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Hexagon sets new targets under cloud of CEO insider investigation
December 1, 2016 / 3:46 PM / in a year

Hexagon sets new targets under cloud of CEO insider investigation

* Sets goal to lift EBIT margin to 27-28 pct in 2021

* Says targets sales of 4.6-5.1 bln euros

* New goals set while CEO under investigation for insider trading

* Chairman says supports CEO Rollen whether indicted or not

By Johannes Hellstrom

STOCKHOLM, Dec 1 (Reuters) - Measurement technology and software firm Hexagon set new five-year targets on Thursday, aiming for stronger profitability and sales boosted by higher software content and steady stream of product launches.

Hexagon has been transformed into one of Sweden’s biggest companies under Chief Executive Ola Rollen, at the helm since 2000, from a disparate conglomerate with a market value of just a few billion crowns.

The firm said it aimed for an operating margin of 27-28 percent by the end of 2021, and for sales to reach between 4.6-5.1 billion euros. Some analysts had been expecting an operating margin target of around 30 percent.

Its shares fell 3.2 percent at 1521 GMT compared with a 1.7 percent drop just before the new targets were revealed.

Hexagon, which counts companies in surveying, energy, manufacturing, construction and automotive among its most main customers, had sales of 2.3 billion euro ($2.44 billion) and an operating margin of 22.9 percent in the year through September.

In 2011, Hexagon set a target to reach sales of 3.5 billion euro and an operating margin of 25 percent by 2015, which were subsequently postponed to 2016. As widely expected, those targets were not likely to be reached, Hexagon said.

“Due to the expected low GDP growth it is more important than ever to continue our focus on new initiatives for future growth,” Rollen said in a statement.

“Hexagon has all the tools to generate profitable growth and we will continue to invest in innovation to expand our addressable market.”

Hexagon has gone through a chaotic period with main owner Melker Schorling announcing he will step down as chairman and Rollen being investigated and briefly held in custody for alleged insider trading in a company unrelated to Hexagon.

The investigation is still ongoing, but Rollen has been back at work since November 7. He denies wrongdoing and has not been charged and the Hexagon board on Thursday repeated its support for him to continue as CEO of the company.

“We want to make it clear that Ola has our full support whether indicted or not. You are innocent until proven guilty,” Chairman Schorling said in a statement.

Hexagon shares are now down about 17 percent since hitting all-time high levels in October. ($1 = 0.9432 euros) (Reporting by Johannes Hellstrom, editing by Niklas Pollard)

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