Hexagon : Annual and Sustainability Report

Table of contents

Hexagon in brief 3

Business overview 5

Core technologies 6

Strategic partnerships 7

Hexagon platforms 8

Customer highlights 9

Letter from President and CEO 11

Financial plan 13

Other targets 14

Board of Directors' report 15

Corporate governance report 24

Board of Directors 32

Executive Leadership 34

Compliance 37

Managing risks 37

Hexagon commitment to ethics and 47 compliance

Sustainability report 50

Financial reports 90

Consolidated and parent 91 company accounts

Notes 98

Signing of the annual report 125

Auditor's report 126

Additional information

ESG related notes 130

The share 140

Quarterly income statements 143

10-year summary 144

Financial definitions 145

Business definitions 146

Currency codes 146

Shareholder information 147

The audited annual accounts and consolidated accounts can be found on pages 15-23 and 90-125. The corporate governance report examined by the auditors can be found on pages 24-31. The sustainability report reviewed by the company's auditors for compliance with the Annual Accounts Act can be found on pages 50-89. The auditors have reviewed greenhouse gas emissions within scope 1 and 2.

About this report

Hexagon AB is a Swedish public limited liability company with corporate registration number 556190-4771. All values are expressed in Euros unless otherwise stated. The Euro is abbreviated EUR, thousands of Euro to KEUR, millions of Euro to MEUR, billions of Euro to bn EUR and million US dollars to MUSD. Figures in parentheses refer to 2022 unless otherwise stated. Data on markets and peers represent Hexagon's own assessments unless otherwise stated. Assessments are based on most recent available facts from published sources. While every care has been taken in the translation of this annual report, readers are reminded that the original annual report, signed by the Board of Directors, is in Swedish.

This report contains forward-looking statements based on Hexagon management's current expectations. Although management considers expectations expressed in such future-oriented information as reasonable, no assurance can be given that these expectations will prove correct. Consequently, actual future results can differ considerably from those implied in the forward-looking statements as a result of factors such as changed conditions in the economy, market and competition, changes in legal requirements and other political measures, fluctuations in exchange rates and other factors.

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Hexagon in brief

At Hexagon, we don't just see the world as it is; we envision what it could be. We are committed to integrating precision data and digital intelligence with human ingenuity to shape a more responsible future. Across more than 27 industries, we empower our customers, communities, and individuals to solve the world's biggest challenges.

To do this, we capture ultra-precise 3D data in the physical world - from particles to planets - then apply AI, simulation, and automation to increase efficiency, quality, safety and sustainability.

From the longest bridge to the smartest car, with Hexagon, companies don't just adapt to new realities - they intelligently shape them.

Hexagon empowers customers to solve the world's biggest challenges.

Hexagon's impact on the world

Featured partnerships

350,000

construction sites

80,000

types of mining equipment

3.5 million	90%	95%	75%
agriculture vehicles	of all airplanes	of all commercial vehicles	of all smartphones

Protects over

1B

peopleHas captured a total of 52Mkm2 of 2D aerial imagery and

800Kkm2 of 3D mapping of the world

From microns to kilometers, we make accurate information about any physical reality accessible at scale.

Helped support the landing of the Curiosity Rover

Helped construct Burj Khalifa the world's tallest building

Driving efficiency in the processing of over 50% of oil, gas and chemicals

Geospatial Enterprise Solutions

Geospatial Enterprise Solutions (GES) includes a world-leading portfolio of reality-capture sensors - from laser scanners, airborne cameras and unmanned aerial vehicles (UAV) to monitoring equipment, mobile mapping technologies and precise positioning. The sensors are complemented by software to create 3D maps and models, which are used for decision-making in a range of software applications, covering areas such as surveying, construction, public safety, mining and agriculture.

Industrial Enterprise Solutions

Industrial Enterprise Solutions (IES) includes a world-leading portfolio of metrology solutions incorporating the latest sensor and software technologies for fast and accurate measurements. These solutions include technologies such as coordinate measurement machines (CMM) and laser trackers and scanners for optimising design, processes and throughput in manufacturing facilities. IES also includes a broad software portfolio, encompassing computer-aided design (CAD), computer-aided manufacturing (CAM) and computer-aided engineering (CAE) platforms. Solutions within this segment also include software for optimising design, improving productivity and creating and leveraging asset management information through the lifecycle of industrial plants and processing facilities.

Core technologies

What matters most to compete in today's world? Growth and profitability? Efficiency? Productivity? Quality? Safety? Digital transformation? What about sustainability?

Thanks to advances in digital reality technologies, achieving these priorities equally is no longer insurmountable.

Hexagon's innovation strategy is built on its established leadership in each of the core technologies critical to realising the full potential of data.

Reality capture

Digital capture of the physical world is the basic building block of a "digital reality" or twin. This includes documenting and preserving an exact truth about what's happened or happening; it means measuring and recording with perfect accuracy and precision; and it's the ability to see, monitor, recognise and understand both contextually and dimensionally in 3D.

Positioning

The need for accurate position information is essential for tracking and controlling the movement or mobility of assets and people. Additionally, achieving full autonomy isn't possible without positioning and other complementary technologies working together - finely-tuned and seamlessly - to make autonomy a reality.

Autonomous technologies

Enriching automated systems with sensors, artificial intelligence (AI) and analytical capabilities enables systems to function and execute tasks without human control.

Design and simulation

Design and simulation technologies help solve real-world problems safely and efficiently - enabling the digital creation and exploration of what could be. The ability to model and simulate millions of real-world scenarios means we can predict failure and success before they occur.

Location intelligence

Complete line of sight to dynamic situations - at any time and from any location - is indispensable to decision-making for all mission-critical applications. The ability to instantly gain insight from complex data relationships leads to big-picture understanding and proactive problem-solving.

Strategic partnerships

Through partnerships, we offer our customers innovative solutions for scaling innovations while strategically expanding our technologies into new markets.

Central to our partnership approach is the flow and accessibility of data. From software to software, from sensors to software, and from ecosystem to ecosystem, teaming up with leading global brands allows us to leverage Hexagon's technologies across expanded markets and user groups.

Microsoft enhances our AI product offering with large language model productisation and document management, open-platform cloud partner and technology partner for the industrial metaverse.

AWS, continues to be a very important Cloud partner. In addition, its Stable Diffusion aids in training AI assistive devices and generating photorealistic scenes in NVIDIA Omniverse for autonomous projects.

Sony Semiconductor Solutions contributes with its advanced Time-of-Flight image sensor and software technologies, crucial for improving the speed and accuracy of our reality capture solutions.

NVIDIA helps us to connect multiple software platforms to create an interconnected industrial metaverse. The flow of data is strengthened by Hexagon's open-data platforms HxDR and Nexus with NVIDIA's Omniverse using OpenUSD

Through strategic partnerships, we integrate our scaling innovation technologies, focusing on facilitating open-format data flow across AI, reality capture, visual computing, and robotics.

Hexagon platforms

Hexagon is redefining value in the digital age. Our platform strategy is the cornerstone, ensuring data flows seamlessly across software, sensors and ecosystems to unlock new levels of efficiency and innovation.

By focusing on platforms built from shared modules and microservices, we're enhancing R&D efficiency and accelerating the journey from concept to reality. This approach to platform engineering allows us to quickly roll out new functionalities, delivering unparalleled value to our customers.

OnCall	EAM	Nexus
Next-generation public	Maximising asset	Streamlining
safety platform	longevity and productivity	manufacturing
with industry-leading	through collaboration
management	and innovation

Power of One	HxGN SDx	HxDR
Seamlessly connecting mines	Accelerating asset	A cloud native platform
digitalisation for optimal	to process, fuse, and
lifecycle performance	share digital reality
data, at scale

Customer highlights

Mortenson

Customer background Major developer and engineering services provider in the commercial, institutional and energy sectors.

Customer challenge

One of its customers, the Citizen M hotel chain, wanted to influence major change in the hospitality industry by introducing prefabricated (modular) construction.

How Hexagon is helping

During construction, Mortenson deployed

Hexagon solutions (OxBlue,Multivista and Avvir software) to monitor and document the project for key stakeholders.

Customer challenge

Looking to automate processes to improve inspection speed.

How Hexagon is helping Expanding upon an existing 25+ year relationship, HAUK has implemented

Hexagon's PRESTO automated inspection cell, Laser trackers, robotics automation and PC-DMIS to improve their inspection speed and ease of data transfer to customer systems.

10

Customer background One of the world's largest globally diversified natural resource companies, headquartered in Switzerland and operating in 35+ countries. Glencore has more than 60 mining, metallurgical and oil production assets.

Customer challenge

Seeking to improve safety in their mining operations with a global strategic partnership across all mine sites and commodities.

10+ years of Glencore/Hexagon partnership

Hexagon's Operator Alertness System 4 continents, 15 mines.

Hexagon's Collision Avoidance System 3 continents including recent deal for 200 CAS systems at Lomas Bayas.

Hexagon's Vehicle Intervention System 3 mine sites, +150 haul trucks.

Customer background Rio de Janeiro is the second largest city in Brazil with over 9 million people.

Customer challenge Consolidating many different departments to more effectively control the city's daily operations.

How Hexagon is helping Hexagon's incident and operational management software platform HxGN OnCall enables over 30 departments to control and share information as needed, in response to emergencies.

This deal includes software, implementation and maintenance over five years.