2019 Company Report

2019 Hilti Company Report 2019 COMPANY REPORT T R O P E R Y N A P M O C 9 1 0 2 N O I T A OR P OR C I T L I H

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2019 Hilti Company Report COVER STORY “G REAT TO SEE YOU!” 2019 Noel Rolando Orosa, Logistics Manager, Hilti Indonesia COMPANY REPORT When Noel Rolando Orosa visits a construction site, he brings more than just a warm disposition and his tools with him. The red Hilti toolbox he carries contains solutions for saving customers time while enhancing their safety and effi ciency. This makes him one of 30,000 Hilti employees around the world who work passionately to meet their customers’ needs. In this 2019 Company Report, we have included images, text and sound bites which capture snippets of Hilti customers’ and employees’ stories. There’s more inside than meets the eye We’ve created six short fi lms to document the events and issues that impacted Hilti in 2019. Simply scan the QR code with your smartphone camera or a free QR code scanner, open the link T and download the Hilti augmented reality app. R Then open the report’s foldout to the left and, O with the app running, scan the world map with P E the smartphone to start your journey. R Y N A P M O C 9 1 0 2 N O I T A OR P OR C I T L I H

2019 Hilti Company Report 02 EDITORIAL 04 COMPANY PROFILE 08 CEO INTERVIEW 10 CHAMPION 2020 STRATEGY 12 Product and Service Differentiation 24 Direct Customer Relationship 38 Operational Excellence 50 High-performing Global Team 62 EXECUTIVE BOARD 64 BOARD OF DIRECTORS 68 FINANCIAL FIGURES 01

DEAR READERS, According to our newly-designed cus- Our operating results rose by 7.4 per- tomer satisfaction survey, 92 percent cent to 783 million Swiss francs, which of our customers have come to place led to a 13.3 percent return on sales as their trust in Hilti. And more than 60 well as a 19.8 percent return on cap- percent say that they have a strong ital employed. Thus, we once again connection to us. With over 1 million achieved our ambitious targets in the active customers around the world, sixth year of implementing our Cham- we are thrilled to receive such feed- pion 2020 corporate strategy. We also back at the end of what has been quite used this solid foundation to carry out a dynamic year. The economic enthu- signi昀椀 cant investments in the future. siasm for the worldwide construction The outlays for research and develop- industry has noticeably lessened in ment – particularly with regard to our the course of the year and investments digital agenda – once again rose by have stalled, particularly in the politi- 3.2 percent. cal hotspots of the Middle East, Turkey and Great Britain. After many years of We further re昀椀 ned the Hilti Founda- low interest rates and strong econom- tion’s social and cultural initiatives, ic cycles, there is now a worldwide which now support some 40 projects surplus of both residential and com- around the world. Initiatives include mercial real estate. Combined with affordable housing, economic em- the increasing uncertainties associ- powerment and utilizing music for ated with global trade, this has led to social change, in which we support- market growth of only 1.5 percent as ed more than 120,000 people in 2019 measured in Swiss francs. Addition- on their path to a better life. Funding ally, unfavorable currency develop- for these activities comes from con- ments have had a negative impact on tributions on behalf of both the Hilti Group and the company’s owner – the our sales and 昀椀 nancial results. Martin Hilti Family Trust. Learn more With sales growth of 4.3 percent to at www.hiltifoundation.org. 5.9 billion Swiss francs, we performed well in this environment, further As we look back on a successful 2019 strengthening our market position. In business year, we remain convinced 2019, the primary growth driver was that by supporting our customers with again the introduction of nearly 70 new ever-improving solutions regarding products and many new software solu- productivity, safety, design, technical We want to thank you, our customers Heinrich Fischer Christoph Loos tions and services, some of which are calculations and the digital transfor- and partners, for your ongoing trust. A Chairman of the Board of Directors Chief Executive Of昀椀 cer presented in this report. We also con- mation of construction processes, we special word of thanks goes out to our tinued to expand our worldwide service have taken another important step in employees around the world for their and sales team, and welcomed 1000 implementing our corporate strategy. commitment and passion in bringing additional team members to the com- We will continue to enhance these de- our corporate mission statement to pany. Every day, they are committed to velopments in the coming year, even in life every day: We passionately create enabling high productivity and safety the face of what could be a more de- enthusiastic customers and build a for our customers’ core applications. manding market environment. better future. 02–03

2019 Hilti Company Report KEY FIGURES 5,900 783 6,000 5,659 800 681 728 5,500 5,113 700 604 5,000 4,633 600 547 4,384 4,500 500 4,000 400 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 3,500 300 Net sales in CHF million Operating result in CHF million 591 600 546 15.0 13.0 13.3 12.9 13.3 521 12.5 550 13.0 500 481 11.0 450 410 9.0 400 7.0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 350 5.0 Net income in CHF million Return on sales (ROS) in % 21.0 21.1 20.6 19.8 22.0 19.0 400 18.0 360 335 325 14.0 320 303 10.0 280 248 245 6.0 240 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2.0 200 Return on capital employed (ROCE) in % Free cash 昀氀ow in CHF million (before acquisition and disposal of subsidiaries, including lease payments) COMPANY PROFILE 400 355 367 32,000 30,006 29,004 350 311 29,000 26,881 300 280 26,000 24,619 Hilti stands for quality, innovation and customers. If there is an on-site chal- Family Trust, which ensures the long- 23,385 direct customer relationships resulting lenge for which no Hilti solution exists, term continuity of the company. Hilti 240 in about 250,000 individual customer one will be developed. This is why the builds a better future – with sustainable 250 23,000 contacts each day. Based in Schaan, company invests approximately 6 per- and innovative solutions. The compa- 200 20,000 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 cent of sales each year in research ny supports society and environment 150 Liechtenstein, the company has 30,000 17,000 employees around the world who con- and development. The strategic ob- equally to actively pursue a better fu- Research and development expenditure Employees at December 31 tribute to making construction work jective is sustainable value creation ture both within and outside of the core simpler, faster and safer while inspiring through market leadership and differ- business area. In addition to the char- in CHF million customers every single day with tech- entiation. The company has also been itable Hilti Foundation, the company’s values of integrity, courage, teamwork nologically leading products, systems, planning with 昀椀nancial foresight since software and services. Many ideas for its founding in 1941 by brothers Eugen and commitment are demonstrated Please note improvements are developed directly and Martin Hilti. All company shares every day in its interactions with team 2017 numbers have been restated due to the adoption of IFRS 15 Revenue from contracts with customers and IFRS 9 Financial Instruments. on construction sites while talking to are in the possession of the Martin Hilti members, partners and customers. Numbers prior to 2017 have not been restated. 04–05

2019 Hilti Company Report BUSINESS AREAS Anchor Systems Measuring Systems Hilti sets new standards in anchor fas- Hilti’s robust laser, radar and optical tening technology with mechanical tools cover all the requirements for and chemical anchoring systems as measuring, leveling, aligning and de- well as cast-in anchors. These sys- tecting, from excavation through to tems are also designed to withstand renovation and maintenance tasks. seismic action. Technical experts and The easy-to-use system solutions also software help to ensure correct anchor serve to bring digital planning directly selection and application. to the construction site. Tool Services Power Tools & Accessories Hilti power tools are known for top Hilti services can enhance produc- performance, user convenience and a tivity while minimizing administrative long lifetime. Accessories developed efforts. This is true in terms of 昀氀 eet management, repair and maintenance speci昀椀 cally for these tools ensure ef- service, Hilti’s integrated software 昀椀 cient chiseling, drilling, sawing and grinding. Vibration reduction, dust re- solutions for asset management as moval and active torque control sys- well as for apps that ensure constant tems are all designed to provide addi- availability of all information regarding tional safety and protection. Hilti tools. Construction Services Direct Fastening & Screw Fastening Hilti systems make direct fastening on Hilti bundles its services for fastening steel and concrete simpler, safer and and 昀椀 re protection products to generate more productive. Recoil, vibration, higher productivity and safety along the noise and dust emissions are reduced entire construction value-adding chain. to a minimum. Optimized systems of in- These services include BIM modeling, novative tools and fasteners provide ad- engineering, testing, pre-assembly, ditional speed on the construction site. training and technical consulting. Firestop Systems Installation Systems Modular installation systems from Hilti The correct installation of 昀椀 restop sys- tems is decisive in helping prevent the provide 昀氀 exibility and ef昀椀 ciency to solutions for supporting and fastening spread of 昀椀 re, smoke and toxic fumes. Hilti provides a comprehensive range pipes, ventilation ducts and electrical of technical consulting services as installations. Engineering and logistics services and design software round well as ef昀椀 cient design and documen- tation software that deliver a higher out the comprehensive package. level of safety from a single source. Diamond Systems The tools and the cutting segments us- ing Hilti diamond technology are built for high performance and low wear. Drilling, cutting, sawing and grinding concrete and other mineral building materials is easy, achieves maximum accuracy and ef昀椀 ciency while keeping dust and vibration to a minimum. 06–07

2019 Hilti Company Report A BALANCE OF FOCUS AND CHANGE CEO Christoph Loos on the dynamics of the Group in 2019 and why learning curves make him optimistic. encouraging progress, including the ing and sales to logistics and 昀椀nance Hilti’s 2019 sales growth weakened to manufacturing and training. It’s a following: The Energy and Industry to 4.3 percent. How do you view this development? very exciting time that is unleashing sector now accounts for almost 20 In recent years, the construction indus- great potential, but also demands great percent of sales. At the center of this success are modular system solutions efforts and 昀椀nancial commitments. try has been able to reap the bene昀椀ts of a very strong economy in many coun- which are digitally integrated into larger projects’ work processes, from tries, which resulted in a great deal of What were the greatest challenges design and construction. This wave the company faced in 2019? early on in the design phase through to installation. For example, we replace of investments is now diminishing. It’s essential to 昀椀nd the correct balance There is an overcapacity of properties of focus and change. In our case, a trio the traditional welded support structure on the market resulting from the low of interests is involved: the focused in electrical/communication and pipe interest rate environment that has been implementation of initiatives stemming installations along with numerous other widespread in recent years. This has from our Champion 2020 corporate applications, helping our customers been exacerbated by ongoing political strategy, the achievement of our to reduce weight while signi昀椀cantly tensions in the Middle East and Turkey, ambitious 昀椀nancial targets and the sig- saving on time and cost expenditures. Another example is our Fleet Manage- Brexit and trade con昀氀icts between Chi- ni昀椀cant transformation of our company na and the USA. It’s a shame, but in the and associated investments. We are ment program for professionally and end, these represent normal market currently rethinking many areas in an ef昀椀ciently managing customers’ entire developments. Our strategy sets tar- effort to try and make the work of our tool 昀氀eets, which is seeing increasing gets relative to our competitors who, of customers safer and more productive. acceptance on account of our battery course, are facing the same weakened This journey to becoming a provider of platform for cordless tools, our very economic conditions. It’s encouraging comprehensive construction industry ef昀椀cient repair service and the high level that we could reach many of these rela- solutions also requires a great deal of of transparency provided by the various effort internally to ensure we take all digital elements of our service. We now tive targets despite signi昀椀cant 昀椀nancial investments. our team members along. This includes sell over 50 percent of our electrical transforming trusted processes as well tools in many countries worldwide via In which areas are these invest- as developing skills and abilities within Fleet Management. Four years after the ments concentrated? the organization. This type of transition launch of ON!Track, our digital asset is never an easy one and, more than management system, thousands of For several years now, Hilti has been evolving from being a provider of anything, it requires time. customers are pro昀椀ting from this solu- innovative, high-quality products to tion which provides ef昀椀cient and trans- parent management, geolocation and becoming a company that provides in- What makes you so certain that the tegrated solutions for the professional course you are following will contin- reliable documentation of their assets. construction industry. These solutions ue to be successful? And in an increasing number of BIM projects, we have helped our customers comprise various products, software First and foremost, the certainty that elements and services, and almost all success is always coupled with the to signi昀椀cantly save time and cut costs of them contain digital elements – spe- willingness to learn. Naturally, we are through BIM design and work昀氀ow ser- cial software, sensors integrated into going through multiple learning curves vices. With this, we have also achieved tools or IoT- and cloud-based solutions associated with the many changes our ambitious targets in the sixth year for evaluating data. At the same time, and the implementation of strategic of implementing our Champion 2020 we are currently digitizing large parts of projects. But overall, I’m very optimistic, strategy. So, I’m quite con昀椀dent about our corporate processes, from market- as we’ve already witnessed a lot of the coming business year. 08–09

“ OUR FOUNDATION IS A STRONG CARING AND PERFORMANCE-ORIENTED CULTURE.” Christoph Loos, Chief Executive Of昀椀cer “We passionately create enthusiastic customers Our strategic objective is sustainable value cre- and build a better future.” This mission statement ation through market leadership and differentia- is based on the conviction that we grow together tion; market leadership in terms of relative market with the people around us – with our customers, share, and differentiation via the direct sale of our employees and partners. Personal exchanges portfolio. We will continue to follow the success- and the aspiration to never rest, only to improve ful course of recent years in 2020 and beyond, and get better, has put us in the position to pro- while emphasizing four proven strategic 昀椀elds of vide products, systems, software and services activity. We are investing in continuous innova- that are world-class. tion. In doing so, we will continue to rely on the core of our corporate strategy: the direct access to and partnership with our customers in the construction industry. Operational excellence in all processes helps to ensure our customers’ success and 昀椀rms up our leading position on the market. A high-performing global team with 30,000 employees works diligently every day to achieve these targets. This year’s Company Re- port will take you on a journey and illustrate how our Champion 2020 corporate strategy can be seen in everything we do. 10–11

2019 Hilti Company Report PRODUCT AND SERVICE DIFFERENTIATION

2019 Hilti Company Report “ THIS IS PRODUCT DIFFERENTIATION THAT WE CAN REALLY USE.” Ronald Klein-Holte, Head of Development VBI, The Netherlands When lifting as much as two tons of concrete through the air, safety is the highest priority. VBI, a provider of prefabricated components for building construction in the Netherlands, sought a faster and simpler solution for transporting heavy concrete slabs for customers. Oftentimes, when constructing prefabricated houses, it’s only a matter of 24 hours before everything is erected, from the foundation to the roof. This task was perfectly suited for Hilti’s team of experts, as there was no standard solution available. The team quickly devel- oped a custom-designed anchor solution tailored to meet the customer’s needs, which can be included directly in the manufacturing process. The colleagues looked on while the solution was demonstrated on-site, as shown in this image taken just before it was put into use for the 昀椀 rst time. From the factory hall to the roof – have a look at the digital version of this report to view the process of how a prefa bri - cated concrete component can be transformed into a transportable roof: www.hilti-companyreport.com/en/vbi 14–15

2019 Hilti Company Report “ OUR CUSTOMERS CAN FIND WHAT THEY ARE LOOKING FOR WITH GREATER EASE.” Nokwanda Nzuza, Account Manager, Hilti South Africa Red, black or gray? In 2019, Hilti has globally introduced the three-level multiline approach, which sorts all products by color. The three lines Ulti- mate, Premium and Standard sort tools, anchors, foams and other products by performance level and price class. Using the color categories, Hilti Account Manager Nokwanda Nzuza explains to her customer exactly what he needs. This eliminates the need for him to review the entire product portfolio, making the selection easier. 16–17

2019 Hilti Company Report “ THE CORDLESS BREAKER MAKES HILTI A GLOBAL LEADER.” Tassilo Deinzer, Head of the Power Tools & Accessories Business Unit, Hilti Headquarters, Liechtenstein The more demanding the job, the more important it is to have a simple and safe application. Hilti develops nearly 70 product innovations each year, all aimed at making the work of our customers more ef昀椀 cient. One of the products developed in 2019 was the TE 500-A36 – the 昀椀 rst cordless breaker in its class worldwide. The tool enables customers to carry out demanding breaking and chiseling work for up to one hour with full mobility and without the need to connect it to the power grid. This is made possible by our 36-volt cordless battery technology, which is compatible with many Hilti tools, offering customers full 昀氀 exibility. The tool includes Hilti’s well-known high safety standard – low vibration levels provided by Active Vibration Reduction (AVR) technology and an optional dust-removal system. 18–19

2019 Hilti Company Report “ IN THE EVENT OF A FIRE, SAFETY IS OUR NUMBER ONE PRIORITY.” Roland Weixler, Development Team Lead, Hilti Germany The 昀氀 ames are climbing higher and higher up the wooden wall, swiftly melting exposed cables and plastic pipes in record time. In reality, this could be cata- strophic, which is why Hilti engineers do extensive testing in the lab. Their goal: to determine how long the Hilti 昀椀 restop sleeves can withstand the intense heat before the protected cables are affected. After a two-hour test, the answer is “passed”. Only then can the 昀椀 restop solutions be of昀椀 cially approved and installed without reservation in wooden buildings. Hilti closes a gap in wooden construction. Moreover, the passive 昀椀 restop products can be preinstalled, and can thus reduce construction time enormously. 20–21

2019 Hilti Company Report “ WE HAVEN’T LOST A SINGLE TOOL SINCE WE’VE STARTED USING ON!TRACK.” Imad Itani, Innovation Manager, ALEC Engineering & Contracting, Dubai At a typically large construction site, such as the one pictured in Dubai, with hundreds of workers, even more tools and countless building materials, it’s not easy to keep an eye on everything. That’s why ALEC Engineering & Contracting relies on the Hilti ON!Track smart asset management solution to keep track of almost 10,000 pieces of equipment on its sites. This image shows ON!Track experts Gerry Bocarro and Melanie Garcia assisting employees from ALEC with registering their assets. They are explaining how easy it is to 昀椀 nd a given tool – all that’s needed is a Bluetooth-enabled smartphone to scan even the most complex construction sites for tools and other assets. The teams now know exactly where to 昀椀 nd what they are looking for, saving them time, keeping everything in order and enhancing the ef昀椀 ciency on the construction site. 22–23

2019 Hilti Company Report DIRECT CUSTOMER RELATIONSHIP

2019 Hilti Company Report “C HINA IS DEVELOPING AT A RAPID PACE.” Camilla Zhou, Business Development Manager, Hilti China A new 4.2-kilometer-long segment is being added to one of the longest supply tunnels in the world, located in Chengdu, China. Hilti employee Camilla Zhou examines the work done on the Hilti installation system helping to ensure that the roughly 8 million inhabitants of the city can continue to enjoy a reliable supply of electricity and water. This large-scale project in Chengdu is only one of many that are now being realized in the most populous nation on earth. This also means an increase in demand for Hilti installa- tion systems, which provide customers with innovative, high-quality and safer solutions for their applications. In 2019, Hilti laid the foundations for more rapidly supplying China with its latest innovation, the MT system. By 2021, a cutting-edge production facility will be built in Handan, China, as part of a joint venture between Hilti, China Electronic System Technology – one of the largest general contractors for high-end buildings in China – and Welser – the Austrian-based world leader in roll-forming technology. 26–27

2019 Hilti Company Report “ THE SEARCH FOR INNOVATION IS TAKING PLACE EVERYWHERE.” Ruediger Wagner, Head of Open Technology Innovation, Hilti Headquarters, Liechtenstein The process of generating new ideas at Hilti doesn’t only happen in collaboration with the customer or in the company’s own Innovation Center, but increasingly in large event halls and coworking spaces. Hilti engineers meet up with programmers and software engineers at hackathons, taking place over the course of a weekend, in order to develop special digital solutions for the industry. These ideas and initial approaches don’t merely create new Hilti solu- tions, as cooperation now takes place in completely new groupings. Continuously advancing digitalization on building sites is turning the construction industry into an attractive target for start-up companies. Whether as part of an event conducted by UnternehmerTUM in Munich, as pictured here, or via our scouting teams in Silicon Valley and in Israel – the search for innovation is taking place everywhere. 28–29

2019 Hilti Company Report “ BIM ALLOWS THE CONSTRUC- TION INDUSTRY TO PRACTICE INTEGRATED COOPERATION.” Daniel Gmeiner, Head of BIM Competence Center, Hilti Netherlands It’s just the beginning of a journey, and it starts in Rotterdam. In June, the Hilti BIM Experience Center opened its doors, offering its visitors a hands-on experience of Building Information Modelling (BIM). What’s the idea behind it? To make complex ideas as simple and custom- er-oriented as possible: digital elements are linked with real installations based on concrete use cases along the entire value chain. On a tour, visitors experience how construction projects are carried out using BIM and how Hilti can accompany them along this path. It begins with design optimization, proceeding through prefabrication and logistics to validation and documentation. In 2019, Hilti was able to take 250 companies on this exciting journey. An up-close look at BIM – in the report’s digital version we take you on a tour of the BIM Experience Center in Rotterdam: www.hilti-companyreport.com/en/bim 30–31

2019 Hilti Company Report “ WITH THE RIGHT TRAINING, IT CAN BE QUITE EASY.” Rodrigo Nifure, Account Manager, Hilti Chile When Gaston Díaz from Novatec goes to work on a construction site, things get dusty. To protect himself from the concrete dust, Gaston often works in a full safety suit, which restricts his movement and can cause him discomfort. Rodrigo Nifure, Account Manager at Hilti Chile, recognized the problem and offered a specialized training. Using the diamond grinder DGH-130, one can work with greater safety, easier and virtually dust-free, even without a full safety suit. That’s because a power- ful dust removal system helps to reduce the dust at the source. This not only makes things easier for Gaston, who no longer needs to wear a full-body suit, but it also pleases the health and safety team at Novatec, which takes the occupational safety of its employees very seriously. 32–33

2019 Hilti Company Report Hilti is close to customers – approximately 14,000 employees call the streets and construction sites of the world their work- place. They share their experiences on internal social channels as well as on It seems hard to believe, but by the end of 2020, items from a Swedish furniture store will be on Instagram, Facebook or LinkedIn. Here is a selection of big and small sale right here, where there is currently nothing more to Hilti moments from 2019. see than a gaping hole in an empty area being developed into a suburb of Indonesia’s capital city. Hilti Key Account Manager Kurnia Bijaksana actively supports the con- struction work. He carries his breaker under the blazing sun across the rough terrain to wherever it’s needed in order to help demonstrate to construction site teams how to quickly and safely remove unwanted foundation piles. A construction site with a view: An exclusive block of 698 apartments is currently being built in downtown Chicago, where workers on the 203-meter-tall Wolf Point East Tower are putting a countless number of Hilti anchors and 昀椀 restop elements to use. Hilti employee Sandra Grigoletti not only enjoys the spectacular panorama from the skyscraper’s 39th 昀氀 oor, but also the satisfaction of supplying her customers with 昀椀 rst-class solutions. On the day that an earthquake shook the Chinese province of Sichuan in June 2019, a Hilti team was already in the city of Yibin teaching a local search and rescue crew how to correctly use Hilti’s reliable demolition tools. What started as a training session immediately turned into actual rescue operations aimed at saving people buried beneath the rubble. This image shows emergency personnel cutting through the debris of a collapsed residential building. 34–35

2019 Hilti Company Report When his customers in the Golden Outback need him, Hilti Account Manager Andrew Sindall gets into his red off-road vehicle. This can mean driving for up to 12 hours and 700 miles to get from Perth to the Western Australian mining regions. In Australia, having satis昀椀 ed customers requires going more than just one extra mile, but Andrew is happy to go the distance. This picture was taken on the way to a new mine on a rough unpaved road leading out of Leonora, Western Australia. They are known as “hunters” – maneuvering their motorcycles to get closer to smaller customers in Tanzania as quickly as they can, and better than anyone else. One thing that’s always along for the ride with the 22 construction site hunters: a red Hilti sales box containing basic tools and accessories. Their target is to make a spontaneous sale to one of the many of workers who largely improvise their work and applications, helping them to be more reliable in what they do. Has the shotcrete suf昀椀 ciently hardened? In Peru’s San In 2016, Mihai Ojog, the general Rafael tin mine, the response comes six hours after the manager of the Romanian shotcrete has been applied. This is no problem with Hilti technology. company Brenneka Install, signed his One simply has to let the concrete harden, set the anchor and 昀椀 rst 昀氀 eet management contract with measure its pull-out resistance. Here, Hilti Account Manager Víctor Hilti Account Manager Bogdan Frantia. Raúl Segura (right) explains to workers how they can use the data This year, he extended that contract. from the HAT 28 anchor tester to quickly and reliably determine the After all, having one’s tools available strength of the concrete. when they are needed has a positive impact on productivity – something he and his teams can’t do without. 36–37

2019 Hilti Company Report OPERATIONAL EXCELLENCE

2019 Hilti Company Report “ WE ARE ALL WORKING TOWARD A BETTER FUTURE.” Mirko Haase, Chief Compliance Of昀椀 cer, Hilti Headquarters, Liechtenstein Hilti is working for a better future from many different perspectives. This could be a charity run in Australia, a school cleanup project in PortugaI or more and more environmental projects such as the one in Japan seen in this photo. Last year, Ai Yanagisawa and her team planted 50 Mizunara oak tree seedlings at the foot of the Mount Fuji to maintain the diversity of the forest there. Small acts like these can make a big difference. One signi昀椀 cant target is 昀椀 rmly anchored in the CO2 strategy: reducing carbon dioxide production by 30 percent per employee by 2030. A decisive factor here is the vehicle 昀氀 eet, which is responsible for half of the company’s CO2 emissions. This is why Hilti is successively transitioning to vehicles having a more climate-friendly drive system by 2030. Find out more about Hilti’s initiatives for reducing CO2 intensity on our website at www.hilti.group. 40–41

2019 Hilti Company Report “ IN THE FUTURE, WE WILL BE ABLE TO OFFER EVEN BETTER SERVICES TO OUR CUSTOMERS.” Oliver Lorenz, Head of CRM of the Future, Hilti Headquarters, Liechtenstein Direct customer relationships represent a particular strength of Hilti. But this is also an area we are looking at in terms of how we can be better at promptly providing our customers with the solutions they need, and in supporting them when they make a decision to purchase a Hilti product. At the headquarters in Liechtenstein, as well as in Paris and in Kuala Lumpur, cross functional Hilti teams have developed our sales approach of the future. At the center of this is one software platform to link all points of contact a customer has with Hilti. This will enable us to respond even faster and more individually to customer needs. And this helps us when consulting with our customers at their job sites, as shown here on a construction site in France. In 2019, the system was tested by a group of selected 昀椀 rst users. The system will be rolled out globally by the end of 2021. 42–43

2019 Hilti Company Report “ FIELD2BIM SOLUTIONS GREATLY ENHANCE THE PRODUCTIVITY OF OUR CUSTOMERS.” Thomas Hillbrand, Head of the Measuring Business Unit, Hilti Headquarters, Liechtenstein This image shows Hilti Project Manager Ashvin Kumar with four of his colleagues – of course, they cannot actually be seen with Ashvin on the construction site in Toronto, Canada, because they are touring the site with him virtually from their workplaces in the USA, Asia and Europe. The images that Ashvin scans are processed into a 3D digital walk-through of the project. This technology, purchased by Hilti in 2019 from the start-up company Indoor Reality Inc., allows Ashvin’s customer to precisely plan the project’s next steps together with an international team of experts. This is made possible using cloud-based 3D visualization, which creates a technological bridge between the physical and digital worlds. 44–45

2019 Hilti Company Report “P ROFIS ENGINEERING SAVES US UP TO 75 PERCENT OF THE TIME REQUIRED TO PERFORM CALCULATIONS BY HAND.” Eric Wheeler, Senior Associate, Thornton Tomasetti, Chicago The proof that a solution provides true value to customers can be seen when they work together with Hilti to tell others about their experiences. This image shows Eric Wheeler, from Thornton Tomasetti, and Mila Averbush and Jennifer Ray from Hilti looking through training documentation for the PROFIS Engineering Premium Software, which Hilti launched in both North America and Great Britain in 2019. Eric’s company, which primarily focuses on building construction, uses PROFIS Engineering to design concrete anchors and base plates. In addition to the advantages presented by the BIM-compatible software solution, Eric is quick to name another: “I think the availability of Hilti’s technical staff to answer any questions that arise is even more important than the software itself.” Service doesn’t end simply because the software has been delivered. 46–47

2019 Hilti Company Report “ IF WE CAN’T GET OUR EMPLOYEES TO THE CONSTRUCTION SITE FOR TRAINING, WE BRING THE CONSTRUCTION SITE TO US.” Matthew Hill, Head of Learning Centre, Hilti Singapore Virtual reality glasses are a standard training compo- nent at the Singapore Learning Centre, which opened in January 2019. Projects and applications that require speci昀椀 c knowledge to more thoroughly advise customers are conveyed here as realistically as possible. The Hilti employees pictured above are taking part in a virtual tour in order to become more familiar with the conditions inside a railway tunnel. The realistic knowledge they gain can be directly applied at the construc- tion site. More than 300 employees located in Asia visited Singapore in 2019 to learn more about new products and to test applications. At Hilti, we regularly conduct training to reinforce the expertise of our sales employees. 48–49

2019 Hilti Company Report HIGH-PERFORMING GLOBAL TEAM

“ EXCELLENT GLOBAL TEAMWORK AND OUR CLOSE RELATIONSHIP WITH CUSTOMERS WERE KEY TO WINNING THE TYRA PROJECT.” Reinhard Schindler, Head of Energy & Industry, Hilti Headquarters, Liechtenstein Tyra 昀椀 eld is the biggest gas 昀椀 eld in the Danish North Sea. In a multi-billion dollar project, several wellhead topsides and a processing platform are currently being redeveloped. The picture shows workers at the offshore construction yard in Indonesia, installing Mekano modular supports from Hilti/Oglaend. As opposed to the conventional method of pre-fabrica- ting supports by welding, the combined Hilti/Oglaend multi-disciplinary tray supports, non-tray supports and integrated 昀氀 ooring systems can be pre-assembled and mounted modularly. The result: less weight, signi昀椀 cant saved time and lower total cost. In a truly global team effort that spans multiple countries, organizations and teams, Hilti and Oglaend System conduct engineering optimization studies and site surveys, assist in 3D modeling and provide extensive job site technical support in aspects of cutting, kitting and pre-assembly. 52–53

2019 Hilti Company Report “ EDUCATION IS KEY FOR LEADING AN AUTONOMOUS LIFE.” Beatrix Baettig Staud, Project Manager, Hilti Foundation Dararath still looks a bit skeptical in the learning center in Steung Sen, Cambodia. But whether he is aware or not, it is likely that he already holds the key to leading an autonomous life through his access to books. Almost one in four Cambodians cannot read or write. The Hilti Foundation supports the social enterprise Bookbridge in assisting committed people from disadvantaged regions in establishing self-昀椀 nanced learning centers. These centers are aimed at providing affordable access to education for children and youths. The Hilti Foundation also makes it possible for employees of the Hilti Group to contribute their expertise in the planning and development of the learning centers. In return, they gain a sense of responsibility while earning the opportunity to reinforce their intercultural communication skills and put new management styles into practice. For more information on the cooperation with Bookbridge and on Hilti Foundation projects please visit www.bookbridge.org and www.hiltifoundation.org. 54–55

2019 Hilti Company Report “ ARE YOU REDi?” Magdalena Gajda, Digital Marketing & Communications Team Lead, Hilti Latin America Hilti has long supported an open and creative exchange among employees worldwide. This is re昀氀 ected in both agile working methods and in the company’s communications systems. In 2019, the global internal collaboration platform known as “REDi” was introduced, along with numerous departmental, hierarchical and transnational communities. These are designed to allow employees to quickly exchange information on various topics and provide each other with help and support. This shared knowledge and the corresponding wealth of ideas it generates not only bene昀椀 ts employees, but also Hilti’s customers. This image shows employees from the REDi project team at the launch of the system in Panama. 56–57

2019 Hilti Company Report “ OUR CORPORATE CUTLURE IS CONTINUOUSLY DEVELOPING.” Eivind Slaaen, Head of People & Culture Development, Hilti Headquarters, Liechtenstein Frequent periods of recovery lead to higher performance. In the seventh edition of Hilti’s series of corporate culture workshops known as Team Camps, the focus is on the challenge of dealing with an increasing workload and higher demands of everyday life. Under the motto Care & Perform, team members at all levels of the company are given practical tips and tools supporting them in paying attention to themselves and building resilience to minimize stress factors – even during phases where demands are high. In 2019, the amount of time team members spent in internal workshops was equal to 42,000 working days. The foundation of Hilti’s Team Camps is a caring and performance-oriented corporate culture which is characterized by shared values, exemplary leadership and the conviction that corporate growth and personal growth go hand in hand. 58–59

2019 Hilti Company Report 30,006 employees worldwide (2018: 29,004) 63 nationalities at headquarters (2018: 65) 127 nationalities in the global team (2018: 127) “ NO TWO DAYS ARE ALIKE.” Annette Borén, Head of Finance GB, Hilti Northern Europe 25% of team members worldwide are women Normally, Annette Borén manages 昀椀 nances for Hilti’s (2018: 24%) market organizations in Northern Europe. However, at her most recent product training, she was less concerned with 昀椀 gures than with the latest Hilti tools. For Annette, it’s these varied possibilities for inspiration that make Hilti a great place to work. A diverse working environment where people can realize their full potential allows us to gain highly quali昀椀 ed and talented professionals from around the world. We have found that diverse teams consisting of members representing various 21% cultures, generations, genders, levels of education and skill sets are most successful when their environments are inclusive of team leaders enough to allow them to achieve their best. This is also one of worldwide are women the reasons why our approach is to ensure a balanced manage- (2018: 20%) ment team while continuing to 昀椀 ll a good 80 percent of manage- ment positions with internal candidates. In 2019, 21 percent of the Group’s management positions were 昀椀 lled by women. Annette is one of them. More inspiring personalities and careers can be found in the digital version of our report: www.hilti-companyreport.com/diversity 60–61

2019 Hilti Company Report Avraham (Avi) Kahn Member of the Executive Board Matthias Gillner since 2020 Member of the Executive Board 1977, USA/Israel since 2011 1967, Germany He is responsible for Asia and the Americas markets and began his In addition to being responsible Hilti career in sales in the USA for the global Energy and Industry in 2004. After holding various business he also leads Finance, management positions, he was Tax, Human Resources, IT and promoted to General Manager for Corporate Development. He held Hilti Canada in 2011. In 2017, he various positions at Hilti since took over the responsibility for the 2000, such as Head of the Electric entire North American region. Tools & Accessories Business Area. ▼ ◀ Dr. Christoph Loos CEO since 2014 1968, Germany A member of the Executive Board since 2007, he was appointed CEO in 2014. Having joined Hilti in 2001, he was responsible for Corporate Development and later developed the Strategic Marketing unit. In 2005, he took the position of General Manager Behind the scenes of Hilti Germany. In the digital version of the Company ▶ Report, you can see which tools and solutions were put to use in the construction of the new building: www.hilti-companyreport.com/executiveboard Jahangir (Jan) Doongaji Member of the Executive Board Dr. Stefan Nöken since 2014 Member of the Executive Board 1967, India/Switzerland since 2007 1965, Germany He is responsible for the Electric Tools and Accessories business, Responsible for the Fastening & Corporate Research & Technology Protection business, Application and Tool Services. Since joining Software and Corporate Logistics. Hilti in 2000, he has held various After joining Hilti in 2000, he held positions. In his most recent func- various positions in Corporate tion, he headed the Power Tools & Engineering and Supply Chain Accessories Business Unit. Management. ◀ ▼ Joaquim Sardà Solsona Member of the Executive Board EXECUTIVE BOARD Marco Meyrat* since 2020 Executive Board Member from 2005-2019 1974, Spain Most recently responsible for North America He is responsible for the European With some 1700 employees at our headquarters in Liechtenstein, and the Emerging Markets. and Middle East markets and for the Hilti ranks as one of the largest employers in the world’s sixth- Jörg Kampmeyer* Strategic Marketing unit. In 2005, he smallest country. Additional investments in the future of the Executive Board Member from 2011-2019 started at Hilti in Corporate Develop- headquarters location were made in 2019, for instance with ment at headquarters. Later he held Most recently responsible for Europe; served as CFO multiple management positions in the construction of two new of昀椀ce buildings that will allow the company to offer employees an attractive working environment Italy and Germany. In 2012, he took that motivates and inspires. The company’s newly constituted * Marco Meyrat and Jörg Kampmeyer left the Executive Board as the position of General Manager of Executive Board met with Hilti Project Manager Marco Belleri in of December 31, 2019. New Executive Board Members effective the Italy market organization and November to observe the progress of the construction. January 1, 2020 are Joaquim Sardà Solsona and Avraham (Avi) Kahn. Southern Europe Region. ▶ 62–63

2019 Hilti Company Report Michael Hilti Schaan, Liechtenstein 1946, elected Honorary Chair- man at the 2018 Annual General Meeting Michael Hilti, son of company founder Professor Martin Hilti, has been a member of the Board of Directors since 1990 and acted Daniel Daeniker as its Chairman from 1994 to Zürich, Switzerland 2006. After studying business 1963, elected until the administration at the University of 2021 Annual General Meeting St. Gallen, he joined the family- owned company in 1975 and was Daniel Daeniker joined the Board named to the Executive Board one of Directors in 2018. He is the Senior Partner of Homburger AG, year later. From 1990 to 1993, he held the position of CEO. Michael a commercial law firm in Zurich. Hilti is Trustee of the Martin Hilti He also holds a board mandate with dormakaba Holding AG Family Trust, member of the Board of the Hilti Foundation and Chair- (Switzerland), is a member of the Supervisory Board of Rothschild & man of the Hilti Art Foundation. Co SCA (France) and a lecturer at ▶ the University of Zurich. ▼ Heinrich Fischer Chairman of the Board of Directors Rüschlikon, Switzerland 1950, re-elected until the ▲ 2022 Annual General Meeting ▲ Carla De Geyseleer Prof. Dr. Pius Baschera Erembodegem, Belgium Zurich, Switzerland Heinrich Fischer was elected to 1968, elected until the 1950, re-elected until the the Board of Directors in 2007 and BOARD OF DIRECTORS became its Chairman in April 2017. 2022 Annual General Meeting 2022 Annual General Meeting Prior to his tenure at Hilti, Heinrich Carla De Geyseleer joined the Pius Baschera joined the Board Fischer, who holds degrees Hilti promotes a corporate culture in which employees listen to one another and feel Board of Directors in 2019. She of Directors in 2006. He served as in electrical engineering and welcome to voice their own opinions, be it in a brainstorming session as a team or when holds an Executive MBA from the its Chairman until April 2017 when technical physics (Swiss Federal meeting with the Board of Directors. The potential to exchange views and perspectives Institute for Management Devel- he ceded this position to Heinrich Institute of Technology Zurich) and provides the basis for creative, innovative and effective thought processes while uniting Fischer. After earning his doctorate business administration, was CEO opment in Lausanne, Switzerland. diversity with success. The link between a globally operating company and the caring Since October 2019 she has been in mechanical engineering and of Saurer AG. Heinrich Fischer is a business administration from the member of the Board of Directors characteristics of a family-owned operation is what has made Hilti into an attractive and CFO of Volvo Car Group in Sweden. of Tecan AG and Sensirion AG. award-winning employer. She previously served for several Swiss Federal Institute of Technology Zurich, he joined Hilti in 1979 years as CFO for SGS in Geneva, ▼ as Head of Financial Controlling Switzerland, Libertel B.V. and DHL Express Benelux, both located in for production. He served as the the Netherlands. Before that, she company’s CEO for 13 years beginning in 1994. Since April 2017 served in multiple 昀椀nance and business development roles on a he has been Speaker of the Martin Hilti Family Trust. regional and global level at DHL. Kim Fausing Barbara Milian Thoralfsson Sønderborg, Denmark Oslo, Norway 1964, re-elected until the 1959, re-elected until the 2022 Annual General Meeting 2020 Annual General Meeting Kim Fausing was elected to the Board of Directors in 2010. He holds Barbara Milian Thoralfsson was a degree in mechanical engineering elected to the Board of Directors in 2014. She has an MBA in marketing and an MBA. Kim Fausing joined Hilti in 1990 where he held various and 昀椀nance from Columbia management positions in Europe University and a BA in psychology and Asia until 2007. In 2007, he from Duke University. She has moved to the Danish Danfoss Group held various CEO positions in the and in 2008, he was appointed COO telecom and consumer goods and member of the Group Executive industries. Since 2006 she has been Team. In July 2017, he became an entrepreneur in the industrial President and CEO of the Danfoss sector building a company that Group. today is the largest recycler of plastics in Scandinavia. She is ▶ ▶ also a director on the boards of SCA AB and Essity AB in Sweden and G4S Plc in the UK. ▶ 64–65

2019 Hilti Company Report NON-FINANCIAL ASPECTS OF CORPORATE RESPONSIBILITY HUMAN RIGHTS ANTI-CORRUPTION ACTIVITIES Code of Conduct Organization Hilti strives to consistently improve the ethical and social The Compliance Management System (CMS) developed conditions associated with business activities and therefore over previous years was developed further in the year under mandates that its suppliers observe international require- review, notably establishing guidelines for regulating con- ments and ethical standards. The company uses audits to 昀氀icts of interest. In strategic terms, the CMS is based on the ensure that the standards are maintained. In case of serious guidelines contained in ISO 19600 and ISO 37001. violations of the Code of Conduct, such as employing child or forced labor, Hilti is authorized to immediately terminate Prevention any agreement. Hilti employees are regularly trained to observe the com- pany’s internal anti-corruption guidelines. Hilti continues Anti-discrimination to work on creating modern methods and approaches Hilti is convinced that commercial success and corporate to prevent corruption. Additionally, possible corporate responsibility are directly connected. In addition to a culture acquisitions are subject to appropriate prevention and that is based on integrity and mutual respect, globally valid inspection measures which meet the company’s high level anti-discrimination guidelines create transparency in order of compliance requirements. to ensure inclusive behavior in the workplace. ENVIRONMENTAL SOCIAL AND PROTECTION EMPLOYEE MATTERS Reducing CO2 emissions Corporate culture As part of its global CO strategy Hilti has taken various The Hilti Way describes a corporate culture characterized 2 measures from a trio of subjects that include deploying elec- by common values, exemplary management and the con- viction that corporate growth and personal development tric vehicles, greater energy ef昀椀ciency in manufacturing and purchasing greener energy. Having achieved large savings in go hand in hand. This is why Hilti invests in workshops each the previous years, the emissions per employee were further year that exclusively focus on corporate culture and that reduced by 2.7 percent. reach all employees and management levels at all locations. In 2019, some 42,000 employee workdays were spent on corporate culture workshops. Energy ef昀椀ciency Another focus topic in 2019 was the energy ef昀椀ciency in the production facilities. At Hilti’s manufacturing facility Occupational safety in Thueringen, Austria, for example, hall ventilators were Accident prevention is a central point of occupational safe- replaced by modern lamellar ventilators. In addition to sig- ty. Over the past several years, a program known as “near ni昀椀cantly reducing the amount of energy used, this measure miss management” was established in the manufacturing also improved the building’s air quality. Various measures facilities, warehouses and tool service centers as part of taken in the year under review resulted in the saving of a comprehensive lean initiative. The target is to identify several 100,000 kWh of energy solely at the company’s dangerous situations or near misses and to implement production facilities. corresponding preventive measures. Employee health You can 昀椀nd an overview of key environment-related 昀椀gures online at www.hilti.group. In 2019, Hilti once again implemented a number of mea- sures and campaigns aimed at promoting better health at various locations around the world. In addition to measures which are required legally, many local organizations also offer initiatives focusing on sport, nutrition and medical and psychological counselling. 66–67

2019 Hilti Company Report FINANCIAL FIGURES 68–69

2019 Hilti Company Report PROFITABLE GROWTH IN A CHALLENGING ENVIRONMENT CHF 783 million With sales growing by 4.3 percent to CHF 5.9 billion, the Hilti Group posted an operating result of CHF 783 million in 2019 (+7.4%). This increase came The Hilti Group’s operating result increased by 7.4 percent. in a challenging economic and currency environment and despite ongoing investments in the implementation of the corporate strategy as well as in new initiatives to strengthen the company’s future viability. Hilti produced solid sales growth in world had a negative impact on sales the construction site by also making At 13.3 percent (2018: 12.9%), this had – despite good natural hedging in CHF 294 million for the 2019 昀椀nancial main currencies – a negative impact year (2018: CHF 272 million). 2019 despite the noticeable economic in Swiss francs totaling 2 percentage wide-ranging investments in this area. 昀椀gure is back at its 2017 level. By slowdown. The North America and points. In 2019, for example, new centers for contrast, the return on capital em- of CHF -27 million on the operating Outlook for 2020 Europe business regions grew, in local digital marketing were developed ployed (ROCE), at 19.8 percent, is result (2018: CHF -20 million). 0.8 percentage points lower than the Economic forecasts point to further currencies, by 7.3 and 6.9 percent, re- Hilti continues to invest in prod- in Paris (France) and Plano (Texas, USA). A new customer management year before, which is solely due to a Very healthy balance sheet and weakening of the environment in 2020. spectively. The above-average growth ucts, services and software solid liquidity This development is underscored by rates in Central and Western Europe The Hilti Group also brought numer- system was also introduced to further change in accounting (IFRS 16). As a were particularly gratifying. Similar ous innovations (70) onto the mar- increase the quality of consulting and result of this change, lease liabilities The equity ratio was 4 percentage greater political uncertainty and trade ket in 2019, which was the result of the effectiveness of the company’s are allocated to the operating capital, points below the previous year’s con昀氀icts. The global construction to the previous year, Latin America market will not be able to escape 昀椀gure (55%). The main reason for posted an increase of 8.5 percent, the continued increase in expendi- direct sales model. Efforts to digitize and therefore this 昀椀gure increased these forces and it is expected to cool this is the introduction of IFRS 16 driven by the further recovery of the ture on research and development, corporate processes and new per- by CHF 385.2 million on a one-off Brazilian market. The performance which advanced by 3.2 percent to sonnel processes and systems were basis. However, the ROS and ROCE and the resulting rebalancing of further, with market growth in the low also driven forward. As of the end of continue to hover at the upper end lease liabilities. Nevertheless, the single digits. However, the Group is in the Eastern Europe / Middle East CHF 367 million. This investment is / Africa region was mixed (+3.7%). nearly 100 percent higher than in 2013 the year, the Group had 30,000 team of the target corridor of 10-12 and equity ratio continues to be more adhering to its strategic objectives members, with around 1000 more 15-20 percent, respectively. The free than the target level of 50 percent. and will use its solid 昀椀nancial position While the Middle East was affected ( CHF 189 million), when the Champion to make additional signi昀椀cant invest- At CHF 1.11 billion, cash and cash by political tensions, Eastern Europe 2020 strategy was developed, under- employees than a year ago. cash 昀氀ow (before the acquisition and saw double-digit growth. In the Asia/ scoring the company’s consistent sale of Group companies, incl. lease equivalents remained stable and were ments in innovative solutions and the slightly higher than the previous year digitalization of corporate processes. Paci昀椀c region, growth slowed to focus on product and service differen- Increased operating result and payments) climbed to CHF 303 million The Hilti Group expects sales growth (CHF 1.03 billion). Financial liabilities (2018: CHF 245 million). A signi昀椀cant 4.3 percent and was therefore below tiation. With the additional expansion pro昀椀tability expectations. Overall, Hilti posted of integrated solutions combining The operating result rose by 7.4 per- factor here is the normalization of the increased to CHF 1,029 million in 2020 in the mid-single digits and pro昀椀tability at around the same levels inventory level that had been built up mainly due to the adoption of IFRS almost triple the average growth in products, software and services, cent to CHF 783 million (2018: as in 2019. the global construction market and Hilti continues to provide innovative CHF 728 million). Net income was in 2018. The negative development 16 (2018: CHF 515 million). Given the gained further market share. A weaker concepts for the professional con- CHF 591 million (2018: CHF 546 million). of the euro exchange rate and the Group’s healthy 昀椀nancial situation, euro and the ongoing decline in value struction industry. Hilti has acknowl- Despite the continued investments, ongoing depreciation of other cur- the Board of Directors proposes the of a number of currencies around the edged increasing digitalization on the return on sales (ROS) grew slightly. rencies compared to the Swiss franc payout of an ordinary dividend of 70–71

2019 Hilti Company Report 60 21.0 20.1 KEY FIGURES 19.3 57 19.0 18.4 18.6 55 17.4 54 52 53 53 17.0 5,900 783 51 6,000 5,659 800 728 51 15.0 681 5,500 5,113 700 604 547 48 13.0 5,000 4,633 600 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 4,384 45 11.0 4,500 500 4,000 400 Total equity Return on equity (ROE) 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 in % total equity and liabilities in % (net income) 3,500 300 Net sales in CHF million Operating result in CHF million 1,200 1,160 1,140 1,029 591 1,000 1,130 1,114 1,114 600 546 15.0 13.0 13.3 12.9 13.3 521 12.5 800 1,100 550 13.0 500 481 11.0 595 600 490 474 515 1,070 450 410 9.0 1,046 400 7.0 400 1,040 1,031 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 350 5.0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Net income in CHF million Return on sales (ROS) in % 200 1,010 Financial debts* in CHF million Cash and cash equivalents in CHF million 21.0 21.1 20.6 19.8 22.0 19.0 400 500 320 18.0 360 335 325 412 294 14.0 320 303 400 334 290 272 289 289 264 10.0 280 248 245 300 246 260 243 6.0 240 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2.0 200 200 230 205 Return on capital employed (ROCE) in % Free cash 昀氀ow in CHF million 100 200 (before acquisition and disposal of subsidiaries, including lease payments) 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 0 170 Capital expenditures on intangible assets Dividend in CHF million and on property, plant and equipment in CHF million 400 355 367 32,000 29,004 30,006 350 311 29,000 26,881 300 280 26,000 23,385 24,619 240 * Includes lease liabilities due to the adaption of IFRS 16 Leases. 250 23,000 200 20,000 Please note 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 The following pages contain extracts from the 2019 Financial Report of the Hilti Group. Because these pages do not contain the full consolidated 昀椀nancial 150 17,000 statements, they do not present complete information about the 昀椀nancial position, 昀椀nancial performance and cash 昀氀ows of the Hilti Group for 2019. Research and development expenditure Employees at December 31 Complete information, including the notes to the consolidated 昀椀nancial statements, is contained in the 2019 Financial Report, which will be available on Employees at December 31 the Group’s website (www.hilti.group) from late March 2020. The full 2019 consolidated 昀椀nancial statements, which are included in the 2019 Financial in CHF million Report, have been prepared in accordance with International Financial Reporting Standards (IFRS). 72–73

2019 Hilti Company Report CONSOLIDATED BALANCE SHEET OF HILTI GROUP AS AT 31 DECEMBER Assets in CHF million 2019 2018 Equity and liabilities in CHF million 2019 2018 Intangible assets 893.4 808.3 Non-controlling interests 6.7 3.7 Property, plant and equipment 952.6 894.0 Equity attributable to equity holders of the parent 3,269.6 3,071.4 Right of use assets 435.2 - TOTAL EQUITY 3,276.3 3,075.1 Investment property 1.9 1.9 Provisions 12.5 13.6 Investments in associates and joint ventures 2.7 2.8 Employee bene昀椀ts 636.8 522.8 Deferred income tax assets 143.0 128.8 Deferred income tax liabilities 119.7 116.0 Other 昀椀nancial investments 16.6 12.2 Bonds 299.9 299.9 Trade and other receivables 800.9 683.5 Long-term bank borrowings 54.0 27.6 Derivative 昀椀nancial instruments 4.7 5.3 Lease liabilities 332.5 1.6 TOTAL NON-CURRENT ASSETS 3,251.0 2,536.8 Contract liabilities 90.6 71.6 Inventories 645.6 678.6 Trade and other payables 36.2 35.3 Trade and other receivables 1,249.6 1,244.2 TOTAL NON-CURRENT LIABILITIES 1,582.2 1,088.4 Current income taxes receivable 13.6 23.4 Provisions 8.4 9.4 Accrued income and prepayments 67.2 68.4 Employee bene昀椀ts 8.5 105.6 Derivative 昀椀nancial instruments 11.0 6.6 Trade and other payables 471.7 478.9 Financial assets at fair value through pro昀椀t or loss 27.3 23.0 Current income taxes payable 116.9 104.1 Cash and cash equivalents 1,113.8 1,030.9 Accrued liabilities and deferred income 461.7 445.5 TOTAL CURRENT ASSETS 3,128.1 3,075.1 Contract liabilities 108.3 114.7 TOTAL ASSETS 6,379.1 5,611.9 Bonds – 33.2 Short-term bank borrowings 226.0 153.9 Lease liabilities 116.1 0.1 Derivative 昀椀nancial instruments 3.0 3.0 TOTAL CURRENT LIABILITIES 1.520.6 1,448.4 TOTAL LIABILITIES 3,102.8 2,536.8 Please note As per year ending 2018 equity comprises share capital of 253,440 registered shares with a par value of CHF 500 each as well as reserves. TOTAL EQUITY AND LIABILITIES 6,379.1 5,611.9 All of the registered shares are owned by the Martin Hilti Family Trust. 74–75

2019 Hilti Company Report CONSOLIDATED INCOME STATEMENT CONSOLIDATED STATEMENT OF HILTI GROUP OF COMPREHENSIVE INCOME OF HILTI GROUP 2019 2018 in CHF million 2019 2018 in CHF million Net sales 5,899.9 5,659.3 NET INCOME 591.2 546.4 Other operating revenues 154.9 134.9 Net movement on cash 昀氀ow hedges (1.6) 2.7 TOTAL OPERATING REVENUES 6,054.8 5,794.2 Deferred tax on net movement on cash 昀氀ow hedges 0.2 (0.3) Change in inventory (25.4) 56.7 Foreign currency translation differences (48.1) (59.3) Material costs (1,623.0) (1,648.9) Deferred tax on foreign currency translation differences 0.2 0.8 Personnel expenses (2,452.8) (2,340.5) ITEMS THAT MAY BE SUBSEQUENTLY RECLASSIFIED TO THE INCOME STATEMENT (49.3) (56.1) Depreciation and amortization (374.0) (202.4) Remeasurements on employee bene昀椀ts (81.7) (25.3) Losses on trade and other receivables (51.9) (44.8) Deferred tax on remeasurements on employee bene昀椀ts 13.4 1.0 Other operating expenses (745.1) (885.9) ITEMS THAT WILL NEVER BE RECLASSIFIED TO THE INCOME STATEMENT (68.3) (24.3) TOTAL OPERATING EXPENSES (5,272.2) (5,065.8) OTHER COMPREHENSIVE INCOME (OCI) (117.6) (80.4) OPERATING RESULT 782.6 728.4 TOTAL COMPREHENSIVE INCOME 473.6 466.0 Other revenues and expenses (net) (13.5) (29.7) Finance costs (53.3) (31.1) Attributable to: NET INCOME BEFORE INCOME TAX EXPENSE 715.8 667.6 Equity holders of the parent 470.6 464.8 Non-controlling interests 3.0 1.2 Income tax expense (124.6) (121.2) NET INCOME 591.2 546.4 Attributable to: Equity holders of the parent 588.1 545.0 Non-controlling interests 3.1 1.4 Please note The notes to the consolidated 昀椀nancial statements are an integral part of, and should be read in conjunction with, the consolidated balance sheet, the consolidated income statement, the consolidated statement of comprehensive income and the consolidated cash 昀氀ow statement. 76–77

2019 Hilti Company Report CONSOLIDATED CASH FLOW STATEMENT OF HILTI GROUP 2019 2018 2019 2018 in CHF million in CHF million OPERATING RESULT 782.6 728.4 Proceeds from long-term borrowings 26.5 1.5 Repayment of long-term borrowings (4.5) (0.5) Depreciation and amortization 374.0 202.4 Payment of lease liabilities (136.2) - Interest received 5.2 5.6 Proceeds from / (repayment of) short-term borrowings 78,2 43.8 Interest paid (52.4) (31.3) Repayment of bonds (33.5) (111.6) Income tax paid (97.6) (101.0) Increase / (decrease) in liability to shareholder 0.1 0.2 (Increase) / decrease in inventories 25.4 (56.7) Dividend paid (272.4) (263.6) (Increase) / decrease in trade receivables (9.4) (13.6) CASH FLOW FROM FINANCING ACTIVITIES (341.8) (330.2) (Increase) / decrease in 昀椀nance lease receivables (180.9) (188.2) Increase / (decrease) in trade payables (10.3) (4.8) Exchange differences (14,0) (20.6) Increase / (decrease) in contract liabilities 17.2 12.7 TOTAL INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 82,9 (109.3) Change in non-cash items 14.6 61.0 Change in other net operating assets (36.2) (41.1) Cash and cash equivalents at January 1 1,030.9 1,140.2 CASH FLOW FROM OPERATING ACTIVITIES 832.2 573.4 CASH AND CASH EQUIVALENTS AT DECEMBER 31 1,113.8 1,030.9 Capital expenditure on intangible assets (202.6) (169.9) Capital expenditure on property, plant and equipment (209.3) (163.9) Acquisition of subsidiaries – (3.7) (Increase) / decrease in 昀椀nancial investments (11.4) 1.5 Disposal of intangible assets – 0.1 Disposal of property, plant and equipment 29.8 4.0 CASH FLOW FROM INVESTING ACTIVITIES (393.5) (331.9) 78–79

2019 Hilti Company Report KEY FIGURES INFORMATION 2019 SALES GROWTH OF HILTI GROUP YEAR ON YEAR Results in CHF million / % 2019 2018 Sales growth in CHF million 2019 2018 Change in CHF (%) Change local currencies (%) Net sales 5,900 5,659 Europe 2,900 2,809 3.2 6.9 Depreciation and amortization 374 202 North America 1,445 1,331 8.6 7.3 Operating result 783 728 Latin America 132 129 2.3 8.5 Net income before tax 716 668 Asia / Paci昀椀c 765 741 3.2 4.3 Net income 591 546 Eastern Europe / Middle East / Africa 658 649 1.4 3.7 Return on capital employed (ROCE) in % (operating result) 19.8 20.6 HILTI GROUP 5,900 5,659 4.3 6.3 Return on equity (ROE) in % (net income) 18.6 18.4 Return on sales (ROS) in % 13.3 12.9 Free cash 昀氀ow (before acquisition and disposal of subsidiaries) 303 245 2019 2018 Balance sheet in CHF million / % Total equity 3,276 3,075 Total equity in % Total equity and liabilities 51 55 Total non-current liabilities 1,582 1,088 Total current liabilities 1,521 1,448 Capital expenditures on intangible assets and on property, plant and equipment 412 334 Intangible assets and property, plant and equipment 1,846 1,702 Other non-current assets 1,405 835 Total current assets 3,128 3,075 Total assets 6,379 5,612 Dividend* 294 272 EMPLOYEES (as at December 31) 30,006 29,004 * Proposal by the Board of Directors 80–81

2019 Hilti Company Report2019 Hilti Company Report PUBLICATION DETAILS Publisher Photography Hilti Corporation Emma Bilz, Reinhard and Luca Fasching (Bregenz, Austria), Global Brand & Communications MyMollseye Productions (Amsterdam, The Netherlands), Timothy ORourke (Hong Kong), Uli Reitz and many PO Box 333, 9494 Schaan, Liechtenstein other photographers from Hilti regions worldwide Editor-in-chief Jessica Nowak Translation Chris Larson, Peschel Communications (Freiburg, Germany) Concept Hilti Global Brand & Communications Image processing pro.昀椀le Armin Ko昀氀er (Lustenau, Austria) Editorial team, text Production coordinator Sabrina Feliu (Lead), Matthias Hassler, Svenja Krauss, Martin Kussler, Chris Larson, Felix Reichstein, Lise Santschi Holger Thissen (Konstanz, Germany) Printed by The 2019 Hilti Company Report Design BVD Druck + Verlag AG is available online at: Benno Erhardt, Manfred Simon, 9494 Schaan, Liechtenstein zurgams Kommunikationsagentur www.hilti-companyreport.com (Dornbirn, Austria) We wish to thank our customers and partners for their kind support. The Company Report is published in German and English. Duplication, even in part, only with permission of the publisher. The complete Financial Report, the principles of corporate governance, the Group organi- zational chart, a list of consolidated companies and information on the Martin Hilti Family Trust can be found on the Internet at www.hilti.group. SC2020021101 82–83

2019 Hilti Company Report 2019 COMPANY REPORT T R O P E R Y N A P M O C 9 1 0 2 N O I T A OR P OR C I T L I H