2023
Financial
ReportTABLE OF CONTENTSGroup at a Glance
Consolidated Management Report

3Group at a Glance

66

Financial ­Statements Hilti Corporation

4

Key Financial Information

67

Balance Sheet

5

Sales Development Across Regions

68

Income Statement

6

Information on Financing and Capital69

Notes to the Financial Statements Hilti Corporation

7

Outlook78

Auditors’ Report on the Financial Statements

8

Consolidated Management Report

11Group Financial Statements

12

Consolidated Income Statement

13

Consolidated Statement of Comprehensive Income

14

Consolidated Balance Sheet

15

Consolidated Statement of Changes in Equity

16

Consolidated Cash Flow Statement

17

Notes to the Consolidated Financial Statements

61

Auditors’ Report on the Consolidated Financial Statements

Hilti Corporation
81

Corporate Governance84

Investor Information

Group Financial Statements
Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Group at a
Glance

CHF

770
Operating result

560
Net income

Asia/Pacific
CHF 791 million

Americas

CHF 1,874 million

CHF 504 million

Europe1

Total Group

6,520
CHF

millionCHF 3,351 million

1

3

millionFree cash flow

GROUP AT A GLANCE

Across Regions

Financing and Capital
OutlookConsolidated Management ReportmillionGroup Financial Statements
Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

CHF

359

Sales Development

Information on

million34,111
Employees (as at December 31)

Excl. Eastern Europe

Hilti 2023 Financial Report

Key Financial Information

CHF

Net sales by region

Eastern Europe /Middle East /AfricaGROUP AT A GLANCE

KEY FINANCIAL INFORMATIONGROUP AT A GLANCEKEY FINANCIAL INFORMATIONof the Group

Sales Development
Across Regions

financial amounts in CHF million
2019

2020

2021

2022

2023

Net sales

5,900

5,332

5,978

6,347

6,520

Depreciation and amortization

(374)

(395)

(412)

(440)

(476)

Operating result

783

728

847

731

770

Net income before tax

716

652

805

668

700

Net income

591

531

675

565

560

Return on capital employed (ROCE) in % (operating result)1

19.8

16.4

17.1

13.2

13.3

Return on equity (ROE) in % (net income)

18.6

15.7

17.4

12.7

12.2

Return on sales (ROS) in %

13.3

13.7

14.2

11.5

11.8

Free cash flow

314

463

377

(147)

359

3,276

3,472

4,294

4,579

4,576

Results

Financing and Capital

2

Balance sheet
Total equity
Total equity in % of total equity and liabilities

51

53

57

62

59

Total non-current liabilities

1,582

1,673

1,470

1,130

1,484

Total current liabilities

1,521

1,401

1,705

1,717

1,644

Capital expenditures on intangible assets and on property, plant and equipment

412

345

401

445

451

Intangible assets and property, plant and equipment

1,846

1,902

2,250

2,350

2,728

Other non-current assets

1,405

1,374

1,486

1,551

1,751

Total current assets

3,128

3,270

3,733

3,525

3,225

Total assets

6,379

6,546

7,469

7,426

7,704

Dividend

294

−

337

281

279

30,00629,54931,11532,487

34,111

3

Employees (as at December 31)
1

Capital employed is defined as the average of the total equity and interest-bearing liabilities of the last two years2

In 2021, the Group decided to change the definition of free cash flow, excluding the cash flow from financial investments and disclosing it as a separate line item. Prior period figures were restated accordingly

3

As proposed by the Board of Directors

4

Information on

Hilti 2023 Financial Report

Group at a Glance

KEY FINANCIAL INFORMATION

OutlookConsolidated Management Report
Group Financial Statements
Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

SALES DEVELOPMENT ACROSS REGIONSGROUP AT A GLANCEKey Financial Information

Change in CHF (%)

SALES DEVELOPMENTACROSS REGIONS

EuropeIn local currencies: 8.7%
1

4.7%
Americas (North and Latin America)
In local currencies: 9.1%

1.8%

Eastern Europe / Middle East / Africa
In local currencies: 3.1%

-7.0%

Information on
Financing and Capital
Outlook

Asia / Pacific (Asia, Australia and the Pacific)
In local currencies: 13.8%

3.7%

5

Hilti 2023 Financial Report

Financial Statements Hilti Corporation
Corporate ­GovernanceTotal net sales
in CHF million

5,900

2019

5,332

Group at a Glance

SALES DEVELOPMENT ACROSS REGIONS

6,347

6,520

12.1%

6.2%

2.7%

2021

2022

2023

5,978

-9.6%

2020

Net sales growth in CHF (%)

Excl. Eastern Europe

Group Financial Statements

Investor ­Information

4.3%

1

Consolidated Management Report

INFORMATION ON FINANCING AND CAPITAL
Equity ratio

Bank borrowings

Equity Ratio

Short- and long-term bank borrowings

Total equity in % of total equity and liabilities

Currencies

Other
CHF

37 million

59%

USD
CHF

15 million
JPY

GROUP AT A GLANCEKey Financial Information
Sales Development
Across Regions

Time to maturity

INFORMATION ON
FINANCING AND CAPITAL

2 to < 5 years
CHF

Total
CHF

EUR
CHF

196

45 million

128 million

million1 to < 2 years
CHF

CHF

Outlook

Total
CHF

196
million< 1 year
CHF

113 million

Group Financial Statements
Financial Statements Hilti Corporation

38 million

16 million

Consolidated Management Report

Corporate ­Governance
Investor ­Information

Information on bonds (nominal values)
Time to maturityin CHF million
2021

2022

CHF bond 1.875% 13/23 (early call for tax reasons only)

100

100

2023
−

CHF bond 0.2% 17/24 (early call for tax reasons only)

100

100

100

CHF bond 0.4% 17/27 (early call for tax reasons only)

100

100

100

CHF bond 0.05% 20/25 (early call for tax reasons only)

150

150

150

CHF bond 1.7425% 23/26 (early call for tax reasons only)

−

−

100

CHF bond 1.9225% 23/31 (early call for tax reasons only)

−

−

150

≥ 5 years
CHF

150 million

3 to < 4 years
CHF

100 million

Total
CHF

600
million< 1 year
CHF

100 million

1 to < 2 years
CHF

150 million
2 to < 3 years
CHF

100 million
6

Hilti 2023 Financial Report

Group at a Glance

INFORMATION ON FINANCING AND CAPITALOUTLOOKGROUP AT A GLANCEKey Financial Information
Sales Development
Across Regions
Information on
Financing and Capital
OUTLOOK

Consolidated Management Report

In 2024, the Hilti Group
expects mid-single-digit
sales growth in local
currencies and a similar
ROS level in Swiss francs
compared to 2023.

7

Hilti 2023 Financial Report

Construction market forecasts
point to a further softening
with negative real growth inseveral geographic areas.
The ongoing geopoliticaltensions and the volatility inthe financial markets will likely
lead to a further appreciationof the Swiss franc and hence
another year of significantly
negative currency impacts.

Group at a Glance

OUTLOOK

The Group’s strategic
objective, value creation
through leadership, built on
differentiation and direct
customer relationships,
encompasses value creation
for all stakeholders andachieving a positive impact
on society beyond financial
goals. Hilti wants to securelong-term success througha business strategy thatvalues ecological, people
and social aspects alongwith economic factors.

To live up to the Group’s
purpose of “Making
Construction Better”, Hilti
will continuously invest in
driving innovation in both
hardware and software
solutions and building up
its market reach resources.
The Group focuses on being
its customers’ best partner
for productivity, safety, andsustainability.

Group Financial Statements
Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Consolidated
Management
ReportGroup at a Glance
CONSOLIDATED MANAGEMENT REPORT
Strong Growth in a
Challenging ­Environment

Group Financial Statements
Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

STRONG GROWTH IN A CHALLENGINGENVIRONMENTGroup at a Glance
Consolidated Management Report
STRONG GROWTH IN A
­C HALLENGING ENVIRONMENTWith sales growth of 9.0 percent
in local currencies (2.7 percent inSwiss francs), the Hilti Group closed
2023 with turnover of more than
CHF 6.5 billion. With this result, Hilti
outperformed the market. Once more,
the appreciation of the Swiss franc led
to a significantly negative currency
impact of 6.3 percentage points onsales. Nevertheless, the operating
result grew at a considerably stronger
rate, by 5.3 percent, and reached
CHF 770 million. Despite economic
and geopolitical uncertainties, Hilti
significantly invested in its sales
capacity, innovation and long-term
projects within the corporate strategy
Lead 2030.

At a regional level, Europe managed to close the yearwith sales growth of 8.7 percent in local currencies,
primarily driven by the strong contribution fromSouthern Europe. The Americas region grew by
9.1 percent, while Asia/Pacific was at 13.8 percent.
China recovered slowly from COVID-19 lockdowns,
while the rest of the region achieved solid growth rates.
The ongoing war in Ukraine had an impact on the entire
Eastern Europe / Middle East / Africa region, resulting
in growth of 3.1 percent.

Investments in innovation and l­ongterm projects
In 2023, the Hilti Group completed the global rolloutof Nuron, its new cordless power tools platform. In
addition to the more than 70 tools launched in 2022,
an additional 30 new tools were brought to the market
in 2023. Expenditures for research and development
reached CHF 454 million (+3.9%), equal to 7.0 percentof the Group’s sales. This underlines Hilti’s strong focus
on innovation and differentiation.
Hilti continued to invest in productivity, safety andsustainability to drive the transformation of theconstruction industry. Following the acquisitionof Fieldwire Inc. (USA) in 2021, Hilti acquired the
4PS Group in 2023, a Netherlands-based local
market leader in developing and providing business
management solutions to the construction industry.

9

Hilti 2023 Financial Report

Consolidated Management Report

STRONG GROWTH IN A CHALLENGING ENVIRONMENTGroup Financial Statements
Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

As of the end of the year, the Hilti Group had
34,111 team members, an addition of 1624 (+5.0%)
compared to the previous year.

Profit development
The operating result increased by 5.3 percent to
CHF 770 million while net income decreased by
0.9 percent to CHF 560 million, due to the significantly
negative currency impact and a higher tax burden
compared to 2022. Despite the inflation-induced
cost increases combined with high investments ininnovation and software, as well as the appreciationof the Swiss franc, the return on sales (ROS) improvedby 0.3 percentage points, reaching 11.8 percent(2022: 11.5%).

The Group’s capital employed grew by CHF 234 million
to CHF 5.8 billion. The return on capital employed(ROCE) increased by 0.1 percentage points to13.3 percent (2022: 13.2%).
Free cash flow bounced back to CHF 359 million
from negative CHF 147 million in 2022. Also, the cash
flow conversion (64.1%) recovered to Lead 2030’s
long-term average target of 60 percent. Inventory
normalization was the biggest contributor to the solid
cash generation.
The pronounced appreciation of the Swiss franc
against all major currencies again led to a significantly
negative currency impact of CHF 51 million on theoperating result (2022: CHF -81 million).

Solid balance sheet and liquidity
The equity ratio of 59 percent (2022: 62%) continues
to be considerably above the target level of
50 percent. Cash and cash equivalents were at
CHF 0.9 billion (2022: CHF 1 billion). Reasons forthe decline include the purchase price for the 4PS
acquisition, the repayment of a corporate bondtranche and the successful placement of a new
dual tranche Swiss-franc-based corporate bond.
Additionally, the syndicated revolving stand-by
credit facility of CHF 600 million was extended
to 2027 and two sustainability key performanceindexes were added. Given the Group’s solid results
and overall healthy financial situation, the Boardof Directors proposes the payout of an ordinary
dividend of CHF 279 million for the 2023 financial
year (2022: 281 million).

10

Hilti 2023 Financial Report

Sustainability reporting
Hilti has accelerated its efforts to create a positive
impact towards the environment, people and society.
Since then, the Group has voluntarily reported inline with the Global Reporting Initiative standards
on an annual basis. By doing so, Hilti demonstrates
the governance structure and the integration ofsustainability into the corporate strategy anddiscloses the sustainability performance in thementioned areas.
The auditor, PricewaterhouseCoopers AG, hasprovided limited assurance on the non-financial
metrics of greenhouse gas emissions (GHG), energy
consumption and lost time incident rate since thereporting period 2021. In 2023, Hilti initiated a
project to prepare for the mandatory qualitative andquantitative sustainability reporting required by theEuropean Union’s Corporate Sustainability Reporting
Directive (CSRD) for the 2025 financial year report.
In addition, a second project has been initiatedin response to the European Union’s Taxonomy
Regulation, as taxonomy disclosures will be part ofthe sustainability reporting. The focus of this projectis to identify and quantify taxonomy-eligible andtaxonomy-aligned economic activities of the Hilti
Group.
To complement the understanding of value
creation and embrace a broader perspective that
includes all stakeholders, a new metric called
Value to Society will be introduced. This metriccomprehensively assesses the contribution to theenvironment, people and society, all quantified inmonetary terms. It will become a pivotal component
in the value creation framework of the Hilti Group

Consolidated Management Report

STRONG GROWTH IN A CHALLENGING ENVIRONMENT

and will also be integrated into the performance
management system in the future. This monetized
impact valuation also provides valuable inputs indefining the material topics for the double materiality
assessment under the CSRD.
In 2023, Hilti achieved carbon neutrality in its own
operations (Scope 1, 2 and business travel GHG
emissions). This step marks an important milestone
in the company’s efforts to combat climate change.
Nonetheless, the Group recognizes the importanceof addressing emissions beyond its own operations
and has thus committed to establishing targets inaccordance with the Science Based Targets initiative(SBTi) during the last reporting period. The interim
target is to reduce Scope 1, 2 and 3 GHG emissions
by approximately 30 percent by 2032, with the goalof reaching net-zero emissions by 2050 at the latest.

OutlookConstruction market forecasts point to a further
softening with negative real growth in several
geographic areas. The ongoing geopolitical tensions
and the volatility in the financial markets will likely leadto a further appreciation of the Swiss franc and hence
another year of significantly negative currency impacts.
To live up to the Group’s purpose of “Making
Construction Better”, Hilti will continuously invest
in driving innovation in both hardware and software
solutions and in building up its market reach resources.
In 2024, the Hilti Group expects mid-single-digit sales
growth in local currencies and a similar ROS level in
Swiss francs compared to 2023.

Group at a Glance
Consolidated Management Report
STRONG GROWTH IN A
­C HALLENGING ENVIRONMENTGroup Financial Statements
Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

GroupFinancial
Statements

Group at a Glance
Consolidated Management Report
GROUP FINANCIAL STATEMENTS
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
Notes to the Consolidated
Financial Statements
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Hilti 2023 Financial Report

Group Financial Statements

TABLE OF CONTENTSCONSOLIDATED INCOME STATEMENTGroup at a Glance
Consolidated Management Report
Group Financial Statements

in CHF million
Note

2022

2023

Net sales

2

6,347

6,520

Other operating income

2

Total operating income

207
6,727

Comprehensive Income
Consolidated Balance Sheet

2(1,767)(1,720)

Personnel expenses

3(2,710)(2,852)

Depreciation and amortization

4

(440)

(476)

(39)

(47)

(1,052)(1,083)208

221(5,800)(5,957)731

770

Other operating expenses

2

Capitalized costs
Total operating expenses
Operating result
Other income and expenses (net)

5

(12)

(32)

Finance costs

5

(51)

(38)

668

700

(103)

(140)

565

560

Net income before income tax expenses
Income tax expenses

8

Net income

Equity holders of the parent

561

557

Non-controlling interests

43

Hilti 2023 Financial Report

Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
Notes to the Consolidated
Financial Statements
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation

Attributable to:12

Consolidated Statement of

184
6,531

Material costs

Losses on trade and other receivables

CONSOLIDATED INCOME STATEMENTGroup Financial Statements

CONSOLIDATED INCOME STATEMENT

Corporate ­Governance
Investor ­Information

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Group at a Glance
Consolidated Management Report
Group Financial Statements

in CHF million
Note

2022

2023

565

560

5/8

(4)

(1)

8

(91)

(201)

(95)

(202)

Consolidated Balance Sheet

152

(80)

Consolidated Statement of

Items that will never be reclassified to the income statement

152

(80)

Changes in Equity

Other comprehensive income (OCI)

57

(282)

Consolidated Cash

Total comprehensive income

622

278

Net income
Net movement on cash flow hedges, net of taxes
Foreign currency translation differences, net of taxes
Items that may be subsequently reclassified to the income statement
Remeasurements on employee benefits, net of taxes

3/8

Consolidated Income Statement
CONSOLIDATED STATEMENT OFCOMPREHENSIVE INCOME

Flow Statement
Notes to the Consolidated
Financial Statements

Attributable to:Equity holders of the parent

618

277

Non-controlling interests

4

1

Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

13

Hilti 2023 Financial Report

Group Financial Statements

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED BALANCE SHEETGroup at a Glance
Consolidated Management Reportas at December 31

Group Financial Statements

AssetsEquity and liabilities

in CHF million

in CHF million
Note

2022

2023

Property, plant and equipment

4

1,066

1,115

Right of use assets

4

418

438

Intangible assets

4

1,284

1,613

Deferred income tax assets

8

185

Other financial assets

5

22

Other assets

7

Trade and other receivables

6

Total non-current assets

Consolidated Income Statement
Note

Non-controlling interests
Equity attributable to equity holders of the parent

2022

2023

14

15

4,565

4,561

Total equity

5

4,579

4,576

175

Employee benefits

3

162

238

28

Deferred income tax liabilities

8

198

245

5

5

Trade and other payables

6

27

22

4/5

704

930

7

39

49

1,130

1,484

921

1,105

Other financial liabilities

3,901

4,479

Other liabilities

Inventories

6

959

778

Trade and other receivables

6

1,371

1,408

Employee benefits

3

16

28

Accrued income and prepaid expenses

6

117

107

Trade and other payables

6

661

630

6

536

561

4/5

436

339

7

68

86

Total non-current liabilities

Other financial assets

5

87

46

Accrued expenses

Cash and cash equivalents

6

991

886

Other financial liabilities

Total current assets

3,525

3,225

Other liabilities

Total assets

7,426

7,704

Total current liabilities

1,717

1,644

Total liabilities

2,847

3,128

Total equity and liabilities

7,426

7,704

Consolidated Statement ofComprehensive Income
CONSOLIDATED BALANCE SHEET
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
Notes to the Consolidated
Financial Statements
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

14

Hilti 2023 Financial Report

Group Financial Statements

CONSOLIDATED BALANCE SHEETCONSOLIDATED STATEMENT OF CHANGES IN EQUITYGroup at a Glance
Consolidated Management Report
Group Financial Statements

in CHF million

SharecapitalCapitalreserves

Translation­reserves

Hedging
reserves

Retainedearnings

Equity­ ttributable toaequity holdersof the parent

127

17

(669)

2

5,088

4,565

14

4,579

−

−

−

−

557

557

3

560

Cash flow hedges

−

−

−

(1)

−

(1)

−

(1)

Remeasurements on employee benefits

−

−

−

−

(80)

(80)

−

(80)

Foreign currency translation differences

−

−

(199)

−

−

(199)

(2)

(201)

Total other comprehensive income

−

−

(199)

(1)

(80)

(280)

(2)

(282)

Total comprehensive income

−

−

(199)

(1)

477

277

1

278

Dividend paid

−

−

−

−

(281)

(281)

−

(281)

Equity at December 31, 2023

127

17

(868)

1

5,284

4,561

15

4,576

Equity at January 1, 2022

127

17

(578)

6

4,712

4,284

10

4,294

−

−

−

−

561

561

4

565

Equity at January 1, 2023
Net income recognized in income statement

Consolidated Income Statement

Non-­
controllinginterests

Total equity

Other comprehensive income

Net income recognized in income statement

Consolidated Statement ofComprehensive Income
Consolidated Balance SheetCONSOLIDATED STATEMENT OFCHANGES IN EQUITY
Consolidated Cash
Flow Statement
Notes to the Consolidated
Financial Statements
Auditors’ Report on
the Consolidated
Financial Statements

Other comprehensive income
Cash flow hedges

−

−

−

(4)

−

(4)

−

(4)

Remeasurements on employee benefits

−

−

−

−

152

152

−

152

Foreign currency translation differences

−

−

(91)

−

−

(91)

−

(91)

Total other comprehensive income

−

−

(91)

(4)

152

57

−

57

Total comprehensive income

−

−

(91)

(4)

713

618

4

622

Dividend paid
Equity at December 31, 2022

15

Hilti 2023 Financial Report

Group Financial Statements

−

−

−

−

(337)

(337)

−

(337)

127

17

(669)

2

5,088

4,565

14

4,579

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

CONSOLIDATED CASH FLOW STATEMENTin CHF million

Group at a Glance
Consolidated Management Report
Group Financial Statements

in CHF million
Note

Operating result
Depreciation and amortization

4

Interest received
Interest paid

2022

2023

Note

2022

2023

731

770

Proceeds from long-term borrowings

5

3

59

440
5

476

Repayment of long-term borrowings

5

(4)

(4)

12

Payment of lease liabilities

4

(138)

(134)

Consolidated Income Statement
Consolidated Statement ofComprehensive Income

(51)

(39)

Proceeds from (repayment of) short-term borrowings

5

71

(89)

Income tax paid

8

(145)

(131)

Proceeds from issuance of bonds

5

−

249

(Increase)/decrease in inventories

6

(221)

142

Repayment of bonds

5

−

(100)

(Increase)/decrease in trade receivables

6

(52)

(46)

Increase/(decrease) in liability to shareholder

8

−

1

(Increase)/decrease in finance lease receivables

6

(211)

(303)

Dividend paid

5

(337)

(281)

Increase/(decrease) in trade payables

6

(2)

(19)

Cash flow from financing activities

(405)

(299)

Increase/(decrease) in contract liabilities

7

7

(2)

Exchange differences

(18)

(43)

FLOW STATEMENT

Non-cash items

(50)

25

Change in other net operating assets

(22)

49

Total increase/(decrease) in cash
and cash equivalents

(273)

(105)

Notes to the Consolidated

Cash flow from operating activities

429

934

Cash and cash equivalents at January 1

1,264

991

991

886

Capital expenditure on intangible assets

4

(222)

(227)

Capital expenditure on property, plant and equipment

4

(223)

(224)

Acquisition of subsidiaries

8

−

(300)

159

44

(Increase)/decrease in financial investments
Disposal of intangible assets

4

−

1

Disposal of property, plant and equipment

4

7

9

(279)

(697)

Cash flow from investing activities

Cash and cash equivalents at December 31

Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
CONSOLIDATED CASH

Financial Statements
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

16

Hilti 2023 Financial Report

Group Financial Statements

CONSOLIDATED CASH FLOW STATEMENTNOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
18 1 Basis of preparation

Group at a Glance
Consolidated Management Report
Group Financial Statements

34 5 Financing and capital

18 1.1 General information

34 5.1 Financial assets

18 1.3 Critical accounting estimates and judgments

38 5.3 Net debt reconciliation

18 1.2 Basis of accounting

19 1.4 Changes in accounting policies and estimates

19 1.5 New standards, amendments and interpretations not yet adopted by the Group
19 1.6 Method of consolidation

19 1.7 Foreign currency translation

36 5.2 Financial liabilities

Consolidated Statement of

39 5.4 Derivative financial instruments

Consolidated Balance Sheet

40 5.5 Financial result
41 5.6 Equity

41 6 Net working capital

20 2 Operating performance

41 6.1 Inventories

20 2.1 Operating income

42 6.2 Trade receivables

21 2.2 Operating segments

44 6.3 Cash and cash equivalents

22 2.3 Operating expenses

44 6.4 Trade and other payables

44 6.5 Accrued income and prepaid expenses

23 3 Personnel expenses

44 6.6 Accrued expenses

23 3.1 Personnel expenses

45 7 Other assets and liabilities

23 3.2 Employee benefits

45 7.1 Other assets

29 4 Tangible and intangible assets

45 7.2 Other liabilities

29 4.1 Property, plant and equipment

46 8 Other disclosures

30 4.2 Leases

32 4.3 Intangible assets

46 8.1 Financial risk management
49 8.2 Income taxes

53 8.3 Business combinations
54 8.4 Related parties

55 8.5 Other information

17

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Income Statement

Comprehensive Income

Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

1 Basis of preparation

1.2 Basis of accounting

1.1 General information

These consolidated financial statements have been
prepared in accordance with IFRS AccountingStandards as adopted by the European Union.
Preparation of the financial statements in accordancewith IFRS Accounting Standards meets therequirements of Liechtenstein’s corporations law, the“Personen- und Gesellschaftsrecht (PGR)”.

The Hilti Group (the Group) comprises the Hilti
Corporation and its domestic and foreign subsidiaries.
The Group supplies the worldwide construction andenergy industries with technologically leading products,
systems, software and services that provide clear andsustainable added value. Its product range includes
tools and systems covering demolition, drilling, sawing,
cutting and grinding, direct and screw fastening,
diamond coring and cutting, anchoring, firestop,
installation and measuring.
The Hilti Corporation is a limited by shares company
incorporated and domiciled in the Principality of
Liechtenstein. The Group’s headquarters and theaddress of its registered office are at Feldkircherstrasse
100, 9494 Schaan, Liechtenstein. The Group’s principal
production and research and development location is
Liechtenstein, with further production and research anddevelopment locations worldwide. The Group operates
in over 120 countries and has about 34,000 employees
worldwide.
These consolidated financial statements were approved
for issue by the Board of Directors on March 13, 2024.

The Group’s accounting policies are set out in the
explanatory notes to the consolidated financial
statements and have been consistently applied to both
periods presented, unless otherwise stated.

1.3 Critical accounting estimates andjudgments
The preparation of the financial statements requires
management to use certain critical accounting
estimates and to exercise its judgment in the processof applying the Group’s accounting policies. The Groupalso makes estimates and assumptions concerning
the future. Estimates and judgments are continually
evaluated and are based on historical experienceand other factors, including expectations of future
events that are believed to be reasonable under thecircumstances. The actual results may differ from theseassumptions and estimates.

Significant estimates (with the related uncertainties)
were primarily made in the following areas:• Assumptions underlying the expected credit loss of
trade receivables (note 6.2)
• Assumptions underlying write-downs of inventories(note 6.1)
• Assumptions underlying impairment testing of
goodwill and intangible assets with an indefinite
useful life (note 4.3)
• Assumptions underlying the recognition of defined
benefit pension plans (note 3.2)
• Assumptions underlying the valuation of current anddeferred tax assets and liabilities (note 8.2)

Group at a Glance
Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

18

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.4 Changes in accounting policies
and estimates
The Group has assessed the following amendments
for the first time for its annual reporting period
commencing January 1, 2023:• Disclosure of Accounting Policies – Amendments to
IAS 1 and IFRS Practice Statement 2• Definition of Accounting Estimates – Amendments to
IAS 8• Deferred Tax related to Assets and Liabilities arisingfrom a Single Transaction – Amendments to IAS 12• International Tax Reform – OECD Pillar Two Model
Rules – amendments to IAS 12
In the context of the publication of the model rules andadditional technical guidance for the implementationof a new global minimum tax regime (known as “BEPS
2.0 Pillar Two”) and the uncertainties created due tothis in terms of potential additional differences andthe measurement of deferred taxes, the IASB issued
amendments (International Tax Reform – Pillar Two
Model Rules) to IAS 12 (Income Taxes), introducing amandatory temporary exception to the requirements of
IAS 12 that a company does not recognize and does
not disclose information about deferred tax assets andliabilities related to income taxes under Pillar Two. Inline with those amendments, the Group applied theexception for the 2023 financial year.
All other amendments listed above had no material
impact on the amounts recognized in prior periods andare not expected to significantly affect the current or
future periods.
In 2022, following the implementation of the new
accounting system for finance lease contracts, theGroup changed the methodology for the recognition

19

Hilti 2023 Financial Report

Group Financial Statementsof certain services, including warranties, for financelease. This was accounted as a change in accounting
estimate, resulting in a decrease of CHF 115 million
in trade receivables and contract liabilities with no
impact on the income statement and CHF 75 million
reclassification within the trade receivables from the net
investment in the lease to other trade receivables.

1.5 New standards, amendments andinterpretations not yet adopted by
the Group
The new accounting standards and interpretations
listed below that have been published are notmandatory for the December 31, 2023 reporting period
and have not yet been adopted by the Group:• Non-current Liabilities with Covenants –Amendments to IAS 1• Lease Liability in a Sale and Leaseback –Amendments to IFRS 16• Supplier Finance Arrangements – Amendments to
IAS 7 and IFRS 7
These standards are not expected to have a material
impact on the Group in the current or future reporting
periods or on foreseeable future transactions.

1.6 Method of consolidation
The consolidated financial statements are basedon the annual financial statements of the individualGroup companies controlled directly or indirectly by
Hilti Corporation and are prepared using consistentaccounting policies. The Group eliminates all
intercompany transactions as part of the Group
consolidation process. A company is consolidated forthe first time or deconsolidated from the date on which
the Group exercises or loses control over the company.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

All entities over which the Group has significant
influence but no control are classified as associates
or joint ventures and accounted for using the equity
method.
The Group has joint operations and, as a joint operator,
accounts for the assets, liabilities, revenues andexpenses in relation to its interest in a joint operation.
Non-controlling interests in the results and equity ofsubsidiaries are shown separately in the consolidated
income statement, statement of comprehensive
income, statement of changes in equity and balance
sheet, respectively. When the Group ceases to havecontrol, any retained interest in the entity is remeasured
to its fair value at the date when control is lost, with thechange in carrying amount being recognized in otherincome and expenses (net).
In 2023, the Group obtained control of 4PS Group,
resulting in the first-time consolidation of the company.
Additionally, the Group acquired the remaining 50% of
the shares of Hillos GmbH, a former joint operation thatis now fully consolidated. The related impact of the two
acquisitions is reported in the line change in scope of
consolidation in the relevant notes to the consolidated
financial statements. Detailed information on the firsttime consolidation of 4PS Group and on the businesscombinations is given in note 8.3.
No significant changes in the Group’s structure took
place in 2022.

1.7 Foreign currency translation
The functional currency of the Group companies isthe currency used in the primary economic environment
in which they operate. The consolidated financial
statements are presented in Swiss francs.

Group at a Glance
Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Foreign currency transactions are translated using
the exchange rates at the dates of the transactions.
Foreign exchange gains and losses, resulting fromthe settlement of such transactions and from thetranslation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies,
are recognized in the income statement. Foreignexchange gains and losses relating to long-term
intercompany foreign currency loans are regarded aspart of the net investment in the foreign entity and arerecognized in other comprehensive income (OCI).
For consolidation purposes, the results and financial
position of all the Group companies in foreign
currencies are translated into Swiss francs. Assets andliabilities are translated at the year-end rates (closingrate), while income and expense items are translated at
the sales-weighted average exchange rates (averagerate).
The change in accumulated exchange differences fromthe translation of foreign companies is recognizedin OCI. If a Group company is sold, or if part of it issold and control is lost, the accumulated exchange
differences are reclassified to the income statement.
The following exchange rates of principal currencies
were applied for translation into Swiss francs:
in CHF

1 CAD

Average rates

Closing rates

2022

2023

2022

2023

0.735

0.666

0.682

0.632

1 EUR

1.004

0.972

0.985

0.926

1 GBP

1.180

1.118

1.110

1.066

100 JPY

0.728

0.639

0.700

0.592

1 USD

0.956

0.899

0.923

0.838

20

Hilti 2023 Financial Report

Group Financial Statements

2 Operating performanceGroup at a Glance

2.1 Operating income

Consolidated Management Report

Accounting policies
Depending on the specific contractual
circumstances, the Group recognizes revenue
over time or, when it transfers control over a
product or service to a customer, at a point intime. The Group has therefore implemented afive-step model applicable to all contracts withcustomers and has disaggregated revenue fromcontracts with customers into the following
categories of revenue recognition patterns: sales
contracts of goods, services and warranties(covering repairs). Net sales of services consist oflogistics, repairs (including service warranty) andother fleet management-related services, tests,
training and software solutions. Other operating
income, among others, comprises finance leaseinterests, including related risk premiums.
Net sales of goods and services
Revenue from the sale of goods is recognizedin the income statement at a point in time, whencontrol of the products has been transferred,
typically when the products are delivered to thecustomer and there is no unfulfilled obligationthat could affect the customer’s acceptanceof the products. Revenue related to goods forwhich control has not yet been transferred tothe customer will be recognized when control istransferred to the customer.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Revenue from services rendered is recognized ata point in time or over time, depending on when
the performance obligation is satisfied.
All revenues from sales of goods and services
rendered are recognized at the normal selling
price less applicable trade discounts and rebates,individually determined in the markets. In mostcases, the consideration is due when legal title
has been transferred. While deferred payment
terms may be agreed upon in rare circumstances,the deferral never exceeds 12 months.
Revenue from sales of goods with a significant
financing component relates to finance leaseand is recognized in the period in which thelease commences, while the applicable interest
income is recognized on an actuarial basis overthe lease term. Revenue from operating leases isrecognized over the lease term.
Service warranty
The Group offers its customers warranties
covering all repairs for a certain period after thesale. These warranty obligations are considered asa separate performance obligation and recognizedover time. For goods sold outright, a portion of
the transaction price is allocated to the service
warranty and recognized as a contract liability.
Revenue is recognized over the period in which
the service warranty is provided based on the time
elapsed. Contract liabilities are shown as part ofother liabilities and split into current and noncurrent. Detailed information is given in note 7.2.

Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

2.2 Operating segments

in CHF million
2022

2023

Net sales of goods

5,872

5,992

Net sales of services

475

528

Total net sales

6,347

6,520

Other operating income

184

207

Total operating income

6,531

6,727

Revenue related to finance lease in the reporting
period amounts to CHF 1092 million (2022:
CHF 906 million).
The following table shows the revenue recognition split
into point in time and period of time:in CHF million
Revenue recognized at a point in time
Revenue recognized over time
Total revenue

2022

2023

5,962

6,111

385

409

6,347

6,520

Revenue recognized over time mainly comprises
special repairs and other fleet management-related
services and software solutions. The subscriptions forsoftware solutions are short-term contracts, whereas
the average contract duration of the repairs and fleet
management-related services is somewhat longer.

Accounting policies
Operating segments are reported in a mannerconsistent with the internal reporting provided
to the chief operating decision-maker. The chief
operating decision-maker, who is responsible forallocating resources and assessing performanceof the operating segments, has been identified
as the Executive Board (EB) that makes strategic
decisions. With the Group’s Multi-Channel
Service (MCS) approach, all products andservices are relevant for all customers and the EB
steers the business at the Group level as one unit.
Consequently, the Group operates in only one
single operating segment. The single operating
segment disclosure is accordingly set out in thebalance sheet, income statement, statement ofcomprehensive income, statement of changes inequity and the cash flow statement.
Net sales information by geographical area isbased on the country of the third-party customer.
Net sales information by major country is basedon the country of domicile of the respective
Group companies.

Net sales information about products and services

Group at a Glancein CHF million

Consolidated Management Report
2022

2023

Electric Tools & Accessories

Products

2,581

2,686

Electric Tools & Accessories

Services

416

466

2,997

3,152

Total Electric Tools &­Accessories

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of

Products

3,291

3,306

Fastening & Protection
Systems

Services

59

62

Consolidated Balance Sheet

Total Fastening &­Protection Systems

3,350

3,368

Consolidated Statement of

Total Group

6,347

6,520

Comprehensive Income

Changes in Equity
Consolidated Cash
Flow Statement

Net sales information about geographical areas
The Group has no customer exceeding the threshold of
10% of the Group’s net sales.

2022

NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on

financial amounts in CHF million

2023

Changein CHF(%)

Changein ­local
currencies(%)

Europe excl.
Eastern Europe

3,201

3,351

4.7

8.7

Americas

1,841

1,874

1.8

9.1

Asia / Pacific

763

791

3.7

13.8

542

504

(7.0)

3.1

6,347

6,520

2.7

9.0

Total Group

Hilti 2023 Financial Report

Consolidated Income Statement

Fastening & Protection
Systems

Eastern E­ urope /Middle East /Africa21

Group Financial Statements

the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Net sales for major countries
in CHF million
2022

2023

1,392

1,411

Germany936

963

France495

505

Liechtenstein (country of domicile)

89

72

Other countries

3,435

3,569

Total Group

6,347

6,520

USA

Tangible and intangible assets information
for major countries
in CHF million
2022

2023

1,408

1,427

Germany351

364

Netherlands

16

360

USA

287

308

Other countries

706

707

Total Group

2,768

3,166

Liechtenstein (country of domicile)

2.3 Operating expenses

Other operating expenses

Group at a Glance

Operating expenses include material costs andchanges in inventory, other operating expenses,
personnel expenses, losses on trade and otherreceivables, depreciation, amortization and capitalized
costs. Detailed information regarding personnel
expenses is given in note 3.1. Capitalized costs mainly
include development costs such as personnel andother consulting costs (see note 4.3).

Major items included in other operating expenses are
as follows:

Consolidated Management Report

Expenditure on research and development in thereporting period amounted to CHF 454 million (2022:
CHF 437 million), thereof CHF 211 million (2022:
CHF 200 million) were recognized as additions on
intangible assets.

Group Financial Statements

in CHF million
Consolidated Income Statement

2022

2023

Outward freight

(152)

(143)

Maintenance & repairs

(123)

(133)

Legal & consulting

(110)

(118)

Expenditures for rent1

(102)

(131)

Transportation

(104)

(66)

Travel

(131)

(146)

Consolidated Statement of

Other administration expenses

(72)

(88)

Changes in Equity

Marketing & communication

(71)

(66)

Material costs

Power

(27)

(28)

Recruiting

(23)

(22)

in CHF million

Other
2022

2023

(1,968)(1,561)

(20)

(17)

Total material costs(1,988)(1,578)Change in inventory

221

(142)

(1,767)(1,720)Materials
Outsourced manufacturing

Total material costs includingchange in inventory

Total other operating expenses
1

(137)

(142)

(1,052)(1,083)

Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet

Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS

Including expenses relating to short-term and low-value leases(detailed information is given in note 4.2)

Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

22

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3 Personnel expenses

3.2 Employee benefits

3.1 Personnel expenses

Accounting policies

in CHF million
Salaries and wages
Social contributions
Total personnel expenses

2022

2023

(2,191)(2,331)

(519)

(521)

(2,710)(2,852)Social contributions include expenses for pensions
and similar liabilities in addition to social security
contributions.
The breakdown of the number of employees of Group
companies by function is as follows:

2022

2023

Sales

24,61925,271

Research and development

2,103

2,842

Production

3,965

4,096

Administration

1,800

1,902

Total employees(as at December 31)

32,487

34,111

Pension obligations
Group companies operate various postemployment schemes, including both defined
benefit and defined contribution pension plans.
These schemes are generally funded throughpayments to insurance companies or trusteeadministered funds, determined by annual
actuarial valuations.
For defined contribution plans, the Group pays
contributions to publicly or privately administeredpension insurance plans on a mandatory,
contractual or voluntary basis. The Group
has no further payment obligations once thecontributions have been paid.
Long service benefits
Some Group companies provide jubilee and othersimilar long service benefits. The entitlement
to these benefits is usually conditional on thecompletion of a minimum service period. The
expected costs of these benefits are accrued overthe period of employment using an accounting
methodology similar to that used for defined
benefit pension plans.
Variable compensation
The Group recognizes a liability and an expensefor variable compensation based on changes in
key financial results, such as sales, operating
profit, net income and capital employed as
specified in the employment contracts.

23

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Group at a Glance anagement judgment andMestimates
The present value of the defined benefit
obligations is determined annually byindependent actuaries using the projected
unit credit method. Actuarial assumptions are
required for this purpose. The calculation of the
discount rate, future increases in salaries/wages
and pensions, and mortality are significant
assumptions in actuarial valuations.

Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity

Employee benefits creating obligations of the Groupto its employees comprise defined benefit plans, otherlong-term employee benefits and short-term employee
benefits. The Group also provides employee benefits
through defined contribution plans.
Defined benefit plans
Swiss pension plan
The Group’s largest defined benefit pension plan is
located in Switzerland and covers employees of theparent company as well as of the Swiss and other
Liechtenstein-based Group companies (the “Swisspension plan”). The Swiss pension plan accounts for
84% (2022: 83%) of the Group’s total defined benefit
obligation and 90% (2022: 90%) of the Group’s plan
assets. The weighted average duration of the defined
benefit obligation is 14.0 years (2022: 13.6 years).

Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

The Swiss pension plan is funded through a legally
separate trustee-administered pension fund. The
pension plan is overseen by a regulator as well as by astate supervisory body. The pension plan’s most senior
governing body (Board of Trustees) must be composedof equal numbers of employee and employer
representatives. The Board of Trustees is responsible
for the investment of the assets. When defining theinvestment strategy, it takes into account the pension
fund’s objectives, benefit obligations and risk capacity.
The investment strategy is defined in the form of along-term target asset structure (investment policy).
The Board of Trustees delegates the implementationof the investment policy – in accordance with theinvestment strategy – to an Investment Committee.
The cash funding of the plan is designed to ensure that
present and future contributions should be sufficient tomeet future liabilities. Further on, the Board of Trustees
is able to adapt the contributions and benefits. Thereis a stop-loss insurance which covers the risk from acertain excess amount (e.g., for disability or death).
The Swiss pension plan contains a cash balance
benefit formula and is therefore accounted for asa defined benefit plan. Employer and employee
contributions are defined in the pension fund rules interms of an age-related sliding scale of percentagesof remuneration. Under Swiss law, the pension fundguarantees the vested benefit amount as confirmed
annually to members. Interest may be added tomember balances at the discretion of the Board ofTrustees (i.e., 1.0% in 2023 and 1.0% in 2022). At
retirement date, members have the right to take theirretirement benefit as a lump sum, an annuity or partas a lump sum with the remaining balance converted
to a fixed annuity at the rates defined in the fund rules.
The Board of Trustees may change the conversion
rate at their discretion subject to the plan’s funded
status and the requirements of the Swiss Federal Law
on Occupational Retirement, Survivors’ and Disability
Pension Plan (BVG).
Other defined benefit plans
The remaining defined benefit plans are located inAustria, Germany, Great Britain, Italy, Taiwan, Korea,
Norway, the Philippines, France and Japan. Only
the last two plans listed are still open for new plan
participants.
Other long-term employee benefits
Other long-term employee benefits comprise jubilee
and other long service benefits, a long-term incentive
and other long-term employee benefits. The relevant
period for the long-term incentive is 2023-2025, withfinal payment to be made in 2026. Historically, thelevel of outflows concerning other long-term employee
benefits (excluding the long-term incentive) has been
constant each year.

Short-term employee benefits

Group at a Glance

Short-term employee benefits such as short-term
variable compensation are included in accrued
expenses and deferred income (see note 6.6).

Consolidated Management Report

Defined contribution plans
The employer’s contribution totals CHF 58 million(2022: CHF 56 million).

Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

24

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Employee benefit obligations (defined benefit plans and other long-term benefits)Group at a Glancein CHF million
2022

Consolidated Management Report

2023

FundedUnfunded

Total

FundedUnfunded

Total

Fair value of plan assets

967

−

967

984

−

984

Present value of defined benefit obligation

(975)

−

(975)

(1,055)−(1,055)

(8)

−

(8)

(71)

−

(71)

Switzerland

Net defined benefit (liability)/asset at December 31

Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income

Other plans
Fair value of plan assets

114

−

114

111

−

111

Present value of defined benefit obligation

(156)

(50)

(206)

(150)

(46)

(196)

Net defined benefit (liability)/asset at December 31

(42)

(50)

(92)

(39)

(46)

(85)

Fair value of plan assets

1,081

−

1,081

1,095

−

1,095

Present value of defined benefit obligation(1,131)(50)(1,181)(1,205)(46)(1,251)

(50)

(50)

(100)

(110)

(46)

(156)

−

(78)

(78)

−

(110)

(110)

(50)

(128)

(178)

(110)

(156)

(266)

Total

Net defined benefit (liability)/asset at December 31
Present value of other employee benefits
Total net book value of employee benefits at December 31
Thereof current portion

(16)

(28)

Thereof non-current portion

(162)

(238)

Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

25

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Reconciliation of present value of defined benefit obligation and fair value of plan assets

Group at a Glancein CHF million
2022

Opening balance at January 1
Current service cost
Past service cost

Consolidated Management Report

2023

Present valueof obligation

Fair value ofplan assets

Total

Present valueof obligation

Fair value ofplan assets

Total(1,480)

1,180

(300)

(1,181)

1,081

(100)

(36)

−

(36)

(24)

−

(24)

6

−

6

19

−

19

Interest (expense)/income

(10)

8

(2)

(29)

27

(2)

Total amount recognized in profit or loss

(40)

8

(32)

(34)

27

(7)

Actuarial gains/(losses) arising from changes in demographic assumptions

(5)

−

(5)

2

−

2

Actuarial gains/(losses) arising from changes in financial assumptions

306

−

306

(82)

−

(82)

Actuarial gains/(losses) arising from experience adjustments

(10)

−

(10)

−

0

0

−

(107)

(107)

−

(11)

(11)

291

(107)

184

(80)

(11)

(91)

−

35

35

−

33

33

Contributions by plan participants

(19)

19

−

(19)

19

−

Benefits paid

49

(41)

8

53

(49)

4

Currency translation adjustment

18

(13)

5

10

(5)

5

Total other movements

48

−

48

44

(2)

42

(1,181)

1,081

(100)

(1,251)

1,095

(156)

Return on plan assets excluding interest income
Total remeasurements recognized in other comprehensive income
Contributions by employer

Closing balance at December 31

Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

In the income statement, the various components ofthe defined benefit costs are included as follows:

Financial Statements Hilti Corporation• Total service cost – in personnel expenses(see note 3.1) and• Interest income and expense – in other income
and expenses (net) (see note 5.5)

26

Hilti 2023 Financial Report

Group Financial Statements

Corporate ­Governance
Investor ­Information

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Plan asset classes

Group at a Glance

financial amounts in CHF million
2022
Quotedmarket priceNon-quoted
market priceConsolidated Management Report

2023
Total

%

Quotedmarket priceNon-quoted
market price

Total

%

Cash and cash equivalents

45

−

45

4

41

−

41

4

Equity instruments (including private equity funds)

217

48

265

24

224

48

272

25

Debt and compound financial instruments

300

−

300

28

318

−

318

29

Real estate and investments in infrastructures

9

309

318

29

9

311

320

29

Derivatives

(3)

−

(3)

−

(1)

−

(1)

−

Investment funds

55

6

61

6

45

4

49

4

Others

−

95

95

9

−

96

96

9

623

458

1,081

100

636

459

1,095

100

Total plan assets at fair value

Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity

The Group does not make use of any assets held bypension plans.
Cash and cash equivalents are primarily invested
in money market funds and current accounts withfinancial institutions that mostly have at least an “A”
rating.
Equity instruments represent investments in equity
funds and direct investments. They generally havequoted market prices in an active market. The
pension plans’ assets do not include any shares of
Hilti Corporation.

27

Hilti 2023 Financial Report

Group Financial Statements

Debt instruments (e.g., bonds) generally have a credit
rating that is no lower than “BBB”, have quoted market
prices in an active market and are primarily direct
investments. Compound financial instruments include
convertible bonds.
Real estate represents indirect and direct investments
in residential and commercial properties, as well as ininfrastructures. Indirect investments comprise listed andunlisted real estate funds, investment foundations andunlisted real estate fund of funds. Direct investments areprimarily held in residential properties in Liechtenstein.
Directly held real estate is periodically valued by anindependent expert.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Investment funds represent investments with aninsurance company and a mandate with a bank whichinvests in alternative asset classes (e.g., hedge funds
and commodities). In the case of investment funds,
quoted market prices in an active market are usually
not available.
In the current year, we reassessed and changed theplan asset classes, and therefore certain assets in
Others were reallocated to the appropriate category.
Prior period figures, CHF 65 million for investments ininfrastructures, CHF 52 million mainly for compound
financial instruments and CHF 48 million for private
equity funds were restated accordingly. The position
Others primarily includes mezzanine investments andinsurance-linked securities, among others. Leveraging
and short selling is prohibited. Quoted market prices inan active market are usually not available.

Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Plan members at December 31

Group at a Glance

financial amounts in CHF million
2022

Consolidated Management Report

2023

ActiveDeferred

Retired

Total

ActiveDeferred

Retired

Total

Plan members

6,198

728

1,699

8,625

6,475

667

1,767

8,909

Defined benefit obligation

(597)

(77)

(507)

(1,181)

(630)

(78)

(543)

(1,251)

50

7

43

100

51

6

43

100

15.9

17.9

10.7

13.7

16.4

17.9

10.8

14.0

Defined benefit obligation share in % of total
Average weighted duration in years

Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income

The employer’s best estimate of contributions expected
to be paid to defined benefit plans for the financial year
2024 is CHF 39 million.
Actuarial assumptions
Actuarial assumptions are based on long-term
economic factors in the respective countries. Each
item of “Other plans” is a weighted average in relation
to the relevant underlying component. The significant
assumptions are as in the table below.

• A 0.25% increase/decrease in expected futuresalaries would lead to an increase/decrease of 0.4%
in the defined benefit obligation• A one-year increase/decrease in life expectancy
would lead to an increase/decrease of 2.6% in thedefined benefit obligation

Life expectancy is reflected in the defined benefit
obligations by using mortality tables of the country inwhich the plan is located. The generational tables BVG/
LPP 2020 (2022: BVG/LPP 2020) have been used for
Switzerland.
The following impacts on the defined benefit obligation
would result from changes in actuarial assumptions:

The sensitivity analysis is based on realistically possible
changes as of the end of the reporting period. Eachchange in a significant actuarial assumption was
analyzed separately as part of the test. Interdependencies
were not taken into account.

• A 0.25% increase/decrease in the discount ratewould lead to a decrease/increase of 3.4% in thedefined benefit obligation

Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

in %
2022

Financial Statements Hilti Corporation

2023

Switzerland

Other plans

Total

Switzerland

Other plans

Total

Discount rate

2.25

3.75

2.51

1.50

3.73

1.85

Future salary increase

1.50

1.43

1.49

1.50

1.31

1.47

Future pension increase

0.00

1.94

0.34

0.00

2.00

0.31

28

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Corporate ­Governance
Investor ­Information

4 Tangible and intangible assets
4.1 Property, plant and equipment

Property, plant and equipment
2022

Accounting policies
Land is valued at historical cost less accumulated
impairment losses, if any. Other property, plantand equipment consist mainly of office equipment,
testing instruments, leasehold improvements andvehicles and are recognized at historical costless accumulated depreciation and accumulated
impairment losses, if any. Historical cost includes
expenditure that is directly attributable to theacquisition of the items. Cost includes transfersfrom equity of any gains or losses on qualifying
cash flow hedges. Historical cost may also include
transfers from equity of gains/losses on qualifying
cash flow hedges of foreign currency purchases oftangible fixed assets.
Depreciation is calculated using the straight-line
method to allocate the historical costs of assets
over their estimated useful lives. Additions toaccumulated depreciation are included in the
depreciation and amortization line item of theincome statement. The estimated useful lives ofdepreciable property, plant and equipment are:
Buildings
Plant and machinery
Other operating assets

20 to 40 years
5 to 15 years
2 to 10 years

An impairment test is performed whenever
impairment indicators are identified. If the test
reveals that the carrying amount exceeds therecoverable amount, the carrying amount isreduced accordingly. Impairment losses arerecognized in the income statement.
29

Hilti 2023 Financial Report

Group Financial Statements

Group at a Glancein CHF million

Consolidated Management Report2023

Land andbuildings

Plant
and ma­chinery

Other
operatingassetsAssetsunderconstruction

930

806

648

117

Total

Land andbuildings

Plant
and ma­chinery

Other
operatingassetsAssetsunderconstruction

Total

2,501

897

795

635

202

2,529

Group Financial Statements

Cost
Opening balance
at January 1
Change in scope of
consolidation

−

−

−

−

−

1

1

5

−

7

Additions

13

25

68

117

223

20

29

84

91

224

Disposals

(28)

(27)

(63)

−

(118)

(1)

(23)

(39)

−

(63)

4

16

5

(25)

−

96

22

47

(165)

–

Currency translation
adjustment

(22)

(25)

(23)

(7)

(77)

(31)

(32)

(50)

(7)

(120)

Closing balance
at December 31

897

795

635

202

2,529

982

792

682

121

2,577

Other transfers

Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATED

Accumulated­depreciation

FINANCIAL STATEMENTS

Opening balance
at January 1

(394)

(653)

(459)

−

(1,506)

(379)

(645)

(439)

−

(1,463)

Auditors’ Report on

Change in scope of
consolidation

−

−

−

−

−

(1)

(1)

(2)

−

(4)

Financial Statements

Additions

(24)

(33)

(56)

−

(113)

(26)

(33)

(60)

−

(119)

Disposals

28

22

61

−

111

1

18

35

−

54

Other transfers

−

−

−

−

−

2

−

(2)

−

–

Currency translation
adjustment

11

19

15

−

45

14

24

32

−

70

Closing balance
at December 31

(379)

(645)

(439)

−

(1,463)

(389)

(637)

(436)

−

(1,462)Net book values
at December 31

518

150

196

202

1,066

593

155

246

121

1,115

Capital expenditure, shown as additions to cost, relates
primarily to manufacturing facility enhancements andextensions of sales organizations.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As at December 31, 2023, the Group had enteredinto firm commitments for capital expenditures of
CHF 18 million (2022: CHF 24 million).

the Consolidated

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

4.2 Leases

Group at a Glance

Accounting policies
The Group assesses at contract inception
whether a contract is, or contains, a lease. Thatis, whether the contract conveys the right tocontrol the use of an identified asset for a periodof time in exchange for consideration.
As lessee
The Group, as a lessee, identified leases mainly
relating to rental contracts for buildings (e.g.,
offices, warehouses, retail stores) and vehicles.
Contracts may contain both lease and nonlease components; the Group has elected not
to separate lease and non-lease components
and instead accounts for these as a single lease
component.
The Group applies a single recognition andmeasurement approach for all leases, except for
short-term leases and leases of low-value assets,
which are recognized as expenses on a straightline basis over the lease terms.
At the date at which the leased asset is available
for use, the Group recognizes lease liabilities tomake lease payments and right of use assets
representing the right to use the underlying
assets.
At the commencement date of the lease, theGroup recognizes lease liabilities measured at thepresent value of lease payments to be made overthe lease term, which include:

30

Hilti 2023 Financial Report

Group Financial Statements• Fixed payments, less any lease incentives
receivable• Variable lease payments that are based on anindex or a rate
• Amounts expected to be payable by the Group
under residual value guarantees• The exercise price of a purchase option if theGroup is reasonably certain to exercise that
option• Payments of penalties for terminating the lease
Lease liabilities are subsequently increased by
the interest cost on the lease liability and are
decreased by lease payments made.
The Group has several lease contracts that
include extension and termination options.
Lease payments to be made under reasonably
certain extension options are also included in themeasurement of the liability. The Group applies
judgment in evaluating whether it is reasonably
certain whether or not the option to renew or
terminate the lease will be exercised, considering
relevant facts and circumstances that create an
economic incentive.
The lease payments are discounted using theinterest rate implicit in the lease. If that ratecannot be readily determined, which is generally
the case for leases in the Group, the lessee’s
incremental borrowing rate is used, being the ratethat the individual lessee would have to pay toborrow the funds necessary to obtain an asset ofsimilar value to the right of use asset in a similar

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

economic environment with similar terms, security
and conditions.
The right of use assets are initially measured atcost comprising the following:• The amount of the initial measurement oflease liability• Any lease payments made at or before thecommencement date less any lease incentives
received• Any initial direct costs• Restoration costs
Subsequently, the right of use assets aremeasured at cost less any accumulated
depreciation and impairment losses and adjusted
for any remeasurement of lease liabilities.
Right of use assets are generally depreciatedover the shorter of the asset's useful life and thelease term on a straight-line basis. If the Group isreasonably certain to exercise a purchase option,or if the purchase option is exercised, the rightof use asset is depreciated over the underlying
asset’s useful life.
The carrying amount of the right of use assets isderecognized at the end date of the contract or
before in case of early termination.

Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Right of use assets

Lease liabilities

in CHF million

in CHF million
2022
Buildings

VehiclesGroup at a Glance2023
Others

Total

Buildings

VehiclesOthers

Total

Cost

2022

2023

< 1 year121

121

1 to < 2 years

94

95

2 to < 5 years

138

145

≥ 5 years

85

103

Total lease liabilities

438

464

Opening balance
at January 1

450

251

10

711

477

275

8

760

Change in scopeof consolidation

−

−

−

−

4

2

−

6

Additions

69

87

1

157

104

108

4

216

Disposals

(24)

(54)

(3)

(81)

(27)

(87)

(1)

(115)

Currency translation adjustment

(18)

(9)

−

(27)

(44)

(23)

(1)

(68)

The consolidated income statement shows thefollowing amounts relating to leases:

Closing balance
at December 31

477

275

8

760

514

275

10

799

in CHF million

Accumulated depreciation
(151)

(123)

(5)

(279)

(198)

(140)

(4)

(342)

Additions

(69)

(71)

(2)

(142)

(67)

(74)

(2)

(143)

Disposals

16

48

3

67

20

72

1

93

Currency translation adjustment

6

6

−

12

20

11

−

31

Closing balance
at December 31

(198)

(140)

(4)

(342)

(225)

(131)

(5)

(361)

Net book values
at December 31

279

135

4

418

289

144

5

438

Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income

Interest expense

Consolidated Balance Sheet
Consolidated Statement ofDepreciation

Opening balance
at January 1

Consolidated Management Report

1

Expense relating to short-term leases

2022

2023

(142)

(143)

(14)

(17)

Changes in Equity
Consolidated Cash
Flow Statement

(15)

(14)

Expense relating to low-value assetsthat are not short-term leases2

(18)

(17)

Expense relating to variable lease­payments not included in lease liabilities2

(37)

(41)

Auditors’ Report on

Expense relating to leases relating to­software and other intangible assets2

(32)

(59)

Financial Statements2

1

Included in finance costs (see note 5.5)

2

Included in other operating expenses (see note 2.3)

NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS

the Consolidated

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

31

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

4.3 Intangible assets

Group at a Glance

Accounting policies
Intangible assets with finite useful lives areamortized on a straight-line basis over their usefullife and tested for impairment when indicatorsof impairment are identified. Intangible assetsthat have an indefinite useful life, like goodwill,or intangible assets not ready to use are notsubject to amortization and are tested annuallyfor impairment, or when indicators of impairment
are identified.
Goodwill is recognized at cost less any
accumulated impairment losses, which are
not reversed. For the purposes of assessing
impairment, assets are grouped at the lowest
levels for which there are largely independent
cash flows (CGU).
Development costs are recognized as an asset
only when the expenditure attributable to theinternally generated intangible asset can bemeasured reliably and it is probable that theintangible asset will generate future economic
benefits directly attributable to the costs. Only

costs for certain product development projects,
subjected to a stringent review process, meet thiscondition. Such assets are normally amortized ona straight-line basis over a five-year period. Allother development costs are recognized directly
as an expense when incurred.
Other intangible assets consist of database andapplication software as well as manufacturing
patents, which are recognized at historical costless accumulated amortization and accumulated
impairment losses, if any, and of customer
contracts, patents, trademarks and licenses,
which were acquired as part of a businesscombination and initially recognized at fair value
at the date of acquisition. They are amortized ona straight-line basis over their estimated useful
lives, which are mostly periods of between three
and ten years. Other periods may be used where
specific contractual conditions apply.
Additions to accumulated amortizationand impairment losses are included in the
depreciation and amortization line item of theincome statement.

 anagement judgment andMestimates
An impairment loss is recognized for the amountby which the carrying amount of an asset
or a cash-generating unit (CGU) exceeds its
recoverable amount. The recoverable amount is
the higher of an asset’s fair value less costs ofdisposal and its value in use.
For impairment of goodwill, the recoverable
amounts of CGU are determined based on valuein-use calculations which require medium- andlong-term estimates. The discounted cash flow
model adopted is most sensitive to the following
key assumptions, which are tested for sensitivity:• Forecasts of free cash flows, which are basedon the expected sales volumes of the CGU in
years one to four and the long-term growthrate, for the terminal value beyond year four
• Pre-tax discount rate, which is based on
external and internal data

Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

32

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Intangible assets

Group at a Glancein CHF million

2022

2023

Goodwill

Development
costs

Other intangible
assets

Total

240

1,159

366

−

200

22

Consolidated Management Report

Goodwill

Development
costs

Other intangible
assets

Total

1,765

233

1,339

354

1,926

222

−

211

16

Cost
Opening balance at January 1

Change in scope of consolidation−

Additions

Disposals

−

−

−

(20)

(28)

233

1,339

354

Opening balance at January 1

−

(350)

Additions

−

−

−

−

(185)

1,926

440

(160)

(510)

(137)

(41)

(178)

−

20

28

48

Closing balance at December 31

−

(474)

(168)

Net book values at December 31

233

865

186

Currency translation adjustment(7)

Closing balance at December 31

−

(6)

(48)

241

119

360

227

(1)

(186)

1,365

474

2,279

−

(474)

(168)

(642)

−

(169)

(44)

(213)

−

185

−

185

(642)

−

(459)

(207)

(666)

1,284

440

906

267

1,613

(13)

(34)

−

(14)

(48)

Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet

Accumulated amortization
Change in scope of consolidation−

Impairment losses−

Disposals

Currency translation adjustment−

The goodwill arises for CHF 73 million (2022:
CHF 83 million) from the acquisition of the Oglaend Group
in 2017, for CHF 136 million (2022: CHF 150 million)
from the acquisition of Fieldwire Inc. in 2021 and for
CHF 231 million from the acquisition of the 4PS Groupin the current year (detailed information is given in note8.3). Based on the assessment made in the current
year, no impairment losses have been recognized in the
consolidated financial statements for the reporting period.
For impairment testing purposes, goodwill of Oglaend
is solely allocated to the Group’s offshore businessas CGU. The goodwill recognized on Fieldwire and4PS is accelerating the Group’s capability to deliverproductivity to customers through software solutions
and strengthen its software portfolio and is allocated to
the whole Hilti Group.
33

Hilti 2023 Financial Report

Group Financial Statements

−

(7)

−

−

−
5

−

(7)
5

The projected cash flows for Oglaend largely dependon management’s expectations concerning thedevelopment of the offshore market and the planned
business focus by the Group on this area of operation.
The projected cash flows for Fieldwire and 4PS arelargely dependent on management’s expectations
concerning the whole Hilti Group.
For Oglaend, the pre-tax discount rate of 10.7%
reflects the specific risks to the CGU offshore and isderived from its weighted cost of capital (WACC). For
Fieldwire and 4PS acquisition, the Group WACC wasapplied to reflect the risk of the whole Group.
For all acquisitions, the long-term growth rate is based
upon management’s expectations corroborated byexternal information sources and does not exceed the
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

−

−
−

−

(1)
−

(1)

−
6

(1)

(1)
6

long-term average growth rate customarily used for the
relevant countries and markets.
The future cash flows are estimated based on thebusiness plan approved by management in generalcovering a four-year forecast period from 2024 to2027 and a constant growth rate assumption of 2.0%(2022: 2.0%) for the terminal value beyond 2027.
The key assumptions were tested for sensitivity by
applying a reasonably possible change. Reasonably
possible changes in key assumptions would not resultin an impairment of goodwill.

Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

5 Financing and capitalGroup at a Glance

5.1 Financial assets

Consolidated Management Report

Accounting policies
For the purpose of identifying accounting policies
applied, after initial recognition, financial assets
are classified as subsequently measured:• at amortized cost and• at fair value through profit or loss (FVPL)For all classes of financial assets, purchases andsales are recognized on the trade date (the dateon which the Group commits to purchase or sell
the asset). Financial assets are derecognizedwhen the rights to receive cash flows from theassets have expired or have been transferred.
Financial assets are included in the current assets
if they are either held for trading or are expected
to be realized within 12 months of the balance
sheet date; otherwise, they are classified as noncurrent assets.
Financial assets measured at amortized costThis category includes loans and trade andother receivables, held within a business model
whose objective is to collect contractual cash
flows, which are solely of payments, fixed ordeterminable, of principal and interest. They

34

Hilti 2023 Financial Report

Group Financial Statements

arise when, in the ordinary course of business,
the Group provides money, goods or services
directly to a debtor with no intention of trading thereceivable.
Financial assets measured at amortized costs
are initially recognized at fair value plus directly
attributable transaction costs and subsequently
measured at amortized cost using the effective
interest method. Detailed information concerning
trade receivables is given in note 6.2.
Financial assets measured at fair value
through profit or loss
Financial assets other than those classified
as measured at amortized cost are initiallyrecognized at fair value with applicabletransaction costs immediately recognized in
the income statement. Subsequently, they aremeasured at fair value with all changes in fairvalue recognized in the income statement.
The financial assets at fair value through profit
and loss include investments in deposits andequities restricted to the funding of a deferredcompensation plan for employees.
These financial assets are classified as held for
trading, as acquired principally for the purpose

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

of selling in the short term or so designated bymanagement. Other financial assets mandatorily
measured at fair value through profit or loss
mainly comprise other investments in equities.
Derivatives are also categorized as held for
trading unless they are designated as hedges.
Fair value estimation
Financial instruments measured at fair value areassigned to one of the following three hierarchy
levels according to the input data available:
Level 1:
Fair values are determined using quoted prices in
active markets.
Level 2:
Fair values are determined using quoted prices ininactive markets or according to the discounted
cash flow method based on observable market
data.
Level 3:
Fair values are determined by using externalvaluations or according to the discounted cash
flow method based on unobservable data.

Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Financial assets listed according to the measurement
categories are as follows:

Group at a Glance
Consolidated Management Reportin CHF million
Measurement
categories

2022

Fair value
measurement
hierarchy

2023

Current

Non-current

Total

Current

Non-current

Total

Trade and other receivables

Amortized cost

1,371

921

2,292

1,408

1,105

2,513

Cash and cash equivalents

Amortized cost

991

−

991

886

−

886

Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet

Other financial assets
Held for trading

FVPL

23

−

23

24

−

24

Level 1Other financial investments

FVPL

3

22

25

2

23

25

Level 2

Amortized cost

50

−

50

−

−

−

Short-term cash deposits

Consolidated Statement of
Changes in Equity
Consolidated Cash

Derivative financial instruments
Used for hedging

FVPL

Held for trading

FVPL

Total other financial assets
Total financial assets

4

−

4

3

5

8

Level 2
Level 2

7

−

7

17

−

17

87

22

109

46

28

74

2,449

943

3,392

2,340

1,133

3,473

Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated

The maximum exposure to credit risk at the end of thereporting period is the carrying amount of each class offinancial assets mentioned above.

The Group has nil (2022: CHF 50 million) short-term
cash deposits with an original maturity of longer than
three months but lower than 12 months.

There were no transfers between levels 1 and 2 during
the current period or the prior period.

35

Hilti 2023 Financial Report

Group Financial Statements

Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

5.2 Financial liabilities

Group at a Glance

Financial liabilities

Consolidated Management Report

Accounting policies
Financial liabilities comprise trade and otherpayables, bonds and borrowings, measured atamortized cost; derivative financial instruments,
measured at FVPL; and lease liabilities.
Detailed information regarding trade and otherpayables, lease liabilities and derivative financial
instruments is given in notes 6.4, 4.2 and 5.4,
respectively.
Borrowings are recognized initially at fair value netof transaction costs incurred and subsequently
measured at amortized cost, with any difference
between the amount at initial recognition and theredemption value being recognized in the income
statement over the period of the borrowings using
the effective interest method. Borrowings areclassified as current liabilities unless the Group
has an unconditional right to defer settlementof the liability for at least 12 months after thebalance sheet date.
Financial liabilities are derecognized when thecontractual obligations are fulfilled, cancelled or
expire.

36

Hilti 2023 Financial Report

Group Financial Statements

Financial liabilities listed according to the measurement
categories:

Group Financial Statements
Consolidated Income Statementin CHF million
Measurement
categories

Trade and other payables

2022

Fair value
measurement
hierarchy

2023

Current

Non-­current

Total

Current

Non-­current

Total

661

27

688

630

22

652

Amortized cost

Consolidated Statement of
Changes in Equity

Bonds1

Amortized cost

100

350

450

100

504

604

Bank borrowings

Amortized cost

211

37

248

113

83

196

n/a

121

317

438

121

343

464

Used for hedging

FVPL

2

−

2

2

−

2

Level 2

Held for trading

FVPL

Level 2

Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATED

Derivative financial ­instruments
2

−

2

3

−

3

436

704

1,140

339

930

1,269

1,097

731

1,828

969

952

1,921

Total other financial liabilities
Total financial liabilities
1

Comprehensive Income
Consolidated Balance Sheet

Other financial liabilities

Lease liabilities

Consolidated Statement of

FINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

In 2023, the non-current bond value includes fair value hedge adjustments of CHF 5 million related to hedge accounting

Financial Statements Hilti Corporation

There were no transfers between levels 1 and 2 during
the current period or the prior period.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Corporate ­Governance
Investor ­Information

BondsLong-term bank borrowings

financial amounts in CHF million

in CHF million
2022

2023

Maturity

2022

2023

Maturity< 1 year

100

100

1 to < 2 years

21

38

1 to < 2 years

100

150

2 to < 5 years

16

45

2 to < 3 years

150

100

≥ 5 years−−

3 to < 4 years−

100

Total long-term bank borrowings

37

83

4 to < 5 years

100

−

−

154

450

604

≥ 5 years
Total bonds
Further information
Fair values

431

601

Average effective interest rates (in %)

0.6

0.9

The bonds were issued by Hilti Corporation. Further
details of the individual bonds are given in the
Information on Financing and Capital section( see here).
The fair values of Swiss franc bonds totaling
CHF 601 million (2022: CHF 431 million) are based on
the quoted market prices and are within level 1 of thefair value hierarchy.

37

Hilti 2023 Financial Report

Group Financial Statements(2022: CHF 5 million) of the total long-term bankborrowings are secured by the underlying assets
subleased to customers in the same amount. In
addition, CHF 82 million (2022: CHF 29 million) of thetotal long-term bank borrowings are secured by nonrecourse sale of fleet management business-related
account receivables in the same amount (see note 6.2).
Short-term bank borrowings

EUR

29

82

RUB

5

1

USD

3

−

Total long-term bank borrowings

37

83

In certain countries, in order to finance its fleet
management business, the Group enters into dedicatedrefinancing structures, either based on sale-andleaseback transactions of the underlying assets andtherewith subsequently subleasing the tools to thecustomers, or by a sale of the according accountreceivables on a non-recourse basis to financial
institutions or similar vehicles. As the transfers do not
qualify as sales in accordance with IFRS 15 Revenues
from contracts with customers, the Group recognizes
the related financial liabilities equal to the transfer
proceeds as bank borrowings. In 2023, CHF 1 million

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income

in CHF million

Currency

Group at a Glance

2022

2023

Consolidated Balance Sheet

EUR

27

46

Consolidated Statement of

JPY

14

16

USD

119

15

MXN

4

10

Other

47

26

Total short-term bank borrowings

211

113

Currency

Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS

In 2023, CHF 1 million (2022: CHF 2 million) of
the total short-term bank borrowings are securedby the underlying assets subleased to customers
in the same amount. In addition, CHF 46 million(2022: CHF 26 million) of the total short-term bankborrowings are secured by a non-recourse sale of fleet
management business-related account receivables inthe same amount (see note 6.2).

Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

5.3 Net debt reconciliation

Group at a Glancein CHF million

Consolidated Management ReportNon-cash changes
January 1,
2023

Bonds

450

Long-term borrowings

37

Lease liabilities
Other long-term loans1
Short-term bank borrowings
Total liabilities from financing activities
1

Cash flow

Change in scopeof consolidation

Acquisition/­
disposal of leases

149

−

−

54

1

−

438

(134)

6

193

4

1

−

211

(89)

1,140

(19)

Exchange­differences

Other
non-cash changes

December 31,
2023

−

5

604

(5)

(4)

83

(39)

−

464

−

−

−

5

−

−

(13)

4

113

7

193

(57)

5

1,269

Included in trade and other payables (see note 6.4)

Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cashin CHF million

Flow Statement

Non-cash changes

Bonds

January 1,
2022

Cash flow

Change in scopeof consolidation

Acquisition/­
disposal of leases

Exchange­differences

Other
non-cash changes

December 31,
2022

450

−

−

−

−

−

450

NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS

Long-term borrowings

41

−

−

−

(1)

(3)

37

Auditors’ Report on

Lease liabilities

448

(138)

−

143

(15)

−

438

the Consolidated

5

(1)

−

−

−

−

4

141

71

−

−

(4)

3

211

1,085

(68)

−

143

(20)

−

1,140

Other long-term loans

1

Short-term bank borrowings
Total liabilities from financing activities
1

Included in trade and other payables (see note 6.4)

Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

38

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

5.4 Derivative financial instruments

Accounting policies
Derivatives are only used for economic hedging
purposes and not as speculative investments.
Hedge effectiveness is determined anddocumented at the inception of the hedge
relationship, through periodic prospective
effectiveness assessments to ensure that an
economic relationship exists between the hedged
item and the hedging instrument. The Group also
documents its risk management objective andstrategy for undertaking its hedge transactions.
Derivatives are initially recognized at fair value on
the date a derivative contract is entered into andare subsequently remeasured at their fair value.
The method of recognizing the resulting gain orloss depends on the nature of the item being
hedged. The Group designates certain derivatives
as one of:• Fair value hedges – Hedges of the fair valueof recognized assets or liabilities or a firm
commitment• Cash flow hedges – Hedges of highly probable
forecast transactions

Group at a Glance

Hilti 2023 Financial Report

Group Financial Statements

Derivative contracts to hedge foreign currency risks
and interest rate risks outstanding at the balance sheet
date are as follows:Moreover, the Group enters into interest
rate swaps. The hedged item is identified
proportionally to the outstanding loans up to
the notional amount of the swaps. As based onan effectiveness assessment of all critical terms
matched at any time, the economic relationshipwas 100% effective.

Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement

Contract face amounts
in CHF million

NOTES TO THE CONSOLIDATED
2022

FINANCIAL STATEMENTS

2023

CHF

USD

EUR

Other

Total

CHF

USD

EUR

Other

Total

Foreign currency
forward contracts

−

147

130

338

615

−

155

185

350

690

Outstanding interest
rate swaps

60

−

−

−

60

150

−

−

−

150

Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance

The Group enters into derivative contracts tohedge the foreign currency risks arising fromforecast foreign currency sales and purchases
transactions and foreign currency investment
positions. The critical terms of the hedging
instrument match exactly with the termsof the hedged item. The Group performs a
qualitative assessment to identify any changes

39

There was no ineffectiveness to be recognized in theincome statement. All contracts have a maturity of lessthan 12 months. The fixed interest rate of the interest
rate swaps is 1.9% (2022: 1.9%) and the floating rate is
SARON.

in circumstances affecting the critical terms. The
applicable derivative contracts are designated as
cash flow, fair value and net investment hedges,
respectively.

Investor ­Information

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Reconciliations for derivative financial instruments

5.5 Financial result

Group at a Glancein CHF million

Finance costs

Consolidated Management Report

Finance costs are reported at the gross interest
expense amount. Interest expense includes interest on
lease liabilities; see note 4.2.

Group Financial Statements

2022

2023

Foreign­currency risks

Interest
rate risks

Total

Foreign­currency risks

Interest
rate risks

Current assets

11

−

Total

11

20

−

Non-current assets

−

20

−

−

−

5

5

Current liabilities

(4)

−

(4)

(5)

−

(5)

Non-current liabilities

−

−

−

−

−

−

Total net book value derivative­financial instruments at December 31

7

−

7

15

5

20

The cash flow hedging reserve in equity, net of tax,
amounts to CHF 1 million (2022: CHF 2 million).
The Group enters into derivative financial instrumentswith various counterparties, principally financial
institutions with investment grade credit ratings of atleast “A” according to Standard & Poor’s.

Other income and expenses (net)

Consolidated Income Statement
Consolidated Statement ofComprehensive Income

in CHF million
2022

2023

Interest and dividend income

411

Gains/(losses) arising from valuation
changes on financial assets andfair value hedging instruments−(1)

Gains/(losses) on foreign currency
hedging instruments

1031

Gains/(losses) on foreign currencies

(24)

(71)

Net interest income/(expense) on
defined benefit plans

(2)

(2)

Total other income and expenses (net)

(12)

(32)

Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

40

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6 Net working capital

5.6 Equity

Accounting policies
Dividend distributions to the Hilti Corporation’sshareholder are recognized as liabilities in theGroup’s financial statements in the periods
in which the dividends are approved by the
Corporation’s shareholder.
The share capital consists of 253,440 registered andfully paid shares with a par value of CHF 500 each.
100% of the registered shares of the Hilti Corporation
are owned by the Martin Hilti Family Trust. As at
December 31, 2023, Hilti has no authorized capital toissue.
The capital reserve contains the share premium from
capital increases and capital accruing from mergers inprevious years.
A dividend in respect of the year ended December 31,
2023 of CHF 279 million (financial year 2022:
CHF 281 million) is to be proposed at the Annual
General Meeting.

Net working capital is the capital invested in theGroup’s operating activities. Net working capital equals
current assets and current liabilities – excluding current
other financial and non-financial assets and liabilities
and employee benefits. For completeness, non-current
trade receivables and non-current trade and otherpayables are also reported in this section.

6.1 Inventories

Accounting policies
Inventories are stated at the lower of cost and
net realizable value. Cost is determined using thestandard cost method with variances capitalized
at acquisition and production and recognized in
the income statement together with the standard
cost of inventory at time of sale. Standard costs
are annually reviewed and updated in light ofcurrent conditions. Cost determined under thismethod approximates cost determined under the
FIFO method.

 anagement judgment andMestimates
Write-downs of inventories are recognized forparticular items when net realizable value falls
below cost. The determination of net realizablevalue is made using a valuation process based on
the ageing of items, with ageing parameters set
based on estimates of historical loss experience.
This process assumes a linear realizable value
reduction based on age.

41

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Inventories

Group at a Glancein CHF million
2022

2023

Raw materials

113

93

Work in progress

10

10

Finished goods

836

675

Total inventories

959

778

Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement of

The change in inventories includes a currencytranslation adjustment which decreases the inventories
by CHF 49 million in 2023. This is due to the change inclosing rates in 2023 compared to those in 2022.
The allowance made for possible inventory losses
due to age and obsolescence totals CHF 79 million(2022: CHF 85 million). The change in the allowance
recognized in the income statement is CHF 0 million(2022: CHF -22 million) and is included in theline change in inventory under the material costs(see note 2.3).

Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

6.2 Trade receivables

Group at a Glance

Accounting policies
Trade receivables that do not have a significant
financing component are initially recognized attheir transaction price and subsequently measured
at amortized cost, which equals their transaction
value less expected credit losses (ECL).
The Group manufactures goods which are soldor leased to the customers. The Group classifies
its leases as operating lease or finance lease andaccounts for these two types of leases differently.
Finance lease transfers substantially all the risks
and rewards incidental to ownership to the lessee.
For such a lease, a receivable is recognized at theamount of net investment in the lease, while theselling profit, recognized in the income statement,as part of the Hilti’s integrated business model,
is substantially in line with the selling profit of thegoods sold outright (detailed information related torevenue from finance lease is given in note 2.1).
ECLs are recognized for financial assets measured
at amortized cost and finance lease receivables.
A credit loss is the present value of the difference
between the contractual cash flows and the cash
flows that the entity expects to receive.
For trade receivables that do not contain asignificant financing component, the Groupelected to adopt the simplified approach, which

42

Hilti 2023 Financial Report

Group Financial Statementsallows entities to use a provision matrix torecognize lifetime ECL. The provision matrix isbased on historical loss patterns, reflecting thecustomers’ payment behavior in the different
countries, adjusted for forward-looking estimates.

Consolidated Management Reportin CHF million
Trade receivables

2022

2023

2,281

2,475

Less adjustment for impairmentof trade receivables

(138)

(139)

Trade receivables net

2,143

2,336

149

177

Total trade and other receivables

2,292

2,513

Thereof current portion

1,371

1,408

921

1,105

The amount of the loss allowances is calculated
based on ageing applied to the following
categories: normal or doubtful. A write-off is madewhen all or part of the financial asset is deemed
uncollectible or forgiven.

Other receivables

For finance lease receivables, the Group elected
to calculate the 12-month expected credit loss
model based on the historical default rates.

1 to < 2 years

457

498

2 to < 3 years

290

365

3 to < 4 years

145

192

4 to < 5 years

25

41_> 5 years

4

9

921

1,105

 anagement judgment andMestimates
Losses on trade receivables are recognized when
they are expected, which requires management’s
best estimate of probable losses. Such estimates
require consideration of historical loss experience,adjusted for current conditions, and judgments
about the probable effects of relevant observabledata, including the financial health of specificcustomers and market sectors or collateralvalues.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Thereof non-current portion

Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement ofMaturity of non-current portion

Total non-current trade andother receivables

Group Financial Statements

Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

The closing loss allowances for trade receivables andfinance lease receivables as at December 31 reconcile
to the opening loss allowances as follows:in CHF million
2022

2023

Opening balance of adjustment
for the impairment of trade receivables
at January 1

143

138

Additional impairment adjustment
charged to income statement during year

31

33

Write-offs of trade receivables
charged to impairment adjustment
account during year
Closing balance of adjustment
for the impairment of trade receivables
at December 31

(36)

138

Other receivables primarily consist of VAT, income tax
receivables and tax refunds totaling CHF 85 million(2022: CHF 75 million) and deposits totaling
CHF 43 million (2022: CHF 35 million).

Consolidated Management Report
Group Financial Statements
Consolidated Income Statement

Comprehensive Income

in CHF million
2022

2023

Gross
investmentin the lease

Unearnedfinance
incomeNet
investmentin the lease

Grossinvestmentin the lease

Unearnedfinance
incomeNet
investmentin the lease< 1 year

691

124

566

733

148

585

1 to < 5 years

988

113

876

1,205

146

1,059

−

−

−

3

−

3

1,679

237

1,442

1,941

294

1,647

_> 5 years

The change in trade and other receivables includes
a currency translation adjustment which decreases
the trade and other receivables by CHF 180 million in
2023 (2022: decreases by CHF 95 million), due to thechange in closing rates in 2023 compared to those in
2022.

Details of the finance lease receivables included in
trade receivables are as follows:

Group at a Glance

Consolidated Statement of

(32)

139

Receivables totaling CHF 128 million (2022:
CHF 55 million) serve as security for bank borrowings.
There are no other financial assets pledged as collateral
for recognized liabilities or for contingent liabilities.

The net change in the adjustment for the impairment oftrade receivables is recognized in the income statementin the line losses on trade and other receivables.

Total at December 31
Accumulated allowance for uncollectible
finance lease receivables

(33)

(32)

Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

43

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6.3 Cash and cash equivalents

Accounting policies

6.4 Trade and other payables

Cash includes cash on hand and at banks, while
cash equivalents include short-term deposits withoriginal maturities of three months or less.

Accounting policies

Cash totals CHF 521 million (2022: CHF 523 million);cash equivalent totals CHF 365 million (2022:
CHF 468 million).
The movement in cash and cash equivalents is shownin detail in the cash flow statement and the following
cash flow bridge.

2022

2023

Cash flow from operating activities

429

934

Capital expenditures on/disposalof intangible assets and property,
plant and equipment

(438)

(441)

Payment of lease liabilities

(138)

(134)

Free cash flow

(147)

359

Acquisition and disposal of subsidiaries

−

(300)

Cash flow from financial investments

159

44

Cash flow from financing activities1

(267)

(165)

Effects of exchange rate changes
on cash and cash equivalents

(18)

(43)

Total increase/(decrease) in cash
and cash equivalents

(273)

(105)

The change in trade and other payables includes acurrency translation adjustment which decreases tradeand other payables by CHF 31 million in 2023. This isdue to the change in closing rates in 2023 compared tothose in 2022.

Group Financial Statements

6.6 Accrued expenses
Accrued expenses include estimates and areshort-term accrued liabilities.

Group at a Glance
Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS

2022

2023

Trade payables

338

310

Other payables

350

342

Total trade and other payables

688

652

Thereof current portion

661

630

Thereof non-current portion27

22

1 to < 2 years

129

2 to < 5 years

128_> 5 years

3

5

Total non-current trade andother payables

27

22

Maturity of non-current portion

Excluding payment of lease liabilities

Hilti 2023 Financial Report

Accrued income and prepaid expenses mainly comprise
prepayments for property, plant and equipment andprepaid operating expenditure to be recorded as expenses
in the next accounting period.

in CHF million

in CHF million

44

6.5 Accrued income and prepaid expenses

Trade and other payables are recognized initiallyat fair value and subsequently measured atamortized cost using the effective interest
method. Other payables include income tax
payables.

Cash and cash equivalents are recognized initiallyat fair value and subsequently measured atamortized cost using the effective interest method.

1

Other payables primarily consist of income tax payables
totaling CHF 96 million (2022: CHF 118 million),
liabilities for source-deducted taxes and VAT totaling
CHF 109 million (2022: CHF 90 million), liabilities forsocial contributions totaling CHF 30 million (2022:
CHF 39 million) and customers with credit balances
totaling CHF 55 million (2022: CHF 51 million).

The Group has legal or economic restrictions on
CHF 2 million (2022: CHF 2 million).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

7 Other assets and liabilities
7.1 Other assets
Other assets comprise investment property totaling
CHF 2 million (2022: CHF 2 million) and investments
in associates and joint ventures totaling CHF 3 million(2022: CHF 3 million). The Group has not acquired newmaterial ownership interests in associates or new joint
ventures during the reporting period.

7.2 Other liabilities

Other liabilities comprise provisions and contract
liabilities.
The Group records provisions when it is probablethat a liability has been incurred as a result of past
events and the amount can be reliably estimated.
These provisions are adjusted periodically asassessments change or additional information
becomes available.
In the ordinary course of business, the Group is or
may be involved in lawsuits, claims, investigations
and proceedings, including product liability,commercial, environmental, health and safety
matters, etc. The Group is currently not aware ofany such matter that, either individually or in theaggregate, could likely have a material adverse
effect on the company’s future financial position
or results of operations.

Hilti 2023 Financial Report

Group Financial Statements

Contract liabilities

Group at a Glance

The revenue recognized that was included in thecontract liabilities balance at the beginning of
the reporting period totals CHF 71 million (2022:
CHF 123 million).

Consolidated Management Report
Group Financial Statements
Consolidated Income Statement

The Group has recognized the following revenuerelated contract liabilities from contracts withcustomers:

Accounting policies regarding contract liabilities
are disclosed under the operating income section(see note 2.1).

Consolidated Statement ofComprehensive Income

in CHF million

Provisions

Accounting policies

45

When conditions required to recognize a provision
are not met, a contingent liability is disclosed,
unless the likelihood of an outflow of resources
is remote. Contingent liabilities also include
guarantees to third parties.

in CHF million

Consolidated Balance Sheet
2022

2023

Opening balance at January 1

201

82

Change in scope of consolidation

−

8

2022

2023

Additions

129

87

Opening balance at January 1

23

25

Amount released

(125)

(89)

Additions

1239

Change in accounting estimate1

(115)

−

Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement

Amounts used

(7)

(8)

Currency translation adjustment

(8)

(6)

Unused reversals

(3)

(2)

NOTES TO THE CONSOLIDATED

Closing balance at December 31

82

82

FINANCIAL STATEMENTS

Change in scope of consolidation−

1

Thereof current portion

56

59

Currency translation adjustment−(2)

Thereof non-current portion

26

23

Closing balance at December 31

25

53

1

Thereof current portion

12

27

Thereof non-current portion

13

26

Provisions are, among others, built up for obligations
regarding legal claims, product liability, assurance
warranty, future dismantling of buildings, restructuring
and job accidents, which are individually immaterial.
Additions are mainly related to contingent
considerations for the 4PS Group acquisition; detailed
information is given in note 8.3.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

See note 1.4

Auditors’ Report on
the Consolidated
Financial Statements

Contingent liabilities

Financial Statements Hilti Corporationin CHF million
2022

2023

Guarantees

8

6

Other contingent liabilities

4

3

Total contingent liabilities

129

Corporate ­Governance
Investor ­Information

8 Other disclosures

Group at a Glance

8.1 Financial risk management

Consolidated Management Report

Accounting policies
Financial risk management
The Group’s activities expose it to a variety offinancial risks: market risk (including currency
risk, interest rate risk and other price risks),credit risk and liquidity risk. The Group’s overallrisk management program focuses on theunpredictability of financial markets and seeks
to minimize potential adverse effects on theGroup’s financial performance. The Group uses
derivative financial instruments to hedge certain
risk exposures.
Risk management is carried out by a central
treasury department (Corporate Treasury) underpolicies approved by the Board of Directors.
Corporate Treasury identifies, evaluates andhedges certain financial risks in close cooperation
with the Group’s operating units. The Board
provides written principles for overall risk
management, as well as written policies covering
specific areas, such as the use of derivative andnon-derivative financial instruments, managing
market risk, credit risk and investing excess
liquidity.
Currency risk
The Group operates globally and is exposed torisk arising from various currency exposures.
Currency risk arises from future commercial
transactions, recognized assets and liabilities,
and net investments in foreign operations.

46

Hilti 2023 Financial Report

Group Financial Statements

Currency risk arising from future operatingtransactions (sales and purchases of goods andservices) and recognized assets and liabilities ismanaged by Corporate Treasury using hedging
instruments, primarily forward contracts.
Corporate Treasury’s general risk management
practice is to hedge between 50% and 100%of the Group’s anticipated net cash inflows or
outflows in each major foreign currency for thesubsequent 12 months. For hedge accounting
purposes, forward contracts are designatedagainst the relevant amounts of projectedintercompany sales by the parent company, and100% (2022: 100%) of projected sales qualify as‘highly probable’ forecast transactions.
Currency risks arising from net investments inforeign operations are only hedged in exceptional
cases.
Currency exposures arising from open balanceswith third parties and/or Group companies intrade and other receivables, trade and otherpayables, and bonds are reduced through thenatural hedging (currency matching) of these
items, as well as managed using hedging
instruments. Currency exposures arising fromcash and cash equivalents are reduced by limiting
non-Swiss franc-denominated investments tothe main currencies of the operative businessof the Group and by limiting the proportions ofinvestments in these currencies.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Currency risk sensitivity

Group Financial Statements

At December 31, if the Swiss franc had strengthened/
weakened by 10% against the US dollar, euro and allother currencies with all other variables held constant,
net income for the year would have been affected asfollows:

Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheetin CHF million
Swiss franc­strengthened (+10%)

Consolidated Statement of

Swiss franc
weakened (–10%)

2022

2023

2022

2023

USD

(3)

(3)

3

3

EUR

(8)

4

8

(4)

All other c­ urrencies

(7)

(3)

7

3

Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS

These effects result from the translation of monetary
asset and liability positions held in foreign currencies
and from derivative contracts to hedge these foreign
currency risks and do not include any effects of foreign
currency transactions during the year.

Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

risk arising from long-term financing (banking andcapital market) liabilities is managed by Corporate
Treasury by using hedging instruments, primarily
interest rate swaps. Corporate Treasury’s general risk
management practice is to hedge the Group’s relevantinterest exposure.

At December 31, if the Swiss franc had strengthened/
weakened by 10% against the US dollar, euro and allother currencies with all other variables held constant,
OCI would have been affected as follows:in CHF million
Swiss franc­strengthened (+10%)

Swiss franc
weakened (–10%)

Interest rate sensitivity

2022

2023

2022

2023

USD

4

2

(4)

(2)

EUR

−

−

−

−

All other ­currencies

4

7

(4)

(7)

These effects result from changes in the values (due tothe respective Swiss franc movements) of Swiss franc
derivative contracts held to hedge foreign currency risk.
Interest rate risk
The Group has investments in interest-bearing assets,
mainly deposits and long-term borrowings. Interestbearing assets and borrowings subject to variable
rates or held for trading expose the Group to cash
flow interest rate risk. Interest-bearing assets andborrowings subject to fixed rates and not held for
trading expose the Group to fair value interest rate risk.
Virtually all the Group’s interest-bearing assets are
subject to variable rates or are reported at fair value
through profit or loss because they are held for trading.
All the Group’s bond liabilities are reported at amortizedcost. The interest-bearing assets are denominatedprimarily in Swiss franc and euro investments andthe bond liabilities are effectively denominated in a
combination of Swiss francs and euros. Interest rate

47

Hilti 2023 Financial Report

Group Financial Statements

Based on December 31 levels of borrowings subject
to variable rates, lease liabilities and interest-bearing
assets subject to variable rates or held for trading, anincrease/decrease of one hundred basis points would
have affected net income as follows:in CHF million
Increase of hundredbasis points
All ­currencies

Decrease of hundredbasis points

2022

2023

2022

2023

3

2

(3)

(2)

Separate simulations of the impact of interest ratechanges on each of the Swiss franc, euro and US dollar
investment holdings have not been completed since anincrease/decrease of one hundred basis points is notconsidered reasonably possible for each of the threecurrencies.
Credit risk
Credit risk is managed on a Group basis. Virtually all
credit risk arises from cash and cash equivalents (whichprimarily consist of demand deposits with first-classfinancial institutions) and from trade receivables (which
represent credit exposures to customers).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Group has significant concentrations of credit
risk arising from its investments in cash and cash
equivalents. These concentrations relate to demand
deposits with banking institutions. For all majorcounterparty banking institutions, a minimum credit
rating of “A” is required. The Group regularly reviews
the counterparties’ creditworthiness based on theratings issued by Standard & Poor’s. Management does
not expect any losses from non-performance by thesecounterparties.
For trade receivables, the Group has policies in place
to ensure that credit sales of products are made tocustomers with appropriate credit histories. In addition,an active credit management focus is maintained in
all the Group’s market organizations to ensure thatthe impact of credit risk is minimized. Details of theimpairment estimates of trade receivables are given innote 6.2. The Group has no significant concentrationsof corresponding credit risk with trade receivables.
Liquidity risk
Cash flow forecasting is performed in the operatingcompanies of the Group and aggregated by Corporate
Treasury. Corporate Treasury monitors rolling forecastsof the Group’s liquidity requirements to ensure it
has sufficient cash to meet operational needs, while
maintaining sufficient headroom on its undrawn
established borrowing facilities at all times so that theGroup does not breach borrowing limits or covenants(where applicable) on any of its borrowing facilities.
Such forecasting takes into consideration the Group’s
debt financing plans, covenant compliance, compliancewith internal balance sheet ratio targets and, if
applicable, external regulatory or legal requirements –for example, currency restrictions.

Group at a Glance
Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Surplus cash held by the operating companies over
and above the balance required for working capitalmanagement is transferred to Corporate Treasury.
Corporate Treasury deposits surplus cash in current
accounts and time deposits, choosing instrumentswith appropriate maturities or sufficient liquidity toprovide sufficient headroom as determined by theabove-mentioned forecasts. In line with the Group’s
refinancing strategy, a five-year syndicated standby facility of CHF 600 million with the Group’s
core banks was established in December 2021. In
2022, the Group made use of its right to extend thecredit facility by one year. In 2023, Hilti strategicallyleveraged the rendezvous clause embedded in
the Revolving Credit Facility (RCF). This initiativetransformed the facility into a sustainability-linked loan,
incorporating the key performance indicators (KPIs) of
Scope 1 and 2 CO2 emissions, along with the LostTime-Incident for occupational health and safety. The
inclusion of Scope 3 CO2 emissions as a third KPIs will
follow in 2025. Additionally, Hilti opted to extend the
RCF for a second time, stretching its maturity date to
December 2028. At the reporting date, the Group has
cash and cash equivalents of CHF 886 million (2022:
CHF 991 million).
The following table analyzes the Group’s non-derivative
financial liabilities into relevant maturity groupings,
based on the periods from the balance sheet date to
the contractual maturity date. The amounts disclosed in
the table are the contractual undiscounted cash flows,
including future interest payments:

48

Hilti 2023 Financial Report

Group Financial Statements

in CHF million

Group at a Glance
2022

2023

< 1 year

1 to < 2years

2 to < 5years≥ 5 years

314

122

267

−

Lease liabilities

130

101

149

Trade and other payables

661

12

12

Bonds and borrowings

Consolidated Management Report< 1 year

1 to < 2years

2 to < 5years≥ 5 years

218

194

256

164

91

133

105

160

112

3

630

9

8

5

Group Financial Statements
Consolidated Income Statement
Consolidated Statement of

Most of the non-trading Group’s gross or net
settled derivative financial instruments are in hedge
relationships and are due to be settled gross or net
within 12 months of the balance sheet date. These
contracts require undiscounted contractual cash
inflows of CHF 1028 million (2022: CHF 641 million)
and undiscounted contractual cash outflows of
CHF 1019 million (2022: CHF 638 million). All of the
non-trading Group’s derivative financial instruments arein hedge relationships and are disclosed in note 5.4.
Capital structure risk management
The Group’s primary objective when managing capital
is to add sustainable value for investors while ensuring
the independence of the Group. In order to maintainor adjust the capital structure, the Group maintains aflexible dividend policy within the limits of its overall
finance policies.
The Group monitors capital on the basis of the equity
ratio measured as equity in percentage of total equity
and liabilities. The Group views a high equity ratio as
the basis for ensuring security, capability of taking
risk, independence, flexibility and creditworthiness.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Group’s objective is to maintain a sufficiently highequity ratio, primarily to ensure independence from theinfluence of external creditors, as well as to maintain ahigh external credit rating to help minimize the cost ofdebt if and when further debt is issued.
The Group’s policy is to maintain a minimum equity
ratio of 45% on a mid-term basis. The following tableshows equity ratio information at the balance sheet
date:Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS

financial amounts in CHF million
2022

2023

Total equity

4,579

4,576

Total equity and liabilities

7,426

7,704

Total equity in % of
total equity and liabilities

62

59

Based on the Group’s credit profile and outlook asassessed by UBS Switzerland AG during 2023 on thebasis of the Group’s 2022 Financial Report, a credit
rating of “A+, stable” was assigned (2022: “A+, stable”).

Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

8.2 Income taxes

Group at a Glance

Accounting policies
The tax expenses for the period comprise current
and deferred income taxes. Income taxes arerecognized in the income statement, except to theextent that they relate to items recognized in OCI;in this case, the tax is also recognized in OCI.
Current income taxes
The current income tax charge is calculated on
the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the
countries where the company and its subsidiaries
operate and generate taxable income.
Management periodically evaluates positions
taken in tax returns with respect to situations
in which applicable tax regulation is subject tointerpretation. It establishes provisions, whereappropriate, on the basis of amounts expected
to be paid to the tax authorities. If late payment
interests and/or penalties or fines are due inconnection with additional direct taxes that arepayable as the result of a tax audit, a voluntary
disclosure, the amendment of a tax return or the
like, such payments are considered as income
taxes.
Deferred income taxes
Deferred income taxes are provided in full, using
the liability method, on temporary differences
arising between the tax bases of assets andliabilities and their carrying amounts in the49

Hilti 2023 Financial Report

Group Financial Statements

consolidated financial statements. However,if the deferred income tax arises from initialrecognition of an asset or liability in a transaction
other than a business combination that, at thetime of the transaction, affects neither accounting
nor taxable profit or loss, it is not accounted for.
Deferred income tax is determined using tax rates
that have been legally or substantially enacted
by the balance sheet date and are expected toapply when the related deferred income tax asset
is realized or the deferred income tax liability
is settled, and reflects uncertainty related toincome taxes, if any. Deferred income tax assets
are recognized to the extent that it is probablethat future taxable profit will be available against
which the temporary differences can be utilized.
Deferred income tax is provided on temporary
differences arising on investments in subsidiaries,
associates and joint arrangements, except
where the timing of the reversal of a temporary
difference is controlled by the Group and it isprobable that the temporary difference will not bereversed in the foreseeable future.
Global and local tax reform initiatives
Substantial progress has been made on the
introduction of a global minimum tax regime
implementation under the Inclusive Framework(IF) on Base Erosion and Profit Shifting (BEPS)
developed by the Organisation for Economic
Co-operation and Development (OECD) (known
as “BEPS 2.0 Pillar Two”). Pillar Two legislation

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

has been enacted, or substantively enacted, incertain jurisdictions in which the Group operates.
The legislation in those jurisdictions will beeffective for the Group’s financial year beginning
January 1, 2024. The Group is in scope of theenacted or substantively enacted legislation andhas performed an assessment of the Group’s
potential exposure to Pillar Two income taxes
based on the most recent information available
regarding the financial performance of theconstituent entities in the Group. Based on theassessment, the Group has identified potential
exposure to Pillar Two income taxes in respectof profits earned in Liechtenstein, where theexpected Pillar Two effective tax rate may be
below 15%, mainly due to the lower statutory
corporate income tax rate. An exposure,although in comparatively limited amounts, mayalso exist in other jurisdictions, again mainly due
to lower local statutory tax rates, but detailed
assessment is still in progress and/or dependent
on local implementation of the Pillar Two rules.
Due to this dependency on local implementation
and because previous assessments could only
be based on prior years, for which some criticalfacts and circumstances may not be sufficiently
comparable and for which not all Pillar Tworelevant data points were available, quantitative
information to indicate potential exposure to
Pillar Two income taxes is currently not known
or reasonably estimable. The Group continues toclosely monitor further developments regarding

Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Pillar Two and the local implementation andis further refining its assessment, whereverneeded. The Group also continues to closely
follow the developments in connection with Pillar
One on new nexus and profit allocation rules,
where the final rule set and political consensus
is, however, still pending.

 anagement judgment andMestimates
The measurement of current and deferred income
tax liabilities or assets is dependent on the
judgment and interpretation of existing tax laws
and regulations in the respective countries andtherefore requires certain estimates. Generally,deferred tax assets and liabilities are determinedbased on temporary differences between thefinancial accounts and the tax balance and aremeasured relying on enacted tax rates and, if
applicable, on tax rates that are anticipated to
be in effect when differences are estimated toreverse, if substantively enacted. Unforeseenchanges in these areas may affect the current

and deferred tax asset and liability estimates.
Additionally, in tax disputes, the judgments
taken by management could be challenged
by tax authorities, potentially resulting in thepayment of additional taxes, interest and/or
penalties. Consequently, deviations between theinitial assumptions and the final determinationof income taxes may lead to material changes
to current or deferred income tax expenses forthe period in which such income tax becomes
definite. Furthermore, the recognition of deferred
tax assets on tax loss carryforwards depends
on the probability of future taxable profits ofGroup companies. Several internal and external
factors, such as forecasts, interpretations ofexisting tax laws and regulations, are used in theestimation of such future profits. Tax positions are
regularly and proactively clarified with external tax
experts to reduce tax contingencies. If such tax
positions are still considered uncertain, they areassessed and treated based on the International
Financial Reporting Interpretations Committee’sinterpretation on “Uncertainty over Income Tax
Treatments” (IFRIC 23).

The tax on the Group’s profit before tax differs fromthe theoretical amount that would arise using theweighted average tax rate applicable to profits of theconsolidated companies as follows:

Group at a Glance
Consolidated Management Report
Group Financial Statements

financial amounts in CHF million
Net income before income tax
Tax calculated at domestic tax rates­applicable to profits in the respective
countries

2022

2023

668

700

Consolidated Income Statement
Consolidated Statement of

(95)

(130)

Comprehensive Income

Income not subject to tax

89

Expenses not deductible for tax purposes

(9)

(11)

Utilization of previously unrecognized
tax losses

1

5

Changes in Equity

Consolidated Balance Sheet
Consolidated Statement of

Tax losses for which no deferred
tax asset has been recognized

(3)

(1)

Consolidated CashTax attributable to prior years

(4)

(9)

Flow Statement

(1)

(3)

Income tax expenses

Other effects

(103)

(140)

Thereof current tax

(127)

(108)

Thereof deferred tax

24

(32)

14.2

18.6

Weighted average applicable tax rate (%)

The line “Other effects” includes the effects of changes
in tax rates and expenses or incomes subject todifferent tax rates.

NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

50

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The tax effects on other comprehensive income areas follows:

Group at a Glance
Consolidated Management Reportin CHF million
2022Group Financial Statements

2023

Pre-tax amount

Tax

After-tax amountPre-tax amount

Tax

After-tax amount

184

(32)

152

(91)

11

(80)

Remeasurement of defined benefit plans
Cash flow hedges

(5)

1

(4)

(1)

−

(1)

Currency translation of foreign operations

(92)

1

(91)

(204)

3

(201)

Other comprehensive income

87

(30)

57

(296)

14

(282)

Deferred income tax assets and liabilities
Deferred income tax assets and liabilities are offset
when there is a legally enforceable right to offset
current tax assets against current tax liabilities andwhen the deferred income taxes relate to the same
fiscal authority. The net book values are shown in thetable on the right:

51

Hilti 2023 Financial Report

Group Financial Statements

2022

2023

More than 1 year

(179)

(207)

Less than 1 year

166

137

Total

(13)

(70)

Inventories

108

81

Fixed and intangible assets

35

21

Provisions and employee benefits

21

28

(236)

(263)

Tax losses

815

Trade payables and contract liabilities

11

11

Other

40

37

Total

(13)

(70)

of which recognized as deferred tax assets

185

175

of which recognized as deferred tax liabilities

(198)

(245)

Recovery of deferred tax balances

Comprehensive Income
Consolidated Balance Sheet

Changes in Equity
Consolidated CashComponents of deferred tax balances

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement ofConsolidated Statement ofin CHF million

Receivables

Consolidated Income Statement

Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

The movements in net deferred tax assets/(liabilities)
during the reporting period and prior period are as
follows:

Group at a Glance
Consolidated Management Reportin CHF million

Group Financial Statements
Inventories

Fixed and­intangible assets

Provisions andemployee benefits

108

35

21

Opening balance at January 1, 2023
Changes in scope of consolidation

ReceivablesTaxlossesTrade payables andcontract liabilities

Other

Total

(236)

8

11

40

(13)

−

(31)

−

−

1

−

−

(30)

(19)

27

(2)

(44)

8

1

1

(28)

(Charged)/credited to OCI

−

−

11

−

−

−

−

11

Currency translation adjustment

(8)

(10)

(2)

17

(2)

(1)

(4)

(10)

Closing balance at December 31, 2023

81

21

28

(263)

15

11

37

(70)

Opening balance at January 1, 2022

72

30

52

(242)

8

39

38

(3)

(Charged)/credited to income statement

40

10

2

(4)

−

(27)

3

24

(Charged)/credited to OCI

−

−

(32)

−

−

−

−

(32)

Currency translation adjustment

(4)

(5)

(1)

10

−

(1)

(1)

(2)

Closing balance at December 31, 2022

108

35

21

(236)

8

11

40

(13)

(Charged)/credited to income statement

Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS

Deferred income tax assets are recognized for tax
loss carryforwards to the extent that the realization of
the related tax benefit through future taxable profits is
probable. Details are shown in the table on the right:

in CHF million

Deferred income tax liabilities have not beenrecognized for withholding tax and other taxes thatwould be payable on the unremitted earnings ofcertain subsidiaries totaling CHF 455 million (2022:
CHF 399 million). Such amounts are permanently
reinvested.

2022

2023

Tax loss carryforwards recognized in deferred tax

4270

Unused tax loss carryforwards

32

12

Total tax loss carryforwards

74

82

Expiration < 1 year

9−

Expiration 1 year to < 5 years

11

Expiration _> 5 years or no expiration date22

11

Expiration of unused tax loss carryforwards:

Tax effect of unused tax loss carryforwards
Unremitted earnings subject to withholding tax or other taxes

52

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

9

4

399

455

Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

8.3 Business combinations

Accounting policies
The Group applies the acquisition method toaccount for business combinations. Identifiable
assets acquired, liabilities and contingent
liabilities assumed in a business combination
are, with limited exceptions, measured initiallyat their fair values at the acquisition date. The
Group recognizes any non-controlling interestin the acquiree at the non-controlling interest’s
proportionate share of the recognized amounts of
the acquiree’s identifiable net assets. Acquisition
costs are expensed as incurred.
The positive difference between the acquisition
costs and the fair value of the net assets acquired
is recognized as goodwill.
When the Group obtains control of an associate
in a step acquisition, the previously heldinterests are measured at fair value at theacquisition date. Any gain or loss resulting
from the remeasurement is recognized in otherincome. Items previously recognized in OCI arereclassified to the income statement.

On October 2, 2023, the Hilti Group acquired 100%of the share capital of 4PS Group, with a headcountof more than 350 team members, which is specialized
in providing business management (vertical ERP)
solutions for the construction industry.

53

Hilti 2023 Financial Report

Group Financial Statements

Founded in 2000 in the Netherlands, 4PS is a leading
player in its domestic market and has expanded its
presence to the UK, Belgium and Germany. On top of
ERP functionalities such as accounting, purchasing,sales and marketing, the 4PS Construct software
offers construction-specific functionalities that enable
companies to manage the entire construction project
life cycle. The acquisition will further strengthen oursoftware offering beyond asset management andjobsite management.

Contingent considerations are recognized for the futuretransfer of additional considerations in cash to theformer owners, subject to the achievement of certain
financial targets in the reporting periods 2024 and2025. The estimated outcome of CHF 28 million isthe discounted amount based on the probability ofthe expected payments, which range from CHF nil to
CHF 60 million.

In the current reporting year, the acquired business
contributed revenues of CHF 15 million and a net lossof CHF 1 million to the Group, while losses includedin OCI totaled CHF 14 million. If the acquisition had
occurred on January 1, 2023, the Group’s revenue
would have increased by a further CHF 38 million, while
net profit would have decreased by 3 million.
Details of net assets acquired are as follows:in CHF million
2023
Purchase consideration
Cash paid

297

Group at a Glance
Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement of

The assets and liabilities recognized as a result of theacquisition are as follows:

Comprehensive Income
Consolidated Balance Sheetin CHF million
2023
Fair value
Intangible assets

118

Other operating assets and right of use assets

8

Trade and other receivables

12

Cash and cash equivalents

6

Deferred tax assets

1

Deferred tax liabilities(31)

Other financial liabilities(8)

Contract liabilities(8)

Accrued liabilities(8)

Deferred payment of purchase price to sellers

1

Trade and other payables(5)

Contingent considerations

28

Fair value of net assets

85

Total purchase consideration

326

Goodwill

241

Total purchase consideration

326

Purchase consideration settled in cash

(297)

Acquisition-related costs, included in other operating
expenses in the consolidated income statement for theyear ended December 31, 2023, were CHF 6 million.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Cash and cash equivalents in subsidiary acquired
Cash outflow on acquisition

6
(291)

Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

The goodwill is attributable to the assembled
workforce, the commercial synergies and economic
benefits arising from the software portfolio. It will not be
deductible for tax purposes. The fair value of acquired
trade and other receivables is CHF 12 million, whichcorresponds to the gross contractual amount, expected
to be fully collectible in line with the contractual
timeline.
Additionally on May 31, 2023, Hilti increased to 100%
its interest in Hillos GmbH, acquiring the remaining
50% of its share capital. Hillos GmbH, based in
Jena, Germany, was a joint operation, founded as adevelopment and manufacturing partnership for laser
measuring devices and positioning equipment between
Jenoptik AG and Hilti. In the future, Hillos will serve as
a competence center for highly complex measuring
tools. This transaction had no material impact on theGroup’s financial statements.
During the prior reporting period, the Group was not
involved in any business combinations.
Transactions with non-controlling interests
During the current and prior reporting period, there
were no transactions with non-controlling interests.

8.4 Related parties
Details of compensation of key management personnel
are as follows:

Hilti 2023 Financial Report

Group Financial Statements

Consolidated Management Report
Group Financial Statements

Key management personnel compensation
financial amounts in CHF million
2022

Consolidated Income Statement

2023

Number ofmembers

Remuneration

Number ofmembers

Remuneration

Board of Directors

8

3

8

3

Corporate Management(Executive Board and Executive Management Team)

31

30

32

40

Total

39

33

40

43

Salaries and other short-term employee benefits

26

26

Post-employment benefits

43

Other employee benefits, mainly related to long-term incentive

3

14

Total employee benefits to key management

33

43

Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATED

Employee benefits to key management include
both fixed and variable components. The variable
components are performance-linked and include along-term incentive which is payable only if certain
predetermined specific financial targets linked to thesustainable development and growth of the Group’sbusiness are achieved. The 2023 portion of theestimated ultimate amount payable has been recognized
as an obligation at December 31, 2023, under theheading of other employee benefits (see note 3.2).
Loans amounting to CHF 2 million (2022: CHF 2 million)
have been granted to members of the Corporate
Management at market interest rates.

54

Group at a Glance

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Other transactions and balances withthe shareholder
The Hilti Corporation rendered accounting,administration, rental and other support services tothe Martin Hilti Family Trust. The amount invoiced was
CHF 2 million (2022: CHF 1 million). These services
were charged at cost. Additionally, the Hilti Corporation
has a current liability to the Martin Hilti Family Trust of
CHF 1 million.

FINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

8.5 Other information

Group at a Glance

Events after the reporting period

Consolidated Management Report

There were no significant transactions after thereporting period.

Group Financial Statements
Consolidated Income Statement

Group companies and joint arrangements

Country

Company name and location

ActivityS = sales
R = research
D = development
P = production
Se = services
H = holding

Hilti Corporation, Feldkircherstrasse 100, P.O. Box 333, 9494 Schaan,
Tel. +423 234 2111, www.hilti.group

S, R, D, P, Se, H

Parent company
Liechtenstein

100% owned consolidated Group companies (subsidiaries – including production plants and market organizations)
Albania

Hilti Albania sh.p.k., Tirana

Algeria

Hilti Construction Equipements EURL, Alger

S

Hilti Argentina S.R.L., Buenos AiresS

Australia

Hilti (Aust.) Pty. Ltd., Rhodes New South WalesS

Austria

Hilti Austria Gesellschaft m.b.H., Vienna

S

Hilti Holding GmbH, Vienna

H

Hilti Aktiengesellschaft Zweigniederlassung Thüringen, Thüringen

P

Hilti Austria Industrie GmbH, Lanzenkirchen

P, D

Belarus

Hilti BY FLLC, Minsk

S

Belgium

Hilti Belgium N.V., Brussels

S

4PS Belgium NV, Gent

S

Bosnia-Herzegovina

Hilti Systems BH d.o.o. Sarajevo, Sarajevo

S

BrazilHilti do Brasil Comercial Ltda., São PauloS

Bulgaria

Hilti (Bulgaria) EOOD, Sofia

S

CanadaHilti (Canada) Corporation, Oakville

S

Chile

Hilti Chile Limitada, Santiago de Chile

S

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATED

S

Argentina

55

Consolidated Statement of

FINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Group companies and joint arrangements

Country

Company name and location

ActivityS = sales
R = research
D = development
P = production
Se = services
H = holding

China

Hilti (China) Ltd., ZhanjiangP, D

Hilti (China) Distribution Ltd., ShanghaiS

Hilti (PEC Suzhou) Ltd., Suzhou

P

Hilti (Shanghai) Ltd., ShanghaiP, D

Oglaend Industries (Changzhou) Co., Ltd., Changzhou

P

Colombia

Hilti Colombia S A S, Bogota D.C.

SGroup at a Glance
Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet

Croatia

Hilti Croatia d.o.o., Sesvete

S

Consolidated Statement ofCzech Republic

Hilti ČR spol. s r.o., Průhonice

S

Changes in Equity

Denmark

Hilti Danmark A/S, HvidovreSØglænd System A/S, Haderslev

S, Se

Egypt

Hilti Egypt for distribution LLC, Cairo

S

Consolidated Cash
Flow Statement

Estonia

Hilti Eesti OÜ, Tallinn

S

NOTES TO THE CONSOLIDATEDFinland

Hilti (Suomi) OY, Vantaa

S

FINANCIAL STATEMENTS

FranceHilti France SAS, Boulogne-Billancourt

S

Hilti Digital Marketing Services SAS, Boulogne-Billancourt

Se

Fieldwire France SAS, Paris

Se

Hilti Deutschland AG (Liechtenstein), Zweigniederlassung Deutschland, Kaufering

S

Germany

Great Britain

56

Hilti GmbH Industriegesellschaft für Befestigungstechnik, KauferingP

Hilti Entwicklungsgesellschaft mbH, KauferingD

Hilti Kunststofftechnik GmbH, Nersingen

P

Hilti Deutschland Logistik GmbH, Oberhausen

Se

PEC Europe GmbH, Duisburg

S

HILLOS GmbH, JenaP

4PS Bausoftware GmbH, Ulm

Se

Hilti (Gt. Britain) Ltd., Manchester

S

Oglaend System UK Limited, Wednesbury

S

4PS Construction Solutions Ltd, Birmingham

S

Metaphorix Ltd, Birmingham

S

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Group companies and joint arrangements

Country

ActivityS = sales
R = research
D = development
P = production
Se = services
H = holding

Company name and location

GreeceHilti Hellas S.A., Athens

S

Hong Kong

Hilti Asia Ltd., Kowloon, Hong Kong

H, Se

Hilti (Hong Kong) Ltd., Kowloon, Hong Kong

S

Hilti (Hungária) Szolgáltató Kft., Budapest

S

Hilti Szerszám Kft., Kecskemét

P, D

Hilti India Private Ltd., Gurgaon

S

Hilti Manufacturing India Private Limited, Mumbai

P, D

Hilti Technology Solutions India Private Limited, Pune

Se

Indonesia

PT Hilti Nusantara, Jakarta

S

Ireland

Hilti (Fastening Systems) Ltd., Dublin

S

IsraelHilti (Israel) Ltd., Petach Tiqva

S

Italy

Hilti Italia S.p.A., Sesto San Giovanni

S

Japan

Hilti (Japan) Ltd., Yokohama

S

Kazakhstan

Hilti Kazakhstan LLP, Almaty

S

Korea

Hilti (Korea) Ltd., Seoul

S

LatviaHilti Services Limited, Riga

S

Liechtenstein

Hilti Deutschland AG, SchaanS

Hungary
India

Hilti Equipment Corporation, Schaan

H

Hilti (International) Services, Ltd., Schaan

Se

Hilti Service Corporation, Schaan

Se

Hilti (Schweiz) AG, Zweigniederlassung Schaan, SchaanS

Hilti Global Services AG, Schaan

Se

Lithuania

Hilti Complete Systems UAB, Vilnius

S

Luxembourg

Hilti Belgium S.A. Succursale, Luxembourg

S

Macao

Hilti (Hong Kong) Ltd. Macao Branch, Macao

S

Malaysia

57

Hilti (Malaysia) Sdn. Bhd., Selangor

S

Hilti Asia IT Services Sdn. Bhd., SelangorSe

Oglaend Industries Sdn Bhd, Kuala Lampur

P, D

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Group at a Glance
Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Group companies and joint arrangements

Country

ActivityS = sales
R = research
D = development
P = production
Se = services
H = holding

Company name and location

MexicoHilti Mexicana, S.A. de C.V., Mexico CityS

Hilti Operaciones de Mexico, S.A. de C.V., Matamoros

P

Montenegro

Hilti Montenegro d.o.o Podgorica, Podgorica

S

MoroccoHilti Maroc S.A., Casablanca

S

Netherlands

Hilti Nederland B.V., Berkel en Rodenrijs

S

Oglaend System BV, Ridderkerk

S

4PS Beheer B.V., Ede

H

4PS Group B.V., EdeH

4PS Development B.V., Ede

Se

HOOMCTRL B.V., EdeS

4PS Bouw B.V., Ede

S

4PS Installatie B.V., Ede

S

4PS GWW B.V., Ede

S

Be-Sync B.V., Ede

S

4PS International B.V., Ede

S

New ZealandHilti (New Zealand) Limited, Auckland

S

NorwayØglænd Group Holding AS, KleppeH

PanamaØglænd Industrier AS, Kleppe

H, SeØglænd System AS, Kleppe

S, P, D

Hilti Latin America S.A., Panama City

S, Se

Transportes Continentales S.A., Panama City

Se

Hilti Regional Services S.A., Panama City

Se

Peru

Hilti Peru S.A., Lima

S

Philippines

Hilti (Philippines) Inc., Manila

S

PolandHilti (Poland) Sp. z o.o., Warsaw

S

Portugal

Hilti (Portugal) – Produtos e Serviços Lda., PortoS

Puerto Rico

Hilti Caribe LLC, San JuanS

58

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Group at a Glance
Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Group companies and joint arrangements

Country

ActivityS = sales
R = research
D = development
P = production
Se = services
H = holding

Company name and location

Romania

Hilti Romania SRL, Bucharest

S

Russian Federation

Hilti Distribution Ltd., Moscow

S

LLC "Oglaend System", Saint Petersburg

P

SerbiaHilti SMN d.o.o. Beograd, BelgradeS

Singapore

Hilti Far East Private Ltd., Singapore

S

Hilti Asia Pacific Pte. Ltd, Singapore

Se

Oglaend System Singapore Pte Ltd., Singapore

S

Slovakia

Hilti Slovakia spol. s r.o., Bratislava

S

Slovenia

Hilti Slovenija d.o.o., Ljubljana

S

South Africa

Hilti Africa Holdings (Pty) Ltd., Johannesburg/Midrand

H

Spain

Hilti Española, S.A., Madrid

S

SwedenHilti Svenska AB, Arlöv-MalmöS

Switzerland

Hilti (Schweiz) AG, Adliswil

S

Hilti Befestigungstechnik AG, Buchs

Se

Hilti-Finanz GmbH, Buchs

H, Se

TaiwanHilti Taiwan Co., Ltd., Taipei

S

Thailand

Hilti (Thailand) Ltd., Bangkok

S

TurkeyHilti Insaat Malzemeleri Ticaret A.Ş., Istanbul

S

UkraineHilti (Ukraine) Ltd., Kiev

S

United Arab Emirates

Hilti Middle East FZE, Dubai

S, Se

USA

Vietnam59

Hilti Inc., Plano

S

Hilti of America, Inc., Delaware

H

Hilti Holdings Limited, Delaware

H

Hilti Fieldwire, Inc., San Francisco

S, R, D

Hilti Vietnam Company Limited, Ho Chi Minh CityS

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Group at a Glance
Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
Auditors’ Report on
the Consolidated
Financial Statements

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Group companies and joint arrangements

Country

ActivityS = sales
R = research
D = development
P = production
Se = services
H = holding

Company name and location

Less than 100% owned consolidated Group companies (subsidiaries)

Group at a Glance
Consolidated Management Report
Group Financial Statements
Consolidated Income Statement

Bahrain

Hilti Bahrain Co. W.L.L., Manama (49%)

S

China

Hilti (Handan) Manufacturing Ltd., Handan (80%)

P

Qatar

Hilti Qatar W.L.L., Doha (49%)

S

Saudi Arabia

Hilti Saudi Arabia for Construction Tools LLC, Riyadh (75%)

SSouth Africa

Hilti (South Africa) (Pty) Ltd., Johannesburg/Midrand (87.25%)

S

United Arab Emirates

Hilti Emirates LLC, Abu Dhabi (49%)

S

Group has control as contractual agreements grant theGroup the right to appoint and remove management
responsible for directing the relevant activities. In
addition, the Group is entitled to appoint, remove andAlthough the Group owns less than half of the voting
rights of Hilti Bahrain Co. W.L.L., Hilti Qatar W.L.L.
and Hilti Emirates LLC, management has determinedthat the Group controls these three companies. The

substitute a majority of members of the companies’
Board of Directors.

Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS

Joint operations
China

Panasonic Power Tools (Shanghai) Company Limited, Shanghai (49%)

P

TaiwanRacing Point Industry Co., Ltd., Kaohsiung (49%)

P

USAIntelligent Construction Tools LLC, Delaware (50%)

P, D

the Consolidated
Financial Statements

Financial Statements Hilti Corporation

Joint venture
South Africa

Auditors’ Report on

Hilti SA Holding (Pty) Ltd., Johannesburg/Midrand (49%)

H

Corporate ­Governance
Investor ­Information

60

Hilti 2023 Financial Report

Group Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSREPORT OF THE STATUTORY AUDITOR TO THE
GENERAL MEETING OF HILTI AKTIENGESELLSCHAFTSCHAAN
Report on the audit of the consolidated
financial statements
OpinionWe have audited the consolidated financial statementsof Hilti Aktiengesellschaft (the Company) andits subsidiaries (the Group), which comprise theconsolidated income statement and the consolidated
statement of comprehensive income for the year ended
31 December 2023, the consolidated balance sheet as
at 31 December 2023 and the consolidated statementof changes in equity and the consolidated cash flow
statement for the year then ended, and the notes to theconsolidated financial statements, including a summaryof significant accounting policies.
In our opinion, the consolidated financial statements(pages 12 to 60) give a true and fair view of theconsolidated financial position of the Group as at
31 December 2023 and its financial performance forthe year then ended in accordance with International
Financial Reporting Standards (IFRS AccountingStandards) as adopted by the European Union and theprovisions of Liechtenstein law.

61

Hilti 2023 Financial Report

Group Financial Statements

Basis for opinion

Our audit approach

We conducted our audit in accordance with
Liechtenstein law and International Standards on
Auditing (ISAs). Our responsibilities under those
provisions and standards are further described in
the “Auditor’s Responsibilities for the Audit of theconsolidated Financial Statements” section of ourreport.

Overview

We are independent of the Group in accordancewith the provisions of Liechtenstein law and therequirements of the audit profession, as well as
the International Code of Ethics for Professional
Accountants (including International IndependenceStandards) of the International Ethics Standards Board
for Accountants (IESBA Code) and we have fulfilled
our other ethical responsibilities in accordance withthese requirements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.

AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

Group at a Glance
Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet

Materiality

Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement

Audit
scope

Notes to the Consolidated
Financial Statements
AUDITORS’ REPORT ON
THE CONSOLIDATEDFINANCIAL STATEMENTS

Key audit
matters

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Overall Group materiality: CHF 34.9 million
Audit scope:• We concluded full scope audit work at 19 reporting
units.
• Our full scope audit work addressed 83% of theGroup’s total revenue and 72% of the Group’s total
assets.
• In addition, specified procedures were performed
for one reporting unit, representing a further 1% of
the Group’s total revenue and 1% of the Group’s
total assets.
• Furthermore, we performed additional procedures
to address other reporting units as deemed
appropriate.
As key audit matters the following areas of focus havebeen identified:• Capitalized development costs• Goodwill impairment assessment• Business combination accounting

the overall Group materiality for the consolidated
financial statements as a whole as set out in the tablebelow. These, together with qualitative considerations,helped us to determine the scope of our audit andthe nature, timing and extent of our audit procedures
and to evaluate the effect of misstatements, bothindividually and in aggregate, on the consolidated
financial statements as a whole.
Overall Groupmateriality

CHF 34.9 million

How wedetermined it

Net income before income tax
expenses

Rationale forthe materiality
benchmarkapplied

We chose net income before
income tax expenses as thebenchmark because, in ourview this is the most commonlyused performance measure forthe industry in which the Group
operates and it is a generally
accepted benchmark.

Materiality
The scope of our audit was influenced by our applicationof materiality. Our audit opinion aims to provide
reasonable assurance that the consolidated financial
statements are free from material misstatement.
Misstatements may arise due to fraud or error. They are
considered material if, individually or in aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of the consolidated
financial statements.
Based on our professional judgement, we determinedcertain quantitative thresholds for materiality, including

62

Hilti 2023 Financial Report

Group Financial Statements

Audit scope
We tailored the scope of our audit in order to perform
sufficient work to enable us to provide an opinion
on the consolidated financial statements as a whole,taking into account the structure of the Group, theaccounting processes and controls, and the industry
in which the Group operates.
The consolidated financial statements are a
consolidation of over 100 reporting units, comprising
the Group’s operating businesses and market

AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

organisations, production plants, research anddevelopment centres, and centralised functions.
Subsequently, we determined the type and level ofaudit work required from component auditors in orderthat sufficient appropriate audit evidence had beenobtained for our opinion on the Group consolidated
financial statements as a whole. At the largest reporting
units (market organisations) in the USA and Germany,
we were directly involved in the audits. The oversightprocedures we performed for the remaining component
audits were tailored based on the size and complexityof the components.
The Group’s reporting units vary significantly in size. We
identified 19 reporting units where a full scope audit of
the complete financial information was required, thereof
four reporting units which were financially significant
due to their size. All these component audits accounted
for 83% of the Group’s total revenue and 72% of theGroup’s total assets. Specific audit procedures oncertain balances and transactions were performed for
one reporting unit representing a further 1% of theGroup’s total revenue and 1% of the Group’s total
assets. Finally, for the remaining reporting units weperformed additional procedures on Group level.

Key Audit Matters
Key audit matters are those matters that, in our
professional judgement, were of most significance in
our audit of the consolidated financial statements ofthe current period. These matters were addressed in
the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion onthese matters.

Group at a Glance
Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
Notes to the Consolidated
Financial Statements
AUDITORS’ REPORT ON
THE CONSOLIDATEDFINANCIAL STATEMENTS

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

Key audit matter

How our audit addressed the key audit matter

Group at a Glance

Capitalized development costs

We assessed and tested the design and operating effectiveness of the key controls relating to the capitalization
process, particularly those that:

Consolidated Management Report

Refer to note 4.3 for the accounting policies.
We focused on this area due to the significance of total capitalized internal development costs (CHF 906 million
as of 31 December 2023 accounted for in the balance sheet item intangible assets) and because significant­judgement is involved in assessing whether costs are either research or development in nature and whether thecriteria set forth in IAS 38 Intangible assets, have been met, particularly:• Generation of probable future economic benefit;• Reliable measure of the attributable expenditure; and• Technical feasibility of the project.

• Address whether costs are research or development in nature.
• Address the risks relating to the ‘probable future economic benefit’ and ‘technical feasibility’.
•	Ensure the correct, timely and complete capitalization of the internal employee costs and any other­project-related costs.
We held interviews with the business unit controllers and project managers, to:Consolidated Statement of

Our work also included substantive audit procedures (e.g., reading the project documentation, evaluating the
project’s key assumptions, testing a sample of standard hourly rates).

Consolidated Balance Sheet

Goodwill impairment assessment

We have performed the following procedures for the goodwill impairment assessments:

Refer to note 4.3 for the accounting policies.

•	Assessment of the mathematical accuracy of management’s goodwill impairment model and reconciliation
with underlying forecasts approved by management.
•	Testing of management’s forecasts by comparing forecast growths to historical growth or actual­performance, applying sensitivities to future cash flows and assessing long term growth assumptions.
•	Audit of the discount rate applied by management.

Under IAS 36, the Group is required to determine the recoverable amount of the cash generating units as part ofan annually performed impairment assessment. This annual impairment test was significant to our audit, as the
goodwill balance as of 31 December 2023 is significant to the consolidated financial statements.

Based on the procedures performed, we conclude that the goodwill impairment assessment is free of material
misstatements.

Refer to note 8.3 for the accounting policies.

•	Assessment of the methodology adopted by management for calculating the fair value of technology,­customer relationships and trademark related assets for the intangible assets.
•	Evaluation of the reasonability of the significant assumptions in the valuation of the intangible assets.
•	Testing of the accounting treatment of the payments from the contingent arrangements.
•	Substantive audit procedures of selected opening balances at the date of the acquisition.
Based on the procedures we have performed we conclude that the business combination accounting is free ofmaterial misstatements.

We consider this business combination a key audit matter in the audit due to the high level of management­judgement used in determining the fair value for the net assets acquired.

Hilti 2023 Financial Report

Group Financial Statements

Changes in Equity
Consolidated Cash
Flow Statement
Notes to the Consolidated
Financial Statements
AUDITORS’ REPORT ON

Financial Statements Hilti Corporation
We have performed the following procedures for the business combination:

63

Consolidated Statement of

FINANCIAL STATEMENTS

Business combination accounting

The primary element of the valuation and purchase price allocation process was to assess the fair value of
intangible assets (CHF 118 million) in the form of brand, customer relationships, software and technology related
intellectual property and the resulting goodwill amounted to CHF 241 million. The allocation also considered otherassets and liabilities.

Comprehensive Income

THE CONSOLIDATED

Furthermore, the carrying value of goodwill is contingent on future cash flows and there is a risk if these cash
flows do not meet the Group’s expectations that the assets will be impaired. The impairment reviews performedby the Group contain several significant assumptions, including forecasts of free cash flows, which are based on
expected sales volumes and the long-term growth, and discount rate. Changes in these assumptions can have asignificant impact on the headroom available in the impairment calculations.

In October 2023, Hilti Group acquired 100% of the share capital of 4PS Group for a total purchase considerationof CHF 326 million. The acquisition is accounted for as a business combination (IFRS 3) and includes several
significant and complex judgements in the determination of the fair value of the assets and liabilities acquired.

Consolidated Income Statement•	Gain an understanding of their development projects and why specific projects were considered to meet therequirements of the relevant accounting standards.
• Discuss specific project topics and risks with business unit controllers and critically assess their responses.

Overall, we identified no significant findings in relation to the capitalization of internal development costs.

The balance sheet item intangible assets include CHF 440 million of goodwill at 31 December 2023 which­increased by CH 231 million as a result of the acquisition of the 4PS Group in 2023. The remaining goodwill­balance consists of the balance from the acquisition of Oglaend Group in the amount of CHF 73 million in 2017
and CHF 136 million from the acquisition of Fieldwire Inc. in 2021.

Group Financial Statements

AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

Corporate ­Governance
Investor ­Information

Other information in the annual report
The Board of Directors is responsible for the otherinformation in the Annual Report. The other information
comprises all information included in the annual
report, but does not include the consolidated financial
statements, the stand-alone financial statements, theconsolidated management report, the management
report and our auditor’s reports thereon.
Our opinion on the consolidated financial statements
does not cover the other information in the annual
report and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the consolidated
financial statements, our responsibility is to read theother information in the annual report and, in doing so,
consider whether the other information is materiallyinconsistent with the consolidated financial statementsor our knowledge obtained in the audit, or otherwise
appears to be materially misstated.
If, based on the work we have performed, we conclude
that there is a material misstatement of this otherinformation, we are required to report that fact. We
have nothing to report in this regard.

In preparing the consolidated financial statements,
the Board of Directors is responsible for assessing
the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going
concern and using the going concern basis ofaccounting unless the Board of Directors either
intends to liquidate the Group or to cease operations,or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of theConsolidated Financial Statements
Our objectives are to obtain reasonable assurance
about whether the consolidated financial statements as
a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor’s reportthat includes our opinion. Reasonable assurance is ahigh level of assurance, but is not a guarantee that anaudit conducted in accordance with Liechtenstein law
and ISAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in
the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on thebasis of these consolidated financial statements.

Responsibilities of the Board of Directors for
the Consolidated Financial Statements

As part of an audit in accordance with Liechtenstein
law and ISAs, we exercise professional judgement andmaintain professional scepticism throughout the audit.
We also:The Board of Directors is responsible for the
preparation of the consolidated financial statementsthat give a true and fair view in accordance with
Liechtenstein law and IFRS Accounting Standards,
and for such internal control as the Board of Directors
determines is necessary to enable the preparation of
consolidated financial statements that are free frommaterial misstatement, whether due to fraud or error.

• Identify and assess the risks of material misstatementof the consolidated financial statements or, whether
due to fraud design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher
than for one resulting from error, as fraud may

64

Hilti 2023 Financial Report

Group Financial Statements

AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

involve collusion, forgery, intentional omissions,misrepresentations or the override of internal control.
• Obtain an understanding of internal control relevantto the audit in order to design audit proceduresthat are appropriate in the circumstances, but notfor the purpose of expressing an opinion on theeffectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting
estimates and related disclosures made.
• Conclude on the appropriateness of the Boardof Directors’ use of the going concern basis ofaccounting and, based on the audit evidence
obtained, whether a material uncertainty exists
related to events or conditions that may castsignificant doubt on the Group’s ability to continue
as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in
the consolidated financial statements or, if suchdisclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report.
However, future events or conditions may cause theGroup to cease to continue as a going concern.
• Evaluate the overall presentation, structure andcontent of the consolidated financial statements,
including the disclosures, and whether the
consolidated financial statements represent theunderlying transactions and events in a manner that
achieves fair presentation.

Group at a Glance
Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement
Notes to the Consolidated
Financial Statements
AUDITORS’ REPORT ON
THE CONSOLIDATEDFINANCIAL STATEMENTS

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

• Obtain sufficient appropriate audit evidence
regarding the financial information of the entities orbusiness activities within the Group to express an
opinion on the consolidated financial statements.
We are responsible for the direction, supervision andperformance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the Board of Directors or the
Audit Committee regarding, among other matters, theplanned scope and timing of the audit and significant
audit findings, including any significant deficiencies ininternal control that we identify during our audit.
From the matters communicated with the Board of
Directors or the Audit Committee, we determine thosematters that were of most significance in the audit of
the consolidated financial statements of the current
period and are therefore the key audit matters. We
describe these matters in our auditor’s report unlesslaw or regulation precludes public disclosure about thematter or when, in extremely rare circumstances, we
determine that a matter should not be communicated inour report because the adverse consequences of doing
so would reasonably be expected to outweigh the
public interest benefits of such communication.

Report on Other Legal and Regulatory
Requirements
The accompanying consolidated management reporthas been prepared in accordance with the applicablelegal requirements, is consistent with the consolidated
financial statements and, in our opinion, based on theknowledge obtained in the audit of the consolidated
financial statements and our understanding of theGroup and its environment does not contain any
material misstatements.
We further confirm that the consolidated financial
statements comply with Liechtenstein law and thearticles of incorporation. We recommend that theaccompanying consolidated financial statements
submitted to you be approved.

Group at a Glance
Consolidated Management Report
Group Financial Statements
Consolidated Income Statement
Consolidated Statement ofComprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Cash
Flow Statement

PricewaterhouseCoopers AG

Notes to the Consolidated
Financial Statements
AUDITORS’ REPORT ON

Stefan Räbsamen

Beat Inauen
Liechtenstein Certified
Public Accountant
Auditor in charge

St. Gallen, March 13, 2024

THE CONSOLIDATEDFINANCIAL STATEMENTS

Financial Statements Hilti Corporation
Corporate ­Governance
Investor ­Information

65

Hilti 2023 Financial Report

Group Financial Statements

AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

Financial­Statements
Hilti Corporation
INCLUDING BRANCHESGroup at a Glance
Consolidated Management Report
Group Financial Statements
FINANCIAL STATEMENTS HILTI CORPORATION
Balance Sheet
Income Statement
Notes to the Financial
Statements Hilti Corporation
Auditors’ Report on
the Financial Statements
Hilti Corporation

Corporate ­Governance
Investor ­Information

BALANCE SHEETGroup at a Glance
Consolidated Management Reportas at December 31

Group Financial Statements
Financial Statements Hilti Corporationin CHF million
Note

2022

2023

BALANCE SHEETIntangible assets

4

120

83

Income Statement

Property, plant and equipment

5

428

432

Financial investments

6

2,238

2,521

2,786

3,036

AssetsTotal non-current assets
Inventories

7

254

230

Trade and other receivables

8

1,034

856

Accrued income and prepayments

73

81

Cash and cash equivalents

631

462

Total current assets

1,992

1,629

Total assets

4,778

4,665

Share capital

127

127

Legal reserves

108

108

Foreign currency translation reserve

(23)

(27)

Retained earnings brought forward

2,818

2,932

Net income

395

204

3,425

3,344

Total equity

9

Provisions

10

83

93

Borrowings, payables and other liabilities

11

1,159

1,082

111

146

Total liabilities

1,353

1,321

Total equity and liabilities

4,778

4,665

Accrued expenses

Hilti 2023 Financial ReportStatements Hilti Corporation
Auditors’ Report on
the Financial Statements
Hilti Corporation

Corporate ­Governance
Investor ­Information

Equity and liabilities

67

Notes to the Financial

Financial Statements Hilti Corporation

BALANCE SHEETINCOME STATEMENTGroup at a Glance
Consolidated Management Report
Group Financial Statements

in CHF million
Note
Net sales
Change in inventory of finished goods and work in progress

2022

2023

3,712

3,482

(1)

−

Capitalized own production

3

5

Other operating revenues

13

12

Total operating revenues

3,727

3,499

Material costs

12(1,645)(1,459)Personnel expenses

13

(351)

(422)

Depreciation and amortization

14

(99)

(77)

Other operating expenses(1,196)(1,266)

Total operating expenses(3,291)(3,224)436

275

Operating result
Financial revenues

15

37

37

Financial expenses

16

(27)

(82)

Financial result

10

(45)

Net income before income tax expense

446

230

Tax expense

(51)

(26)

Net income

395

204

68

Hilti 2023 Financial Report

Financial Statements Hilti Corporation

INCOME STATEMENT

Financial Statements Hilti Corporation
Balance Sheet
INCOME STATEMENT
Notes to the Financial
Statements Hilti Corporation
Auditors’ Report on
the Financial Statements
Hilti Corporation

Corporate ­Governance
Investor ­Information

NOTES TO THE FINANCIAL
STATEMENTS HILTI CORPORATION
1 General information

2 Accounting policies

Hilti Corporation is a limited by shares company
incorporated and domiciled in the Principalityof Liechtenstein. Its registered office is at
Feldkircherstrasse 100, 9494 Schaan, Liechtenstein.
Hilti Corporation is the parent and main operatingcompany of the Hilti Group. The shareholder has
an interest in the Group through its interest in Hilti
Corporation. The accompanying Group’s consolidated
financial statements are the most significant indicatorof the Group’s financial position and financial
performance.

2.1 Overview

69

Hilti 2023 Financial Report

In contrast to the Group’s consolidated financial
statements, which have been prepared in accordancewith International Financial Reporting Standards (IFRS),
the financial statements of Hilti Corporation havebeen prepared in accordance with Liechtenstein’s
corporations law, the “Personen- und Gesellschaftsrecht(PGR)”. As a result, there are significant differences
between the accounting treatments in the financial
statements of Hilti Corporation and the accounting
treatments in the Group’s consolidated financial
statements. The significant measurement, recognitionand presentation differences are listed below. Apartfrom these differences, the accounting policies adopted
for the measurement, recognition and presentationof financial statement items in both sets of financial
statements are substantially the same.

Financial Statements Hilti Corporation

NOTES TO THE FINANCIAL STATEMENTS HILTI CORPORATIONGroup at a Glance
Consolidated Management Report
Group Financial Statements

2.2 Differences in accounting policies
to those of the GroupThe following table identifies the relevant financial
statement items and the corresponding treatments
where the accounting policies adopted for themeasurement and recognition of items in the financial
statements of Hilti Corporation are significantly different
from those adopted in the Group’s consolidated
financial statements.

Financial Statements Hilti Corporation
Balance Sheet
Income Statement
NOTES TO THE FINANCIAL
STATEMENTS HILTI CORPORATION
Auditors’ Report on
the Financial Statements
Hilti Corporation

Corporate ­Governance
Investor ­Information

Relevant financial statement item
Valuation of property, plant and equipment

Treatment in financial statementsof Hilti Corporation

Treatment in Group financial statements

In accordance with taxation rules pursuant to Article 1086
of the PGR.

At lower of market value and historical cost subject to adjustment for obsolescence basedon economic estimates.

In accordance with taxation rules pursuant to Article 1086
of the PGR.

At lower of market value and historical cost subject to adjustment for depreciation based on
economic estimates.

At historical cost.

In accordance with the equity method of accounting.

Valuation of provisions

Based on business risk criteria.

In accordance with the best estimate of the amounts required to satisfy existing obligations.

Reporting of development costs

All immediately expensed.

Valuation of inventories
Valuation of investments in associated companies and joint
venturesReporting of derivative financial instruments hedging anticipatedoperating transactions (cash flow hedges)

Recognized at fair value with value changes reported directly in
the income statement.

Measurement of pension plan obligation

Treated as defined contribution plan.

Reporting of operating lease contracts

Lease payments are recognized in the income statement in the
period in which they are incurred. Payment commitments arereported as off-balance sheet commitments.

Recognized at fair value with value changes reported as part of equity and reclassified to theincome statement when the anticipated operating transactions occur.
For qualifying new product developments, capitalized during the development phases andsubsequently amortized over the sales lives of the new products while other development
costs are immediately expensed.

Treated as defined benefit plan with cumulative remeasurements recognized directly inequity.

Recognized on the balance sheet, reflecting right of use assets as well as lease liabilities –except for short-term contracts and low-value assets.

Group at a Glance
Consolidated Management Report
Group Financial Statements
Financial Statements Hilti Corporation
Balance Sheet
Income Statement
NOTES TO THE FINANCIAL
STATEMENTS HILTI CORPORATION
Auditors’ Report on
the Financial Statements

Relevant financial statement item
Investments in deposits, bonds and equities restricted to thefunding of losses arising from damages to assets and losses
arising from product-related obligations

Investments in short-term cash deposits with an original maturityof longer than three months but lower than 12 months

Recognized values of derivative financial instruments
Short-term tax obligations

Presentation in financial statements of
Hilti Corporation

Included in financial investments.

Included in other financial investments at fair value through profit or loss under non-current
other financial assets line item.

Included in cash and cash equivalents.

Included in other financial investments at amortized costs under current other financial
assets line item.

Included in accrued income and prepayments or accrued­expenses, as applicable.

Included in provisions.

The table above identifies the significant presentationdifferences relating to items in the financial statementsof Hilti Corporation and the corresponding items in theGroup’s consolidated financial statements.

70

Hilti 2023 Financial Report

Presentation in Group financial statements

Presented in the derivative financial instruments under each of the current and non-current
other financial assets and other financial liabilities line items.

Included in income tax payables under trade and other payables, mainly under current
liabilities heading.

2.3 Changes in accounting policies

3 Exchange rates

There have been no material changes in accounting
policies in the 2023 financial statements of
Hilti Corporation from those adopted in 2022.

For details of foreign exchange rates of principal
currencies that have been applied for translation into
Swiss francs, see note 1.7 of the Group’s consolidated
financial statements.

Financial Statements Hilti Corporation

NOTES TO THE FINANCIAL STATEMENTS HILTI CORPORATION

Hilti Corporation

Corporate ­Governance
Investor ­Information

4 Intangible assets

Group at a Glance
Consolidated Management Reportin CHF million

RightsOther­intangible
assets

Total

Opening balance at January 1, 2023

4

285

289

Additions

−

13

13

Closing balance at December 31, 2023

4

298

302

Opening balance at January 1, 2023

(4)

(165)

(169)

Additions

−

(50)

(50)

Closing balance at December 31, 2023

(4)

(215)

(219)

Net book values at December 31, 2023

−

83

83

Net book values at December 31, 2022

−

120

120

Group Financial Statements

Cost 2023

Accumulated amortization 2023

Financial Statements Hilti Corporation
Balance Sheet
Income Statement
NOTES TO THE FINANCIAL
STATEMENTS HILTI CORPORATION
Auditors’ Report on
the Financial Statements
Hilti Corporation

Corporate ­Governance
Investor ­Information

71

Hilti 2023 Financial Report

Financial Statements Hilti Corporation

NOTES TO THE FINANCIAL STATEMENTS HILTI CORPORATION

5 Property, plant and equipment

Group at a Glance
Consolidated Management Reportin CHF million­Prepayments
or assets­under­construction

TotalGroup Financial Statements

Land andbuildings

Plant andmachinery

Other­operating
equipment

Opening balance at January 1, 2023

542

407

87

23

1,059

Currency translation adjustment

(3)

(5)

(1)

−

(9)

Additions

−

18

3

14

35

Disposals

−

(7)

(6)

−

(13)

Transfers

14

4

−

(18)

–

Closing balance at December 31, 2023

553

417

83

19

1,072

Cost 2023

Opening balance at January 1, 2023

(186)

(370)

(75)

−

(631)

Currency translation adjustment

2

4

1

−

7

Additions

(7)

(16)

(4)

−

(27)

Disposals

−

5

6

−

11

Closing balance at December 31, 2023

(191)

(377)

(72)

−

(640)

Net book values at December 31, 2023

362

40

11

19

432

Net book values at December 31, 2022

356

37

12

23

428

Hilti 2023 Financial Report

Balance Sheet
Income Statement
NOTES TO THE FINANCIAL
STATEMENTS HILTI CORPORATION
Auditors’ Report on

Accumulated depreciation 2023

72

Financial Statements Hilti Corporation

Financial Statements Hilti Corporation

NOTES TO THE FINANCIAL STATEMENTS HILTI CORPORATION

the Financial Statements
Hilti Corporation

Corporate ­Governance
Investor ­Information

6 Financial investments

7 Inventories

in CHF million

in CHF million

Shareholdings

Loans
to Group­companies

Other financial
investments

2022

2023

Total

24

22

Consumables

118

Production in progress8

8

Finished products and goods held
for resale

211

192

Total inventories

254

230

2,366

38

12

2,416

Additions

317

1

3

321

Disposals

(14)

−

(1)

(15)

2,669

39

14

2,722

Closing balance at December 31, 2023

Consolidated Management Report

Raw materials

Cost 2023
Opening balance at January 1, 2023

Group at a GlanceGroup Financial Statements
Financial Statements Hilti Corporation
Balance Sheet
Income Statement
NOTES TO THE FINANCIAL

Accumulated valuation allowance 2023
Opening balance at January 1, 2023

(178)

−

−

(178)

Disposals

(23)

−

−

(23)

Closing balance at December 31, 2023

(201)

−

−

(201)

Net book values at December 31, 2023

2,468

39

14

2,521

Net book values at December 31, 2022

2,188

38

12

2,238

Total inventories include a provision of CHF 114 million(2022: CHF 126 million), noted in accordance with tax
regulations.

STATEMENTS HILTI CORPORATION
Auditors’ Report on
the Financial Statements
Hilti Corporation

Corporate ­Governance

A list of Group companies, directly or indirectly heldby Hilti Corporation, is included in note 8.5 of thisFinancial Report. Pursuant to Article 1094 (3) of the
PGR, some details relating to investments in Group
companies have not been disclosed in this list.

73

Hilti 2023 Financial Report

Financial Statements Hilti Corporation

Investor ­Information

NOTES TO THE FINANCIAL STATEMENTS HILTI CORPORATION

8 Trade and other receivables

The share capital consists of 253,440 registered shareswith a par value of CHF 500 each.

in CHF million
2022

2023

Short-termLong-term

Total

Short-termLong-term

Total

Trade accounts receivables fromthird parties

23

−

23

23

−

23

Trade accounts receivables fromGroup companies

921

−

921

653

−

653

Total trade accounts receivables

944

−

944

676

−

676

Other accounts receivables fromthird parties

27

−

27

36

−

36

Other accounts receivables fromGroup companies

63

−

63

144

−

144

Total other accounts receivables

90

−

90

180

−

180

Total trade and other receivables

1,034

−

1,034

856

−

856

The contractual maturity for short-term receivables isless than one year and for long-term receivables over
one year.

in CHF million

Share andPC capital

Legal reserves

Foreign­ urrencyctranslation
reserve

127

108

(23)

3,213

3,425

Dividend paid

−

−

−

(281)

(281)

Foreign currency translation differences

−

−

(4)

−

(4)

Net income

−

−

−

204

204

127

108

(27)

3,136

3,344

Equity at December 31, 2023

74

Hilti 2023 Financial Report

Consolidated Management Report
Group Financial Statements
Financial Statements Hilti Corporation
Balance Sheet
Income Statement

10 Provisions

NOTES TO THE FINANCIAL
STATEMENTS HILTI CORPORATION

in CHF million
2022

2023

Provision for employee benefits

25

58

Tax obligations

50

26

Other provisions

8

9

Total provisions

83

93

Auditors’ Report on
the Financial Statements
Hilti Corporation

Corporate ­Governance
Investor ­Information

9 Equity

Equity at January 1, 2023

The currency translation differences arise from theinclusion of the income statement and balance
sheet items of plant Thüringen, Austria, which aredenominated in euro. The foreign currency translation
reserve comprises the accumulated foreign currency
gains and losses recognized in equity since 2003.

Group at a Glance

Financial Statements Hilti Corporation

Retainedearnings

Total equity

NOTES TO THE FINANCIAL STATEMENTS HILTI CORPORATION11 Borrowings, payables andother liabilities

Group at a Glance
Consolidated Management Reportin CHF million
2022Group Financial Statements

2023

Short-termLong-term

Total

Short-termLong-term

Total

100

350

450

100

504

604

Bank borrowings

20

−

20

−

−

−

Trade accounts payables third parties

181

−

181

162

−

162

Trade accounts payables Group companies

168

−

168

193

−

193

Total trade accounts payables

349

−

349

355

−

355

Other liabilities owing to third parties

27

8

35

13

7

20

Other liabilities owing to Group companies

305

−

305

103

−

103

Bonds

Total other liabilities

332

8

340

116

7

123

Total borrowings, payables and other liabilities

801

358

1,159

571

511

1,082

Financial Statements Hilti Corporation
Balance Sheet
Income Statement
NOTES TO THE FINANCIAL
STATEMENTS HILTI CORPORATION
Auditors’ Report on
the Financial Statements
Hilti Corporation

The contractual maturity for short-term liabilities is lessthan one year and for long-term liabilities over one year.
The total amount of liabilities with a remaining term of
more than five years is CHF 155 million (2022: CHF nil).

12 Material costs

13 Personnel expenses

in CHF million

in CHF million
2022

Raw materials, consumables
and bought-in goods for resale
Outsourced manufacturing
Total material costs

75

Hilti 2023 Financial Report

Financial Statements Hilti Corporation

2023(1,631)(1,447)

(14)

(12)

(1,645)(1,459)NOTES TO THE FINANCIAL STATEMENTS HILTI CORPORATION

Corporate ­Governance
Investor ­Information
2022

2023

Wages and salaries

(288)

(353)

Pension contributions

(46)

(47)

Other social contributions

(17)

(22)

Total personnel expenses

(351)

(422)

14 Depreciation and amortization

17 Derivative financial instruments

18 Segment information

This position comprises depreciation and amortizationof intangible assets and property, plant and equipment.

Hilti Corporation enters into derivative contracts
to hedge mainly foreign currency risks arising fromforecast foreign currency sales and purchases
transactions. Derivative contracts are recognized when
the applicable forecast transactions occur. Until then,they remain off-balance sheet. Recognized (i.e., onbalance sheet) derivative contracts are reported at fairvalue. Changes in the fair value of recognized derivative
contracts are reported in the income statement. In
accordance with Article 1093 of the PGR, details of
the on- and off-balance sheet derivative contracts
outstanding at balance sheet date are as follows:

Pursuant to Article 1094 (2) of the PGR, a breakdown of
net sales has not been disclosed.

15 Financial revenues
in CHF million
2022

2023

Recovery of depreciation on
financial assets

5−

Financial investment revenues
from third parties

1

5

Financial investment revenues
from Group companies

31

32

Total revenues fromfinancial investments

32

37

Total financial revenues

37

37

16 Financial expenses

Balance Sheetin CHF million
2022

2023

−

−

Guarantees Group companies

182

171

Total contingent liabilities

182

171

Guarantees third parties

20 Commitments

Foreign currency forward contracts

615

690

Interest rate swaps

60

150

Payment commitments arising from operating lease
contracts are as follows:

Total contract face amounts

675

840

Contract face amounts

NOTES TO THE FINANCIAL
STATEMENTS HILTI CORPORATION

Hilti Corporation

Corporate ­Governance
Investor ­Informationin CHF million

Foreign currency forward contracts

715Interest rate swaps−

5

Depreciation on financial assets

−

(24)

Total contract values

720Interest and similar expenses incurred
to third parties

(6)

(6)

Reporting of contract values

Interest and similar expenses incurred
to Group companies

(4)

(3)

Contract values recognized(on-balance sheet)

7

20

Total interest and similar expenses

(10)

(9)

Total contract values

720

Operating currency and hedge
gains/(losses)

(17)

(49)

Total financial expenses

(27)

(82)

Financial Statements Hilti Corporation

Income Statement

the Financial Statements

2023

2023

Hilti 2023 Financial Report

Group Financial Statements
Financial Statements Hilti Corporation

2022

2022

76

19 Contingent liabilities

Consolidated Management Report

Auditors’ Report onin CHF million

Contract values
in CHF million

Group at a Glance

2022

2023

Expiring within 1 year

1

1

Expiring between 1 and 5 years

11

Total commitments

2

2

21 R
 emuneration of theBoard of Directors and the
Corporate Management
For details of the remuneration of the Board of Directors
and the Corporate Management, see note 8.4 of theGroup’s consolidated financial statements.

NOTES TO THE FINANCIAL STATEMENTS HILTI CORPORATION

24 Management report

22 Other transactions and balanceswith the shareholder

Pursuant to Article 1121 (3) of the PGR, themanagement report of Hilti Corporation has beencombined with the consolidated management
report. The consolidated management report is on
pages 8 to 10 of this Financial Report ( see here).

For details about other transactions and balanceswith the shareholder, see note 8.4 within the notes tothe consolidated financial statements.

23 Number of employees

Financial Statements Hilti Corporationin CHF million
Profit brought forward

%

2023

%

Austria

875

38

870

37

Germany

468

20

475

20

Switzerland

217

9

217

9

Proposal by the Board of Directors

Liechtenstein

132

6

138

6

Other countries

637

27

664

28

Dividend of CHF 1,100 (2022: CHF 1,110)
per share

2,329

100

2,364

100

Hilti 2023 Financial Report

Group Financial Statements

Balance Sheet
Income Statement

2022

77

Consolidated Management Report

25 Appropriation of retained earnings

The breakdown of employees by nationality is asfollows:

Total
employees

Group at a Glance

Net income
At the disposal of the General Meeting

2022

2023

2,818

2,932

395

204

3,213

3,136

STATEMENTS HILTI CORPORATION
Auditors’ Report on
the Financial Statements
Hilti Corporation

281

279

Balance carried forward

2,932

2,857

Total

3,213

3,136

Financial Statements Hilti Corporation

NOTES TO THE FINANCIALNOTES TO THE FINANCIAL STATEMENTS HILTI CORPORATION

Corporate ­Governance
Investor ­Information

REPORT OF THE STATUTORY AUDITOR TO THE
GENERAL MEETING OF HILTI AKTIENGESELLSCHAFTSCHAAN
Report on the audit of the financial
statements
OpinionWe have audited the financial statements of Hilti
Aktiengesellschaft (the Company), which comprise thebalance sheet as at 31 December 2023, the income
statement for the year then ended, and the notes to thefinancial statements, including a summary of significant
accounting policies.
In our opinion, the financial statements (page 67 to 77)
give a true and fair view of the financial position of theCompany as at 31 December 2023 and its financial
performance for the year then ended in accordancewith Liechtenstein law.

Basis for Opinion

Our audit approach

We conducted our audit in accordance with
Liechtenstein law and International Standards on
Auditing (ISAs). Our responsibilities under those
provisions and standards are further described in
the “Auditor’s Responsibilities for the Audit of the
Financial Statements” section of our report.

Overview

We are independent of the Company in accordancewith the provisions of Liechtenstein law and therequirements of the audit profession, as well as
the International Code of Ethics for Professional
Accountants (including International IndependenceStandards) of the International Ethics Standards Board
for Accountants (IESBA Code) and we have fulfilled
our other ethical responsibilities in accordance withthese requirements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.

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Financial Statements Hilti Corporation

AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS HILTI CORPORATIONGroup at a Glance
Consolidated Management Report
Group Financial Statements
Financial Statements Hilti Corporation
Balance Sheet
Income Statement
Notes to the Financial

Materiality

Statements Hilti Corporation
AUDITORS’ REPORT ON
THE FINANCIAL STATEMENTSHILTI CORPORATION

Audit
scope

Corporate ­Governance
Investor ­Information

Key audit
matters

Overall materiality: CHF 15 million

Overall materiality CHF 15 million

Other Information in the Annual Report

We tailored the scope of our audit in order to perform
sufficient work to enable us to provide an opinion on
the financial statements as a whole, taking into accountthe structure of the entity, the accounting processes
and controls, and the industry in which the entity
operates.

How wedetermined it

Net income before income tax
expenseRationale forthe materiality
benchmarkapplied

We chose net income before
income tax expense as thebenchmark because, in ourview, this is the most commonlyused performance measure forthe entity and it is a generally
accepted benchmark.

The Board of Directors is responsible for the otherinformation in the annual report. The other information
comprises that information included in the annual
report, but does not include the consolidated financial
statements, the stand-alone financial statements, theconsolidated management report, the management
report and our auditor’s reports thereon.

We have determined that there are no key audit mattersto communicate in our report.

Materiality
The scope of our audit was influenced by ourapplication of materiality. Our audit opinion aims
to provide reasonable assurance that the financial
statements are free from material misstatement.
Misstatements may arise due to fraud or error. They
are considered material if, individually or in aggregate,
they could reasonably be expected to influence theeconomic decisions of users taken on the basis of thefinancial statements.
Based on our professional judgement, we determinedcertain quantitative thresholds for materiality, including
the overall materiality for the financial statements as
a whole as set out in the table below. These, together
with qualitative considerations, helped us to determine
the scope of our audit and the nature, timing andextent of our audit procedures and to evaluate theeffect of misstatements, both individually and inaggregate, on the financial statements as a whole.

Audit scope
We designed our audit by determining materiality andassessing the risks of material misstatement in thefinancial statements. In particular, we considered where
subjective judgements were made; for example, inrespect of significant accounting estimates that involved
making assumptions and considering future events thatare inherently uncertain. As in all of our audits, we also
addressed the risk of management override of internal
controls, including among other matters considerationof whether there was evidence of bias that represented
a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform
sufficient work to enable us to provide an opinion on thefinancial statements as a whole, taking into account thestructure of the entity, the accounting processes andcontrols, and the industry in which the entity operates.

Key Audit Matters
We have determined that there are no key audit mattersto communicate in our report.

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Our opinion on the financial statements does not cover
the other information, and we do not express any formof assurance conclusion thereon.
In connection with our audit, we have the responsibility
to read the other information and to consider whether
the other information is materially inconsistent with thefinancial statements or our knowledge obtained in theaudit, or otherwise appears to be materially misstated.
If, on the basis of our work we have performed, weconclude that there is a material misstatement of thisother information, we are required to report that fact.
We have nothing to report in this regard.

Responsibilities of the Board of Directors
for the Financial Statements
The Board of Directors is responsible for the
preparation of the financial statements that give a trueand fair view in accordance with Liechtenstein law,and for such internal control as the Board of Directors
determines is necessary to enable the preparationof financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of
Directors is responsible for assessing the Company’s
ability to continue as a going concern, disclosing,

AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS HILTI CORPORATIONGroup at a Glance
Consolidated Management Report
Group Financial Statements
Financial Statements Hilti Corporation
Balance Sheet
Income Statement
Notes to the Financial
Statements Hilti Corporation
AUDITORS’ REPORT ON
THE FINANCIAL STATEMENTSHILTI CORPORATION

Corporate ­Governance
Investor ­Information

as applicable, matters related to going concern andusing the going concern basis of accounting unlessthe Board of Directors either intends to liquidate theCompany or to cease operations, or has no realistic
alternative but to do so.

• Obtain an understanding of internal control relevantto the audit in order to design audit proceduresthat are appropriate in the circumstances, but notfor the purpose of expressing an opinion on theeffectiveness of the Company’s internal control.

Auditor’s Responsibilities for the Auditof the Financial Statements• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting
estimates and related disclosures made.

Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due tofraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that anaudit conducted in accordance with Liechtenstein law
and ISAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in
the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with Liechtenstein
law and ISAs, we exercise professional judgement andmaintain professional skepticism throughout the audit.
We also:• Identify and assess the risks of material misstatementof the financial statements or, whether due to fraud
design and perform audit procedures responsive
to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations or
the override of internal control.

• Conclude on the appropriateness of the Boardof Directors’ use of the going concern basis ofaccounting and, based on the audit evidence
obtained, whether a material uncertainty exists
related to events or conditions that may castsignificant doubt on the Company’s ability tocontinue as a going concern. If we conclude thata material uncertainty exists, we are required to
draw attention in our auditor’s report to the related
disclosures in the financial statements or, if suchdisclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report.
However, future events or conditions may cause theCompany to cease to continue as a going concern.
• Evaluate the overall presentation, structure andcontent of the financial statements, including thedisclosures, and whether the financial statements
represent the underlying transactions and events ina manner that achieves fair presentation.
We communicate with the Board of Directors or the
Audit Committee regarding, among other matters, theplanned scope and timing of the audit and significant
audit findings, including any significant deficiencies ininternal control that we identify during our audit.

From the matters communicated with the Board of
Directors or the Audit Committee, we determine thosematters that were of most significance in the audit of
the financial statements of the current period and are
therefore the key audit matters. We describe thesematters in our auditor’s report unless law or regulationprecludes public disclosure about the matter or when,in extremely rare circumstances, we determine thata matter should not be communicated in our reportbecause the adverse consequences of doing so would
reasonably be expected to outweigh the public interest
benefits of such communication.

Report on Other Legal and Regulatory
Requirements
The accompanying management report has been
prepared in accordance with the applicable legal
requirements, is consistent with the financial statements
and, in our opinion, based on the knowledge obtainedin the audit of the financial statements and ourunderstanding of the Company and its environment
does not contain any material misstatements.
We further confirm that the financial statements and the
proposed appropriation of retained earnings comply
with Liechtenstein law and the articles of incorporation.
We recommend that the accompanying financial
statements submitted to you be approved.
PricewaterhouseCoopers AG

Stefan Räbsamen

St. Gallen, March 13, 2024
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Financial Statements Hilti Corporation

AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS HILTI CORPORATION

Beat Inauen
Liechtenstein Certified
Public Accountant
Auditor in chargeGroup at a Glance
Consolidated Management Report
Group Financial Statements
Financial Statements Hilti Corporation
Balance Sheet
Income Statement
Notes to the Financial
Statements Hilti Corporation
AUDITORS’ REPORT ON
THE FINANCIAL STATEMENTSHILTI CORPORATION

Corporate ­Governance
Investor ­Information

Corporate
GovernanceGroup at a Glance
Consolidated Management Report
Group Financial Statements
Financial Statements Hilti Corporation
CORPORATE ­GOVERNANCE
Investor ­Information

Election and term of office for the membersof the Board of Directors
Members of the Board of Directors of Hilti Corporation
are elected by the Annual General Meeting, generally
for a three-year term with the possibility of re-election.
In principle, the admissible term of office shall belimited to four terms and the mandate shall lapse
with effect at the end of the business year in which
the relevant member reaches the age of 70. For goodreason, the term of office may be extended.
Allocation of responsibilities and dutiesof the Board of Directors
The Board of Directors is the supreme executive
body of Hilti Corporation and responsible forsuperintendence, supervision and control of the
management. In addition to further legally defined
obligations, the Board of Directors adopts thefundamental strategic orientation of the Group,
approves the Group’s strategic planning and material
business decisions, searches for and proposes eligible
candidates to the General Meeting for election as
members of the Board of Directors and ensures the
succession planning and appointment of the Executive
Board.
In the last business year, the Board of Directors
supervised the activities of the Executive Board andsupported it in a consultative capacity. The Boardof Directors took a strategic focus and was actively
involved in projects concerning Group strategy. In
several multiday Board meetings and visits (performed
physically or virtually, as practicable) to major operating

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CORPORATE GOVERNANCE

units of the Group, as well as on the basis of written
and oral reports of the Executive Board, the Board of
Directors dealt intensively with the economic situation,
day-to-day running of the business, as well as with its
corporate policy, financial planning, risk management
and basic questions of corporate development.
Furthermore, the Board of Directors was kept fully
informed by the statutory auditors on the results of theaudit of the annual financial statements.
Audit Committee
The Audit Committee assists the Board of Directors
in fulfilling its supervisory responsibilities with respect
to the accounting and financial reporting practices of
Hilti Corporation and its subsidiaries, compliance withlegal and regulatory requirements, the internal andexternal audit processes, as well as with its oversightof risk management. The overall responsibility for thetasks delegated to the Audit Committee remains with
the Board of Directors. In 2023, the Audit Committee
consisted of Carla De Geyseleer (Chair of the Audit
Committee) and Dr. Daniel Daeniker.
Internal audit
The internal audit department, Corporate Audit,
supports the Board of Directors by monitoring theinternal control status within Group companies. To
achieve this, Corporate Audit conducts audits focusedon controls within major transaction cycles, as well as
on processes for management of selected corporaterisks. Corporate Audit’s objective is to provide
transparency over the Group’s control environment
and enable security to be provided over the Group’s
resources.

Risk management

Group at a Glance

The Group maintains an enterprise-wide risk
management process, which involves a complete risk
inventory with different risk owners assigned to manage
all known strategic, financial and occurrence-oriented
risks of the Group. The risk owners are responsible for
evaluating, implementing, reviewing and monitoring
compliance with the corresponding risk mitigation
measures for their respective risks. For financial andoccurrence-oriented risks, the Corporate Risk Manager
is responsible for the risk reporting process and for
ensuring that the reported content and identified
measures regarding the identified risks are plausible.
Corporate Audit undertakes reviews of selectedrisks as part of their internal control reviews in Group
companies (see above) and in corporate functions
managed by the respective risk owners. For strategicrisks, Corporate Development runs annual strategy
review workshops with the Executive Board. The risk
management reporting is regularly reviewed by the
Audit Committee on behalf of the Board of Directors.

Consolidated Management Report

Shareholders’ rights
Details of share capital are given in the Group financial
statements (see note 5.6). In principle, resolutions of
the General Meeting are passed by absolute majorityof the voting shares represented. A majority of at least
three quarters of the voting shares represented at theGeneral Meeting is required for: an amendment to the
Articles of Association, an increase in the share capital,
the buyback of shares, the restriction or cancelation of
the subscription right, mergers with other companies,
transformation of the company into another legal formor the dissolution of the company.

Group Financial Statements
Financial Statements Hilti Corporation
CORPORATE ­GOVERNANCE
Investor ­Information

Auditors

Group at a Glance

The examinations of the Group financial statements
and the financial statements of Hilti Corporation
are conducted by PricewaterhouseCoopers AG,
St. Gallen (leading auditor). The company was reappointed in March 2023 for the 2023 year. The
auditor-in-charge has been responsible for the
mandate from 2019 following a partner rotation after
the 2018 year. In respect of the 2023 year, audit fees ofPricewaterhouseCoopers amount to CHF 2.4 million,
whereas there are no significant audit-related fees andnon-audit fees. Total audit fees of the Group, including
audits not performed by PricewaterhouseCoopers,amount to CHF 2.9 million.

Consolidated Management Report

83

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CORPORATE GOVERNANCE

Group Financial Statements
Financial Statements Hilti Corporation
CORPORATE ­GOVERNANCE
Investor ­Information

INVESTOR INFORMATIONGroup at a Glance
Consolidated Management Report

Contact information

Key dates

Investor relations

Interim financial information
January to April 2024

May 17, 2024

Interim financial information
January to August 2024

September 26, 2024

Publication of the 2024 Financial Report

March 14, 2025

Annual results media conference

March 14, 2025

Mandy Wang
Global Head Finance & Controlling
Hilti Corporation
Feldkircherstrasse 1009494 Schaan
Liechtenstein
Phone +423 234 2305
E-mail: mandy.wang@hilti.com
www.hilti.groupMedia relations
Matthias Hassler
Manager Media Relations/Spokesperson
Hilti Corporation
Feldkircherstrasse 1009494 Schaan
Liechtenstein
Phone +423 234 4949
E-mail: matthias.hassler@hilti.com
www.hilti.group84

Hilti 2023 Financial Report

INVESTOR INFORMATIONGroup Financial Statements
Financial Statements Hilti Corporation
Corporate ­Governance
INVESTOR ­INFORMATION