Hexagon's overall financial objective is to increase earnings per share by at least 15 per cent annually. Strong growth in earnings per share is the best way to produce favourable long-term return on shareholder investment.
Hexagon shall strive to minimize the weighted average cost of capital (WACC) for the company's financing. A strong equity ratio provides opportunities for using loans to finance parts of future expansion.
A positive cash flow creates freedom of action for long-term expansion. It also allows Hexagon's shareholders to govern operations on the basis of a lower required equity ratio than if the cash flow was uncertain.
The long-term required return on capital employed over a business cycle amounts to more than 15 per cent annually. The required return has been set based on an assumption of long-term risk-free interest of around 5 per cent and a risk premium of some 10 per cent.
