\u00a0994 | 2\u00a0707\u00a0569 |
Additions continuing operations | - | 12\u00a0427 | 10\u00a0676 | - | 23\u00a0104 |
Additions discontinued operations | - | 1\u00a0294 | 51\u00a0331 | - | 52\u00a0625 |
Disposals continuing operations | - | (82) | - | - | (82) |
Disposals discontinuing operations | - | (262) | (74) | (336) | |
Translation differences | 144\u00a0036 | 23\u00a0250 | 12\u00a0186 | 17\u00a0880 | 197\u00a0351 |
Cost of acquisition 31 December 2022 | 1\u00a0717\u00a0097 | 276\u00a0081 | 428\u00a0180 | 558\u00a0874 | 2\u00a0980\u00a0232 |
Accumulated amortization and impairment | |||||
Opening balance 1 January 2022 | 274 | 51\u00a0279 | 118\u00a0270 | 153\u00a0221 | 323\u00a0045 |
Amortization for the year from continuing operation | - | 14\u00a0278 | 16\u00a0424 | 28\u00a0453 | 59\u00a0156 |
Amortization for the year from discontinuing operation | - | 2\u00a0923 | 14\u00a0820 | 19\u00a0163 | 36\u00a0906 |
Impairment | - | - | - | - | - |
Disposals continuing operations | - | - | - | - | - |
Disposals discontinuing operations | - | (261) | (74) | - | (336) |
Translation differences | (274) | 2\u00a0538 | (5\u00a0769) | (5\u00a0888) | (9\u00a0393) |
Accumulated amortization and impairment 31 December 2022 | - | 70\u00a0757 | 143\u00a0672 | 194\u00a0950 | 409\u00a0379 |
Net carrying amount 31 December 2022 | 1\u00a0717\u00a0097 | 205\u00a0324 | 284\u00a0508 | 363\u00a0924 | 2\u00a0570\u00a0853 |
Useful life | Indefinite | 3\u201317 years | 5\u201320 years | 7\u201315 years | |
Amortization method | None | Straight-line | Straight-line | Straight-line |
Research & development costs totalling MNOK 38.0 (MNOK 50.0) were expensed in 2023. The Group has received government grants of MNOK 6.7 (MNOK 7.3) in 2023. MNOK 6.7 (MNOK 7.3) has been offset against research and development costs.
The Group has recognized goodwill as a result of several acquisitions of business enterprises. Each goodwill item is linked to a cash generating unit (CGU). When the acquired business enterprise is maintained as an independent business enterprise it is, as a starting point, the CGU. Entities that have con-siderable synergies and for which the type of activity is the same, are considered to be a unified CGU. This applies when acquired business enterprises are integrated with an existing Hexagon Composites company or the acquired business enterprise is, in operative terms, closely linked together with existing Hexagon Composites businesses. In these instances, it is the linking enterprise that is the level of the CGU where goodwill is measured and followed up. As of the end of 2023, the Group has three CGU\u2019s where capitalized goodwill has been allocated to, which are similar to the operating segments disclosed and pre-sented in note 4. Last year, the Group had four CGU\u2019s and four operating segments, including Hexagon Purus - which was deconsolidated and presented as discontinued operations on 29 June 2023.
Goodwill impairment testing
Goodwill is not depreciated but is subject to impair-ment testing in the fourth quarter each year. If there are particular indications of possible impairment, the impairment test is carried out on a quarterly basis. The impairment test is carried out by the cal-culated recoverable amount being compared with
invested capital for the unit in question. When the recoverable amount exceeds invested capital, capi-talized goodwill is maintained. When the recoverable amount is lower than invested capital, capitalized goodwill is written down to its recoverable amount. Invested capital consists of the units\u2019 total assets less interest-free current liabilities and interest-free non-current liabilities. The recoverable amount is based on expected future cash flows for the relevant unit based on the management\u2019s approved budget and strategy figures for the next five years. These are estimated based on current sales and margins and the expected market development. For subsequent periods it is assumed that there will be an increase in the cash flows equivalent to expected general growth within the various business areas.
The expected future investment requirements for the units are reflected in the calculations. These are in accordance with the management\u2019s approved budget and strategy. For the period beyond the next five years, it is assumed that the re-investment requirement will be equivalent to expected depreciation. Changes in working capital have been assessed and adjusted in accordance with expected developments.
When there are indications that a company\u2019s assets (including goodwill) may be impaired, an impairment test is conducted using the company\u2019s weighted average capital cost (WACC) as an esti-mate for the discount rate (= return on assets ratio). Correspondingly, WACC is also used for annual impairment testing. The WACC rate which is used to discount future cash flows is derived by the weighted average of the company\u2019s cost of equity and cost of debt, taking into account the 10-year risk-free interest
rates in the market, beta factor, market risk premium, the company\u2019s interest rate, and equity ratio.
Value in use is calculated by discounting future cash flows. Present value calculations are based on expected future cash flows for the different cash-gen-erating units, as described above and the units are not expected to have a finite useful life. The projections take into account appropriate and typically modest forms of growth in the cash flows into perpetuity.
Key assumptions used in value in use calculations
The most important assumptions for calculating value in use are related to estimates for operating revenues, EBITDA margins, discount rates and growth rates beyond the forecast period of 5 years. Discount rates have used have been matched and reflective of the currency of the cash flows being tested. The table below shows WACC rates used.
WACC rates used in impairment testing
Currency | 2023 | 2022 | ||
Post-tax | Pre-tax | Post-tax | Pre-tax | |
USD | 10.1% | 12.9% | 11.9% | 15.3% |
NOK | 9.6% | 12.3% | 11.4% | 14.6% |
The main reason for the lower WACC rates in 2023 compared to 2022 is related to exclusion of liquidity- and size premiums in determining cost of equity in 2023, as these premiums have been deemed no longer relevant for Hexagon.
All operating revenues and EBITDA margins are based on the stated forecast periods, past perfor-mance and management expectations of market
development for the future. Growth rates are consistent with industry and market forecasts except where conservatively applied outside the primary forecast periods.
Hexagon\u2019s primary forecast horizon is 5 years from 2024 to 2028 and from which projections are made, on a rolling 5 year basis, using prudently conserva-tive growth rates which collectively approximate to 15 per cent. Hexagon collectively employs targets of:
\u2022At least 15 per cent annual operating revenue growth
\u2022Attaining 15 per cent EBITDA margin
The differing CGUs within Hexagon may have differing revenue growth and EBITDA margins at differing periods of time, but collectively are expected to attain the Hexagon targets within the primary forecast horizon. Hexagon Digital Wave is in the middle of a transformational business plan, through digitalization, incorporating opex invest-ments over the next couple of years which weigh on positive margins short-term and increase growth in revenues and margins longer-term. The assump-tions used per CGU in relation to the Hexagon proforma targets are as follows:
\u2022Hexagon Agility attaining > target revenue growth and > target EBITDA margin
\u2022Hexagon Ragasco attaining < target revenue growth and > target EBITDA margin
\u2022Hexagon Digital Wave > target revenue growth and > target EBITDA margin
Growth beyond the forecast horizon are deter-mined based on general economic growth rates in the geographical markets Hexagon\u2019s businesses operate in.
The goodwill items of the following cash generating units have been subject to impairment testing
2023 | 2022 | |
Hexagon Agility | 1\u00a0162\u00a0713 | 1\u00a0124\u00a0360 |
Hexagon Digital Wave | 37\u00a0817 | 36\u00a0646 |
Hexagon Purus | - | 523\u00a0741 |
Hexagon Ragasco | 32\u00a0350 | 32\u00a0350 |
Total goodwill | 1\u00a0232\u00a0880 | 1\u00a0717\u00a0097 |
The assumptions that were used as a basis for the calculations made at the end of 2023 resulted in comfortable headroom for all of the above. Following the deconsolidation of Hexagon Purus as a subsidiary on 29 June 2023, the goodwill associated with Hexagon Purus was effectively derecognized on the same date, and has thus not been subject to goodwill impairment testing in 2023. See note 26for the Group\u2019s equity-accounted investment in Hexagon Purus and impairment assessments made for this investment specifically.
Other assumptions for the impairment testing of goodwill
The recoverable amount is calculated based on the general assumptions referred to above. The calcu-lations do not assume major changes in the nature of business activities compared with 2023. In the prognosis period, an increase in the operating profit equal to the general growth in the economy is, at a minimum, expected. The impairment testing is per-formed in the functional geographic currency of the CGU being USD for Hexagon Agility and Hexagon Digital Wave, and NOK for Hexagon Ragasco.
Sensitivity analyses for the goodwill
In connection with the impairment testing of good-will, the Group has carried out sensitivity analyses. These sensitivity analyses are carried out for each cash-generating unit. The present value of the cash flow in the calculations made is, among other things, sensitive to changes in the discount rate. The sensitivity analysis uses the economic assumptions referred to above as its starting point. Calculations have been made based on one of the estimated economic assumptions being changed and in which the other economic assumptions remain unchanged.
The sensitivity analyses for the CGU demonstrate that recoverable amounts of Hexagon Agility, Hexagon Ragasco and Hexagon Digital Wave good-will exceed the recognized value by a good margin, and a reasonable change in key assumption (+ 1.0 per cent for WACC and - 2.0 per cent on EBITDA margin) would not cause the carrying amount to exceed value in use.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f71081": { "value": "Research & development costs totalling MNOK 38.0 (MNOK 50.0) were expensed in 2023. The Group has received government grants of MNOK 6.7 (MNOK 7.3) in 2023. MNOK 6.7 (MNOK 7.3) has been offset against research and development costs.", "dimensions": { "concept": "ifrs-full:DisclosureOfResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f71082": { "value": "Research & development costs totalling MNOK 38.0 (MNOK 50.0) were expensed in 2023. The Group has received government grants of MNOK 6.7 (MNOK 7.3) in 2023. MNOK 6.7 (MNOK 7.3) has been offset against research and development costs.", "dimensions": { "concept": "ifrs-full:DisclosureOfGovernmentGrantsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__113-1": { "value": "Note 12\tOther non-current financial assets
(NOK 1\u00a0000) | 2023 | 2022 |
Interest swaps\u200c1 | 20\u00a0174 | 25\u00a0431 |
Loans to associated companies\u200c2 | 100\u00a0102 | 48\u00a0270 |
Other investments in shares | 5\u00a0391 | 389 |
Equity investments at fair value\u200c3 | - | 67\u00a0339 |
Total other non-current financial assets | 125\u00a0667 | 141\u00a0429 |
1On 16 May 2022, Hexagon Composites ASA entered into three float-to-fix interest rate swaps, a USD 10 million swap with a 10 year maturity, a USD 10 million swap with a 7 year maturity, and a USD 33 million swap with a 5 year maturity. The swaps principal value represents approxi-mately 40 per cent of the Company\u2019s term loan (NOK 1\u00a0100 million) and revolving credit facility (NOK 350 million).
2Loans to associated companies relates to loans granted to Cryoshelter Bio-LNG, where the Group holds a 40 per cent minority interest.
3Relates to Hexagon Purus\u2019 investment in Norwegian Hydrogen AS, which as of 27 August 2022, was subject to a fair value adjustment following reclassification from an associated company to an equity investment on the same date. See also note 26for further information and gain related to the reclassification.
Note 15\tOther current assets
(NOK 1\u00a0000) | 2023 | 2022 |
Prepaid expenses | 27\u00a0991 | 80\u00a0757 |
Prepayment to suppliers | - | 61\u00a0188 |
VAT refund | 7\u00a0504 | 6\u00a0956 |
Prepaid tax overseas | 30\u00a0343 | 1 992 |
Other receivables to associates | 29 123 | - |
Other\u200c1 | 45 799 | 37 878 |
Total other current assets | 140\u00a0760 | 188\u00a0772 |
1Other include receivables from the Skattefunn tax incentive scheme and other grants of NOK 3\u00a0500 thousand (4\u00a0820 thousand).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f72649": { "value": "Note 12\tOther non-current financial assets
(NOK 1\u00a0000) | 2023 | 2022 |
Interest swaps\u200c1 | 20\u00a0174 | 25\u00a0431 |
Loans to associated companies\u200c2 | 100\u00a0102 | 48\u00a0270 |
Other investments in shares | 5\u00a0391 | 389 |
Equity investments at fair value\u200c3 | - | 67\u00a0339 |
Total other non-current financial assets | 125\u00a0667 | 141\u00a0429 |
1On 16 May 2022, Hexagon Composites ASA entered into three float-to-fix interest rate swaps, a USD 10 million swap with a 10 year maturity, a USD 10 million swap with a 7 year maturity, and a USD 33 million swap with a 5 year maturity. The swaps principal value represents approxi-mately 40 per cent of the Company\u2019s term loan (NOK 1\u00a0100 million) and revolving credit facility (NOK 350 million).
2Loans to associated companies relates to loans granted to Cryoshelter Bio-LNG, where the Group holds a 40 per cent minority interest.
3Relates to Hexagon Purus\u2019 investment in Norwegian Hydrogen AS, which as of 27 August 2022, was subject to a fair value adjustment following reclassification from an associated company to an equity investment on the same date. See also note 26for further information and gain related to the reclassification.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f72899": { "value": "Note 13\tInventories
(NOK 1\u00a0000) | 2023 | 2022 |
Raw materials and consumables | 894\u00a0530 | 1\u00a0143\u00a0340 |
Work in progress | 54\u00a0576 | 176\u00a0940 |
Finished goods | 161\u00a0299 | 226\u00a0217 |
Total inventories | 1\u00a0110\u00a0406 | 1\u00a0546\u00a0497 |
Provision for obsolete inventory in balance sheet | (59\u00a0456) | (77\u00a0530) |
Carrying amount of holdings used as pledged assets | - | - |
Note 14\tTrade receivables
(NOK 1\u00a0000) | 2023 | 2022 |
Trade receivables | 559\u00a0809 | 878\u00a0568 |
Provisions for expected credit loss | (8\u00a0454) | (13\u00a0165) |
Trade receivables after provision for losses | 551\u00a0356 | 865\u00a0403 |
Carrying amount of trade receivables used as pledged assets | - | - |
Losses on trade receivables are classified as other operating expenses in the income statement. Set out below is the information about the credit risk exposure on the Group\u2019s trade receivables and contract assets using a provision matrix:
As of 31 December the company had the following ageing of trade receivables.
Contract assets | Total | Not due | <30 days | 30\u201360 days | 60\u201390 days | >90days | |
Expected credit loss rate 2023 | - | 1.5% | 0.2% | 0.8% | 1.3% | 1.7% | 40.2% |
Estimated total gross carrying amount at default 2023 | - | 559\u00a0809 | 425\u00a0056 | 106\u00a0069 | 7\u00a0769 | 4\u00a0867 | 16\u00a0048 |
Expected credit loss 2023 | - | 8\u00a0454 | 1\u00a0000 | 822 | 103 | 81 | 6\u00a0448 |
Expected credit loss rate 2022 | - | 1.5% | 0.4% | 0.2% | 4.5% | 16.7% | 12.3% |
Estimated total gross carrying amount at default 2022 | 9\u00a0488 | 878\u00a0568 | 540\u00a0017 | 222\u00a0194 | 55\u00a0274 | 11\u00a0861 | 49\u00a0222 |
Expected credit loss 2022 | - | 13\u00a0165 | 2\u00a0126 | 528 | 2\u00a0494 | 1\u00a0977 | 6\u00a0039 |
Changes in the provision for losses are as follows
2023 | 2022 | |
Opening balance 1 January | 13\u00a0165 | 10\u00a0915 |
Provision for losses for the year | (2\u00a0409) | 1\u00a0897 |
Actual losses during the year | (777) | (358) |
Derecognition from deconsolidation of subsidiary (Hexagon Purus) | (2\u00a0174) | - |
Translation differences | 649 | 712 |
Closing balance 31 December | 8\u00a0454 | 13\u00a0165 |
Credit risk and currency risk regarding trade receivables are described in more detail in note25.
Note 14\tTrade receivables
(NOK 1\u00a0000) | 2023 | 2022 |
Trade receivables | 559\u00a0809 | 878\u00a0568 |
Provisions for expected credit loss | (8\u00a0454) | (13\u00a0165) |
Trade receivables after provision for losses | 551\u00a0356 | 865\u00a0403 |
Carrying amount of trade receivables used as pledged assets | - | - |
Losses on trade receivables are classified as other operating expenses in the income statement. Set out below is the information about the credit risk exposure on the Group\u2019s trade receivables and contract assets using a provision matrix:
As of 31 December the company had the following ageing of trade receivables.
Contract assets | Total | Not due | <30 days | 30\u201360 days | 60\u201390 days | >90days | |
Expected credit loss rate 2023 | - | 1.5% | 0.2% | 0.8% | 1.3% | 1.7% | 40.2% |
Estimated total gross carrying amount at default 2023 | - | 559\u00a0809 | 425\u00a0056 | 106\u00a0069 | 7\u00a0769 | 4\u00a0867 | 16\u00a0048 |
Expected credit loss 2023 | - | 8\u00a0454 | 1\u00a0000 | 822 | 103 | 81 | 6\u00a0448 |
Expected credit loss rate 2022 | - | 1.5% | 0.4% | 0.2% | 4.5% | 16.7% | 12.3% |
Estimated total gross carrying amount at default 2022 | 9\u00a0488 | 878\u00a0568 | 540\u00a0017 | 222\u00a0194 | 55\u00a0274 | 11\u00a0861 | 49\u00a0222 |
Expected credit loss 2022 | - | 13\u00a0165 | 2\u00a0126 | 528 | 2\u00a0494 | 1\u00a0977 | 6\u00a0039 |
Changes in the provision for losses are as follows
2023 | 2022 | |
Opening balance 1 January | 13\u00a0165 | 10\u00a0915 |
Provision for losses for the year | (2\u00a0409) | 1\u00a0897 |
Actual losses during the year | (777) | (358) |
Derecognition from deconsolidation of subsidiary (Hexagon Purus) | (2\u00a0174) | - |
Translation differences | 649 | 712 |
Closing balance 31 December | 8\u00a0454 | 13\u00a0165 |
Credit risk and currency risk regarding trade receivables are described in more detail in note25.
Note 14\tTrade receivables
(NOK 1\u00a0000) | 2023 | 2022 |
Trade receivables | 559\u00a0809 | 878\u00a0568 |
Provisions for expected credit loss | (8\u00a0454) | (13\u00a0165) |
Trade receivables after provision for losses | 551\u00a0356 | 865\u00a0403 |
Carrying amount of trade receivables used as pledged assets | - | - |
Losses on trade receivables are classified as other operating expenses in the income statement. Set out below is the information about the credit risk exposure on the Group\u2019s trade receivables and contract assets using a provision matrix:
As of 31 December the company had the following ageing of trade receivables.
Contract assets | Total | Not due | <30 days | 30\u201360 days | 60\u201390 days | >90days | |
Expected credit loss rate 2023 | - | 1.5% | 0.2% | 0.8% | 1.3% | 1.7% | 40.2% |
Estimated total gross carrying amount at default 2023 | - | 559\u00a0809 | 425\u00a0056 | 106\u00a0069 | 7\u00a0769 | 4\u00a0867 | 16\u00a0048 |
Expected credit loss 2023 | - | 8\u00a0454 | 1\u00a0000 | 822 | 103 | 81 | 6\u00a0448 |
Expected credit loss rate 2022 | - | 1.5% | 0.4% | 0.2% | 4.5% | 16.7% | 12.3% |
Estimated total gross carrying amount at default 2022 | 9\u00a0488 | 878\u00a0568 | 540\u00a0017 | 222\u00a0194 | 55\u00a0274 | 11\u00a0861 | 49\u00a0222 |
Expected credit loss 2022 | - | 13\u00a0165 | 2\u00a0126 | 528 | 2\u00a0494 | 1\u00a0977 | 6\u00a0039 |
Changes in the provision for losses are as follows
2023 | 2022 | |
Opening balance 1 January | 13\u00a0165 | 10\u00a0915 |
Provision for losses for the year | (2\u00a0409) | 1\u00a0897 |
Actual losses during the year | (777) | (358) |
Derecognition from deconsolidation of subsidiary (Hexagon Purus) | (2\u00a0174) | - |
Translation differences | 649 | 712 |
Closing balance 31 December | 8\u00a0454 | 13\u00a0165 |
Credit risk and currency risk regarding trade receivables are described in more detail in note25.
Note 19\tProvisions
Non-current provisions
(NOK 1\u00a0000) | 2023 | 2022 |
Other non-current provisions | 8\u00a0594 | 6\u00a0133 |
Total non-current provisions | 8\u00a0594 | 6\u00a0133 |
Warranty provisions (current)
(NOK 1\u00a0000) | 2023 | 2022 |
Balance 1 January | 102\u00a0557 | 66\u00a0747 |
Derecognition from deconsolidation of subsidiary (Hexagon Purus) | (49\u00a0447) | - |
Provisions for year | 54\u00a0793 | 53\u00a0713 |
Translation differences | 5\u00a0903 | 6\u00a0708 |
Provisions used during year | (45\u00a0795) | (24\u00a0611) |
Balance 31 December | 68\u00a0011 | 102\u00a0557 |
The Group seeks to minimize the level of warranty or other claims from third parties through a diligent focus on quality. The Group also seeks to consistently recognize any potential impact of unanticipated events. Provisions are made for both general and, if required, specific warranty claims on low-pressure and high-pressure cylinders or on delivered systems. Such provisions are typically based on i) historical warranty costs levels for equivalent products and services, ii) our assessment of any ongoing third-party legal disputes or quality related matters in the ordinary course of business. In such cases, including products liability cases, the Group prepares estimates based on experience, professional judgment of legal counsel, and other assumptions it believes to be reasonable. The Group also recognizes an asset if insurance covers all or part of any recorded liability. As additional information becomes available, potential liability related to pending litigation is reassessed and related estimates are updated., and iii) a forward view based on the changing levels and complexity of our business activities within cylinder and systems business areas respectively.
The warranty period is mostly one year from delivery with exceptions for individual contracts. The provision can thereby be expected to be related to activity and new contracts.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f73560": { "value": "Note 15\tOther current assets
(NOK 1\u00a0000) | 2023 | 2022 |
Prepaid expenses | 27\u00a0991 | 80\u00a0757 |
Prepayment to suppliers | - | 61\u00a0188 |
VAT refund | 7\u00a0504 | 6\u00a0956 |
Prepaid tax overseas | 30\u00a0343 | 1 992 |
Other receivables to associates | 29 123 | - |
Other\u200c1 | 45 799 | 37 878 |
Total other current assets | 140\u00a0760 | 188\u00a0772 |
1Other include receivables from the Skattefunn tax incentive scheme and other grants of NOK 3\u00a0500 thousand (4\u00a0820 thousand).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f73561": { "value": "Note 15\tOther current assets
(NOK 1\u00a0000) | 2023 | 2022 |
Prepaid expenses | 27\u00a0991 | 80\u00a0757 |
Prepayment to suppliers | - | 61\u00a0188 |
VAT refund | 7\u00a0504 | 6\u00a0956 |
Prepaid tax overseas | 30\u00a0343 | 1 992 |
Other receivables to associates | 29 123 | - |
Other\u200c1 | 45 799 | 37 878 |
Total other current assets | 140\u00a0760 | 188\u00a0772 |
1Other include receivables from the Skattefunn tax incentive scheme and other grants of NOK 3\u00a0500 thousand (4\u00a0820 thousand).
", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f73695": { "value": "Note 16\tBank deposits, cash and cash equivalents
(NOK 1\u00a0000) | 2023 | 2022 |
Cash at bank and in hand | 154\u00a0350 | 713\u00a0547 |
Bank deposits, cash and cash equivalents | 154\u00a0350 | 713\u00a0547 |
Cash & cash equivalents in the cash flow analysis | 154\u00a0350 | 713\u00a0547 |
Undrawn Group overdraft facility | 238\u00a0745 | 135\u00a0769 |
Undrawn loan facilities | 350\u00a0000 | 225\u00a0000 |
Restricted funds included in cash & cash equivalents\u200c1 | 9\u00a0802 | 9\u00a0283 |
1Restricted tax withholdings.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f73696": { "value": "Note 16\tBank deposits, cash and cash equivalents
(NOK 1\u00a0000) | 2023 | 2022 |
Cash at bank and in hand | 154\u00a0350 | 713\u00a0547 |
Bank deposits, cash and cash equivalents | 154\u00a0350 | 713\u00a0547 |
Cash & cash equivalents in the cash flow analysis | 154\u00a0350 | 713\u00a0547 |
Undrawn Group overdraft facility | 238\u00a0745 | 135\u00a0769 |
Undrawn loan facilities | 350\u00a0000 | 225\u00a0000 |
Restricted funds included in cash & cash equivalents\u200c1 | 9\u00a0802 | 9\u00a0283 |
1Restricted tax withholdings.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f73870": { "value": "Note 17\tShare capital, shareholder information and dividend
(NOK 1\u00a0000) | 2023 | 2022 |
Ordinary shares of NOK 0.10 each | 201\u00a0619\u00a0712 | 201\u00a0619\u00a0712 |
Total number of shares | 201\u00a0619\u00a0712 | 201\u00a0619\u00a0712 |
The Company\u2019s share capital consists of one class of shares and is fully paid-up.
Changes in share capital and share premium
Number of shares | Share capital(NOK 1\u00a0000) | Share premium(NOK 1\u00a0000) | ||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
Ordinary shares | ||||||
Issued and paid 1 January | 201\u00a0619\u00a0712 | 201\u00a0619\u00a0712 | 20\u00a0162 | 20\u00a0162 | 2\u00a0075\u00a0999 | 2\u00a0075\u00a0999 |
Issued new share capital | - | - | - | - | - | - |
Transaction cost | - | - | ||||
Dividend in kind | (1\u00a0369\u00a0455) | - | ||||
Issued and paid 31 December | 201\u00a0619\u00a0712 | 201\u00a0619\u00a0712 | 20\u00a0162 | 20\u00a0162 | 706\u00a0544 | 2\u00a0075\u00a0999 |
Treasury shares | ||||||
1 January | 650\u00a0418 | 847\u00a0292 | 65 | 85 | ||
Change during period | 729\u00a0435 | (196\u00a0874) | 73 | (20) | ||
31 December | 1\u00a0379\u00a0853 | 650\u00a0418 | 138 | 65 |
As of 31 December 2023 the Company had 1\u00a0379\u00a0853 treasury shares (650\u00a0418). The cost of acquisition of NOK 50\u00a0358 thousand (NOK 18\u00a0789 thousand) is entered as a reduction in equity. The shares are held as \u201ctreasury shares\u201d, and the Company is entitled to sell them in the future.
20 Largest shareholders as of 31 December 2023 | Number of shares | Shareholding |
MITSUI & CO LTD | 45\u00a0833\u00a0321 | 22.73% |
CLEARSTREAM BANKING S.A. | 17\u00a0337\u00a0750 | 8.60% |
FLAKK COMPOSITES AS\u200c1 | 15\u00a0213\u00a0217 | 7.55% |
MP PENSJON PK | 12\u00a0073\u00a0762 | 5.99% |
BROWN BROTHERS HARRIMAN & CO | 5\u00a0584\u00a0136 | 2.77% |
BR\u00d8DR. B\u00d8CKMANN AS | 5\u00a0430\u00a0745 | 2.69% |
KTF FINANS AS\u200c1 | 5\u00a0000\u00a0000 | 2.48% |
FOLKETRYGDFONDET | 4\u00a0033\u00a0463 | 2.00% |
N\u00d8DINGEN AS | 3\u00a0992\u00a0956 | 1.98% |
STATE STREET BANK AND TRUST COMPANY | 3\u00a0278\u00a0311 | 1.63% |
RBC INVESTOR SERVICES TRUST | 3\u00a0023\u00a0977 | 1.50% |
JPMORGAN CHASE BANK, N.A., LONDON | 2\u00a0516\u00a0427 | 1.25% |
THE NORTHERN TRUST COMPANY, LONDON | 2\u00a0096\u00a0540 | 1.04% |
VERDIPAPIRFONDET STOREBRAND NORGE | 2\u00a0077\u00a0342 | 1.03% |
J.P. MORGAN SE | 2\u00a0027\u00a0430 | 1.01% |
UBS SWITZERLAND AG | 1\u00a0848\u00a0335 | 0.92% |
FLAKK GRUPPEN AS\u200c1 | 1\u00a0690\u00a0504 | 0.84% |
SKANDINAVISKA ENSKILDA BANKEN AB | 1\u00a0559\u00a0478 | 0.77% |
RBC INVESTOR SERVICES TRUST | 1\u00a0545\u00a0168 | 0.77% |
THE BANK OF NEW YORK MELLON SA/NV | 1\u00a0459\u00a0308 | 0.72% |
Total 20 largest shareholders | 137\u00a0622\u00a0170 | 68.26% |
Remainder | 63\u00a0997\u00a0542 | 31.74% |
Total | 201\u00a0619\u00a0712 | 100.00% |
1These shareholdings are controlled by the Chair of the Board, Knut Flakk.
Ownership structure
The total number of shareholders as of 31 December 2023 was 5\u00a0298 of whom 435 were foreign shareholders. The number of shares held by foreign shareholders was 120\u00a0841\u00a0131 or 60.0 per cent.
Dividend in kind NOK 1 369 million represents fair value of 69 164 402 shares in Hexagon Purus ASA distributed 29 June 2023 (see note 5). The Board proposes to the general assembly that there will be no further dividend to be paid for the fiscal year 2023.
Dividends are included as allocations to the owners in the period in which they are paid.
The Board has a mandate to increase share capital by up to NOK 2\u00a0016\u00a0195 by issuing up to 20\u00a0161\u00a0950 shares (par value NOK 0.10). This authorization is valid until the next ordinary general assembly and requires an unanimous Board resolution.
", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f73871": { "value": "Note 17\tShare capital, shareholder information and dividend
(NOK 1\u00a0000) | 2023 | 2022 |
Ordinary shares of NOK 0.10 each | 201\u00a0619\u00a0712 | 201\u00a0619\u00a0712 |
Total number of shares | 201\u00a0619\u00a0712 | 201\u00a0619\u00a0712 |
The Company\u2019s share capital consists of one class of shares and is fully paid-up.
Changes in share capital and share premium
Number of shares | Share capital(NOK 1\u00a0000) | Share premium(NOK 1\u00a0000) | ||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
Ordinary shares | ||||||
Issued and paid 1 January | 201\u00a0619\u00a0712 | 201\u00a0619\u00a0712 | 20\u00a0162 | 20\u00a0162 | 2\u00a0075\u00a0999 | 2\u00a0075\u00a0999 |
Issued new share capital | - | - | - | - | - | - |
Transaction cost | - | - | ||||
Dividend in kind | (1\u00a0369\u00a0455) | - | ||||
Issued and paid 31 December | 201\u00a0619\u00a0712 | 201\u00a0619\u00a0712 | 20\u00a0162 | 20\u00a0162 | 706\u00a0544 | 2\u00a0075\u00a0999 |
Treasury shares | ||||||
1 January | 650\u00a0418 | 847\u00a0292 | 65 | 85 | ||
Change during period | 729\u00a0435 | (196\u00a0874) | 73 | (20) | ||
31 December | 1\u00a0379\u00a0853 | 650\u00a0418 | 138 | 65 |
As of 31 December 2023 the Company had 1\u00a0379\u00a0853 treasury shares (650\u00a0418). The cost of acquisition of NOK 50\u00a0358 thousand (NOK 18\u00a0789 thousand) is entered as a reduction in equity. The shares are held as \u201ctreasury shares\u201d, and the Company is entitled to sell them in the future.
20 Largest shareholders as of 31 December 2023 | Number of shares | Shareholding |
MITSUI & CO LTD | 45\u00a0833\u00a0321 | 22.73% |
CLEARSTREAM BANKING S.A. | 17\u00a0337\u00a0750 | 8.60% |
FLAKK COMPOSITES AS\u200c1 | 15\u00a0213\u00a0217 | 7.55% |
MP PENSJON PK | 12\u00a0073\u00a0762 | 5.99% |
BROWN BROTHERS HARRIMAN & CO | 5\u00a0584\u00a0136 | 2.77% |
BR\u00d8DR. B\u00d8CKMANN AS | 5\u00a0430\u00a0745 | 2.69% |
KTF FINANS AS\u200c1 | 5\u00a0000\u00a0000 | 2.48% |
FOLKETRYGDFONDET | 4\u00a0033\u00a0463 | 2.00% |
N\u00d8DINGEN AS | 3\u00a0992\u00a0956 | 1.98% |
STATE STREET BANK AND TRUST COMPANY | 3\u00a0278\u00a0311 | 1.63% |
RBC INVESTOR SERVICES TRUST | 3\u00a0023\u00a0977 | 1.50% |
JPMORGAN CHASE BANK, N.A., LONDON | 2\u00a0516\u00a0427 | 1.25% |
THE NORTHERN TRUST COMPANY, LONDON | 2\u00a0096\u00a0540 | 1.04% |
VERDIPAPIRFONDET STOREBRAND NORGE | 2\u00a0077\u00a0342 | 1.03% |
J.P. MORGAN SE | 2\u00a0027\u00a0430 | 1.01% |
UBS SWITZERLAND AG | 1\u00a0848\u00a0335 | 0.92% |
FLAKK GRUPPEN AS\u200c1 | 1\u00a0690\u00a0504 | 0.84% |
SKANDINAVISKA ENSKILDA BANKEN AB | 1\u00a0559\u00a0478 | 0.77% |
RBC INVESTOR SERVICES TRUST | 1\u00a0545\u00a0168 | 0.77% |
THE BANK OF NEW YORK MELLON SA/NV | 1\u00a0459\u00a0308 | 0.72% |
Total 20 largest shareholders | 137\u00a0622\u00a0170 | 68.26% |
Remainder | 63\u00a0997\u00a0542 | 31.74% |
Total | 201\u00a0619\u00a0712 | 100.00% |
1These shareholdings are controlled by the Chair of the Board, Knut Flakk.
Ownership structure
The total number of shareholders as of 31 December 2023 was 5\u00a0298 of whom 435 were foreign shareholders. The number of shares held by foreign shareholders was 120\u00a0841\u00a0131 or 60.0 per cent.
Dividend in kind NOK 1 369 million represents fair value of 69 164 402 shares in Hexagon Purus ASA distributed 29 June 2023 (see note 5). The Board proposes to the general assembly that there will be no further dividend to be paid for the fiscal year 2023.
Dividends are included as allocations to the owners in the period in which they are paid.
The Board has a mandate to increase share capital by up to NOK 2\u00a0016\u00a0195 by issuing up to 20\u00a0161\u00a0950 shares (par value NOK 0.10). This authorization is valid until the next ordinary general assembly and requires an unanimous Board resolution.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f74178": { "value": "As of 31 December 2023 the Company had 1\u00a0379\u00a0853 treasury shares (650\u00a0418). The cost of acquisition of NOK 50\u00a0358 thousand (NOK 18\u00a0789 thousand) is entered as a reduction in equity. The shares are held as \u201ctreasury shares\u201d, and the Company is entitled to sell them in the future.", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__130-1": { "value": "Note 20\tInterest-bearing liabilities
2023 | 2022 | ||||||
(NOK 1\u00a0000) | Interest rate conditions | Currency | Maturity | Facility size | Carrying amount | ||
Facility size | Carrying amount | ||||||
Secured | |||||||
Term loan DNB and Danske Bank (bullet) | Nibor 3 month + margin | NOK | 9 Dec 2024 | 1\u00a0100\u00a0000 | 1\u00a0100\u00a0000 | 1\u00a0100\u00a0000 | 1\u00a0100\u00a0000 |
Revolving credit facility DNB and Danske Bank (bullet) | Nibor 3 month + margin | NOK | 9 Dec 2024\u200c\u200c | 350\u00a0000 | - | 350\u00a0000 | 350\u00a0000 |
Accordion facility DNB and Danske Bank (bullet) | Nibor 3 month + margin | NOK | 31 Mar 2024\u200c\u200c | - | - | 325\u00a0000 | 100\u00a0000 |
Overdraft facility DNB and Danske Bank | Nibor 3 month + margin | NOK | 9 Dec 2024 | 250\u00a0000 | 11\u00a0255 | 250\u00a0000 | 130\u00a0002 |
Total DNB and Danske Bank\u200c1 | 1\u00a0700\u00a0000 | 1\u00a0111\u00a0255 | 2\u00a0025\u00a0000 | 1\u00a0680\u00a0002 | |||
Bank loan Volksbank an der Niers AG | 1.55% | EUR | 30 Sep 2036 | N/A | - | N/A | 7\u00a0356 |
Bank loan Deutsche Bank AG | 1.96% | EUR | 30 Mar 2037 | N/A | - | N/A | 16\u00a0881 |
Bank loan Deutsche Bank AG | 2.88% | EUR | 30 Jun 2033 | N/A | - | N/A | 14\u00a0524 |
Bank loan Deutsche Bank AG | 1.79% | EUR | 30 Nov 2025 | N/A | - | N/A | 5\u00a0586 |
Overdraft facility Deutsche Bank | Euribor 3 month + margin | EUR | N/A | - | 15\u00a0771 | - | |
Total Deutsche Bank and Volkesbank\u200c2 | - | - | 15\u00a0771 | 44\u00a0347 | |||
Total secured interest-bearing liabilities | 1\u00a0700\u00a0000 | 1\u00a0111\u00a0255 | 2\u00a0040\u00a0771 | 1\u00a0724\u00a0348 | |||
Amortized transaction costs\u200c | (2\u00a0787) | (7\u00a0534) | |||||
Total interest-bearing liabilities | 1\u00a0108\u00a0468 | 1\u00a0716\u00a0815 | |||||
hereof current: | |||||||
Overdraft facility | 11\u00a0255 | 130\u00a0002 | |||||
Current interest bearing liabilities | 1\u00a0097\u00a0213 | 100\u00a0000 | |||||
1styear\u2019s instalments, classified as current | - | 4\u00a0673 | |||||
Total current interest-bearing liabilities | 1\u00a0108\u00a0468 | 234\u00a0674 | |||||
Total non-current interest bearing liabilities | - | 1 482 140 |
Estimated repayment structure for non-current\u00a0liabilities (NOK 1\u00a0000) as of 31 December 2023
2024 | 2025 | 2026 | 2027 | 2028 | There-after |
1\u00a0111\u00a0255 | - | - | - | - | - |
1On 9 December 2021, Hexagon Composites ASA entered into a Senior Secured bilateral loan facility with DNB and Danske Bank. The overall size of the committed facility was NOK 1\u00a0700 million, comprising a term loan of NOK 1\u00a0100 million, a multi-currency revolving credit facility (RCF) of NOK 350 million and an over-draft facility of NOK 250 million. The size of the uncommitted credit facility amounted to a maximum of NOK 400 million, where NOK 325 was called upon and became committed as of 30 September 2022. As of 31 December 2022 the total commit-ment under the facilities was NOK 2\u00a0025 million. During 2023, the accordion facility was released in full and is the committed amount as of 31 December 2023 is zero. The NOK 1\u00a0100 million term loan with DNB and Danske Bank matures in December 2024, and has thus been classified and presented as current interest bearing liabilities as of 31 December 2023. On the date of signing of these financial statements, Hexagon are in advanced discus-sions with its banking partners related to a refinancing of its debt facilities and aims to refinance its debt facilities well in advance of December 2024.
2The bank loans towards Volksbank and Deutsche Bank as of 31 December 2022 was related to Hexagon Purus\u2019 wholly owned subsidiary, Wystrach, which as of 31 December 2023 is no longer a component of Hexagon\u2019s group accounts following the decon-solidation of Hexagon Purus on 29 June 2023.
Covenants
As of 31 December 2023, financial covenants, related to equity ratio and leverage (NIBD/EBITDA) were in compliance with comfortable headrooms.
Reconciliation for liabilities arising from financing activities
(NOK 1\u00a0000) | Non-current interest-bearing liabilities | Non-current convertible bond loan | Current interest-bearing liabilities | Lease liabilities | Total |
Liabilities as of 1 January 2022 | 1\u00a0166\u00a0057 | - | 13\u00a0635 | 292\u00a0732 | 1 472 424 |
Financing activities with cash settlement | |||||
Repayment of non-current liabilities | - | - | (4\u00a0560) | - | (4\u00a0560) |
New interest bearing liabilities | 318\u00a0268 | - | 221\u00a0039 | - | 539\u00a0307 |
Repayment of lease liabilities | - | - | - | (74\u00a0025) | (74\u00a0025) |
Repayment of current liabilities | - | - | - | - | - |
Financing activities without cash settlement | |||||
New lease liabilities | - | - | - | 307\u00a0333 | 307\u00a0333 |
Reclassification 1styear\u2019s instalments | (4\u00a0673) | - | 4\u00a0673 | - | - |
Exchange differences | 2\u00a0089 | - | (113) | 25\u00a0551 | 27\u00a0528 |
Other transactions without cash settlement | 399 | - | - | - | 399 |
Liabilities as of 31 December 2022 | 1\u00a0482\u00a0140 | - | 234\u00a0674 | 551\u00a0592 | 2 268 406 |
(NOK 1\u00a0000) | Non-current interest-bearing liabilities | ||||
Non-current convertible bond loan | Current interest-bearing liabilities | ||||
Lease liabilities | |||||
Total | |||||
Liabilities as of 1 January 2023 | 1\u00a0482\u00a0140 | - | 234\u00a0674 | 551\u00a0592 | 2 268 406 |
Financing activities with cash settlement | |||||
Repayment of non-current liabilities | (365\u00a0398) | - | - | - | (365\u00a0398) |
New interest bearing liabilities | - | 800\u00a0000 | - | - | 800\u00a0000 |
Transaction costs | - | (23\u00a0091) | - | - | (23\u00a0091) |
Repayment of lease liabilities | - | - | - | (71\u00a0375) | (71\u00a0375) |
Repayment of current liabilities | - | - | (222\u00a0437) | - | (222\u00a0437) |
Financing activities without cash settlement | |||||
New lease liabilities | - | - | - | 108\u00a0189 | 108\u00a0189 |
Reclassifications non-current to current\u200c1 | (1\u00a0097\u00a0213) | - | 1\u00a0097\u00a0213 | - | - |
Exchange differences | 5\u00a0421 | - | - | 24\u00a0528 | 29\u00a0949 |
Equity component of convertible bond less transaction costs | - | (270\u00a0318) | - | - | (270\u00a0318) |
Other transactions without cash settlement | 5\u00a0604 | 21\u00a0024 | - | - | 26\u00a0628 |
Derecognition from deconsolidation of subsidiary | (30\u00a0554) | (527\u00a0615) | (982) | (163\u00a0807) | (722\u00a0959) |
Liabilities as of 31 December 2023 | - | - | 1\u00a0108\u00a0468 | 449\u00a0127 | 1 557 595 |
1The NOK 800 million convertible bond issuance in 2023 relates to Hexagon Purus ASA, which was derecognized as a subsidiary on 29 June 2023. A total of NOK 723 million of interest bearing financial liabilities were derecognized from Hexagon\u2019s group accounts following the deconsolidation of Hexagon Purus.
Note 22\tCurrent interest-bearing liabilities
(NOK 1\u00a0000) | 2023 | 2022 |
Current interest-bearing liabilities \u2013 overdraft facility | 11\u00a0255 | 130\u00a0002 |
Current interest-bearing liabilities \u2013 term loan | 1\u00a0097\u00a0213 | 100\u00a0000 |
1styear\u2019s instalments on non-current interest-bearing liabilities | - | 4\u00a0673 |
Total current interest-bearing liabilities | 1\u00a0108\u00a0468 | 234\u00a0674 |
1styear\u2019s instalments, lease liabilities | 61\u00a0867 | 70\u00a0574 |
Total | 1\u00a0170\u00a0335 | 305\u00a0248 |
Current interest-bearing debt is subject to the same financial terms as the secured non-current interest-bearing debt disclosed in note 20note 20. The overdraft facilities within the Group are generally priced on base rate + margin, in addition to periodic charges related to the provision of the facilities.. The overdraft facilities within the Group are generally priced on base rate + margin, in addition to periodic charges related to the provision of the facilities.
The NOK 1\u00a0100 million term loan with DNB and Danske Bank matures in December 2024, and has thus been clas-sified and presented as current interest bearing liabilities as of 31 December 2023. On the date of signing of these financial statements, Hexagon are in advanced discussions with its banking partners related to a refinancing of its debt facilities and aims to refinance its debt facilities well in advance of December 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__131-1": { "value": "Note 20\tInterest-bearing liabilities
2023 | 2022 | ||||||
(NOK 1\u00a0000) | Interest rate conditions | Currency | Maturity | Facility size | Carrying amount | ||
Facility size | Carrying amount | ||||||
Secured | |||||||
Term loan DNB and Danske Bank (bullet) | Nibor 3 month + margin | NOK | 9 Dec 2024 | 1\u00a0100\u00a0000 | 1\u00a0100\u00a0000 | 1\u00a0100\u00a0000 | 1\u00a0100\u00a0000 |
Revolving credit facility DNB and Danske Bank (bullet) | Nibor 3 month + margin | NOK | 9 Dec 2024\u200c\u200c | 350\u00a0000 | - | 350\u00a0000 | 350\u00a0000 |
Accordion facility DNB and Danske Bank (bullet) | Nibor 3 month + margin | NOK | 31 Mar 2024\u200c\u200c | - | - | 325\u00a0000 | 100\u00a0000 |
Overdraft facility DNB and Danske Bank | Nibor 3 month + margin | NOK | 9 Dec 2024 | 250\u00a0000 | 11\u00a0255 | 250\u00a0000 | 130\u00a0002 |
Total DNB and Danske Bank\u200c1 | 1\u00a0700\u00a0000 | 1\u00a0111\u00a0255 | 2\u00a0025\u00a0000 | 1\u00a0680\u00a0002 | |||
Bank loan Volksbank an der Niers AG | 1.55% | EUR | 30 Sep 2036 | N/A | - | N/A | 7\u00a0356 |
Bank loan Deutsche Bank AG | 1.96% | EUR | 30 Mar 2037 | N/A | - | N/A | 16\u00a0881 |
Bank loan Deutsche Bank AG | 2.88% | EUR | 30 Jun 2033 | N/A | - | N/A | 14\u00a0524 |
Bank loan Deutsche Bank AG | 1.79% | EUR | 30 Nov 2025 | N/A | - | N/A | 5\u00a0586 |
Overdraft facility Deutsche Bank | Euribor 3 month + margin | EUR | N/A | - | 15\u00a0771 | - | |
Total Deutsche Bank and Volkesbank\u200c2 | - | - | 15\u00a0771 | 44\u00a0347 | |||
Total secured interest-bearing liabilities | 1\u00a0700\u00a0000 | 1\u00a0111\u00a0255 | 2\u00a0040\u00a0771 | 1\u00a0724\u00a0348 | |||
Amortized transaction costs\u200c | (2\u00a0787) | (7\u00a0534) | |||||
Total interest-bearing liabilities | 1\u00a0108\u00a0468 | 1\u00a0716\u00a0815 | |||||
hereof current: | |||||||
Overdraft facility | 11\u00a0255 | 130\u00a0002 | |||||
Current interest bearing liabilities | 1\u00a0097\u00a0213 | 100\u00a0000 | |||||
1styear\u2019s instalments, classified as current | - | 4\u00a0673 | |||||
Total current interest-bearing liabilities | 1\u00a0108\u00a0468 | 234\u00a0674 | |||||
Total non-current interest bearing liabilities | - | 1 482 140 |
Estimated repayment structure for non-current\u00a0liabilities (NOK 1\u00a0000) as of 31 December 2023
2024 | 2025 | 2026 | 2027 | 2028 | There-after |
1\u00a0111\u00a0255 | - | - | - | - | - |
1On 9 December 2021, Hexagon Composites ASA entered into a Senior Secured bilateral loan facility with DNB and Danske Bank. The overall size of the committed facility was NOK 1\u00a0700 million, comprising a term loan of NOK 1\u00a0100 million, a multi-currency revolving credit facility (RCF) of NOK 350 million and an over-draft facility of NOK 250 million. The size of the uncommitted credit facility amounted to a maximum of NOK 400 million, where NOK 325 was called upon and became committed as of 30 September 2022. As of 31 December 2022 the total commit-ment under the facilities was NOK 2\u00a0025 million. During 2023, the accordion facility was released in full and is the committed amount as of 31 December 2023 is zero. The NOK 1\u00a0100 million term loan with DNB and Danske Bank matures in December 2024, and has thus been classified and presented as current interest bearing liabilities as of 31 December 2023. On the date of signing of these financial statements, Hexagon are in advanced discus-sions with its banking partners related to a refinancing of its debt facilities and aims to refinance its debt facilities well in advance of December 2024.
2The bank loans towards Volksbank and Deutsche Bank as of 31 December 2022 was related to Hexagon Purus\u2019 wholly owned subsidiary, Wystrach, which as of 31 December 2023 is no longer a component of Hexagon\u2019s group accounts following the decon-solidation of Hexagon Purus on 29 June 2023.
Covenants
As of 31 December 2023, financial covenants, related to equity ratio and leverage (NIBD/EBITDA) were in compliance with comfortable headrooms.
Reconciliation for liabilities arising from financing activities
(NOK 1\u00a0000) | Non-current interest-bearing liabilities | Non-current convertible bond loan | Current interest-bearing liabilities | Lease liabilities | Total |
Liabilities as of 1 January 2022 | 1\u00a0166\u00a0057 | - | 13\u00a0635 | 292\u00a0732 | 1 472 424 |
Financing activities with cash settlement | |||||
Repayment of non-current liabilities | - | - | (4\u00a0560) | - | (4\u00a0560) |
New interest bearing liabilities | 318\u00a0268 | - | 221\u00a0039 | - | 539\u00a0307 |
Repayment of lease liabilities | - | - | - | (74\u00a0025) | (74\u00a0025) |
Repayment of current liabilities | - | - | - | - | - |
Financing activities without cash settlement | |||||
New lease liabilities | - | - | - | 307\u00a0333 | 307\u00a0333 |
Reclassification 1styear\u2019s instalments | (4\u00a0673) | - | 4\u00a0673 | - | - |
Exchange differences | 2\u00a0089 | - | (113) | 25\u00a0551 | 27\u00a0528 |
Other transactions without cash settlement | 399 | - | - | - | 399 |
Liabilities as of 31 December 2022 | 1\u00a0482\u00a0140 | - | 234\u00a0674 | 551\u00a0592 | 2 268 406 |
(NOK 1\u00a0000) | Non-current interest-bearing liabilities | ||||
Non-current convertible bond loan | Current interest-bearing liabilities | ||||
Lease liabilities | |||||
Total | |||||
Liabilities as of 1 January 2023 | 1\u00a0482\u00a0140 | - | 234\u00a0674 | 551\u00a0592 | 2 268 406 |
Financing activities with cash settlement | |||||
Repayment of non-current liabilities | (365\u00a0398) | - | - | - | (365\u00a0398) |
New interest bearing liabilities | - | 800\u00a0000 | - | - | 800\u00a0000 |
Transaction costs | - | (23\u00a0091) | - | - | (23\u00a0091) |
Repayment of lease liabilities | - | - | - | (71\u00a0375) | (71\u00a0375) |
Repayment of current liabilities | - | - | (222\u00a0437) | - | (222\u00a0437) |
Financing activities without cash settlement | |||||
New lease liabilities | - | - | - | 108\u00a0189 | 108\u00a0189 |
Reclassifications non-current to current\u200c1 | (1\u00a0097\u00a0213) | - | 1\u00a0097\u00a0213 | - | - |
Exchange differences | 5\u00a0421 | - | - | 24\u00a0528 | 29\u00a0949 |
Equity component of convertible bond less transaction costs | - | (270\u00a0318) | - | - | (270\u00a0318) |
Other transactions without cash settlement | 5\u00a0604 | 21\u00a0024 | - | - | 26\u00a0628 |
Derecognition from deconsolidation of subsidiary | (30\u00a0554) | (527\u00a0615) | (982) | (163\u00a0807) | (722\u00a0959) |
Liabilities as of 31 December 2023 | - | - | 1\u00a0108\u00a0468 | 449\u00a0127 | 1 557 595 |
1The NOK 800 million convertible bond issuance in 2023 relates to Hexagon Purus ASA, which was derecognized as a subsidiary on 29 June 2023. A total of NOK 723 million of interest bearing financial liabilities were derecognized from Hexagon\u2019s group accounts following the deconsolidation of Hexagon Purus.
The following table shows the group\u2019s sensitivity to potential changes in interest rates. The calculations take into account all interest-bearing instruments and associated interest rate derivatives (if any) as of 31 December
Change in interestrates in base points | Effect on profit/lossbefore tax (NOK 1\u00a0000) | Gains or losses on interest rate derivatives in other comprehensive income before tax (NOK 1\u00a0000) | |
2023 | +100 | (5\u00a0721) | - |
(100) | 5\u00a0721 | - | |
2022 | +100 | (11\u00a0944) | - |
(100) | 11\u00a0944 | - |
Based on the interest bearing liabilities which existed as of 31 December 2023, an interest rate increase of 1% would reduce profit after tax by NOK 4 462 thousand (9\u00a0316 thousand).
The average effective interest rate on financial liabilities was as follows:
2023 | 2022 | |
Bank overdrafts | 3.8\u20136.7% | 1.4\u20135.7% |
Bank loan | 6.1\u20138.2% | 1.5\u20137.4% |
Lease liabilities | 1\u20138.0% | 1\u201310.5% |
Note 20\tInterest-bearing liabilities
2023 | 2022 | ||||||
(NOK 1\u00a0000) | Interest rate conditions | Currency | Maturity | Facility size | Carrying amount | ||
Facility size | Carrying amount | ||||||
Secured | |||||||
Term loan DNB and Danske Bank (bullet) | Nibor 3 month + margin | NOK | 9 Dec 2024 | 1\u00a0100\u00a0000 | 1\u00a0100\u00a0000 | 1\u00a0100\u00a0000 | 1\u00a0100\u00a0000 |
Revolving credit facility DNB and Danske Bank (bullet) | Nibor 3 month + margin | NOK | 9 Dec 2024\u200c\u200c | 350\u00a0000 | - | 350\u00a0000 | 350\u00a0000 |
Accordion facility DNB and Danske Bank (bullet) | Nibor 3 month + margin | NOK | 31 Mar 2024\u200c\u200c | - | - | 325\u00a0000 | 100\u00a0000 |
Overdraft facility DNB and Danske Bank | Nibor 3 month + margin | NOK | 9 Dec 2024 | 250\u00a0000 | 11\u00a0255 | 250\u00a0000 | 130\u00a0002 |
Total DNB and Danske Bank\u200c1 | 1\u00a0700\u00a0000 | 1\u00a0111\u00a0255 | 2\u00a0025\u00a0000 | 1\u00a0680\u00a0002 | |||
Bank loan Volksbank an der Niers AG | 1.55% | EUR | 30 Sep 2036 | N/A | - | N/A | 7\u00a0356 |
Bank loan Deutsche Bank AG | 1.96% | EUR | 30 Mar 2037 | N/A | - | N/A | 16\u00a0881 |
Bank loan Deutsche Bank AG | 2.88% | EUR | 30 Jun 2033 | N/A | - | N/A | 14\u00a0524 |
Bank loan Deutsche Bank AG | 1.79% | EUR | 30 Nov 2025 | N/A | - | N/A | 5\u00a0586 |
Overdraft facility Deutsche Bank | Euribor 3 month + margin | EUR | N/A | - | 15\u00a0771 | - | |
Total Deutsche Bank and Volkesbank\u200c2 | - | - | 15\u00a0771 | 44\u00a0347 | |||
Total secured interest-bearing liabilities | 1\u00a0700\u00a0000 | 1\u00a0111\u00a0255 | 2\u00a0040\u00a0771 | 1\u00a0724\u00a0348 | |||
Amortized transaction costs\u200c | (2\u00a0787) | (7\u00a0534) | |||||
Total interest-bearing liabilities | 1\u00a0108\u00a0468 | 1\u00a0716\u00a0815 | |||||
hereof current: | |||||||
Overdraft facility | 11\u00a0255 | 130\u00a0002 | |||||
Current interest bearing liabilities | 1\u00a0097\u00a0213 | 100\u00a0000 | |||||
1styear\u2019s instalments, classified as current | - | 4\u00a0673 | |||||
Total current interest-bearing liabilities | 1\u00a0108\u00a0468 | 234\u00a0674 | |||||
Total non-current interest bearing liabilities | - | 1 482 140 |
Estimated repayment structure for non-current\u00a0liabilities (NOK 1\u00a0000) as of 31 December 2023
2024 | 2025 | 2026 | 2027 | 2028 | There-after |
1\u00a0111\u00a0255 | - | - | - | - | - |
1On 9 December 2021, Hexagon Composites ASA entered into a Senior Secured bilateral loan facility with DNB and Danske Bank. The overall size of the committed facility was NOK 1\u00a0700 million, comprising a term loan of NOK 1\u00a0100 million, a multi-currency revolving credit facility (RCF) of NOK 350 million and an over-draft facility of NOK 250 million. The size of the uncommitted credit facility amounted to a maximum of NOK 400 million, where NOK 325 was called upon and became committed as of 30 September 2022. As of 31 December 2022 the total commit-ment under the facilities was NOK 2\u00a0025 million. During 2023, the accordion facility was released in full and is the committed amount as of 31 December 2023 is zero. The NOK 1\u00a0100 million term loan with DNB and Danske Bank matures in December 2024, and has thus been classified and presented as current interest bearing liabilities as of 31 December 2023. On the date of signing of these financial statements, Hexagon are in advanced discus-sions with its banking partners related to a refinancing of its debt facilities and aims to refinance its debt facilities well in advance of December 2024.
2The bank loans towards Volksbank and Deutsche Bank as of 31 December 2022 was related to Hexagon Purus\u2019 wholly owned subsidiary, Wystrach, which as of 31 December 2023 is no longer a component of Hexagon\u2019s group accounts following the decon-solidation of Hexagon Purus on 29 June 2023.
Covenants
As of 31 December 2023, financial covenants, related to equity ratio and leverage (NIBD/EBITDA) were in compliance with comfortable headrooms.
Reconciliation for liabilities arising from financing activities
(NOK 1\u00a0000) | Non-current interest-bearing liabilities | Non-current convertible bond loan | Current interest-bearing liabilities | Lease liabilities | Total |
Liabilities as of 1 January 2022 | 1\u00a0166\u00a0057 | - | 13\u00a0635 | 292\u00a0732 | 1 472 424 |
Financing activities with cash settlement | |||||
Repayment of non-current liabilities | - | - | (4\u00a0560) | - | (4\u00a0560) |
New interest bearing liabilities | 318\u00a0268 | - | 221\u00a0039 | - | 539\u00a0307 |
Repayment of lease liabilities | - | - | - | (74\u00a0025) | (74\u00a0025) |
Repayment of current liabilities | - | - | - | - | - |
Financing activities without cash settlement | |||||
New lease liabilities | - | - | - | 307\u00a0333 | 307\u00a0333 |
Reclassification 1styear\u2019s instalments | (4\u00a0673) | - | 4\u00a0673 | - | - |
Exchange differences | 2\u00a0089 | - | (113) | 25\u00a0551 | 27\u00a0528 |
Other transactions without cash settlement | 399 | - | - | - | 399 |
Liabilities as of 31 December 2022 | 1\u00a0482\u00a0140 | - | 234\u00a0674 | 551\u00a0592 | 2 268 406 |
(NOK 1\u00a0000) | Non-current interest-bearing liabilities | ||||
Non-current convertible bond loan | Current interest-bearing liabilities | ||||
Lease liabilities | |||||
Total | |||||
Liabilities as of 1 January 2023 | 1\u00a0482\u00a0140 | - | 234\u00a0674 | 551\u00a0592 | 2 268 406 |
Financing activities with cash settlement | |||||
Repayment of non-current liabilities | (365\u00a0398) | - | - | - | (365\u00a0398) |
New interest bearing liabilities | - | 800\u00a0000 | - | - | 800\u00a0000 |
Transaction costs | - | (23\u00a0091) | - | - | (23\u00a0091) |
Repayment of lease liabilities | - | - | - | (71\u00a0375) | (71\u00a0375) |
Repayment of current liabilities | - | - | (222\u00a0437) | - | (222\u00a0437) |
Financing activities without cash settlement | |||||
New lease liabilities | - | - | - | 108\u00a0189 | 108\u00a0189 |
Reclassifications non-current to current\u200c1 | (1\u00a0097\u00a0213) | - | 1\u00a0097\u00a0213 | - | - |
Exchange differences | 5\u00a0421 | - | - | 24\u00a0528 | 29\u00a0949 |
Equity component of convertible bond less transaction costs | - | (270\u00a0318) | - | - | (270\u00a0318) |
Other transactions without cash settlement | 5\u00a0604 | 21\u00a0024 | - | - | 26\u00a0628 |
Derecognition from deconsolidation of subsidiary | (30\u00a0554) | (527\u00a0615) | (982) | (163\u00a0807) | (722\u00a0959) |
Liabilities as of 31 December 2023 | - | - | 1\u00a0108\u00a0468 | 449\u00a0127 | 1 557 595 |
1The NOK 800 million convertible bond issuance in 2023 relates to Hexagon Purus ASA, which was derecognized as a subsidiary on 29 June 2023. A total of NOK 723 million of interest bearing financial liabilities were derecognized from Hexagon\u2019s group accounts following the deconsolidation of Hexagon Purus.
Reconciliation for liabilities arising from financing activities
(NOK 1\u00a0000) | Non-current interest-bearing liabilities | Non-current convertible bond loan | Current interest-bearing liabilities | Lease liabilities | Total |
Liabilities as of 1 January 2022 | 1\u00a0166\u00a0057 | - | 13\u00a0635 | 292\u00a0732 | 1 472 424 |
Financing activities with cash settlement | |||||
Repayment of non-current liabilities | - | - | (4\u00a0560) | - | (4\u00a0560) |
New interest bearing liabilities | 318\u00a0268 | - | 221\u00a0039 | - | 539\u00a0307 |
Repayment of lease liabilities | - | - | - | (74\u00a0025) | (74\u00a0025) |
Repayment of current liabilities | - | - | - | - | - |
Financing activities without cash settlement | |||||
New lease liabilities | - | - | - | 307\u00a0333 | 307\u00a0333 |
Reclassification 1styear\u2019s instalments | (4\u00a0673) | - | 4\u00a0673 | - | - |
Exchange differences | 2\u00a0089 | - | (113) | 25\u00a0551 | 27\u00a0528 |
Other transactions without cash settlement | 399 | - | - | - | 399 |
Liabilities as of 31 December 2022 | 1\u00a0482\u00a0140 | - | 234\u00a0674 | 551\u00a0592 | 2 268 406 |
(NOK 1\u00a0000) | Non-current interest-bearing liabilities | ||||
Non-current convertible bond loan | Current interest-bearing liabilities | ||||
Lease liabilities | |||||
Total | |||||
Liabilities as of 1 January 2023 | 1\u00a0482\u00a0140 | - | 234\u00a0674 | 551\u00a0592 | 2 268 406 |
Financing activities with cash settlement | |||||
Repayment of non-current liabilities | (365\u00a0398) | - | - | - | (365\u00a0398) |
New interest bearing liabilities | - | 800\u00a0000 | - | - | 800\u00a0000 |
Transaction costs | - | (23\u00a0091) | - | - | (23\u00a0091) |
Repayment of lease liabilities | - | - | - | (71\u00a0375) | (71\u00a0375) |
Repayment of current liabilities | - | - | (222\u00a0437) | - | (222\u00a0437) |
Financing activities without cash settlement | |||||
New lease liabilities | - | - | - | 108\u00a0189 | 108\u00a0189 |
Reclassifications non-current to current\u200c1 | (1\u00a0097\u00a0213) | - | 1\u00a0097\u00a0213 | - | - |
Exchange differences | 5\u00a0421 | - | - | 24\u00a0528 | 29\u00a0949 |
Equity component of convertible bond less transaction costs | - | (270\u00a0318) | - | - | (270\u00a0318) |
Other transactions without cash settlement | 5\u00a0604 | 21\u00a0024 | - | - | 26\u00a0628 |
Derecognition from deconsolidation of subsidiary | (30\u00a0554) | (527\u00a0615) | (982) | (163\u00a0807) | (722\u00a0959) |
Liabilities as of 31 December 2023 | - | - | 1\u00a0108\u00a0468 | 449\u00a0127 | 1 557 595 |
1The NOK 800 million convertible bond issuance in 2023 relates to Hexagon Purus ASA, which was derecognized as a subsidiary on 29 June 2023. A total of NOK 723 million of interest bearing financial liabilities were derecognized from Hexagon\u2019s group accounts following the deconsolidation of Hexagon Purus.
Note 22\tCurrent interest-bearing liabilities
(NOK 1\u00a0000) | 2023 | 2022 |
Current interest-bearing liabilities \u2013 overdraft facility | 11\u00a0255 | 130\u00a0002 |
Current interest-bearing liabilities \u2013 term loan | 1\u00a0097\u00a0213 | 100\u00a0000 |
1styear\u2019s instalments on non-current interest-bearing liabilities | - | 4\u00a0673 |
Total current interest-bearing liabilities | 1\u00a0108\u00a0468 | 234\u00a0674 |
1styear\u2019s instalments, lease liabilities | 61\u00a0867 | 70\u00a0574 |
Total | 1\u00a0170\u00a0335 | 305\u00a0248 |
Note 24\tLeases
Right of use assets (NOK 1\u00a0000) | Land and buildings | Plant and equipment | Fixtures\u00a0& fittings, vehicles | 2023Total |
At cost | ||||
Cost of acquisition 1 January | 592\u00a0722 | 83\u00a0951 | 9\u00a0102 | 685\u00a0775 |
Additions continuing operations | 98\u00a0052 | - | 6\u00a0878 | 104\u00a0930 |
Additions discontinued operations | 6\u00a0384 | 1\u00a0497 | 1\u00a0388 | 9\u00a0270 |
Expirations at maturity continuing operations | (12\u00a0603) | - | (958) | (13\u00a0560) |
Expirations at maturity discontinued operations | (35\u00a0296) | (304) | (782) | (36\u00a0382) |
Derecognition from deconsolidation of subsidiary | (175\u00a0106) | (24\u00a0447) | (6\u00a0956) | (206\u00a0508) |
Translation differences | 23\u00a0704 | 6\u00a0176 | 486 | 30\u00a0366 |
Cost of acquisition 31 December | 497\u00a0858 | 66\u00a0873 | 9\u00a0159 | 573\u00a0890 |
Accumulated depreciation and impairment | ||||
Accumulated depreciation and impairment 1 January | 158\u00a0230 | 49\u00a0208 | 5\u00a0105 | 212\u00a0542 |
Depreciations continuing operations | 59\u00a0098 | 8\u00a0880 | 1\u00a0333 | 69\u00a0311 |
Depreciations discontinued operations | 10\u00a0694 | 2\u00a0464 | 723 | 13\u00a0881 |
Expirations at maturity continuing operations | (8 522) | - | (958) | (9 479) |
Expirations at maturity discontinued operations | (35 296) | (304) | (782) | (36 383) |
Derecognition from deconsolidation of subsidiary | (35\u00a0029) | (8\u00a0472) | (3\u00a0715) | (47\u00a0216) |
Translation differences | 1\u00a0944 | 3\u00a0370 | 296 | 5\u00a0610 |
Accumulated depreciation and impairment | 151\u00a0119 | 55\u00a0145 | 2\u00a0002 | 208\u00a0266 |
Carrying amount as of 31 December | 346\u00a0739 | 11\u00a0728 | 7\u00a0157 | 365\u00a0624 |
Useful life | 3\u201317 years | 3\u20137 years | 2\u20135 years | |
Depreciation method | Straight-line | Straight-line | Straight-line |
Discontinued operations
On 29 June 2023, Hexagon Purus was effectively deconsolidated from the group accounts of Hexagon Composites, see also note 5. Due this, Hexagon Purus\u2019 figures up to and including 29 June 2023, have been presented separately as discontinued operations
Right of use assets (NOK 1\u00a0000) | Land and buildings | Plant and equipment | Fixtures\u00a0& fittings, vehicles | 2022Total |
At cost | ||||
Cost of acquisition 1 January | 373\u00a0042 | 78\u00a0270 | 5\u00a0537 | 456\u00a0849 |
Additions continuing operations | 122\u00a0154 | - | 1\u00a0366 | 123\u00a0520 |
Additions discontinued operations | 118\u00a0929 | 1\u00a0505 | 2\u00a0038 | 122\u00a0472 |
Expirations at maturity continuing operations | (52\u00a0166) | - | (262) | (52\u00a0428) |
Expirations at maturity discontinued operations | - | - | - | - |
Translation differences | 30\u00a0763 | 4\u00a0175 | 424 | 35\u00a0362 |
Cost of acquisition 31 December | 592\u00a0722 | 83\u00a0951 | 9\u00a0102 | 685\u00a0775 |
Accumulated depreciation and impairment | ||||
Accumulated depreciation and impairment 1 January | 136\u00a0613 | 34\u00a0391 | 3\u00a0536 | 174\u00a0540 |
Depreciations continuing operations | 48\u00a0486 | 7\u00a0838 | 547 | 56\u00a0871 |
Depreciations discontinued operations | 18\u00a0387 | 4\u00a0937 | 1\u00a0079 | 24\u00a0404 |
Expirations at maturity continuing operations | (52\u00a0166) | - | (262) | (52\u00a0428) |
Expirations at maturity discontinued operations | - | |||
Translation differences | 6\u00a0909 | 2\u00a0041 | 205 | 9\u00a0156 |
Accumulated depreciation and impairment | 158\u00a0230 | 49\u00a0208 | 5\u00a0105 | 212\u00a0542 |
Carrying amount as of 31 December | 434\u00a0492 | 34\u00a0743 | 3\u00a0998 | 473\u00a0233 |
Useful life | 3\u201317 years | 3\u20137 years | 2\u20135 years | |
Depreciation method | Straight-line | Straight-line | Straight-line |
Sale- and leaseback transactions
On 31 December 2022, Agility North Carolina LLC, a wholly owned subsidiary of Hexagon within the Hexagon Agility segment, affected a sale- and leaseback transaction of its facility in Salisbury, North Carolina. The facility consists of approximately 19\u00a0000 square metres for production and assembly of fuel systems, as well as approx-imately 144\u00a0000 square metres of land. The consideration received for the facility amounted to NOK 161 million, which resulted in an accounting gain of NOK 8 million net of transaction costs. The gain is presented as other operating income in the income statement.
The lease agreement has a lease term of 16 years with options to extend for two 10 year periods. Initial recognition of lease liability per 31 December was NOK 135 million. Extension options are, due to uncertainty of exercising, not included in the lease liability calculation. Recognized right of use asset amounted to NOK 72 million representing a 84 per cent proportionate share (derived by the ration of the recognized lease liability over the of the facility\u2019s fair market value), pre-sale book value of NOK 86 million.
In addition to the affected sale-and leaseback transaction of the existing facility in Salisbury, North Carolina, the buyer also acquired the right to develop Agility\u2019s planned NOK 136 million expansion of the Salisbury facility. The expansion is estimated to commence in January 2025, where a separate lease agreement will be entered into with the buyer. Both the sale-and leaseback agreement and the outsourcing of the expansion project is affected according to Hexagon\u2019s preference of renting instead of owning its facilities.
Lease liabilities
(NOK 1\u00a0000) | 2023 Total | 2022 Total |
Undiscounted lease liabilities and maturity of cash outflows | ||
Less than 1 year | 85\u00a0525 | 100\u00a0831 |
1\u20132 years | 70\u00a0894 | 102\u00a0808 |
2\u20133 years | 61\u00a0947 | 79\u00a0016 |
3\u20134 years | 54\u00a0503 | 67\u00a0828 |
4\u20135 years | 42\u00a0449 | 59\u00a0817 |
More than 5 years | 289\u00a0485 | 345\u00a0007 |
Total undiscounted lease liabilities at 31 December | 604\u00a0802 | 755\u00a0305 |
Summary of the lease liabilities
(NOK 1\u00a0000) | 2023 Total | 2022 Total |
At initial application 1 January | 551\u00a0592 | 292\u00a0732 |
Additions from continuing operations | 98\u00a0919 | 184\u00a0861 |
Additions from discontinued operations | 9\u00a0270 | 122\u00a0472 |
Cash payments for the principal portion of the lease liability continuing operations | (57\u00a0486) | (50\u00a0369) |
Cash payments for the principal portion of the lease liability discontinued operations | (13\u00a0889) | (23\u00a0656) |
Cash payments for the interest portion of the lease liability continuing operations | (22\u00a0850) | (7\u00a0067) |
Cash payments for the interest portion of the lease liability discontinued operations | (6\u00a0828) | (2\u00a0471) |
Interest expense on lease liabilities continuing operations | 22\u00a0850 | 7\u00a0067 |
Interest expense on lease liabilities discontinued operations | 6\u00a0828 | 2\u00a0471 |
Derecognition from deconsolidation of subsidiary | (163\u00a0807) | - |
Currency exchange differences | 24\u00a0528 | 25\u00a0551 |
Total lease liabilities at 31 December | 449\u00a0127 | 551\u00a0592 |
Current lease liabilities | 61\u00a0867 | 70\u00a0574 |
Non-current lease liabilities | 387\u00a0260 | 481\u00a0018 |
Summary of cash outflows leases
(NOK 1\u00a0000) | 2023 Total | 2022 Total |
Cash payments for leases continuing operations | 80\u00a0335 | 57\u00a0438 |
Variable payments continuing operations | 13\u00a0975 | 12\u00a0055 |
Cash payments related to short-term leases and leases of low value continuing operations | 1\u00a0524 | 333 |
Total cash outflows for leases continuing operations | 95\u00a0835 | 69\u00a0827 |
Cash payments for leases discontinued operations | 20\u00a0791 | 26\u00a0127 |
Variable payments discontinued operations | 12\u00a0055 | 8\u00a0508 |
Cash payments related to short-term leases and leases of low value discontinued operations | 333 | 259 |
Total cash outflows for leases discontinued operations | 33\u00a0179 | 34\u00a0894 |
Some of the leases have options to extend the contract beyond the period used in the calculations. For most cases the probability of utilizing such options are not sufficiently high to include options in the calculation of the leases. The leases do not contain any termination options that are considered significant for the calculations.
The leases do not contain any restrictions on the Group\u2019s dividend policy or financing, and there are no require-ments to financial performance or ratios. The Group does not have significant residual value guarantees related to its leases to disclose. No operational risks related to leases are identified.
The Group as a lessor
The Group does not have any significant lease agreements where Hexagon Composites is the lessor.
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__135-1": { "value": "Note 21\tFinancial liabilities
(NOK 1\u00a0000) | 2023 | 2022 |
Cross-currency swap (fair value)\u200c1 | - | 216\u00a0885 |
Contingent consideration from business combination | - | 39\u00a0789 |
Total non-current financial liabilities | - | 256\u00a0675 |
Cross-currency swap (fair value)\u200c1 | 252\u00a0299 | - |
Other current financial liabilities (total return swap)\u200c2 | 124\u00a0609 | - |
Deferred payment from business combination\u200c3 | - | 45\u00a0776 |
Contingent considerations from business combination\u200c3 | - | 29\u00a0275 |
Total current financial liabilities | 376\u00a0909 | 75\u00a0051 |
1In 2019 the company entered into a cross-currency swap of USD 120.3 to effectively convert its NOK 1\u00a0100 million term loan from NOK to USD. During 2021 the swap was settled and re-issued with an USD denominated balance of 132.7 million. In relation with the refinancing of the Group in December 2021 the maturity of the swap was extended concurrent with the initial maturity of the term loan. The value of the swap as of 31 December 2023 was NOK -252.3 million and has been presented as current due its concurrent maturity with the term loan on 9 December 2024.
2On 29 June 2023, Hexagon Composites entered into a total return swap (TRS) with financial exposure to 13\u00a0839\u00a0872 shares (representing 5 per cent of the total outstanding shares) in Hexagon Purus ASA. The total return swap gives Hexagon Composites financial exposure to any change in the fair value of the underlying 13\u00a0839\u00a0872 shares from the initial amount of NOK 19.80 per share. Hexagon has no right or obligation to acquire the underlying shares at maturity. Due to the structure and the relevant facts pertaining to the agreement, the TRS has been classified as a financial derivative with changes in fair value through profit or loss (FVTPL). As of 31 December 2023, the fair value of the TRS was NOK -124.6 million. The TRS agreement matures on 2 July 2024.
3Deferred payment from business combinations and contingent considerations from business combinations relate to Hexagon Purus\u2019 acquisi-tion of Wystrach GmbH in 2021. Following the deconsolidation of Hexagon Purus on 29 June 2023, all liabilities related to Hexagon Purus were effectively derecognized from Hexagon\u2019s group accounts.
Note 23\tOther current liabilities
(NOK 1\u00a0000) | 2023 | 2022 |
Public duties payable | 27\u00a0561 | 26\u00a0949 |
Unpaid salaries, bonuses, holiday pay | 132\u00a0634 | 111\u00a0892 |
Accrued expenses and other current liabilities | 127\u00a0645 | 204\u00a0313 |
Total | 287\u00a0840 | 343\u00a0154 |
Note 21\tFinancial liabilities
(NOK 1\u00a0000) | 2023 | 2022 |
Cross-currency swap (fair value)\u200c1 | - | 216\u00a0885 |
Contingent consideration from business combination | - | 39\u00a0789 |
Total non-current financial liabilities | - | 256\u00a0675 |
Cross-currency swap (fair value)\u200c1 | 252\u00a0299 | - |
Other current financial liabilities (total return swap)\u200c2 | 124\u00a0609 | - |
Deferred payment from business combination\u200c3 | - | 45\u00a0776 |
Contingent considerations from business combination\u200c3 | - | 29\u00a0275 |
Total current financial liabilities | 376\u00a0909 | 75\u00a0051 |
1In 2019 the company entered into a cross-currency swap of USD 120.3 to effectively convert its NOK 1\u00a0100 million term loan from NOK to USD. During 2021 the swap was settled and re-issued with an USD denominated balance of 132.7 million. In relation with the refinancing of the Group in December 2021 the maturity of the swap was extended concurrent with the initial maturity of the term loan. The value of the swap as of 31 December 2023 was NOK -252.3 million and has been presented as current due its concurrent maturity with the term loan on 9 December 2024.
2On 29 June 2023, Hexagon Composites entered into a total return swap (TRS) with financial exposure to 13\u00a0839\u00a0872 shares (representing 5 per cent of the total outstanding shares) in Hexagon Purus ASA. The total return swap gives Hexagon Composites financial exposure to any change in the fair value of the underlying 13\u00a0839\u00a0872 shares from the initial amount of NOK 19.80 per share. Hexagon has no right or obligation to acquire the underlying shares at maturity. Due to the structure and the relevant facts pertaining to the agreement, the TRS has been classified as a financial derivative with changes in fair value through profit or loss (FVTPL). As of 31 December 2023, the fair value of the TRS was NOK -124.6 million. The TRS agreement matures on 2 July 2024.
3Deferred payment from business combinations and contingent considerations from business combinations relate to Hexagon Purus\u2019 acquisi-tion of Wystrach GmbH in 2021. Following the deconsolidation of Hexagon Purus on 29 June 2023, all liabilities related to Hexagon Purus were effectively derecognized from Hexagon\u2019s group accounts.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__137-1": { "value": "Note 21\tFinancial liabilities
(NOK 1\u00a0000) | 2023 | 2022 |
Cross-currency swap (fair value)\u200c1 | - | 216\u00a0885 |
Contingent consideration from business combination | - | 39\u00a0789 |
Total non-current financial liabilities | - | 256\u00a0675 |
Cross-currency swap (fair value)\u200c1 | 252\u00a0299 | - |
Other current financial liabilities (total return swap)\u200c2 | 124\u00a0609 | - |
Deferred payment from business combination\u200c3 | - | 45\u00a0776 |
Contingent considerations from business combination\u200c3 | - | 29\u00a0275 |
Total current financial liabilities | 376\u00a0909 | 75\u00a0051 |
1In 2019 the company entered into a cross-currency swap of USD 120.3 to effectively convert its NOK 1\u00a0100 million term loan from NOK to USD. During 2021 the swap was settled and re-issued with an USD denominated balance of 132.7 million. In relation with the refinancing of the Group in December 2021 the maturity of the swap was extended concurrent with the initial maturity of the term loan. The value of the swap as of 31 December 2023 was NOK -252.3 million and has been presented as current due its concurrent maturity with the term loan on 9 December 2024.
2On 29 June 2023, Hexagon Composites entered into a total return swap (TRS) with financial exposure to 13\u00a0839\u00a0872 shares (representing 5 per cent of the total outstanding shares) in Hexagon Purus ASA. The total return swap gives Hexagon Composites financial exposure to any change in the fair value of the underlying 13\u00a0839\u00a0872 shares from the initial amount of NOK 19.80 per share. Hexagon has no right or obligation to acquire the underlying shares at maturity. Due to the structure and the relevant facts pertaining to the agreement, the TRS has been classified as a financial derivative with changes in fair value through profit or loss (FVTPL). As of 31 December 2023, the fair value of the TRS was NOK -124.6 million. The TRS agreement matures on 2 July 2024.
3Deferred payment from business combinations and contingent considerations from business combinations relate to Hexagon Purus\u2019 acquisi-tion of Wystrach GmbH in 2021. Following the deconsolidation of Hexagon Purus on 29 June 2023, all liabilities related to Hexagon Purus were effectively derecognized from Hexagon\u2019s group accounts.
Note 23\tOther current liabilities
(NOK 1\u00a0000) | 2023 | 2022 |
Public duties payable | 27\u00a0561 | 26\u00a0949 |
Unpaid salaries, bonuses, holiday pay | 132\u00a0634 | 111\u00a0892 |
Accrued expenses and other current liabilities | 127\u00a0645 | 204\u00a0313 |
Total | 287\u00a0840 | 343\u00a0154 |
Note 21\tFinancial liabilities
(NOK 1\u00a0000) | 2023 | 2022 |
Cross-currency swap (fair value)\u200c1 | - | 216\u00a0885 |
Contingent consideration from business combination | - | 39\u00a0789 |
Total non-current financial liabilities | - | 256\u00a0675 |
Cross-currency swap (fair value)\u200c1 | 252\u00a0299 | - |
Other current financial liabilities (total return swap)\u200c2 | 124\u00a0609 | - |
Deferred payment from business combination\u200c3 | - | 45\u00a0776 |
Contingent considerations from business combination\u200c3 | - | 29\u00a0275 |
Total current financial liabilities | 376\u00a0909 | 75\u00a0051 |
1In 2019 the company entered into a cross-currency swap of USD 120.3 to effectively convert its NOK 1\u00a0100 million term loan from NOK to USD. During 2021 the swap was settled and re-issued with an USD denominated balance of 132.7 million. In relation with the refinancing of the Group in December 2021 the maturity of the swap was extended concurrent with the initial maturity of the term loan. The value of the swap as of 31 December 2023 was NOK -252.3 million and has been presented as current due its concurrent maturity with the term loan on 9 December 2024.
2On 29 June 2023, Hexagon Composites entered into a total return swap (TRS) with financial exposure to 13\u00a0839\u00a0872 shares (representing 5 per cent of the total outstanding shares) in Hexagon Purus ASA. The total return swap gives Hexagon Composites financial exposure to any change in the fair value of the underlying 13\u00a0839\u00a0872 shares from the initial amount of NOK 19.80 per share. Hexagon has no right or obligation to acquire the underlying shares at maturity. Due to the structure and the relevant facts pertaining to the agreement, the TRS has been classified as a financial derivative with changes in fair value through profit or loss (FVTPL). As of 31 December 2023, the fair value of the TRS was NOK -124.6 million. The TRS agreement matures on 2 July 2024.
3Deferred payment from business combinations and contingent considerations from business combinations relate to Hexagon Purus\u2019 acquisi-tion of Wystrach GmbH in 2021. Following the deconsolidation of Hexagon Purus on 29 June 2023, all liabilities related to Hexagon Purus were effectively derecognized from Hexagon\u2019s group accounts.
Note 29\tPurchasing commitments
The Group has the following commitments resulting from purchasing materials
(NOK 1\u00a0000) | 2023 | 2022 |
2023 | - | 599\u00a0243 |
2024 | 450\u00a0170 | - |
Thereafter | - | - |
Total | 450\u00a0170 | 599\u00a0243 |
The Group has the following commitments resulting from contracts for investments in production facilities/machines
(NOK 1\u00a0000) | 2023 | 2022 |
2023 | - | 204\u00a0112 |
2024 | 108\u00a0131 | - |
Thereafter | - | - |
Total | 108\u00a0131 | 204\u00a0112 |
All contracts relate to investments in production facilities/machines.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f77664": { "value": "Note 21\tFinancial liabilities
(NOK 1\u00a0000) | 2023 | 2022 |
Cross-currency swap (fair value)\u200c1 | - | 216\u00a0885 |
Contingent consideration from business combination | - | 39\u00a0789 |
Total non-current financial liabilities | - | 256\u00a0675 |
Cross-currency swap (fair value)\u200c1 | 252\u00a0299 | - |
Other current financial liabilities (total return swap)\u200c2 | 124\u00a0609 | - |
Deferred payment from business combination\u200c3 | - | 45\u00a0776 |
Contingent considerations from business combination\u200c3 | - | 29\u00a0275 |
Total current financial liabilities | 376\u00a0909 | 75\u00a0051 |
1In 2019 the company entered into a cross-currency swap of USD 120.3 to effectively convert its NOK 1\u00a0100 million term loan from NOK to USD. During 2021 the swap was settled and re-issued with an USD denominated balance of 132.7 million. In relation with the refinancing of the Group in December 2021 the maturity of the swap was extended concurrent with the initial maturity of the term loan. The value of the swap as of 31 December 2023 was NOK -252.3 million and has been presented as current due its concurrent maturity with the term loan on 9 December 2024.
2On 29 June 2023, Hexagon Composites entered into a total return swap (TRS) with financial exposure to 13\u00a0839\u00a0872 shares (representing 5 per cent of the total outstanding shares) in Hexagon Purus ASA. The total return swap gives Hexagon Composites financial exposure to any change in the fair value of the underlying 13\u00a0839\u00a0872 shares from the initial amount of NOK 19.80 per share. Hexagon has no right or obligation to acquire the underlying shares at maturity. Due to the structure and the relevant facts pertaining to the agreement, the TRS has been classified as a financial derivative with changes in fair value through profit or loss (FVTPL). As of 31 December 2023, the fair value of the TRS was NOK -124.6 million. The TRS agreement matures on 2 July 2024.
3Deferred payment from business combinations and contingent considerations from business combinations relate to Hexagon Purus\u2019 acquisi-tion of Wystrach GmbH in 2021. Following the deconsolidation of Hexagon Purus on 29 June 2023, all liabilities related to Hexagon Purus were effectively derecognized from Hexagon\u2019s group accounts.
", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f80338": { "value": "Note 25\tMarket risk
Financial risk
The Group\u2019s principal financial liabilities, other than derivatives, comprise loans and borrowings, and trade and other payables. The main purpose of these financial liabilities is to finance the Group\u2019s operations. The Group\u2019s principal financial assets include trade receivables, cash and cash equivalents that derive directly from its opera-tions. The Group use some financial derivatives for hedging purposes.
The Group is exposed to interest rate risk, liquidity risk, currency risk and credit risk. The Group\u2019s management regularly evaluates these risks and defines guidelines on appropriate financial risk governance framework for the Group. Procedures for risk management are adopted by the board and carried out by the chief financial officer in close cooperation with the subsidiaries.
The Group may use financial instruments to hedge risks associated with interest rate and foreign currency fluctu-ations. The Group uses derivative financial instruments to minimize these risks under its strategy for interest and currency exposure. The accounting treatment of financial derivatives is described in note 2.
The Group has the following financial assets and liabilities divided into different categories for accounting treatment and reconciled against the balance sheet items 31 December 2023
(NOK 1\u00a0000) | Derivatives designated as hedging instruments through profit or loss | Equity instruments designated at fair value through OCI | Financial instruments at fair value through P&L | Financial instruments at amortized cost | |
Total | |||||
Assets | |||||
Other non-current financial assets | 20\u00a0174 | 5 391 | 100 102 | 125\u00a0667 | |
Trade receivables | 551\u00a0356 | 551\u00a0356 | |||
Bank deposits, cash and cash equivalents | 154\u00a0350 | 154\u00a0350 | |||
Total financial assets | 20\u00a0174 | - | 5 391 | 805 808 | 831\u00a0373 |
Liabilities | |||||
Non-current lease liabilities | 387\u00a0260 | 387\u00a0260 | |||
Current lease liabilities | 61\u00a0867 | 61\u00a0867 | |||
Current interest-bearing liabilities | 1\u00a0108\u00a0468 | 1\u00a0108\u00a0468 | |||
Other current financial liabilities | 376\u00a0909 | - | - | 376\u00a0909 | |
Trade payables | 384\u00a0015 | 384\u00a0015 | |||
Total financial liabilities | 376\u00a0909 | - | - | 1\u00a0941\u00a0610 | 2\u00a0318\u00a0518 |
The Group has the following financial assets and liabilities divided into different categories for accounting treatment and reconciled against the balance sheet items 31 December 2022
(NOK 1\u00a0000) | Derivatives designated as hedging instruments through profit or loss | Equity instruments designated at fair value through OCI | Financial instruments at fair value through P&L | Financial instruments at amortized cost | |
Total | |||||
Assets | |||||
Other non-current financial assets | 25\u00a0431 | 67 727 | 48 270 | 141\u00a0429 | |
Trade receivables | 865\u00a0403 | 865\u00a0403 | |||
Bank deposits, cash and cash equivalents | 713\u00a0547 | 713\u00a0547 | |||
Total financial assets | 25\u00a0431 | - | 67 727 | 1 627 220 | 1\u00a0720\u00a0378 |
Liabilities | |||||
Non-current interest-bearing liabilities | 1\u00a0482\u00a0140 | 1\u00a0482\u00a0140 | |||
Other non-current financial liabilities | 216\u00a0885 | 39\u00a0789 | - | 256\u00a0675 | |
Non-current lease liabilities | 481\u00a0018 | 481\u00a0018 | |||
Current lease liabilities | 70\u00a0574 | 70\u00a0574 | |||
Current interest-bearing liabilities | 234\u00a0674 | 234\u00a0674 | |||
Other current financial liabilities | 29 275 | 45 776 | 75 051 | ||
Trade payables | 572\u00a0569 | 572\u00a0569 | |||
Total financial liabilities | 216\u00a0885 | - | 69 064 | 2 886 751 | 3 172 701 |
(I) Credit risk
The Group is mainly exposed to credit risk associated with trade receivables and contract assets. The Group minimizes its exposure to credit risk by ensuring that all parties requiring defined levels of credit (primarily trade receivables) are approved and undergo a credit check.
The Group has a small number of large customers or counterparties who could be considered to be a Group due to similarities in credit risk. The risk associated with these counterparties is regularly reviewed and is minimized by measures such as use of credit insurance. The subsidiaries Hexagon Ragasco AS and Hexagon Agility GmbH applies credit insurance to cover parts of the companies\u2019 receivables.
Trade receivables amounted to NOK 560 million (NOK 879 million). Except of parts in Hexagon Ragasco AS and Hexagon Agility GmbH these do not have credit insurance. However, these are partly covered through Letter of Credits and prepayments from customers.
The Group has policies in place to ensure that sales of products are made to customers with an appropriate credit history and that outstanding amounts do not exceed the defined credit limits. Credit information is also used in the group\u2019s regular appraisal of new and existing customers.
The Group has not issued guarantees for third party obligations.
The carrying amount of the financial assets, including derivatives, in the balance sheet represents the maximum risk exposure. As counterparties in derivative transactions are normally banks, the credit risk associated with derivatives is considered to be negligible. The Group considers its maximum risk exposure to be the carrying amount of its trade receivables (see note 14).
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns (i.e. geographical region, product type, customer type and rating, coverage by letter of credit or prepayments or other forms of credit insurance). The calculation reflects the probability-weighted outcome and reasonable and supportable information that is available at the reporting date about past events, current con-ditions and forecasts of future economic conditions. Generally, trade receivables are written-off if past due for more than one year and are not subject to enforcement activity. Note 14disclose the ageing of trade receivables.
(II) Interest rate risk
The Group is exposed to interest rate risk from its financing activities (see notes 20, 22and 24). The majority of the Group\u2019s interest-bearing liabilities have variable interest rates, which means it is affected by changes in interest rates.
The aim of the Group\u2019s interest rate risk management is to reduce interest expenses, while also keeping the volatility of future interest payments within acceptable limits. The Group\u2019s strategy is for its finance departments to regularly evaluate the interest rate exposure of Hexagon Composites liabilities based on a total assessment of interest expectations and risk profile. The total fixed-interest term must not exceed 10 years. The Group may use derivatives to adjust its effective interest rate exposure. The principal bank loan facility in the parent company has been drawn in Euro, NOK and USD, with EURIBOR/NIBOR/SOFR base rates. As part of the NOK 1.1 billion financing of the acquisition of Hexagon Agility in 2019, a cross-currency hedge was established where the Group receives a variable rate equal to NIBOR + margin and pays a variable rate equal to SOFR + margin. In addition to the cross currency swap, Hexagon Composites ASA entered into three float-to-fix interest rate swaps in May 2022 with a maturity of 5, 7 and 10 years for a total principal amount of USD 33 million, USD 10 million and USD 10 million respectively. These interest rate swaps effectively hedges approximately 40 per cent of the Group\u2019s 1.1 billion term loan at base rates (excluding margins) of 2.90 per cent, 2.93 per cent and 3.00 per cent for the 5, 7, and 10 year swaps respectively.
The following table shows the group\u2019s sensitivity to potential changes in interest rates. The calculations take into account all interest-bearing instruments and associated interest rate derivatives (if any) as of 31 December
Change in interestrates in base points | Effect on profit/lossbefore tax (NOK 1\u00a0000) | Gains or losses on interest rate derivatives in other comprehensive income before tax (NOK 1\u00a0000) | |
2023 | +100 | (5\u00a0721) | - |
(100) | 5\u00a0721 | - | |
2022 | +100 | (11\u00a0944) | - |
(100) | 11\u00a0944 | - |
Based on the interest bearing liabilities which existed as of 31 December 2023, an interest rate increase of 1% would reduce profit after tax by NOK 4 462 thousand (9\u00a0316 thousand).
The average effective interest rate on financial liabilities was as follows:
2023 | 2022 | |
Bank overdrafts | 3.8\u20136.7% | 1.4\u20135.7% |
Bank loan | 6.1\u20138.2% | 1.5\u20137.4% |
Lease liabilities | 1\u20138.0% | 1\u201310.5% |
(iii) Liquidity risk
Liquidity risk is the risk of the group not being in a position to fulfil its financial liabilities when they fall due. The group\u2019s strategy for managing liquidity risk is to set a level of available liquidity to enable it to discharge its finan-cial liabilities when they fall due, both under normal and unexpected circumstances, without risking unacceptable losses or damaging the group\u2019s reputation. Undrawn credit facilities are disclosed in note16.
The majority of excess liquidity is invested in bank deposits
The following table provides an overview of the maturity structure of the group\u2019s financial obligations based on undiscounted contractual payments. In cases where the counterparty is entitled to ask for early settlement, the amount is included in the earliest period in which the payment may be demanded. If the counterparty is entitled to ask for on-demand settlement, the amount is included in the first column (under 1 month):
31 December 2023 Remaining period (NOK 1\u00a0000) | Less than 1\u00a0month | 1\u20133 Months | 3\u201312 Months | 1\u20135Years | More than 5 years | Total |
Repayment of interest-bearing liabilities | - | - | 1\u00a0111\u00a0255 | - | - | 1\u00a0111\u00a0255 |
Interest on interest-bearing liabilities | 6\u00a0151 | 12\u00a0413 | 55\u00a0029 | - | - | 73\u00a0593 |
Current financial liabilities | - | - | 376\u00a0909 | - | - | 376\u00a0909 |
Repayment of leases | 5\u00a0218 | 10\u00a0491 | 46\u00a0158 | 160\u00a0556 | 226\u00a0704 | 449\u00a0127 |
Interest on leases | 2\u00a0072 | 4\u00a0089 | 17\u00a0495 | 69\u00a0252 | 62\u00a0769 | 155\u00a0675 |
Trade payables | 345\u00a0613 | 38\u00a0401 | 384\u00a0015 | |||
Total | 359\u00a0054 | 65\u00a0394 | 1\u00a0606\u00a0845 | 229\u00a0807 | 289\u00a0473 | 2\u00a0550\u00a0574 |
The Group\u2019s interest-bearing debt facilities matures in December 2024, and has thus been classified and presented as current liabiltities. Hexagon management is however in advanced discussions with its banking partners, DNB and Danske Bank, to refinance its debt facilities, which is expected to be finalized well in advance of December 2024. See also note20.
Current financial liabilities consist of a negative fair value on the group cross currency swap of NOK 252 million and a negative fair value of a total return swap with Hexagon Purus shares as underlying of NOK 125 million. The TRS matures in June 2024 while the cross currency swap matures in December 2024 concurrent with the maturity of the debt facility. The liquidity risk of these swaps are however fluctative by nature and is dependent upon the fair value of the swaps on maturity. The cross currency is expected to be roll forwarded without a liquidity effect in relation to the mentioned debt refinancing.
31 December 2022 Remaining period (NOK 1\u00a0000) | Less than 1\u00a0month | 1\u20133 Months | 3\u201312 Months | 1\u20135Years | More than 5 years | Total |
Bank overdrafts | - | - | ||||
Repayment of interest-bearing liabilities | 389 | 101\u00a0168 | 133\u00a0117 | 1\u00a0466\u00a0430 | 23\u00a0244 | 1\u00a0724\u00a0348 |
Interest on interest-bearing liabilities | 9\u00a0595 | 19\u00a0578 | 79\u00a0903 | 82\u00a0107 | 1\u00a0962 | 193\u00a0144 |
Non-current financial liabilities | - | - | - | 256\u00a0675 | - | 256\u00a0675 |
Other current financial liabilities | - | 75\u00a0051 | - | - | - | 75\u00a0051 |
Repayment of leases | 5\u00a0900 | 11\u00a0715 | 52\u00a0959 | 224\u00a0637 | 256\u00a0381 | 551\u00a0592 |
Interest on leases | 2\u00a0626 | 5\u00a0196 | 22\u00a0481 | 90\u00a0978 | 82\u00a0432 | 203\u00a0713 |
Trade payables | 475\u00a0232 | 97\u00a0337 | 572\u00a0569 | |||
Total | 493\u00a0743 | 310\u00a0044 | 288\u00a0461 | 2\u00a0120\u00a0826 | 364\u00a0019 | 3\u00a0577\u00a0092 |
(iv) Foreign exchange risk
As the Group has production and sales in different countries with different functional currencies, the Group may from time to time use forward contracts to reduce its currency risk from cash flows denominated in foreign currencies. Currency risk is calculated for each currency and takes into consideration assets and liabilities, off-bal-ance sheet obligations and highly probable purchases and sales in the relevant currency. The Group also has a cross currency interest rate swap which effectively converts its NOK 1.1 billion term loan to a USD 132.7 million USD loan (see also note 21). This financial instrument gives rise to foreign exchange effect in the profit/loss of the parent company, Hexagon Composites ASA. However, the parent company also has significant interest bearing loan receivable not designated as net investment hedges towards its US subsidiary Hexagon USA Holdings Inc. denominated in USD. The said portion of the receivable is subject to currency re-evaluations through the profit/loss which largely neutralizes the foreign exchange risk related to the mentioned cross currency swap.
The following table shows the group\u2019s sensitivity to potential changes in the Norwegian krone, with all other conditions remaining constant. The calculation is based on the same movement of the krone against the relevant currencies. The effect on the profit/loss is caused by currency effects from USD-denominated loan receivables not designated as net investment hedge through OCI, and currency effects of the cross currency swap.
The OCI effect is caused by currency effects of USD-denominated loan receivables designated as net invest-ments in foreign operations. In Hexagon Composites ASA, an intercompany interest-bearing loan of USD 5.2 million (MNOK 52.8) at 31 December 2023 (USD 105.2 million (MNOK 1\u00a0035.9) at 31 December 2022) has been designated as net investments in the US-based subsidiary, Hexagon USA Holdings Inc. The reduction in the
designated amount from 2022 to 2023 is related to a debt-to-equity conversion of USD 99.9 million in Hexagon USA Holdings Inc. in July 2023. The remaining balance is being used to reduce the exposure to the USD foreign exchange risk on this investment. Gains or losses on the retranslation of this borrowing are transferred to OCI to offset any gains or losses in the Group on translation of this loan in the Group.
Movement ofNOK against USD | Effect on profit/lossbefore tax (NOK 1\u00a0000) | Effect on other comprehensive income and expenses before tax (NOK 1\u00a0000) | |
2023 | +10% | (23 262) | (5 280) |
(10%) | 23 262 | 5 280 | |
2022 | +10% | (18 735) | (103 591) |
(10%) | 18 735 | 103 591 |
The fair values of derivatives classified as hedging instruments are reported under other current assets/liabilities or other non-current assets/liabilities depending on the recovery or settlement date for the associated hedged item.
As of 31 December 2023, the Group does not have any forward contracts.
As of 31 December 2022, the Group had the following forward contracts to hedge future sales to customers.
Forward exchange contracts | Currency sell/buy | Amount(1\u00a0000) | Maturity | Exchangerate | Fair value 31 Dec 2022 |
Forward contracts to hedge expected future sale | |||||
EUR/NOK | 100/1\u00a0050 | 2023 | 10.50\u201310.50 | - | |
Total | - |
The group does not apply hedge accounting for any of its derivatives
(v) Measurement of fair value
The fair value of forward exchange contracts is calculated by comparing the agreed forward rate and the estimated equivalent forward rate prevailing on the balance sheet date with the same maturity multiplied by the fixed volume specified in the contract. Contingent considerations arising from business combinations are measured as a best estimate of target achievement at each reporting date. For the derivatives, the fair value is confirmed by the financial institution with which the Company has entered into the contract.
The following of the Group\u2019s financial instruments are not measured at fair value: Cash & cash equivalents, trade receivable, other current receivables and payables and bank overdrafts. These items are recognized at nominal value in the balance sheet as of 31 December, without taking into account the discount rate which relates to future inflows and outflows. Loans to employees and non-current interest bearing liabilities are recognized in accordance with amortized cost.
The carrying amount of cash and cash equivalents is approximately equal to fair value since these instruments have a short term to maturity. Similarly, the carrying amount of trade receivables and other current receivables and payables is approximately equal to fair value since they are short term and entered into on \u201cnormal\u201d terms and conditions. The carrying amount of bank overdrafts are assessed to be approximately equal to fair value because the floating interest rate are adjusted to reflect current conditions.
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly
Level 3: Techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
Carrying amount and fair value of financial assets and financial liabilities
2023 | 2022 | ||||
(NOK 1\u00a0000) | Level | Book value | Fair value | Book value | Fair value |
Financial assets | |||||
Interest rate swaps | 2 | 20\u00a0174 | 20\u00a0174 | 25\u00a0431 | 25\u00a0431 |
Investments in shares | 3 | 5\u00a0391 | 5\u00a0391 | 67\u00a0727 | 67\u00a0727 |
Loans to associated companies | 2 | 100\u00a0102 | 100\u00a0102 | 48\u00a0270 | 48\u00a0270 |
Financial liabilities | |||||
Non-current interest-bearing liabilities | 2 | - | - | 1\u00a0482\u00a0140 | 1\u00a0489\u00a0674 |
Non-current contingent considerations | 3 | - | - | 39\u00a0789 | 39\u00a0789 |
Non-current financial liabilities | 3 | - | - | 216\u00a0885 | 216\u00a0885 |
Current interest-bearing liabilities | 2 | 1\u00a0108\u00a0468 | 1\u00a0111\u00a0255 | 234\u00a0674 | 234\u00a0674 |
Current contingent considerations | 3 | - | - | 29\u00a0275 | 29\u00a0275 |
Deferred payment from business combination | 3 | - | - | 45\u00a0776 | 45\u00a0776 |
Cross-currency swap | 2 | 252\u00a0299 | 252\u00a0299 | - | - |
Total return swap | 2 | 124\u00a0609 | 124\u00a0609 | - | - |
The fair values of the Group\u2019s interest-bearing bank loans are determined by using the DCF method using discount rate that reflects the issuer\u2019s borrowing rate as at the end of the reporting period. The own non-perfor-mance risk as at 31 December 2023 and 31 December 2022 was assessed to be insignificant.
The Group enters into foreign exchange contracts with various counterparties, principally financial institutions with investment grade credit ratings. Foreign exchange forward contracts are valued using valuation techniques, which employ the use of market observable inputs. The most frequently applied valuation techniques include forward pricing models using present value calculations.
Financial instruments apprised at fair value with gains and losses in the income statement
2023 | 2022 | |||
(NOK 1\u00a0000) | Assets | Liabilities | Assets | Liabilities |
Level 1: Based on prices in an active market | - | - | - | |
Level 2: Observable market data\u200c1 | 20\u00a0174 | 376\u00a0909 | 25\u00a0431 | 216\u00a0885 |
Level 3: Other than observable market data\u200c2 | 5\u00a0391 | - | 67\u00a0727 | 69\u00a0064 |
Total financial instruments at fair value | 25\u00a0565 | 376\u00a0909 | 93\u00a0158 | 285\u00a0950 |
1Level 2 relates to interest rate swap shown in note 12and a cross currency swap and total return swap shown in note 21. Level 2 is estimated based on calculating the net present value of future cash flows, using interest rate curves, exchange rates and currency spreads as of the balance sheet date.
2Level 3 instruments in 2022 relates largely to contingent considerations and unlisted equity investments in Hexagon Purus, which were derecog-nized on 29 June 2023. In 2023, the Group has only minor unlisted equity investments measured at fair value.
Financial instruments appraised at fair value with gains and losses over other income and expenses in total comprehensive income
(NOK 1\u00a0000) | 2023 | 2022 |
Level 1: Based on prices in an active market | - | - |
Level 2: Observable market data | - | - |
Level 3: Other than observable market data | - | - |
Total financial instruments at fair value | - | - |
Other information relating to financial instruments
During the reporting period there were no financial assets or liabilities which were reclassified by changing the measurement method from amortized cost to fair value or vice versa, and there were no changes in the fair value measurement which caused transfers between level 1 and level 2, and no transfers to or from level 3.
(vi) Capital structure and equity
The main goal of the Group\u2019s capital structure management is to ensure it maintains a strong credit rating (and therefore reasonable borrowing terms from lenders) and a level of equity which is reasonable in relation to the Group\u2019s operations.
By achieving a good debt/equity ratio, the Group will be able to support its operations and in doing so maximize the value of its shares. The Group\u2019s shareholders shall receive a competitive return on their shares, mainly through price increases in the Group\u2019s shares, but also in the form of dividends based on financial performance/investment needs.
The Group manages and makes necessary changes to its capital structure by regularly assessing prevailing economic conditions and prospects of short and medium-term growth.
Capital structure management is largely dealt with by means of new share issues. No changes to guidelines in this area were made in 2022 or 2023.
Note 25\tMarket risk
Financial risk
The Group\u2019s principal financial liabilities, other than derivatives, comprise loans and borrowings, and trade and other payables. The main purpose of these financial liabilities is to finance the Group\u2019s operations. The Group\u2019s principal financial assets include trade receivables, cash and cash equivalents that derive directly from its opera-tions. The Group use some financial derivatives for hedging purposes.
The Group is exposed to interest rate risk, liquidity risk, currency risk and credit risk. The Group\u2019s management regularly evaluates these risks and defines guidelines on appropriate financial risk governance framework for the Group. Procedures for risk management are adopted by the board and carried out by the chief financial officer in close cooperation with the subsidiaries.
The Group may use financial instruments to hedge risks associated with interest rate and foreign currency fluctu-ations. The Group uses derivative financial instruments to minimize these risks under its strategy for interest and currency exposure. The accounting treatment of financial derivatives is described in note 2.
The Group has the following financial assets and liabilities divided into different categories for accounting treatment and reconciled against the balance sheet items 31 December 2023
(NOK 1\u00a0000) | Derivatives designated as hedging instruments through profit or loss | Equity instruments designated at fair value through OCI | Financial instruments at fair value through P&L | Financial instruments at amortized cost | |
Total | |||||
Assets | |||||
Other non-current financial assets | 20\u00a0174 | 5 391 | 100 102 | 125\u00a0667 | |
Trade receivables | 551\u00a0356 | 551\u00a0356 | |||
Bank deposits, cash and cash equivalents | 154\u00a0350 | 154\u00a0350 | |||
Total financial assets | 20\u00a0174 | - | 5 391 | 805 808 | 831\u00a0373 |
Liabilities | |||||
Non-current lease liabilities | 387\u00a0260 | 387\u00a0260 | |||
Current lease liabilities | 61\u00a0867 | 61\u00a0867 | |||
Current interest-bearing liabilities | 1\u00a0108\u00a0468 | 1\u00a0108\u00a0468 | |||
Other current financial liabilities | 376\u00a0909 | - | - | 376\u00a0909 | |
Trade payables | 384\u00a0015 | 384\u00a0015 | |||
Total financial liabilities | 376\u00a0909 | - | - | 1\u00a0941\u00a0610 | 2\u00a0318\u00a0518 |
The Group has the following financial assets and liabilities divided into different categories for accounting treatment and reconciled against the balance sheet items 31 December 2022
(NOK 1\u00a0000) | Derivatives designated as hedging instruments through profit or loss | Equity instruments designated at fair value through OCI | Financial instruments at fair value through P&L | Financial instruments at amortized cost | |
Total | |||||
Assets | |||||
Other non-current financial assets | 25\u00a0431 | 67 727 | 48 270 | 141\u00a0429 | |
Trade receivables | 865\u00a0403 | 865\u00a0403 | |||
Bank deposits, cash and cash equivalents | 713\u00a0547 | 713\u00a0547 | |||
Total financial assets | 25\u00a0431 | - | 67 727 | 1 627 220 | 1\u00a0720\u00a0378 |
Liabilities | |||||
Non-current interest-bearing liabilities | 1\u00a0482\u00a0140 | 1\u00a0482\u00a0140 | |||
Other non-current financial liabilities | 216\u00a0885 | 39\u00a0789 | - | 256\u00a0675 | |
Non-current lease liabilities | 481\u00a0018 | 481\u00a0018 | |||
Current lease liabilities | 70\u00a0574 | 70\u00a0574 | |||
Current interest-bearing liabilities | 234\u00a0674 | 234\u00a0674 | |||
Other current financial liabilities | 29 275 | 45 776 | 75 051 | ||
Trade payables | 572\u00a0569 | 572\u00a0569 | |||
Total financial liabilities | 216\u00a0885 | - | 69 064 | 2 886 751 | 3 172 701 |
(I) Credit risk
The Group is mainly exposed to credit risk associated with trade receivables and contract assets. The Group minimizes its exposure to credit risk by ensuring that all parties requiring defined levels of credit (primarily trade receivables) are approved and undergo a credit check.
The Group has a small number of large customers or counterparties who could be considered to be a Group due to similarities in credit risk. The risk associated with these counterparties is regularly reviewed and is minimized by measures such as use of credit insurance. The subsidiaries Hexagon Ragasco AS and Hexagon Agility GmbH applies credit insurance to cover parts of the companies\u2019 receivables.
Trade receivables amounted to NOK 560 million (NOK 879 million). Except of parts in Hexagon Ragasco AS and Hexagon Agility GmbH these do not have credit insurance. However, these are partly covered through Letter of Credits and prepayments from customers.
The Group has policies in place to ensure that sales of products are made to customers with an appropriate credit history and that outstanding amounts do not exceed the defined credit limits. Credit information is also used in the group\u2019s regular appraisal of new and existing customers.
The Group has not issued guarantees for third party obligations.
The carrying amount of the financial assets, including derivatives, in the balance sheet represents the maximum risk exposure. As counterparties in derivative transactions are normally banks, the credit risk associated with derivatives is considered to be negligible. The Group considers its maximum risk exposure to be the carrying amount of its trade receivables (see note 14).
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns (i.e. geographical region, product type, customer type and rating, coverage by letter of credit or prepayments or other forms of credit insurance). The calculation reflects the probability-weighted outcome and reasonable and supportable information that is available at the reporting date about past events, current con-ditions and forecasts of future economic conditions. Generally, trade receivables are written-off if past due for more than one year and are not subject to enforcement activity. Note 14disclose the ageing of trade receivables.
(II) Interest rate risk
The Group is exposed to interest rate risk from its financing activities (see notes 20, 22and 24). The majority of the Group\u2019s interest-bearing liabilities have variable interest rates, which means it is affected by changes in interest rates.
The aim of the Group\u2019s interest rate risk management is to reduce interest expenses, while also keeping the volatility of future interest payments within acceptable limits. The Group\u2019s strategy is for its finance departments to regularly evaluate the interest rate exposure of Hexagon Composites liabilities based on a total assessment of interest expectations and risk profile. The total fixed-interest term must not exceed 10 years. The Group may use derivatives to adjust its effective interest rate exposure. The principal bank loan facility in the parent company has been drawn in Euro, NOK and USD, with EURIBOR/NIBOR/SOFR base rates. As part of the NOK 1.1 billion financing of the acquisition of Hexagon Agility in 2019, a cross-currency hedge was established where the Group receives a variable rate equal to NIBOR + margin and pays a variable rate equal to SOFR + margin. In addition to the cross currency swap, Hexagon Composites ASA entered into three float-to-fix interest rate swaps in May 2022 with a maturity of 5, 7 and 10 years for a total principal amount of USD 33 million, USD 10 million and USD 10 million respectively. These interest rate swaps effectively hedges approximately 40 per cent of the Group\u2019s 1.1 billion term loan at base rates (excluding margins) of 2.90 per cent, 2.93 per cent and 3.00 per cent for the 5, 7, and 10 year swaps respectively.
The following table shows the group\u2019s sensitivity to potential changes in interest rates. The calculations take into account all interest-bearing instruments and associated interest rate derivatives (if any) as of 31 December
Change in interestrates in base points | Effect on profit/lossbefore tax (NOK 1\u00a0000) | Gains or losses on interest rate derivatives in other comprehensive income before tax (NOK 1\u00a0000) | |
2023 | +100 | (5\u00a0721) | - |
(100) | 5\u00a0721 | - | |
2022 | +100 | (11\u00a0944) | - |
(100) | 11\u00a0944 | - |
Based on the interest bearing liabilities which existed as of 31 December 2023, an interest rate increase of 1% would reduce profit after tax by NOK 4 462 thousand (9\u00a0316 thousand).
The average effective interest rate on financial liabilities was as follows:
2023 | 2022 | |
Bank overdrafts | 3.8\u20136.7% | 1.4\u20135.7% |
Bank loan | 6.1\u20138.2% | 1.5\u20137.4% |
Lease liabilities | 1\u20138.0% | 1\u201310.5% |
(iii) Liquidity risk
Liquidity risk is the risk of the group not being in a position to fulfil its financial liabilities when they fall due. The group\u2019s strategy for managing liquidity risk is to set a level of available liquidity to enable it to discharge its finan-cial liabilities when they fall due, both under normal and unexpected circumstances, without risking unacceptable losses or damaging the group\u2019s reputation. Undrawn credit facilities are disclosed in note16.
The majority of excess liquidity is invested in bank deposits
The following table provides an overview of the maturity structure of the group\u2019s financial obligations based on undiscounted contractual payments. In cases where the counterparty is entitled to ask for early settlement, the amount is included in the earliest period in which the payment may be demanded. If the counterparty is entitled to ask for on-demand settlement, the amount is included in the first column (under 1 month):
31 December 2023 Remaining period (NOK 1\u00a0000) | Less than 1\u00a0month | 1\u20133 Months | 3\u201312 Months | 1\u20135Years | More than 5 years | Total |
Repayment of interest-bearing liabilities | - | - | 1\u00a0111\u00a0255 | - | - | 1\u00a0111\u00a0255 |
Interest on interest-bearing liabilities | 6\u00a0151 | 12\u00a0413 | 55\u00a0029 | - | - | 73\u00a0593 |
Current financial liabilities | - | - | 376\u00a0909 | - | - | 376\u00a0909 |
Repayment of leases | 5\u00a0218 | 10\u00a0491 | 46\u00a0158 | 160\u00a0556 | 226\u00a0704 | 449\u00a0127 |
Interest on leases | 2\u00a0072 | 4\u00a0089 | 17\u00a0495 | 69\u00a0252 | 62\u00a0769 | 155\u00a0675 |
Trade payables | 345\u00a0613 | 38\u00a0401 | 384\u00a0015 | |||
Total | 359\u00a0054 | 65\u00a0394 | 1\u00a0606\u00a0845 | 229\u00a0807 | 289\u00a0473 | 2\u00a0550\u00a0574 |
The Group\u2019s interest-bearing debt facilities matures in December 2024, and has thus been classified and presented as current liabiltities. Hexagon management is however in advanced discussions with its banking partners, DNB and Danske Bank, to refinance its debt facilities, which is expected to be finalized well in advance of December 2024. See also note20.
Current financial liabilities consist of a negative fair value on the group cross currency swap of NOK 252 million and a negative fair value of a total return swap with Hexagon Purus shares as underlying of NOK 125 million. The TRS matures in June 2024 while the cross currency swap matures in December 2024 concurrent with the maturity of the debt facility. The liquidity risk of these swaps are however fluctative by nature and is dependent upon the fair value of the swaps on maturity. The cross currency is expected to be roll forwarded without a liquidity effect in relation to the mentioned debt refinancing.
31 December 2022 Remaining period (NOK 1\u00a0000) | Less than 1\u00a0month | 1\u20133 Months | 3\u201312 Months | 1\u20135Years | More than 5 years | Total |
Bank overdrafts | - | - | ||||
Repayment of interest-bearing liabilities | 389 | 101\u00a0168 | 133\u00a0117 | 1\u00a0466\u00a0430 | 23\u00a0244 | 1\u00a0724\u00a0348 |
Interest on interest-bearing liabilities | 9\u00a0595 | 19\u00a0578 | 79\u00a0903 | 82\u00a0107 | 1\u00a0962 | 193\u00a0144 |
Non-current financial liabilities | - | - | - | 256\u00a0675 | - | 256\u00a0675 |
Other current financial liabilities | - | 75\u00a0051 | - | - | - | 75\u00a0051 |
Repayment of leases | 5\u00a0900 | 11\u00a0715 | 52\u00a0959 | 224\u00a0637 | 256\u00a0381 | 551\u00a0592 |
Interest on leases | 2\u00a0626 | 5\u00a0196 | 22\u00a0481 | 90\u00a0978 | 82\u00a0432 | 203\u00a0713 |
Trade payables | 475\u00a0232 | 97\u00a0337 | 572\u00a0569 | |||
Total | 493\u00a0743 | 310\u00a0044 | 288\u00a0461 | 2\u00a0120\u00a0826 | 364\u00a0019 | 3\u00a0577\u00a0092 |
(iv) Foreign exchange risk
As the Group has production and sales in different countries with different functional currencies, the Group may from time to time use forward contracts to reduce its currency risk from cash flows denominated in foreign currencies. Currency risk is calculated for each currency and takes into consideration assets and liabilities, off-bal-ance sheet obligations and highly probable purchases and sales in the relevant currency. The Group also has a cross currency interest rate swap which effectively converts its NOK 1.1 billion term loan to a USD 132.7 million USD loan (see also note 21). This financial instrument gives rise to foreign exchange effect in the profit/loss of the parent company, Hexagon Composites ASA. However, the parent company also has significant interest bearing loan receivable not designated as net investment hedges towards its US subsidiary Hexagon USA Holdings Inc. denominated in USD. The said portion of the receivable is subject to currency re-evaluations through the profit/loss which largely neutralizes the foreign exchange risk related to the mentioned cross currency swap.
The following table shows the group\u2019s sensitivity to potential changes in the Norwegian krone, with all other conditions remaining constant. The calculation is based on the same movement of the krone against the relevant currencies. The effect on the profit/loss is caused by currency effects from USD-denominated loan receivables not designated as net investment hedge through OCI, and currency effects of the cross currency swap.
The OCI effect is caused by currency effects of USD-denominated loan receivables designated as net invest-ments in foreign operations. In Hexagon Composites ASA, an intercompany interest-bearing loan of USD 5.2 million (MNOK 52.8) at 31 December 2023 (USD 105.2 million (MNOK 1\u00a0035.9) at 31 December 2022) has been designated as net investments in the US-based subsidiary, Hexagon USA Holdings Inc. The reduction in the
designated amount from 2022 to 2023 is related to a debt-to-equity conversion of USD 99.9 million in Hexagon USA Holdings Inc. in July 2023. The remaining balance is being used to reduce the exposure to the USD foreign exchange risk on this investment. Gains or losses on the retranslation of this borrowing are transferred to OCI to offset any gains or losses in the Group on translation of this loan in the Group.
Movement ofNOK against USD | Effect on profit/lossbefore tax (NOK 1\u00a0000) | Effect on other comprehensive income and expenses before tax (NOK 1\u00a0000) | |
2023 | +10% | (23 262) | (5 280) |
(10%) | 23 262 | 5 280 | |
2022 | +10% | (18 735) | (103 591) |
(10%) | 18 735 | 103 591 |
The fair values of derivatives classified as hedging instruments are reported under other current assets/liabilities or other non-current assets/liabilities depending on the recovery or settlement date for the associated hedged item.
As of 31 December 2023, the Group does not have any forward contracts.
As of 31 December 2022, the Group had the following forward contracts to hedge future sales to customers.
Forward exchange contracts | Currency sell/buy | Amount(1\u00a0000) | Maturity | Exchangerate | Fair value 31 Dec 2022 |
Forward contracts to hedge expected future sale | |||||
EUR/NOK | 100/1\u00a0050 | 2023 | 10.50\u201310.50 | - | |
Total | - |
The group does not apply hedge accounting for any of its derivatives
(v) Measurement of fair value
The fair value of forward exchange contracts is calculated by comparing the agreed forward rate and the estimated equivalent forward rate prevailing on the balance sheet date with the same maturity multiplied by the fixed volume specified in the contract. Contingent considerations arising from business combinations are measured as a best estimate of target achievement at each reporting date. For the derivatives, the fair value is confirmed by the financial institution with which the Company has entered into the contract.
The following of the Group\u2019s financial instruments are not measured at fair value: Cash & cash equivalents, trade receivable, other current receivables and payables and bank overdrafts. These items are recognized at nominal value in the balance sheet as of 31 December, without taking into account the discount rate which relates to future inflows and outflows. Loans to employees and non-current interest bearing liabilities are recognized in accordance with amortized cost.
The carrying amount of cash and cash equivalents is approximately equal to fair value since these instruments have a short term to maturity. Similarly, the carrying amount of trade receivables and other current receivables and payables is approximately equal to fair value since they are short term and entered into on \u201cnormal\u201d terms and conditions. The carrying amount of bank overdrafts are assessed to be approximately equal to fair value because the floating interest rate are adjusted to reflect current conditions.
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly
Level 3: Techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
Carrying amount and fair value of financial assets and financial liabilities
2023 | 2022 | ||||
(NOK 1\u00a0000) | Level | Book value | Fair value | Book value | Fair value |
Financial assets | |||||
Interest rate swaps | 2 | 20\u00a0174 | 20\u00a0174 | 25\u00a0431 | 25\u00a0431 |
Investments in shares | 3 | 5\u00a0391 | 5\u00a0391 | 67\u00a0727 | 67\u00a0727 |
Loans to associated companies | 2 | 100\u00a0102 | 100\u00a0102 | 48\u00a0270 | 48\u00a0270 |
Financial liabilities | |||||
Non-current interest-bearing liabilities | 2 | - | - | 1\u00a0482\u00a0140 | 1\u00a0489\u00a0674 |
Non-current contingent considerations | 3 | - | - | 39\u00a0789 | 39\u00a0789 |
Non-current financial liabilities | 3 | - | - | 216\u00a0885 | 216\u00a0885 |
Current interest-bearing liabilities | 2 | 1\u00a0108\u00a0468 | 1\u00a0111\u00a0255 | 234\u00a0674 | 234\u00a0674 |
Current contingent considerations | 3 | - | - | 29\u00a0275 | 29\u00a0275 |
Deferred payment from business combination | 3 | - | - | 45\u00a0776 | 45\u00a0776 |
Cross-currency swap | 2 | 252\u00a0299 | 252\u00a0299 | - | - |
Total return swap | 2 | 124\u00a0609 | 124\u00a0609 | - | - |
The fair values of the Group\u2019s interest-bearing bank loans are determined by using the DCF method using discount rate that reflects the issuer\u2019s borrowing rate as at the end of the reporting period. The own non-perfor-mance risk as at 31 December 2023 and 31 December 2022 was assessed to be insignificant.
The Group enters into foreign exchange contracts with various counterparties, principally financial institutions with investment grade credit ratings. Foreign exchange forward contracts are valued using valuation techniques, which employ the use of market observable inputs. The most frequently applied valuation techniques include forward pricing models using present value calculations.
Financial instruments apprised at fair value with gains and losses in the income statement
2023 | 2022 | |||
(NOK 1\u00a0000) | Assets | Liabilities | Assets | Liabilities |
Level 1: Based on prices in an active market | - | - | - | |
Level 2: Observable market data\u200c1 | 20\u00a0174 | 376\u00a0909 | 25\u00a0431 | 216\u00a0885 |
Level 3: Other than observable market data\u200c2 | 5\u00a0391 | - | 67\u00a0727 | 69\u00a0064 |
Total financial instruments at fair value | 25\u00a0565 | 376\u00a0909 | 93\u00a0158 | 285\u00a0950 |
1Level 2 relates to interest rate swap shown in note 12and a cross currency swap and total return swap shown in note 21. Level 2 is estimated based on calculating the net present value of future cash flows, using interest rate curves, exchange rates and currency spreads as of the balance sheet date.
2Level 3 instruments in 2022 relates largely to contingent considerations and unlisted equity investments in Hexagon Purus, which were derecog-nized on 29 June 2023. In 2023, the Group has only minor unlisted equity investments measured at fair value.
Financial instruments appraised at fair value with gains and losses over other income and expenses in total comprehensive income
(NOK 1\u00a0000) | 2023 | 2022 |
Level 1: Based on prices in an active market | - | - |
Level 2: Observable market data | - | - |
Level 3: Other than observable market data | - | - |
Total financial instruments at fair value | - | - |
Other information relating to financial instruments
During the reporting period there were no financial assets or liabilities which were reclassified by changing the measurement method from amortized cost to fair value or vice versa, and there were no changes in the fair value measurement which caused transfers between level 1 and level 2, and no transfers to or from level 3.
(vi) Capital structure and equity
The main goal of the Group\u2019s capital structure management is to ensure it maintains a strong credit rating (and therefore reasonable borrowing terms from lenders) and a level of equity which is reasonable in relation to the Group\u2019s operations.
By achieving a good debt/equity ratio, the Group will be able to support its operations and in doing so maximize the value of its shares. The Group\u2019s shareholders shall receive a competitive return on their shares, mainly through price increases in the Group\u2019s shares, but also in the form of dividends based on financial performance/investment needs.
The Group manages and makes necessary changes to its capital structure by regularly assessing prevailing economic conditions and prospects of short and medium-term growth.
Capital structure management is largely dealt with by means of new share issues. No changes to guidelines in this area were made in 2022 or 2023.
Note 32\tClimate risk
Climate change is among the most important meg-atrends affecting businesses across all sectors today. The urgent need for a transition to a resource-efficient, low-carbon economy opens new business opportuni-ties for Hexagon, as a solutions provider in this space. The transition to a low-carbon economy will continue to entail extensive policy, legal, technology, and market changes, with a potential to have significant impact on Hexagon\u2019s revenues. The Group has experienced an increasing demand for its near-zero- and zero emis-sion energy solutions in the last couple of years due to an increased global focus on climate change and -mitigation. Hexagon expects this focus to continue and expects strong sustainability-driven demand in all its businesses in the years ahead. This climate-related opportunity has impacted the Company\u2019s goodwill impairment tests by being an important driver for future revenue- and activity growth in the financial planning in these tests. In addition, the climate-related opportunities also positively impact the Company\u2019s assessment of future economic benefits expected to materialize from capitalized development projects.
Climate change also represents some level of physical risk to the Group in terms of severe climate events that could damage business facilities or disrupt supply chains. As a part of the Group\u2019s work with the EU Taxonomy, a physical climate risk and vulnerability assessment has been performed for all operational sites. Based on the assessment, Hexagon has identified extreme wind and tornados in the US as events that may cause significant damage or disruptions. More specifically, Hexagon Agility\u2019s cylinder production
facilities in Lincoln, Nebraska is one of the most tor-nado-prone areas in the US, and a direct hit from a major tornado could be a catastrophic event. Although tornados are common in Nebraska, any particular square km of the state will be hit by a tornado less than once every 1\u00a0000 years. As such, the likelihood of a direct hit is considered rare. Extreme wind, particularly from tropical typhones in the Eastern US is also a regularly occurring natural hazard. Hexagon Agility\u2019s facilities in Salisbury, North Carolina, is located in this area and could potentially be exposed to extreme wind or hurricanes with potentially severe physical damages to the facilities and thus production capacity.
Despite the fact that the above-mentioned natural hazards could potentially represent siginficant financial effects for the Group, Hexagon has not identified material assets expected to have a significantly shorter life due to these climate-related risks. It is also noted that Hexagon has insurance coverage for both physical damages as well as for business interruptions.
Hexagon strives to maximize the positive climate impact of its technologies by enabling the avoidance of greenhouse gas emissions from both material pro-duction and waste management in the application of those technologies. The most significant contributors to Hexagon\u2019s own greenhouse gas emissions are the production processes which, throughout the value chain, can be reduced to further strengthen Hexagon\u2019s business model. More information on climate and environmental risks and how these are managed can be found in the Sustainability Report.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__151-1": { "value": "Note 25\tMarket risk
Financial risk
The Group\u2019s principal financial liabilities, other than derivatives, comprise loans and borrowings, and trade and other payables. The main purpose of these financial liabilities is to finance the Group\u2019s operations. The Group\u2019s principal financial assets include trade receivables, cash and cash equivalents that derive directly from its opera-tions. The Group use some financial derivatives for hedging purposes.
The Group is exposed to interest rate risk, liquidity risk, currency risk and credit risk. The Group\u2019s management regularly evaluates these risks and defines guidelines on appropriate financial risk governance framework for the Group. Procedures for risk management are adopted by the board and carried out by the chief financial officer in close cooperation with the subsidiaries.
The Group may use financial instruments to hedge risks associated with interest rate and foreign currency fluctu-ations. The Group uses derivative financial instruments to minimize these risks under its strategy for interest and currency exposure. The accounting treatment of financial derivatives is described in note 2.
(iv) Foreign exchange risk
As the Group has production and sales in different countries with different functional currencies, the Group may from time to time use forward contracts to reduce its currency risk from cash flows denominated in foreign currencies. Currency risk is calculated for each currency and takes into consideration assets and liabilities, off-bal-ance sheet obligations and highly probable purchases and sales in the relevant currency. The Group also has a cross currency interest rate swap which effectively converts its NOK 1.1 billion term loan to a USD 132.7 million USD loan (see also note 21). This financial instrument gives rise to foreign exchange effect in the profit/loss of the parent company, Hexagon Composites ASA. However, the parent company also has significant interest bearing loan receivable not designated as net investment hedges towards its US subsidiary Hexagon USA Holdings Inc. denominated in USD. The said portion of the receivable is subject to currency re-evaluations through the profit/loss which largely neutralizes the foreign exchange risk related to the mentioned cross currency swap.
The following table shows the group\u2019s sensitivity to potential changes in the Norwegian krone, with all other conditions remaining constant. The calculation is based on the same movement of the krone against the relevant currencies. The effect on the profit/loss is caused by currency effects from USD-denominated loan receivables not designated as net investment hedge through OCI, and currency effects of the cross currency swap.
The OCI effect is caused by currency effects of USD-denominated loan receivables designated as net invest-ments in foreign operations. In Hexagon Composites ASA, an intercompany interest-bearing loan of USD 5.2 million (MNOK 52.8) at 31 December 2023 (USD 105.2 million (MNOK 1\u00a0035.9) at 31 December 2022) has been designated as net investments in the US-based subsidiary, Hexagon USA Holdings Inc. The reduction in the
designated amount from 2022 to 2023 is related to a debt-to-equity conversion of USD 99.9 million in Hexagon USA Holdings Inc. in July 2023. The remaining balance is being used to reduce the exposure to the USD foreign exchange risk on this investment. Gains or losses on the retranslation of this borrowing are transferred to OCI to offset any gains or losses in the Group on translation of this loan in the Group.
Movement ofNOK against USD | Effect on profit/lossbefore tax (NOK 1\u00a0000) | Effect on other comprehensive income and expenses before tax (NOK 1\u00a0000) | |
2023 | +10% | (23 262) | (5 280) |
(10%) | 23 262 | 5 280 | |
2022 | +10% | (18 735) | (103 591) |
(10%) | 18 735 | 103 591 |
The fair values of derivatives classified as hedging instruments are reported under other current assets/liabilities or other non-current assets/liabilities depending on the recovery or settlement date for the associated hedged item.
As of 31 December 2023, the Group does not have any forward contracts.
As of 31 December 2022, the Group had the following forward contracts to hedge future sales to customers.
Forward exchange contracts | Currency sell/buy | Amount(1\u00a0000) | Maturity | Exchangerate | Fair value 31 Dec 2022 |
Forward contracts to hedge expected future sale | |||||
EUR/NOK | 100/1\u00a0050 | 2023 | 10.50\u201310.50 | - | |
Total | - |
The group does not apply hedge accounting for any of its derivatives
Note 32\tClimate risk
Climate change is among the most important meg-atrends affecting businesses across all sectors today. The urgent need for a transition to a resource-efficient, low-carbon economy opens new business opportuni-ties for Hexagon, as a solutions provider in this space. The transition to a low-carbon economy will continue to entail extensive policy, legal, technology, and market changes, with a potential to have significant impact on Hexagon\u2019s revenues. The Group has experienced an increasing demand for its near-zero- and zero emis-sion energy solutions in the last couple of years due to an increased global focus on climate change and -mitigation. Hexagon expects this focus to continue and expects strong sustainability-driven demand in all its businesses in the years ahead. This climate-related opportunity has impacted the Company\u2019s goodwill impairment tests by being an important driver for future revenue- and activity growth in the financial planning in these tests. In addition, the climate-related opportunities also positively impact the Company\u2019s assessment of future economic benefits expected to materialize from capitalized development projects.
Climate change also represents some level of physical risk to the Group in terms of severe climate events that could damage business facilities or disrupt supply chains. As a part of the Group\u2019s work with the EU Taxonomy, a physical climate risk and vulnerability assessment has been performed for all operational sites. Based on the assessment, Hexagon has identified extreme wind and tornados in the US as events that may cause significant damage or disruptions. More specifically, Hexagon Agility\u2019s cylinder production
facilities in Lincoln, Nebraska is one of the most tor-nado-prone areas in the US, and a direct hit from a major tornado could be a catastrophic event. Although tornados are common in Nebraska, any particular square km of the state will be hit by a tornado less than once every 1\u00a0000 years. As such, the likelihood of a direct hit is considered rare. Extreme wind, particularly from tropical typhones in the Eastern US is also a regularly occurring natural hazard. Hexagon Agility\u2019s facilities in Salisbury, North Carolina, is located in this area and could potentially be exposed to extreme wind or hurricanes with potentially severe physical damages to the facilities and thus production capacity.
Despite the fact that the above-mentioned natural hazards could potentially represent siginficant financial effects for the Group, Hexagon has not identified material assets expected to have a significantly shorter life due to these climate-related risks. It is also noted that Hexagon has insurance coverage for both physical damages as well as for business interruptions.
Hexagon strives to maximize the positive climate impact of its technologies by enabling the avoidance of greenhouse gas emissions from both material pro-duction and waste management in the application of those technologies. The most significant contributors to Hexagon\u2019s own greenhouse gas emissions are the production processes which, throughout the value chain, can be reduced to further strengthen Hexagon\u2019s business model. More information on climate and environmental risks and how these are managed can be found in the Sustainability Report.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__152-1": { "value": "The Group has the following financial assets and liabilities divided into different categories for accounting treatment and reconciled against the balance sheet items 31 December 2023
(NOK 1\u00a0000) | Derivatives designated as hedging instruments through profit or loss | Equity instruments designated at fair value through OCI | Financial instruments at fair value through P&L | Financial instruments at amortized cost | |
Total | |||||
Assets | |||||
Other non-current financial assets | 20\u00a0174 | 5 391 | 100 102 | 125\u00a0667 | |
Trade receivables | 551\u00a0356 | 551\u00a0356 | |||
Bank deposits, cash and cash equivalents | 154\u00a0350 | 154\u00a0350 | |||
Total financial assets | 20\u00a0174 | - | 5 391 | 805 808 | 831\u00a0373 |
Liabilities | |||||
Non-current lease liabilities | 387\u00a0260 | 387\u00a0260 | |||
Current lease liabilities | 61\u00a0867 | 61\u00a0867 | |||
Current interest-bearing liabilities | 1\u00a0108\u00a0468 | 1\u00a0108\u00a0468 | |||
Other current financial liabilities | 376\u00a0909 | - | - | 376\u00a0909 | |
Trade payables | 384\u00a0015 | 384\u00a0015 | |||
Total financial liabilities | 376\u00a0909 | - | - | 1\u00a0941\u00a0610 | 2\u00a0318\u00a0518 |
The Group has the following financial assets and liabilities divided into different categories for accounting treatment and reconciled against the balance sheet items 31 December 2022
(NOK 1\u00a0000) | Derivatives designated as hedging instruments through profit or loss | Equity instruments designated at fair value through OCI | Financial instruments at fair value through P&L | Financial instruments at amortized cost | |
Total | |||||
Assets | |||||
Other non-current financial assets | 25\u00a0431 | 67 727 | 48 270 | 141\u00a0429 | |
Trade receivables | 865\u00a0403 | 865\u00a0403 | |||
Bank deposits, cash and cash equivalents | 713\u00a0547 | 713\u00a0547 | |||
Total financial assets | 25\u00a0431 | - | 67 727 | 1 627 220 | 1\u00a0720\u00a0378 |
Liabilities | |||||
Non-current interest-bearing liabilities | 1\u00a0482\u00a0140 | 1\u00a0482\u00a0140 | |||
Other non-current financial liabilities | 216\u00a0885 | 39\u00a0789 | - | 256\u00a0675 | |
Non-current lease liabilities | 481\u00a0018 | 481\u00a0018 | |||
Current lease liabilities | 70\u00a0574 | 70\u00a0574 | |||
Current interest-bearing liabilities | 234\u00a0674 | 234\u00a0674 | |||
Other current financial liabilities | 29 275 | 45 776 | 75 051 | ||
Trade payables | 572\u00a0569 | 572\u00a0569 | |||
Total financial liabilities | 216\u00a0885 | - | 69 064 | 2 886 751 | 3 172 701 |
(v) Measurement of fair value
The fair value of forward exchange contracts is calculated by comparing the agreed forward rate and the estimated equivalent forward rate prevailing on the balance sheet date with the same maturity multiplied by the fixed volume specified in the contract. Contingent considerations arising from business combinations are measured as a best estimate of target achievement at each reporting date. For the derivatives, the fair value is confirmed by the financial institution with which the Company has entered into the contract.
The following of the Group\u2019s financial instruments are not measured at fair value: Cash & cash equivalents, trade receivable, other current receivables and payables and bank overdrafts. These items are recognized at nominal value in the balance sheet as of 31 December, without taking into account the discount rate which relates to future inflows and outflows. Loans to employees and non-current interest bearing liabilities are recognized in accordance with amortized cost.
The carrying amount of cash and cash equivalents is approximately equal to fair value since these instruments have a short term to maturity. Similarly, the carrying amount of trade receivables and other current receivables and payables is approximately equal to fair value since they are short term and entered into on \u201cnormal\u201d terms and conditions. The carrying amount of bank overdrafts are assessed to be approximately equal to fair value because the floating interest rate are adjusted to reflect current conditions.
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly
Level 3: Techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
Carrying amount and fair value of financial assets and financial liabilities
2023 | 2022 | ||||
(NOK 1\u00a0000) | Level | Book value | Fair value | Book value | Fair value |
Financial assets | |||||
Interest rate swaps | 2 | 20\u00a0174 | 20\u00a0174 | 25\u00a0431 | 25\u00a0431 |
Investments in shares | 3 | 5\u00a0391 | 5\u00a0391 | 67\u00a0727 | 67\u00a0727 |
Loans to associated companies | 2 | 100\u00a0102 | 100\u00a0102 | 48\u00a0270 | 48\u00a0270 |
Financial liabilities | |||||
Non-current interest-bearing liabilities | 2 | - | - | 1\u00a0482\u00a0140 | 1\u00a0489\u00a0674 |
Non-current contingent considerations | 3 | - | - | 39\u00a0789 | 39\u00a0789 |
Non-current financial liabilities | 3 | - | - | 216\u00a0885 | 216\u00a0885 |
Current interest-bearing liabilities | 2 | 1\u00a0108\u00a0468 | 1\u00a0111\u00a0255 | 234\u00a0674 | 234\u00a0674 |
Current contingent considerations | 3 | - | - | 29\u00a0275 | 29\u00a0275 |
Deferred payment from business combination | 3 | - | - | 45\u00a0776 | 45\u00a0776 |
Cross-currency swap | 2 | 252\u00a0299 | 252\u00a0299 | - | - |
Total return swap | 2 | 124\u00a0609 | 124\u00a0609 | - | - |
The fair values of the Group\u2019s interest-bearing bank loans are determined by using the DCF method using discount rate that reflects the issuer\u2019s borrowing rate as at the end of the reporting period. The own non-perfor-mance risk as at 31 December 2023 and 31 December 2022 was assessed to be insignificant.
The Group enters into foreign exchange contracts with various counterparties, principally financial institutions with investment grade credit ratings. Foreign exchange forward contracts are valued using valuation techniques, which employ the use of market observable inputs. The most frequently applied valuation techniques include forward pricing models using present value calculations.
Financial instruments apprised at fair value with gains and losses in the income statement
2023 | 2022 | |||
(NOK 1\u00a0000) | Assets | Liabilities | Assets | Liabilities |
Level 1: Based on prices in an active market | - | - | - | |
Level 2: Observable market data\u200c1 | 20\u00a0174 | 376\u00a0909 | 25\u00a0431 | 216\u00a0885 |
Level 3: Other than observable market data\u200c2 | 5\u00a0391 | - | 67\u00a0727 | 69\u00a0064 |
Total financial instruments at fair value | 25\u00a0565 | 376\u00a0909 | 93\u00a0158 | 285\u00a0950 |
1Level 2 relates to interest rate swap shown in note 12and a cross currency swap and total return swap shown in note 21. Level 2 is estimated based on calculating the net present value of future cash flows, using interest rate curves, exchange rates and currency spreads as of the balance sheet date.
2Level 3 instruments in 2022 relates largely to contingent considerations and unlisted equity investments in Hexagon Purus, which were derecog-nized on 29 June 2023. In 2023, the Group has only minor unlisted equity investments measured at fair value.
Financial instruments appraised at fair value with gains and losses over other income and expenses in total comprehensive income
(NOK 1\u00a0000) | 2023 | 2022 |
Level 1: Based on prices in an active market | - | - |
Level 2: Observable market data | - | - |
Level 3: Other than observable market data | - | - |
Total financial instruments at fair value | - | - |
Other information relating to financial instruments
During the reporting period there were no financial assets or liabilities which were reclassified by changing the measurement method from amortized cost to fair value or vice versa, and there were no changes in the fair value measurement which caused transfers between level 1 and level 2, and no transfers to or from level 3.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "s9_notes__6__153-1": { "value": "The Group has the following financial assets and liabilities divided into different categories for accounting treatment and reconciled against the balance sheet items 31 December 2023
(NOK 1\u00a0000) | Derivatives designated as hedging instruments through profit or loss | Equity instruments designated at fair value through OCI | Financial instruments at fair value through P&L | Financial instruments at amortized cost | |
Total | |||||
Assets | |||||
Other non-current financial assets | 20\u00a0174 | 5 391 | 100 102 | 125\u00a0667 | |
Trade receivables | 551\u00a0356 | 551\u00a0356 | |||
Bank deposits, cash and cash equivalents | 154\u00a0350 | 154\u00a0350 | |||
Total financial assets | 20\u00a0174 | - | 5 391 | 805 808 | 831\u00a0373 |
Liabilities | |||||
Non-current lease liabilities | 387\u00a0260 | 387\u00a0260 | |||
Current lease liabilities | 61\u00a0867 | 61\u00a0867 | |||
Current interest-bearing liabilities | 1\u00a0108\u00a0468 | 1\u00a0108\u00a0468 | |||
Other current financial liabilities | 376\u00a0909 | - | - | 376\u00a0909 | |
Trade payables | 384\u00a0015 | 384\u00a0015 | |||
Total financial liabilities | 376\u00a0909 | - | - | 1\u00a0941\u00a0610 | 2\u00a0318\u00a0518 |
The Group has the following financial assets and liabilities divided into different categories for accounting treatment and reconciled against the balance sheet items 31 December 2022
(NOK 1\u00a0000) | Derivatives designated as hedging instruments through profit or loss | Equity instruments designated at fair value through OCI | Financial instruments at fair value through P&L | Financial instruments at amortized cost | |
Total | |||||
Assets | |||||
Other non-current financial assets | 25\u00a0431 | 67 727 | 48 270 | 141\u00a0429 | |
Trade receivables | 865\u00a0403 | 865\u00a0403 | |||
Bank deposits, cash and cash equivalents | 713\u00a0547 | 713\u00a0547 | |||
Total financial assets | 25\u00a0431 | - | 67 727 | 1 627 220 | 1\u00a0720\u00a0378 |
Liabilities | |||||
Non-current interest-bearing liabilities | 1\u00a0482\u00a0140 | 1\u00a0482\u00a0140 | |||
Other non-current financial liabilities | 216\u00a0885 | 39\u00a0789 | - | 256\u00a0675 | |
Non-current lease liabilities | 481\u00a0018 | 481\u00a0018 | |||
Current lease liabilities | 70\u00a0574 | 70\u00a0574 | |||
Current interest-bearing liabilities | 234\u00a0674 | 234\u00a0674 | |||
Other current financial liabilities | 29 275 | 45 776 | 75 051 | ||
Trade payables | 572\u00a0569 | 572\u00a0569 | |||
Total financial liabilities | 216\u00a0885 | - | 69 064 | 2 886 751 | 3 172 701 |
(v) Measurement of fair value
The fair value of forward exchange contracts is calculated by comparing the agreed forward rate and the estimated equivalent forward rate prevailing on the balance sheet date with the same maturity multiplied by the fixed volume specified in the contract. Contingent considerations arising from business combinations are measured as a best estimate of target achievement at each reporting date. For the derivatives, the fair value is confirmed by the financial institution with which the Company has entered into the contract.
The following of the Group\u2019s financial instruments are not measured at fair value: Cash & cash equivalents, trade receivable, other current receivables and payables and bank overdrafts. These items are recognized at nominal value in the balance sheet as of 31 December, without taking into account the discount rate which relates to future inflows and outflows. Loans to employees and non-current interest bearing liabilities are recognized in accordance with amortized cost.
The carrying amount of cash and cash equivalents is approximately equal to fair value since these instruments have a short term to maturity. Similarly, the carrying amount of trade receivables and other current receivables and payables is approximately equal to fair value since they are short term and entered into on \u201cnormal\u201d terms and conditions. The carrying amount of bank overdrafts are assessed to be approximately equal to fair value because the floating interest rate are adjusted to reflect current conditions.
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly
Level 3: Techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
Carrying amount and fair value of financial assets and financial liabilities
2023 | 2022 | ||||
(NOK 1\u00a0000) | Level | Book value | Fair value | Book value | Fair value |
Financial assets | |||||
Interest rate swaps | 2 | 20\u00a0174 | 20\u00a0174 | 25\u00a0431 | 25\u00a0431 |
Investments in shares | 3 | 5\u00a0391 | 5\u00a0391 | 67\u00a0727 | 67\u00a0727 |
Loans to associated companies | 2 | 100\u00a0102 | 100\u00a0102 | 48\u00a0270 | 48\u00a0270 |
Financial liabilities | |||||
Non-current interest-bearing liabilities | 2 | - | - | 1\u00a0482\u00a0140 | 1\u00a0489\u00a0674 |
Non-current contingent considerations | 3 | - | - | 39\u00a0789 | 39\u00a0789 |
Non-current financial liabilities | 3 | - | - | 216\u00a0885 | 216\u00a0885 |
Current interest-bearing liabilities | 2 | 1\u00a0108\u00a0468 | 1\u00a0111\u00a0255 | 234\u00a0674 | 234\u00a0674 |
Current contingent considerations | 3 | - | - | 29\u00a0275 | 29\u00a0275 |
Deferred payment from business combination | 3 | - | - | 45\u00a0776 | 45\u00a0776 |
Cross-currency swap | 2 | 252\u00a0299 | 252\u00a0299 | - | - |
Total return swap | 2 | 124\u00a0609 | 124\u00a0609 | - | - |
The fair values of the Group\u2019s interest-bearing bank loans are determined by using the DCF method using discount rate that reflects the issuer\u2019s borrowing rate as at the end of the reporting period. The own non-perfor-mance risk as at 31 December 2023 and 31 December 2022 was assessed to be insignificant.
The Group enters into foreign exchange contracts with various counterparties, principally financial institutions with investment grade credit ratings. Foreign exchange forward contracts are valued using valuation techniques, which employ the use of market observable inputs. The most frequently applied valuation techniques include forward pricing models using present value calculations.
Financial instruments apprised at fair value with gains and losses in the income statement
2023 | 2022 | |||
(NOK 1\u00a0000) | Assets | Liabilities | Assets | Liabilities |
Level 1: Based on prices in an active market | - | - | - | |
Level 2: Observable market data\u200c1 | 20\u00a0174 | 376\u00a0909 | 25\u00a0431 | 216\u00a0885 |
Level 3: Other than observable market data\u200c2 | 5\u00a0391 | - | 67\u00a0727 | 69\u00a0064 |
Total financial instruments at fair value | 25\u00a0565 | 376\u00a0909 | 93\u00a0158 | 285\u00a0950 |
1Level 2 relates to interest rate swap shown in note 12and a cross currency swap and total return swap shown in note 21. Level 2 is estimated based on calculating the net present value of future cash flows, using interest rate curves, exchange rates and currency spreads as of the balance sheet date.
2Level 3 instruments in 2022 relates largely to contingent considerations and unlisted equity investments in Hexagon Purus, which were derecog-nized on 29 June 2023. In 2023, the Group has only minor unlisted equity investments measured at fair value.
Financial instruments appraised at fair value with gains and losses over other income and expenses in total comprehensive income
(NOK 1\u00a0000) | 2023 | 2022 |
Level 1: Based on prices in an active market | - | - |
Level 2: Observable market data | - | - |
Level 3: Other than observable market data | - | - |
Total financial instruments at fair value | - | - |
Other information relating to financial instruments
During the reporting period there were no financial assets or liabilities which were reclassified by changing the measurement method from amortized cost to fair value or vice versa, and there were no changes in the fair value measurement which caused transfers between level 1 and level 2, and no transfers to or from level 3.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f81231": { "value": "(I) Credit risk
The Group is mainly exposed to credit risk associated with trade receivables and contract assets. The Group minimizes its exposure to credit risk by ensuring that all parties requiring defined levels of credit (primarily trade receivables) are approved and undergo a credit check.
The Group has a small number of large customers or counterparties who could be considered to be a Group due to similarities in credit risk. The risk associated with these counterparties is regularly reviewed and is minimized by measures such as use of credit insurance. The subsidiaries Hexagon Ragasco AS and Hexagon Agility GmbH applies credit insurance to cover parts of the companies\u2019 receivables.
Trade receivables amounted to NOK 560 million (NOK 879 million). Except of parts in Hexagon Ragasco AS and Hexagon Agility GmbH these do not have credit insurance. However, these are partly covered through Letter of Credits and prepayments from customers.
The Group has policies in place to ensure that sales of products are made to customers with an appropriate credit history and that outstanding amounts do not exceed the defined credit limits. Credit information is also used in the group\u2019s regular appraisal of new and existing customers.
The Group has not issued guarantees for third party obligations.
The carrying amount of the financial assets, including derivatives, in the balance sheet represents the maximum risk exposure. As counterparties in derivative transactions are normally banks, the credit risk associated with derivatives is considered to be negligible. The Group considers its maximum risk exposure to be the carrying amount of its trade receivables (see note 14).
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns (i.e. geographical region, product type, customer type and rating, coverage by letter of credit or prepayments or other forms of credit insurance). The calculation reflects the probability-weighted outcome and reasonable and supportable information that is available at the reporting date about past events, current con-ditions and forecasts of future economic conditions. Generally, trade receivables are written-off if past due for more than one year and are not subject to enforcement activity. Note 14disclose the ageing of trade receivables.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f82165": { "value": "(iii) Liquidity risk
Liquidity risk is the risk of the group not being in a position to fulfil its financial liabilities when they fall due. The group\u2019s strategy for managing liquidity risk is to set a level of available liquidity to enable it to discharge its finan-cial liabilities when they fall due, both under normal and unexpected circumstances, without risking unacceptable losses or damaging the group\u2019s reputation. Undrawn credit facilities are disclosed in note16.
The majority of excess liquidity is invested in bank deposits
The following table provides an overview of the maturity structure of the group\u2019s financial obligations based on undiscounted contractual payments. In cases where the counterparty is entitled to ask for early settlement, the amount is included in the earliest period in which the payment may be demanded. If the counterparty is entitled to ask for on-demand settlement, the amount is included in the first column (under 1 month):
31 December 2023 Remaining period (NOK 1\u00a0000) | Less than 1\u00a0month | 1\u20133 Months | 3\u201312 Months | 1\u20135Years | More than 5 years | Total |
Repayment of interest-bearing liabilities | - | - | 1\u00a0111\u00a0255 | - | - | 1\u00a0111\u00a0255 |
Interest on interest-bearing liabilities | 6\u00a0151 | 12\u00a0413 | 55\u00a0029 | - | - | 73\u00a0593 |
Current financial liabilities | - | - | 376\u00a0909 | - | - | 376\u00a0909 |
Repayment of leases | 5\u00a0218 | 10\u00a0491 | 46\u00a0158 | 160\u00a0556 | 226\u00a0704 | 449\u00a0127 |
Interest on leases | 2\u00a0072 | 4\u00a0089 | 17\u00a0495 | 69\u00a0252 | 62\u00a0769 | 155\u00a0675 |
Trade payables | 345\u00a0613 | 38\u00a0401 | 384\u00a0015 | |||
Total | 359\u00a0054 | 65\u00a0394 | 1\u00a0606\u00a0845 | 229\u00a0807 | 289\u00a0473 | 2\u00a0550\u00a0574 |
The Group\u2019s interest-bearing debt facilities matures in December 2024, and has thus been classified and presented as current liabiltities. Hexagon management is however in advanced discussions with its banking partners, DNB and Danske Bank, to refinance its debt facilities, which is expected to be finalized well in advance of December 2024. See also note20.
Current financial liabilities consist of a negative fair value on the group cross currency swap of NOK 252 million and a negative fair value of a total return swap with Hexagon Purus shares as underlying of NOK 125 million. The TRS matures in June 2024 while the cross currency swap matures in December 2024 concurrent with the maturity of the debt facility. The liquidity risk of these swaps are however fluctative by nature and is dependent upon the fair value of the swaps on maturity. The cross currency is expected to be roll forwarded without a liquidity effect in relation to the mentioned debt refinancing.
31 December 2022 Remaining period (NOK 1\u00a0000) | Less than 1\u00a0month | 1\u20133 Months | 3\u201312 Months | 1\u20135Years | More than 5 years | Total |
Bank overdrafts | - | - | ||||
Repayment of interest-bearing liabilities | 389 | 101\u00a0168 | 133\u00a0117 | 1\u00a0466\u00a0430 | 23\u00a0244 | 1\u00a0724\u00a0348 |
Interest on interest-bearing liabilities | 9\u00a0595 | 19\u00a0578 | 79\u00a0903 | 82\u00a0107 | 1\u00a0962 | 193\u00a0144 |
Non-current financial liabilities | - | - | - | 256\u00a0675 | - | 256\u00a0675 |
Other current financial liabilities | - | 75\u00a0051 | - | - | - | 75\u00a0051 |
Repayment of leases | 5\u00a0900 | 11\u00a0715 | 52\u00a0959 | 224\u00a0637 | 256\u00a0381 | 551\u00a0592 |
Interest on leases | 2\u00a0626 | 5\u00a0196 | 22\u00a0481 | 90\u00a0978 | 82\u00a0432 | 203\u00a0713 |
Trade payables | 475\u00a0232 | 97\u00a0337 | 572\u00a0569 | |||
Total | 493\u00a0743 | 310\u00a0044 | 288\u00a0461 | 2\u00a0120\u00a0826 | 364\u00a0019 | 3\u00a0577\u00a0092 |
(iv) Foreign exchange risk
As the Group has production and sales in different countries with different functional currencies, the Group may from time to time use forward contracts to reduce its currency risk from cash flows denominated in foreign currencies. Currency risk is calculated for each currency and takes into consideration assets and liabilities, off-bal-ance sheet obligations and highly probable purchases and sales in the relevant currency. The Group also has a cross currency interest rate swap which effectively converts its NOK 1.1 billion term loan to a USD 132.7 million USD loan (see also note 21). This financial instrument gives rise to foreign exchange effect in the profit/loss of the parent company, Hexagon Composites ASA. However, the parent company also has significant interest bearing loan receivable not designated as net investment hedges towards its US subsidiary Hexagon USA Holdings Inc. denominated in USD. The said portion of the receivable is subject to currency re-evaluations through the profit/loss which largely neutralizes the foreign exchange risk related to the mentioned cross currency swap.
The following table shows the group\u2019s sensitivity to potential changes in the Norwegian krone, with all other conditions remaining constant. The calculation is based on the same movement of the krone against the relevant currencies. The effect on the profit/loss is caused by currency effects from USD-denominated loan receivables not designated as net investment hedge through OCI, and currency effects of the cross currency swap.
The OCI effect is caused by currency effects of USD-denominated loan receivables designated as net invest-ments in foreign operations. In Hexagon Composites ASA, an intercompany interest-bearing loan of USD 5.2 million (MNOK 52.8) at 31 December 2023 (USD 105.2 million (MNOK 1\u00a0035.9) at 31 December 2022) has been designated as net investments in the US-based subsidiary, Hexagon USA Holdings Inc. The reduction in the
designated amount from 2022 to 2023 is related to a debt-to-equity conversion of USD 99.9 million in Hexagon USA Holdings Inc. in July 2023. The remaining balance is being used to reduce the exposure to the USD foreign exchange risk on this investment. Gains or losses on the retranslation of this borrowing are transferred to OCI to offset any gains or losses in the Group on translation of this loan in the Group.
Movement ofNOK against USD | Effect on profit/lossbefore tax (NOK 1\u00a0000) | Effect on other comprehensive income and expenses before tax (NOK 1\u00a0000) | |
2023 | +10% | (23 262) | (5 280) |
(10%) | 23 262 | 5 280 | |
2022 | +10% | (18 735) | (103 591) |
(10%) | 18 735 | 103 591 |
The fair values of derivatives classified as hedging instruments are reported under other current assets/liabilities or other non-current assets/liabilities depending on the recovery or settlement date for the associated hedged item.
As of 31 December 2023, the Group does not have any forward contracts.
As of 31 December 2022, the Group had the following forward contracts to hedge future sales to customers.
Forward exchange contracts | Currency sell/buy | Amount(1\u00a0000) | Maturity | Exchangerate | Fair value 31 Dec 2022 |
Forward contracts to hedge expected future sale | |||||
EUR/NOK | 100/1\u00a0050 | 2023 | 10.50\u201310.50 | - | |
Total | - |
The group does not apply hedge accounting for any of its derivatives
Note 31\tExchange rates
Exchange rate1 Jan 2023 | Average exchange\u00a0rate2023 | Exchange rate 31 Dec\u00a02023 | |
USD | 9.8573 | 10.5635 | 10.1724 |
CAD | 7.2810 | 7.8262 | 7.6769 |
EUR | 10.5138 | 11.4242 | 11.2405 |
GBP | 11.8541 | 13.1361 | 12.9342 |
RUB | 13.6700 | 12.4041 | 11.4000 |
SEK | 94.5300 | 99.604 | 101.3000 |
HKD | 1.2642 | 1.349 | 1.3023 |
CNY | 142.8900 | 149.202 | 143.1700 |
(v) Measurement of fair value
The fair value of forward exchange contracts is calculated by comparing the agreed forward rate and the estimated equivalent forward rate prevailing on the balance sheet date with the same maturity multiplied by the fixed volume specified in the contract. Contingent considerations arising from business combinations are measured as a best estimate of target achievement at each reporting date. For the derivatives, the fair value is confirmed by the financial institution with which the Company has entered into the contract.
The following of the Group\u2019s financial instruments are not measured at fair value: Cash & cash equivalents, trade receivable, other current receivables and payables and bank overdrafts. These items are recognized at nominal value in the balance sheet as of 31 December, without taking into account the discount rate which relates to future inflows and outflows. Loans to employees and non-current interest bearing liabilities are recognized in accordance with amortized cost.
The carrying amount of cash and cash equivalents is approximately equal to fair value since these instruments have a short term to maturity. Similarly, the carrying amount of trade receivables and other current receivables and payables is approximately equal to fair value since they are short term and entered into on \u201cnormal\u201d terms and conditions. The carrying amount of bank overdrafts are assessed to be approximately equal to fair value because the floating interest rate are adjusted to reflect current conditions.
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly
Level 3: Techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
Carrying amount and fair value of financial assets and financial liabilities
2023 | 2022 | ||||
(NOK 1\u00a0000) | Level | Book value | Fair value | Book value | Fair value |
Financial assets | |||||
Interest rate swaps | 2 | 20\u00a0174 | 20\u00a0174 | 25\u00a0431 | 25\u00a0431 |
Investments in shares | 3 | 5\u00a0391 | 5\u00a0391 | 67\u00a0727 | 67\u00a0727 |
Loans to associated companies | 2 | 100\u00a0102 | 100\u00a0102 | 48\u00a0270 | 48\u00a0270 |
Financial liabilities | |||||
Non-current interest-bearing liabilities | 2 | - | - | 1\u00a0482\u00a0140 | 1\u00a0489\u00a0674 |
Non-current contingent considerations | 3 | - | - | 39\u00a0789 | 39\u00a0789 |
Non-current financial liabilities | 3 | - | - | 216\u00a0885 | 216\u00a0885 |
Current interest-bearing liabilities | 2 | 1\u00a0108\u00a0468 | 1\u00a0111\u00a0255 | 234\u00a0674 | 234\u00a0674 |
Current contingent considerations | 3 | - | - | 29\u00a0275 | 29\u00a0275 |
Deferred payment from business combination | 3 | - | - | 45\u00a0776 | 45\u00a0776 |
Cross-currency swap | 2 | 252\u00a0299 | 252\u00a0299 | - | - |
Total return swap | 2 | 124\u00a0609 | 124\u00a0609 | - | - |
The fair values of the Group\u2019s interest-bearing bank loans are determined by using the DCF method using discount rate that reflects the issuer\u2019s borrowing rate as at the end of the reporting period. The own non-perfor-mance risk as at 31 December 2023 and 31 December 2022 was assessed to be insignificant.
The Group enters into foreign exchange contracts with various counterparties, principally financial institutions with investment grade credit ratings. Foreign exchange forward contracts are valued using valuation techniques, which employ the use of market observable inputs. The most frequently applied valuation techniques include forward pricing models using present value calculations.
Financial instruments apprised at fair value with gains and losses in the income statement
2023 | 2022 | |||
(NOK 1\u00a0000) | Assets | Liabilities | Assets | Liabilities |
Level 1: Based on prices in an active market | - | - | - | |
Level 2: Observable market data\u200c1 | 20\u00a0174 | 376\u00a0909 | 25\u00a0431 | 216\u00a0885 |
Level 3: Other than observable market data\u200c2 | 5\u00a0391 | - | 67\u00a0727 | 69\u00a0064 |
Total financial instruments at fair value | 25\u00a0565 | 376\u00a0909 | 93\u00a0158 | 285\u00a0950 |
1Level 2 relates to interest rate swap shown in note 12and a cross currency swap and total return swap shown in note 21. Level 2 is estimated based on calculating the net present value of future cash flows, using interest rate curves, exchange rates and currency spreads as of the balance sheet date.
2Level 3 instruments in 2022 relates largely to contingent considerations and unlisted equity investments in Hexagon Purus, which were derecog-nized on 29 June 2023. In 2023, the Group has only minor unlisted equity investments measured at fair value.
Financial instruments appraised at fair value with gains and losses over other income and expenses in total comprehensive income
(NOK 1\u00a0000) | 2023 | 2022 |
Level 1: Based on prices in an active market | - | - |
Level 2: Observable market data | - | - |
Level 3: Other than observable market data | - | - |
Total financial instruments at fair value | - | - |
Other information relating to financial instruments
During the reporting period there were no financial assets or liabilities which were reclassified by changing the measurement method from amortized cost to fair value or vice versa, and there were no changes in the fair value measurement which caused transfers between level 1 and level 2, and no transfers to or from level 3.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f84847": { "value": "(vi) Capital structure and equity
The main goal of the Group\u2019s capital structure management is to ensure it maintains a strong credit rating (and therefore reasonable borrowing terms from lenders) and a level of equity which is reasonable in relation to the Group\u2019s operations.
By achieving a good debt/equity ratio, the Group will be able to support its operations and in doing so maximize the value of its shares. The Group\u2019s shareholders shall receive a competitive return on their shares, mainly through price increases in the Group\u2019s shares, but also in the form of dividends based on financial performance/investment needs.
The Group manages and makes necessary changes to its capital structure by regularly assessing prevailing economic conditions and prospects of short and medium-term growth.
Capital structure management is largely dealt with by means of new share issues. No changes to guidelines in this area were made in 2022 or 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f85056": { "value": "Note 26\tInvestments in associated companies
Companies | Country | Business segment | Ownership 31 December 2022 | Ownership 31 December 2023 | Accounting method |
Hexagon Purus ASA\u200c1 | Norway | Other | 73.0% | 38.4% | Equity method |
Cryoshelter BioLNG GmbH\u200c2 | Austria | Hexagon Agility | 40.0% | 40.0% | Equity method |
1Hexagon Purus ASA classified as an associated company as of 29.06.23 following loss of control and deconsolidation effective on the same date. See also note 5for further information.
2Acquired on 01.08.2022 and classified as an associated companies effective from the same date
Income statement reconciliation | Hexagon Purus ASA | Cryoshelter BioLNG GmbH | Total | |||
(NOK 1000) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Share of profit after tax | (143\u00a0520) | - | (17 949) | (2\u00a0579) | (161 469) | (2\u00a0579) |
PPA amortizations associated companies | (12\u00a0448) | - | (2\u00a0657) | (992) | (15\u00a0105) | (992) |
Impairment | (702\u00a0000) | - | - | - | (702\u00a0000) | - |
Gain on loss of significant influence | - | - | - | - | - | - |
Total profit/loss from investments in associated companies as per 31 December | (857\u00a0968) | - | (20\u00a0606) | (3\u00a0571) | (878\u00a0574) | (3\u00a0571) |
Balance sheet reconciliation | Hexagon Purus ASA | Cryoshelter BioLNG GmbH | Other associates\u200c1 | Total | ||||
(NOK 1000) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
Carrying value as at 1 January | - | - | 20\u00a0243 | - | 33\u00a0029 | 7\u00a0024 | 53\u00a0272 | 7\u00a0024 |
Share of profit after tax incl. PPA amortizations | (155\u00a0968) | - | (20\u00a0606) | (3\u00a0571) | - | - | (176\u00a0574) | (3\u00a0571) |
Share of other comprehensive income | (21\u00a0590) | - | - | - | - | - | (21\u00a0590) | - |
Share of profit after tax incl. PPA amortizations from discontinued operations | - | - | - | - | (4\u00a0402) | (11\u00a0271) | (4\u00a0402) | (11\u00a0271) |
Purchase of shares | - | - | - | 23\u00a0898 | - | 33\u00a0738 | - | 57\u00a0636 |
Share capital contribution | - | - | - | - | 29\u00a0305 | 7\u00a0743 | 29\u00a0305 | 7\u00a0743 |
Initial recognition at fair value following deconsolidation as subsidiary | 2\u00a0378\u00a0695 | - | - | - | - | - | 2\u00a0378\u00a0695 | - |
Sale of shares | (274\u00a0029) | - | - | - | - | - | (274\u00a0029) | - |
Derecognition - loss of significant influence | - | - | - | - | - | (4\u00a0179) | - | (4\u00a0179) |
Derecognition of associates following deconsolidation of subsidiary | - | - | - | - | (57\u00a0804) | - | (57\u00a0804) | - |
Impairment | (702\u00a0000) | - | - | - | - | - | (702\u00a0000) | - |
Currency translation effects | - | - | 363 | (84) | (128) | (25) | 235 | (110) |
Carrying value as per 31 December | 1\u00a0225\u00a0107 | - | - | 20\u00a0243 | - | 33\u00a0029 | 1\u00a0225\u00a0107 | 53\u00a0272 |
1Other associates relate to associated companies of Hexagon Purus. As a result of the deconsolidation of Hexagon Purus effective 29 June 2023, these associated companies were derecognized from the group accounts of Hexagon Composites. The total carrying amount derecognized amounted to NOK 57.8 million.
The following table sets forth summarized financial information for the Group\u2019s material associate, Hexagon Purus.
Companies (NOK 1000) | Hexagon Purus ASA | |
2023 (Full year) | 2023 (29 June to 31 Dec) | |
Interest held as per 31 December | 38.40% | |
Income statement and statement of comprehensive income of the associate | ||
Revenues | 1\u00a0319\u00a0614 | 746\u00a0070 |
EBITDA | (445\u00a0473) | (244\u00a0442) |
EBIT | (595\u00a0258) | (335\u00a0471) |
Profit/loss before taxes | (691\u00a0310) | (386\u00a0726) |
Profit/loss after taxes | (683\u00a0517) | (381\u00a0918) |
- hereof attributable to equity holders of the parent | (672\u00a0703) | (373\u00a0750) |
Other comprehensive income | 44\u00a0157 | (61\u00a0936) |
- hereof attributable to equity holders of the parent | 49\u00a0813 | (56\u00a0224) |
Total comprehensive income | (639\u00a0360) | (443\u00a0854) |
- hereof attributable to equity holders of the parent | (622\u00a0890) | (429\u00a0974) |
Hexagon\u2019s share of profit/loss of the associate | (143\u00a0520) | |
Hexagon\u2019s share of other comprehensive income of the associate | (21\u00a0590) | |
Hexagon\u2019s share of total comprehensive income of the associate | (165\u00a0110) | |
Companies (NOK 1000) | ||
Hexagon Purus ASA | ||
2023 (Full year) | 2023 (29 June to 31 Dec) | |
Other effects related to the associate | ||
PPA amortizations relates to implicit intangible assets of the associate | (12\u00a0448) | |
Impairment loss on the associate | (702\u00a0000) | |
Total effect in Hexagon\u2019s comprehensive income related to the associate | (879\u00a0558) | |
Balance sheet as per 31 December | ||
Non-current assets | 2\u00a0467\u00a0210 | 2\u00a0467\u00a0210 |
Current assets | 1\u00a0305\u00a0797 | 1\u00a0305\u00a0797 |
Non-current liabilities | 1\u00a0154\u00a0847 | 1\u00a0154\u00a0847 |
Current liabilities | 699\u00a0032 | 699\u00a0032 |
Net assets / equity | 1\u00a0919\u00a0128 | 1\u00a0919\u00a0128 |
Hexagon\u2019s share of net assets | 736\u00a0945 | |
Intangible assets | 286\u00a0106 | |
Goodwilll | 904\u00a0056 | |
Impairment | (702\u00a0000) | |
Carrying value as per 31 December | 1\u00a0225\u00a0107 | |
Fair value (if there is a quoted market) as per 31 December | 1\u00a0184\u00a0171 |
Hexagon Purus ASA - initial recognition as associated company in Q2 2023
Following loss of control and deconsolidation of Hexagon Purus as a subsidiary effective from 29 June 2023, Hexagon Composites\u2019 investment in Hexagon Purus is being accounted for as an associated company applying the equity method. On 29 June 2023, following the dividend-in-kind decision, Hexagon Composites\u2019 ownership in Hexagon Purus was effectively reduced to 43.4 per cent. The initial recognition and measurement of Hexagon Purus under the equity method amounted to NOK 2\u00a0379 million, representing 43.4 per cent of the fair market value of Hexagon Purus on 29 June. Furthermore, on 29 June, Hexagon Composites sold 13.8 million Hexagon Purus shares and simultaneously entered into a total return swap (TRS) representing 5 per cent of the total out-standing shares in Hexagon Purus. The transaction was closed at NOK 19.80 per share for a total consideration of
NOK 274 million. Based on the substance of the agreements and the circumstances for the sale, the sale of shares associated with the TRS agreements was accounted for as a reduction in ownership of an associate. Since the sale of shares under the TRS agreement was made subsequently on the same date as the loss-of-control event, the sale represented a zero-gain transaction. From 29 June and onwards, Hexagon Composites has accounted for 38.4 per cent of the profits/losses in Hexagon Purus via the equity method in addition to amortizations of fair value/PPA-adjustments. See also note 5for further information related to the deconsolidation of Hexagon Purus. The table below shows the purchase price allocation of Hexagon Purus as of 29 June 2023.
Purchase price allocation Hexagon Purus as of 29 June 2023 (NOK 1000) | Hexagon Purus 100% basis | Hexagon Composites share |
Ownership share | 38.4% | |
Number of shares | 276\u00a0797\u00a0456 | 106\u00a0296\u00a0223 |
Share price (NOK / share) | 19.80 | 19.80 |
Market value of equity as of 29 June 2023 | 5\u00a0480\u00a0590 | 2\u00a0104\u00a0665 |
Book values as of recognition date / acquisition date | ||
Non-current assets | 1\u00a0917\u00a0324 | 736\u00a0294 |
Current assets | 1\u00a0900\u00a0183 | 729\u00a0712 |
Non-current liabilities | 738\u00a0189 | 283\u00a0481 |
Current liabilities | 731\u00a0115 | 280\u00a0764 |
Book value of equity as of 29 June 2023 | 2\u00a0348\u00a0204 | 901\u00a0761 |
Fair value / PPA adjustments | 3\u00a0132\u00a0386 | 1\u00a0202\u00a0904 |
- hereof intangible assets | 778\u00a0206 | 298\u00a0848 |
- hereof goodwill | 2\u00a0354\u00a0180 | 904\u00a0056 |
Hexagon Purus ASA - impairment testing in Q4 2024
During the second half of 2023, Hexagon Purus experienced a significant decline in its market value and closed at NOK 11.14/share as of 31 December 2023, translating to a fair value of Hexagon\u2019s shares in Hexagon Purus of NOK 1\u00a0184 million. Compared to the share price as of the date of Hexagon\u2019s initial fair value recognition of Hexagon Purus as an associated company of NOK 19.80/share, this represents a 44 per cent decline in fair value. Comparable peer companies within the hydrogen and battery sector experienced similar share price develop-ments in the same period. The significant decline in the fair value of Hexagon Purus and peers caused Hexagon to perform an impairment test of its investment, which resulted in an impairment of NOK 702 million and an adjusted carrying value of NOK 1\u00a0225 million as per 31 December 2023.
The key assumptions for calculating value in use are related to estimates for revenues, EBITDA margins, discount rates and growth rates beyond the forecast period. A 7-year forecast period until 2030 with an extrapolation towards 2033 (total of 10 years) has been used, concurrent with the forecast period used in the determination of intangible assets and goodwill in the purchase price allocation of Hexagon Purus as of 29 June 2023. Hexagon Purus\u2019 business plan projections imply significant growth. However, as a reflection of the overall equity market\u2019s increased implicit risk towards Hexagon Purus during the second half of 2023, Hexagon has for impairment test
purposes per 31 December 2023 incorporated somewhat higher risk factors to Hexagon Purus\u2019 revenue growth rates towards 2030 both within the hydrogen and the battery electric mobility sector, as well as somewhat lower profit margins in the same forecast period. For subsequent periods beyond the 7-year forecast horizon, the Group has prudently phased in a declining growth rate towards an expected average growth rate for the economy in general. A weighted average cost of capital (post-tax) of 10.8 per cent has been used as discount rate of free cash flows.
Although the Company expects to break-even at EBITDA level during 2025, free cash flows are still expected to be negative a couple of years beyond 2025 due to capital expenditures and working capital requirements. As such, a significant portion of the estimated value-in-use amount lies in the terminal value which is dependent upon the size of the company and its free cash flow generation at the end of the forecast period. Despite future cash flows are inherently uncertain, Hexagon management expects Hexagon Purus will capitalize and deliver on its business plan, and that a value-in-use of NOK 1\u00a0225 million represents the best estimate based on known economic con-ditions that will exist in the period including prudent risk adjustments.
Cryoshelter BioLNG GmbH
On 1 August 2022, Hexagon Composites made a EUR 2.4 (NOK 24) million investment and acquired 40 per cent of the shares in Cryoshelter Bio-LNG GmbH, with options to acquire the remaining shares over the next 3-10 years. As of 31 December 2023, the carrying value of Group\u2019s investment in Cryoshelter BioLNG is zero. Furthermore, Hexagon has a convertible loan investment in Cryoshelter of NOK 100.1 million classified as other non-current financial assets. See also note12.
Note 27\tShare-based payment
Share-based payment in Hexagon Composites ASA
The Company has a performance share units program (PSUs) and a restricted share units program (RSUs) cover-ing certain employees in senior positions. As at 31 December 2023, total 72 employees were included in the PSUs programs and 91 employees in the RSUs programs.
Performance share units programs (PSUs)
All PSUs are non-transferable and will vest subject to satisfaction of the applicable vesting conditions. The vesting conditions under the active programs are based on the following metrics:
\u20222021 PSU program: Group revenue and EBITDA targets
\u20222022 PSU program: Group revenue and EBIT targets
\u20222023 PSU program: Group revenue, EBIT and total shareholder return (TSR) targets
The actual number of PSUs vested will depend on performance and vary from minimum zero to the maximum awarded PSUs in each program.Each vested PSU will give the holder the right to receive one share in the Company at an exercise price corresponding to the par value of the shares being NOK 0.10.
Reference is also made to the remuneration report for 2023 for more details on the Group\u2019s PSU programs.
Restricted share units programs (RSUs)
The RSUs are subject to continued employment three years after date of grant, and each participant will at such time receive such number of Hexagon shares as corresponds to the number of RSUs allocated to them.
Overview of share units with equity settlement
RSUs | PSUs | RSUs | PSUs | |
2023 | 2023 | 2022 | 2022 | |
Outstanding options 1 January | 334\u00a0500 | 5\u00a0028\u00a0864 | 212\u00a0852 | 6\u00a0243\u00a0552 |
Options granted | 149\u00a0000 | 3 293 502 | 200\u00a0000 | 2\u00a0660\u00a0082 |
Adjustment due to dividend in kind | 169\u00a0291 | 2\u00a0396\u00a0086 | - | - |
Options exercised | (85\u00a0058) | (905\u00a0887) | (42\u00a0852) | (1\u00a0078\u00a0628) |
Options lapsed/cancelled | (43\u00a0206) | (1 336 128) | (35\u00a0500) | (2\u00a0796\u00a0142) |
Share options outstanding 31 December | 524\u00a0527 | 8\u00a0476\u00a0437 | 334\u00a0500 | 5\u00a0028\u00a0864 |
Exercisable at 31 December | - | - | - | - |
Weighted average exercised price (NOK) | 29.92 | 33.30 | 23.08 | 28 |
The following table list the input to the model used for the plan for year ended 31 December
RSUs Awarded | PSUs Awarded | RSUs Awarded | PSUs Awarded | |
2023 | 2023 | 2022 | 2022 | |
Weighted average fair values at the measurement date per share (NOK) | 28.04 | 35.69 | 28.05 | 35.12 |
Dividend yield (%) | - | - | - | - |
Expected volatility (%) | - | - | - | - |
Risk-free interest rate (%) | - | - | - | - |
Expected lifetime (years) | 3 | 3 | 3 | 3 |
Weighted average share price (NOK) | - | - | - | - |
Model used | Black-Scholes | Black-Scholes | Black-Scholes | Black-Scholes |
The fair value of the options, PSUs and RSUs was calculated on the grant date, based on the Black-Scholes model, and the cost is recognized over the service period. Cost associated with these programs were NOK 49.3 (34.4) million YTD 31 December. The fair value of all outstanding PSUs (8 476 437) and RSUs (524 527) is estimated to NOK 79.2 (52.4) million per 31 December 2023.
In addition to the above-mentioned instruments, the Company has issued bonus arrangements to certain executives within the Group. The bonus arrangements are dependent upon the share price development of Hexagon Purus ASA and is converted to a given number of cash settlement options in Hexagon Purus ASA, for the purpose of calculating quarterly fair values using the Black-Scholes model. These cash settlement arrangements involved total expenses of NOK -5.8 (5.0) million in 2023 and a remaining unamortized accrual estimated to NOK 0.5 (8.0) million as of 31 December 2023.
Share-based payment in Hexagon Purus ASA
For share-based payment in Hexagon Purus ASA, which was a part of the profit and loss of Hexagon Composites up until 30.06.2023, see quarterly financials at hexagonpurus.com.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f88503": { "value": "Note 28\tTransactions with related parties
The Group\u2019s related parties consist of associates, main shareholders, members of the Board and management.
There are no sales to, purchases from, loans to, receivables or liability/payables to members of the Board. There are no sales to, purchases from, loans to, receivables or liability/payables to key management personnel of the Group, except for any short-term postings related to salary payout and remuneration of out-of-the pocket expenses.
All the transactions were carried out as part of normal business and at arm\u2019s length prices.
The income statement includes the following amounts resulting from transactions with related parties
(NOK 1\u00a0000) | 2023 | 2022 |
Sales revenue | 455\u00a0132 | 289\u00a0036 |
Cost of materials | 34\u00a0791 | 44\u00a0391 |
Other operating expenses | 2\u00a0318 | 9\u00a0817 |
Finance expenses | 51 | 117 |
The balance sheet includes the following amounts resulting from transactions with related parties
(NOK 1\u00a0000) | 2023 | 2022 |
Trade receivables | 64\u00a0572 | - |
Other current assets | 29\u00a0579 | - |
Trade payables | 40\u00a0741 | 473 |
As Hexagon Purus Group was fully consolidated in 2022 and as such \u2013 intercompany balances with Hexagon Purus Group was fully eliminated in the reported balance sheet 31 December 2022.
Remuneration of the Board and Executive management 2023
(NOK 1\u00a0000) | Salariesand fees | Bonuses\u200c1 | Benefitsin kind | Pension premium | Value of share options\u200c2 | Totalremuneration2023 |
Executive management | 28 107 | 21 762 | 1 155 | 1 826 | 15 383 | 68 233 |
Board of Directors | 2\u00a0563 | - | - | - | - | 2\u00a0563 |
Total remuneration | 30 670 | 21 762 | 1 155 | 1 826 | 15 383 | 70 796 |
1Bonuses relates to bonuses expensed in the year.
2The value of share options relates to recognized costs for the year. Executives hold other share-based instruments as well (see note Share based payments).
Remuneration of the Board and Executive management 2022
(NOK 1\u00a0000) | Salariesand fees | Bonuses\u200c1 | Benefitsin kind | Pension premium | Value of share options\u200c2 | Totalremuneration2022 |
Executive management | 25 969 | 12 636 | 630 | 1 717 | 11 939 | 52 891 |
Board of Directors | 2\u00a0153 | - | - | - | - | 2\u00a0153 |
Total remuneration | 28 122 | 12 636 | 630 | 1 717 | 11 939 | 55 044 |
1Bonuses relates to bonuses expensed in the year.
2The value of share options relates to recognized costs for the year. Executives hold other share-based instruments as well (see note Share based payments).
Pursuant to Section 6-16a and b of the Norwegian Public Limited Liabilities Companies Act, the Company will disclose a separate remuneration report regarding the determination of pay and benefits to the CEO and management executives. Reference is made to the separate remuneration report which will be made available on the Company`s website.
The Chairman of the Board has no agreement relating to termination benefits. In his employment agreement, the Group President has a period of notice of 6 months. He has an agreement for up to 12 months\u2019 severance pay. The management of the Group have a target-based bonus agreement.
Group management participates in the Company\u2019s general pension arrangements, which are described in note 18, Pensions. The Group President and CFO participate in the Group\u2019s defined contribution plan.
Group management participate in the Company\u2019s share-based incentive scheme, which are described in note 27, Share-based Payment. As of 31 December 2023 the Group President has 316 thousand (164 thousand) provisional performance share units (PSUs performance adjusted) outstanding. In addition he has 573 thousand cash settlement options (573 thousand). The CFO has 211 thousand (109 thousand) provisional performance share units (PSUs performance adjusted) outstanding.
No loans have been made, or security provided for loans, to any member of Group management, the Board or other elected standing committees or any of their related parties.
Shares owned by Board members
(NOK 1\u00a0000) | 2023 | 2022 |
Knut Flakk, (Chairman)\u200c1 | 22\u00a0568\u00a0314 | 27\u00a0868\u00a0314 |
Kristine Landmark (Deputy chair)\u200c2 | 10\u00a0000 | 10\u00a0000 |
Katsunori Mori (Board member)\u200c3 | 45\u00a0833\u00a0321 | 45\u00a0833\u00a0321 |
1Of the shares owned by Knut Flakk, 164\u00a0593 are privately owned, 500\u00a0000 are owned by his wife and 21\u00a0903\u00a0721 are owned through limited liability companies.
2The shares are owned by Kristine Landmark\u2019s husband.
3Shares owned by Mitsui & Co., Ltd., represented in the Board by Katsunori Mori.
Shares held by key management personnel
(NOK 1\u00a0000) | 2023 | 2022 |
Jon Erik Engeset, Group President & CEO\u200c1 | 404\u00a0861 | 378\u00a0216 |
David Bandele, Group Chief Financial Officer | 155\u00a0654 | 152\u00a0654 |
1The shares owned by Jon Erik Engeset, 145 413 are privately owned and 259\u00a0448 are owned by related limited liability companies.
Expensed auditor fees were divided among the following services (excl. Vat)
(NOK 1 000) | 2023 Continuing operations | 2022 Continuing operations | 2022 discontinued operations |
Statutory audit and auditing-related services | 9 984 | 5 856 | 3 674 |
Other attestation services | 862 | 663 | 781 |
Tax advice | 4 234 | 3 065 | 1 180 |
Other non-auditing services | 45 | 302 | 168 |
Total | 15 125 | 9 886 | 5 803 |
Total expensed auditor fees in 2022 including Hexagon Purus Group (deconsolidated 29 June 2023) were NOK 15.7 million.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f88504": { "value": "Note 28\tTransactions with related parties
The Group\u2019s related parties consist of associates, main shareholders, members of the Board and management.
There are no sales to, purchases from, loans to, receivables or liability/payables to members of the Board. There are no sales to, purchases from, loans to, receivables or liability/payables to key management personnel of the Group, except for any short-term postings related to salary payout and remuneration of out-of-the pocket expenses.
All the transactions were carried out as part of normal business and at arm\u2019s length prices.
The income statement includes the following amounts resulting from transactions with related parties
(NOK 1\u00a0000) | 2023 | 2022 |
Sales revenue | 455\u00a0132 | 289\u00a0036 |
Cost of materials | 34\u00a0791 | 44\u00a0391 |
Other operating expenses | 2\u00a0318 | 9\u00a0817 |
Finance expenses | 51 | 117 |
The balance sheet includes the following amounts resulting from transactions with related parties
(NOK 1\u00a0000) | 2023 | 2022 |
Trade receivables | 64\u00a0572 | - |
Other current assets | 29\u00a0579 | - |
Trade payables | 40\u00a0741 | 473 |
As Hexagon Purus Group was fully consolidated in 2022 and as such \u2013 intercompany balances with Hexagon Purus Group was fully eliminated in the reported balance sheet 31 December 2022.
Remuneration of the Board and Executive management 2023
(NOK 1\u00a0000) | Salariesand fees | Bonuses\u200c1 | Benefitsin kind | Pension premium | Value of share options\u200c2 | Totalremuneration2023 |
Executive management | 28 107 | 21 762 | 1 155 | 1 826 | 15 383 | 68 233 |
Board of Directors | 2\u00a0563 | - | - | - | - | 2\u00a0563 |
Total remuneration | 30 670 | 21 762 | 1 155 | 1 826 | 15 383 | 70 796 |
1Bonuses relates to bonuses expensed in the year.
2The value of share options relates to recognized costs for the year. Executives hold other share-based instruments as well (see note Share based payments).
Remuneration of the Board and Executive management 2022
(NOK 1\u00a0000) | Salariesand fees | Bonuses\u200c1 | Benefitsin kind | Pension premium | Value of share options\u200c2 | Totalremuneration2022 |
Executive management | 25 969 | 12 636 | 630 | 1 717 | 11 939 | 52 891 |
Board of Directors | 2\u00a0153 | - | - | - | - | 2\u00a0153 |
Total remuneration | 28 122 | 12 636 | 630 | 1 717 | 11 939 | 55 044 |
1Bonuses relates to bonuses expensed in the year.
2The value of share options relates to recognized costs for the year. Executives hold other share-based instruments as well (see note Share based payments).
Pursuant to Section 6-16a and b of the Norwegian Public Limited Liabilities Companies Act, the Company will disclose a separate remuneration report regarding the determination of pay and benefits to the CEO and management executives. Reference is made to the separate remuneration report which will be made available on the Company`s website.
The Chairman of the Board has no agreement relating to termination benefits. In his employment agreement, the Group President has a period of notice of 6 months. He has an agreement for up to 12 months\u2019 severance pay. The management of the Group have a target-based bonus agreement.
Group management participates in the Company\u2019s general pension arrangements, which are described in note 18, Pensions. The Group President and CFO participate in the Group\u2019s defined contribution plan.
Group management participate in the Company\u2019s share-based incentive scheme, which are described in note 27, Share-based Payment. As of 31 December 2023 the Group President has 316 thousand (164 thousand) provisional performance share units (PSUs performance adjusted) outstanding. In addition he has 573 thousand cash settlement options (573 thousand). The CFO has 211 thousand (109 thousand) provisional performance share units (PSUs performance adjusted) outstanding.
No loans have been made, or security provided for loans, to any member of Group management, the Board or other elected standing committees or any of their related parties.
Shares owned by Board members
(NOK 1\u00a0000) | 2023 | 2022 |
Knut Flakk, (Chairman)\u200c1 | 22\u00a0568\u00a0314 | 27\u00a0868\u00a0314 |
Kristine Landmark (Deputy chair)\u200c2 | 10\u00a0000 | 10\u00a0000 |
Katsunori Mori (Board member)\u200c3 | 45\u00a0833\u00a0321 | 45\u00a0833\u00a0321 |
1Of the shares owned by Knut Flakk, 164\u00a0593 are privately owned, 500\u00a0000 are owned by his wife and 21\u00a0903\u00a0721 are owned through limited liability companies.
2The shares are owned by Kristine Landmark\u2019s husband.
3Shares owned by Mitsui & Co., Ltd., represented in the Board by Katsunori Mori.
Shares held by key management personnel
(NOK 1\u00a0000) | 2023 | 2022 |
Jon Erik Engeset, Group President & CEO\u200c1 | 404\u00a0861 | 378\u00a0216 |
David Bandele, Group Chief Financial Officer | 155\u00a0654 | 152\u00a0654 |
1The shares owned by Jon Erik Engeset, 145 413 are privately owned and 259\u00a0448 are owned by related limited liability companies.
Expensed auditor fees were divided among the following services (excl. Vat)
(NOK 1 000) | 2023 Continuing operations | 2022 Continuing operations | 2022 discontinued operations |
Statutory audit and auditing-related services | 9 984 | 5 856 | 3 674 |
Other attestation services | 862 | 663 | 781 |
Tax advice | 4 234 | 3 065 | 1 180 |
Other non-auditing services | 45 | 302 | 168 |
Total | 15 125 | 9 886 | 5 803 |
Total expensed auditor fees in 2022 including Hexagon Purus Group (deconsolidated 29 June 2023) were NOK 15.7 million.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f89782": { "value": "Note 29\tPurchasing commitments
The Group has the following commitments resulting from purchasing materials
(NOK 1\u00a0000) | 2023 | 2022 |
2023 | - | 599\u00a0243 |
2024 | 450\u00a0170 | - |
Thereafter | - | - |
Total | 450\u00a0170 | 599\u00a0243 |
The Group has the following commitments resulting from contracts for investments in production facilities/machines
(NOK 1\u00a0000) | 2023 | 2022 |
2023 | - | 204\u00a0112 |
2024 | 108\u00a0131 | - |
Thereafter | - | - |
Total | 108\u00a0131 | 204\u00a0112 |
All contracts relate to investments in production facilities/machines.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:5967007LIEEXZXJWMW49", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f89988": { "value": "Note 30\tList of subsidiaries and associates
The following companies are included in the consolidated financial statements
Company | Home Country | Registeredoffice | Businesssegment | Owner-ship | Votes |
Subsidiaries | |||||
Hexagon Ragasco AS | Norway | Raufoss | Hexagon Ragasco | 100% | 100% |
Hexagon Ragasco NA Inc. | USA | Lincoln, NE | Hexagon Ragasco | 100% | 100% |
Composite Scandinavia AB | Sweden | Pite\u00e5 | Hexagon Ragasco | 100% | 100% |
Hexagon Composites India Pvt. Ltd. | India | Bangalore | Hexagon Ragasco | 100% | 100% |
Hexagon Composites Russia LLC | Russia | Nizhny Novgorod | Hexagon Ragasco | 100% | 100% |
Hexagon USA Holdings Inc. | USA | Lincoln, NE | Unallocated | 100% | 100% |
Hexagon Digital Wave LLC | USA | Centennial, CO | Digital Wave | 100% | 100% |
Hexagon R&D Services LLC | USA | Lincoln, NE | Hexagon Agility | 100% | 100% |
Hexagon Agility Inc. | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility Fuel Solutions LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility Fuel Systems LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility California LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility Canada ULC | Canada | Kelowna, BC | Hexagon Agility | 100% | 100% |
Agility Fuel Solutions UK Ltd | UK | London | Hexagon Agility | 100% | 100% |
Agility North Carolina LLC | USA | Salisbury, NC | Hexagon Agility | 100% | 100% |
AFS Salisbury LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility Cylinders, LLC | USA | Lincoln, NE | Hexagon Agility | 100% | 100% |
Agility Powertrain Systems, LLC | USA | Costa Mesa, CA | Hexagon Agility | 100% | 100% |
Agility India Private Ltd | India | Bangalore | Hexagon Agility | 100% | 100% |
Agility Fuel Solutions Norway AS | Norway | Raufoss | Hexagon Agility | 100% | 100% |
Hexagon Lincoln LLC | USA | Lincoln, NE | Hexagon Agility | 100% | 100% |
Hexagon Technical Services LLC | USA | Lincoln, NE | Hexagon Agility | 100% | 100% |
Company | Home Country | Registeredoffice | Businesssegment | Owner-ship | |
Votes | |||||
Hexagon Mobile Pipeline GmbH | Germany | Kassel | Hexagon Agility | 100% | 100% |
Hexagon Agility GmbH | Germany | Kassel | Hexagon Agility | 100% | 100% |
Hexagon Operations GmbH | Germany | Kassel | Hexagon Agility | 100% | 100% |
Hexagon Raufoss AS | Norway | Raufoss | Unallocated | 100% | 100% |
Hexagon Technology AS | Norway | Aalesund | Unallocated | 100% | 100% |
Hexagon Cylinders India Pvt. Ltd. | India | Unallocated | 100% | 100% | |
Associates owned by Hexagon Composites ASA | |||||
Hexagon Purus ASA | Norway | Aalesund | Hexagon Purus | 38% | 38% |
Cryoshelter BioLNG GmbH | Austria | Hexagon Agility | 40% | 40% |
Note 33\tEvents after the balance sheet date
Hexagon Agility \u2013 Significant Mobile Pipeline order
In January 2024, Hexagon Agility received a new order of USD 19 million from REV LNG for delivery of Mobile Pipeline \u00ae TITAN 53 modules.
Hexagon Purus \u2013 NOK 1 000 million convertible bond private placement fully paid-in in February 2024
In February, Hexagon Purus received gross proceeds of NOK 1\u00a0000 million from its sucessful convertible bond private placement announced in December 2023 and as approved by the annual general meeting in January 2024. Hexagon Composites ASA subscribed for NOK 200 million in the private placement.
Hexagon Purus share price development
Hexagon Purus has in the period since year-end 2023 and until signing of these financial statements experienced a significant negative share price development. As described in note 26, the Group has, based on a value in use calculation related to its investment in the associated company Hexagon Purus, recorded an impairment loss of NOK 702 million in the statement of income in 2023. The impairment represented an adjusted carrying amount of the associate of NOK 1\u00a0225 million, equating to an adjusted carrying amount per share of NOK 11.52 in Hexagon Purus. Although the quoted share price of Hexagon Purus upon signing of these financial statements are signif-icantly lower than the adjusted carrying amount per share, the assumptions and estimates used in the value in use calculation still stands upon the signing date of the financial statements of the Group.
There have been no other significant events after the balance sheet date that have not already been disclosed in this report.