Strong Growth in a Challenging Environment

In 2023, the Hilti Group completed the global rollout of 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 percent of the Group’s sales. This underlines Hilti’s strong focus on innovation and differentiation.

Hilti continued to invest in productivity, safety and sustainability to drive the transformation of the construction industry. Following the acquisition of 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.

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.

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 in innovation and software, as well as the appreciation of the Swiss franc, the return on sales (ROS) improved by 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 to 13.3 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 the operating result (2022: CHF -81 million).

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 for the decline include the purchase price for the 4PS acquisition, the repayment of a corporate bond tranche 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 performance indexes were added. Given the Group’s solid results and overall healthy financial situation, the Board of Directors proposes the payout of an ordinary dividend of CHF 279 million for the 2023 financial year (2022: 281 million). 

Hilti has accelerated its efforts to create a positive impact towards the environment, people and society and voluntarily reports on an annual basis in line with the Global Reporting Initiative standards. By doing so, Hilti demonstrates the governance structure and the integration of sustainability into the corporate strategy and discloses the sustainability performance in the mentioned areas. 

The auditor, PricewaterhouseCoopers AG, has provided limited assurance on the non-financial metrics of greenhouse gas emissions (GHG), energy consumption and lost time incident rate since the reporting period 2021. In 2023, Hilti initiated a project to prepare for the mandatory qualitative and quantitative sustainability reporting required by the European Union’s Corporate Sustainability Reporting Directive (CSRD) for the 2025 financial year report. In addition, a second project has been initiated in response to the European Union’s Taxonomy Regulation, as taxonomy disclosures will be part of the sustainability reporting. The focus of this project is to identify and quantify taxonomy-eligible and taxonomy-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 metric comprehensively assesses the contribution to the environment, people and society, all quantified in monetary terms. It will become a pivotal component in the value creation framework of the Hilti Group and will also be integrated into the performance management system in the future. This monetized impact valuation also provides valuable inputs in defining 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 importance of addressing emissions beyond its own operations and has thus committed to establishing targets in accordance 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 goal of reaching net-zero emissions by 2050 at the latest.

Hilti 2023 Sustainability Report

Construction 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 lead to 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.