Hilti 2018 Financial-Report PDF

2018
FINANCIAL REPORT
CONTENTS
Content
Key Figures 3
Management Report 5
Group Financial Statements 9
Financial Statements Hilti Corporation 80
Corporate Governance 96
Investor Information 100
2018 Financial Report | 1

Key Figures
KEY FINANCIAL INFORMATION OF HILTI GROUP

Key Figures
financial amounts in CHF million 2018 2017 2016 2015 2014
Results
Net sales 5,659 5,113 4,633 4,384 4,497
Depreciation and amortization 202 174 156 157 194
Operating result 728 681 604 547 537
Net income before tax 668 644 573 506 499
Net income 546 521 481 410 426
Return on capital employed (RoCE) in % (operating result) 20.6 21.1 21.0 19.0 16.8
Return on equity (RoE) in % (net income) 18.4 19.3 20.1 17.4 17.1
Return on sales (RoS) in % 12.9 13.3 13.0 12.5 11.9
Free cash flow* 245 325 248 335 383
Balance sheet
Total equity 3,075 2,873 2,512 2,272 2,449
Total equity in % Total equity and liabilities 55 53 53 52 53
Total non-current liabilities 1,088 1,129 994 1,010 1,053
Total current liabilities 1,448 1,442 1,208 1,125 1,106
Capital expenditures on intangible assets and on property, plant and
equipment 334 289 289 246 258
Intangible assets and property, plant and equipment 1,702 1,598 1,285 1,190 1,152
Other non-current assets 835 755 660 591 573
Total current assets 3,075 3,090 2,770 2,626 2,884
Total assets 5,612 5,444 4,714 4,407 4,609
Dividend** 272 264 243 205 455
Employees (as at December 31) 29,004 26,881 24,619 23,385 22,248
Information on bonds (nominal values)

0.875% bond 13/18 (early call for tax reasons only) – 100 100 100 100
1.875% bond 13/23 (early call for tax reasons only) 100 100 100 100 100
0.2% bond 17/24 (early call for tax reasons only) 100 100 – – –
0.4% bond 17/27 (early call for tax reasons only) 100 100 – – –
Euro bonds 12/15–19 (variable interest rates***) – 12 53 53 79
Euro bonds 12/15–19 (fixed interest rates****) 33 34 107 108 131
* Before acquisition and disposal of subsidiaries

** As proposed by the Board of Directors; 2014 included special dividends
*** Group opted for an early redemption in 2018
**** Bonds have restricted tradability
2017 numbers have been restated due to the adoption of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with
Customers. Numbers prior to 2017 have not been restated.

Managem ent Report
MANAGEMENT REPORT

Management Report
ACCELERATED SALES GROWTH AND RENEWED RISE IN PROFITABILITY

Management Report
The Hilti Group once again achieved double-digit growth in 2018, boosting sales by 10.7
percent in Swiss francs. When adjusted for acquisition effects the increase amounted to
9.7 percent. The operating result rose 7 percent to CHF 728 million. The primary factor
driving the company’s success once again proved to be the consistent implementation of
the Champion 2020 corporate strategy and significant investments in innovation, market
reach and infrastructure.
Hilti showed strong global growth in 2018. Both North America and Europe achieved double-
digit increases in local currencies, 10.4 and 10.6 percent, respectively. Latin America also grew
strongly, at 8.6 percent, although the region’s main markets continued to be hampered by
political uncertainties. Growth was also strong in the Eastern Europe / Middle East / Africa region
(+9.3%), although political tensions also had a negative influence on results in this region,
particularly in Russia, Turkey and Saudi Arabia. In Asia/Pacific the growth level increased to 7
percent but remained below expectations. Currency effects, particularly the slightly positive
trend for the Euro, contributed 0.9 percentage-points to sales in terms of Swiss francs.

Management Report
Significant ongoing investments Investments in innovation, market reach and infrastructure once again increased in 2018.
Expenditures in research and development rose by 14 percent to CHF 355 million. The
worldwide sales team grew by approximately 1000 people in 2018 and the total number of
Group employees at the end of 2018 was 29,004 (+8%). Altogether this further solidified the
foundation for profitable long-term growth. Expanding the company’s offering in terms of
software and digitalization was also a focus in 2018, and resulted in the creation of two
additional business units, which expanded the product portfolio to include further digital
solutions and services. In Paris, Hilti began setting up a worldwide center for digital marketing.
Hilti is also investing in its Group-wide IT infrastructure, for example by introducing the new ERP
system SAP S/4HANA at the end of November.
Operating result and net income The operating result was CHF 728 million (2017: CHF 681 million), an increase of 7 percent. Net
increase once again income rose to CHF 546 million (2017: 521 million). Development of both return on sales (ROS),
at 12.9 percent (2017: 13.3%), and return on capital employed (ROCE), at 20.6 percent (2017:
21.1%), were slightly lower than their previous-year levels due to the increased investment
amount. Both of these results, however, remained above the target corridor established in the
Champion 2020 corporate strategy of 10–12 percent for ROS and 15–20 percent for ROCE.
Free cash flow (before acquisition and disposal of subsidiaries) declined to CHF 245 million.
The difference to the 2017 amount (CHF 325 million), is the result of disproportionate growth in
fleet management and a Group-wide increase in warehouse capacities. The slight appreciation
of the Euro had next to no influence on the operating result due to the very positive natural
hedging established by the company. Various devaluations, primarily to the Russian ruble and
Turkish lira, were more noticeable. These could only be partly compensated for by local price
increases. Overall, currency effects negatively influenced the operating result by CHF 20 million.
Balance sheet and liquidity remain The equity ratio increased in 2018 to 55 percent (2017: 53%). Cash and cash equivalents were
strong at CHF 1031 million (2017: CHF 1140 million) while financial debt was at CHF 515 million (2017:
CHF 595 million). The Board of Directors has proposed an ordinary dividend payout of CHF 272
million for the 2018 financial year (2017: CHF 264 million).
Outlook After several very positive years, the market and currency environments look to become more
challenging, particularly considering the ongoing political and trade tensions. Taking this into
consideration, Hilti anticipates 2019 market growth in the low single digits and a market that will
be characterized by increasing volatility. The Group maintains its strategic direction while
continuing to invest in sales, products, services and digital solutions based on its solid financial
situation. In light of this, Hilti expects an increase in sales in the mid-to-upper single digits and
a growth level similar to that seen in 2018 for most key financial figures. The change to IFRS
accounting principles, which will be applied for the first time in 2019, is forecast to have a
negative influence on ROCE and equity ratio due to an increase in leasing liabilities.

Group Financial Statements
GROUP FINANCIAL STATEMENTS


CONSOLIDATED BALANCE SHEET
in CHF million Note 31.12.2018 31.12.2017 01.01.2017

Restated* Restated*
ASSETS
Intangible assets 7 808.3 732.0 471.7

Property, plant and equipment 8 894.0 866.3 812.8
Investment property 9 1.9 1.9 1.9
Investments in associates and joint ventures 10 2.8 2.6 –
Deferred income tax assets 11 128.8 154.1 174.6
Other financial investments 12 12.2 11.5 11.0
Trade and other receivables 14 683.5 579.4 481.3
Derivative financial instruments 16 5.3 5.6 7.0
Total non-current assets 2,536.8 2,353.4 1,960.3
Inventories 13 678.6 637.6 548.3

Trade and other receivables 14 1,244.2 1,214.7 990.8
Current income taxes receivable 26 23.4 11.6 22.4
Accrued income and prepayments 15 68.4 55.4 47.9
Financial assets at fair value through profit or loss 17 23.0 25.0 23.5
Cash and cash equivalents 18 1,030.9 1,140.2 1,113.8
Total current assets 3,075.1 3,090.2 2,752.6
TOTAL ASSETS 5,611.9 5,443.6 4,712.9
* See note 2.2
The notes are an integral part of these Group financial statements.

in CHF million Note 31.12.2018 31.12.2017 01.01.2017

Restated* Restated*
EQUITY AND LIABILITIES
Non-controlling interests 3.7 1.5 0.2

Equity attributable to equity holders of the parent 3,071.4 2,871.2 2,462.8
Total equity 20 3,075.1 2,872.7 2,463.0
Provisions 21 13.6 16.5 16.4

Employee benefits 22 522.8 550.9 582.4
Deferred income tax liabilities 11 116.0 91.9 48.3
Bonds 23 299.9 334.4 242.4
Long-term bank borrowings 24 27.6 30.9 28.4
Contract liabilities 29 71.6 64.2 55.6
Trade and other payables 25 36.9 40.6 21.9
Total non-current liabilities 1,088.4 1,129.4 995.4
Provisions 21 9.4 8.7 15.5

Employee benefits 22 105.6 8.7 6.6
Trade and other payables 25 479.0 479.1 377.3
Current income taxes payable 26 104.1 122.1 124.4
Accrued liabilities and deferred income 27 445.5 470.1 415.5
Contract liabilities 29 114.7 115.7 100.9
Bonds 23 33.2 111.7 117.1
Short-term bank borrowings 28 153.9 117.7 86.0
Total current liabilities 1,448.4 1,441.5 1,254.5
Total liabilities 2,536.8 2,570.9 2,249.9
TOTAL EQUITY AND LIABILITIES 5,611.9 5,443.6 4,712.9
* See note 2.2

CONSOLIDATED INCOME STATEMENT
in CHF million Note 2018 2017

Restated*
Net sales 29 5,659.3 5,112.6

Other operating income 29 134.9 114.9
Total operating income 5,794.2 5,227.5
Change in inventory 30 56.7 50.5

Material costs 30 (1,648.9) (1,484.1)
Personnel expenses 31 (2,340.5) (2,109.9)
Depreciation and amortization 32 (202.4) (173.5)
Losses on trade and other receivables (44.8) (36.0)
Other operating expenses 33 (885.9) (793.9)
Total operating expenses (5,065.8) (4,546.9)
Operating result 728.4 680.6
Other income and expenses (net) 34 (29.7) (9.3)

Finance costs 35 (31.1) (27.6)
Net income before income tax expense 667.6 643.7
Income tax expense 36 (121.2) (123.1)
Net income 546.4 520.6
Attributable to:
Equity holders of the parent 545.0 519.3
Non-controlling interests 1.4 1.3
* See note 2.2

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Restated*
Net movement on cash flow hedges 16 2.7 (4.5)

Deferred tax on net movement on cash flow hedges 20 (0.3) 0.6
Foreign currency translation differences 20 (59.3) 54.4
Deferred tax on foreign currency translation differences 20 0.8 (0.5)
Items that may be subsequently reclassified to the income
statement (56.1) 50.0
Remeasurements on employee benefits 22 (25.3) 96.1

Deferred tax on remeasurements on employee benefits 20 1.0 (13.7)
Items that will never be reclassified to the income statement (24.3) 82.4
Other comprehensive income (OCI) (80.4) 132.4
Total comprehensive income 466.0 653.0
Attributable to:
Equity holders of the parent 464.8 651.7
Non-controlling interests 1.2 1.3
* See note 2.2

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
in CHF million Share and Capital Foreign Cash flow Retained Equity Non- Total
PS reserves currency hedging earnings attributable controlling equity
capital translation reserve to equity interests
reserve holders of
the parent
Equity at January 1, 2018 126.7 17.4 (376.8) 3.4 3,100.5 2,871.2 1.5 2,872.7
Net income recognized in income
statement – – – – 545.0 545.0 1.4 546.4
Cash flow hedges – – – 2.4 – 2.4 – 2.4
Remeasurements on employee
benefits – – – – (24.3) (24.3) – (24.3)
Foreign currency translation
differences – – (58.3) – – (58.3) (0.2) (58.5)
Total comprehensive income – – (58.3) 2.4 520.7 464.8 1.2 466.0
Dividend paid – – – – (263.6) (263.6) – (263.6)

Change in non-controlling interests – – 1.0 – (2.0) (1.0) 1.0 –
Equity at December 31, 2018 126.7 17.4 (434.1) 5.8 3,355.6 3,071.4 3.7 3,075.1
in CHF million Share and Capital Foreign Cash flow Retained Equity Non- Total
PS reserves currency hedging earnings attributable controlling equity
capital translation reserve to equity interests
reserve holders of
the parent
Equity at December 31, 2016 126.7 17.4 (430.7) 7.3 2,786.9 2,507.6 4.6 2,512.2
Effects of changes in accounting
policies* – – – – (44.8) (44.8) (4.4) (49.2)
Equity at January 1, 2017* 126.7 17.4 (430.7) 7.3 2,742.1 2,462.8 0.2 2,463.0
Net income recognized in income
statement – – – – 519.3 519.3 1.3 520.6
Cash flow hedges – – – (3.9) – (3.9) – (3.9)
Remeasurements on employee
benefits – – – – 82.4 82.4 – 82.4
Foreign currency translation
differences – – 53.9 – – 53.9 – 53.9
Total comprehensive income – – 53.9 (3.9) 601.7 651.7 1.3 653.0
Dividend paid – – – – (243.3) (243.3) – (243.3)

Equity at December 31, 2017* 126.7 17.4 (376.8) 3.4 3,100.5 2,871.2 1.5 2,872.7
* Restated, see note 2.2
For further details on transactions with non-controlling interests see note (5) and on equity see note (20).

CONSOLIDATED CASH FLOW STATEMENT

Restated*

Depreciation and amortization 32 202.4 173.5
(Increase)/decrease in inventories 30 (56.7) (50.5)
(Increase)/decrease in trade receivables 14 (13.6) (56.1)
(Increase)/decrease in finance lease receivables 14 (188.2) (143.2)
Increase/(decrease) in trade payables 25 (4.8) 65.6
Increase/(decrease) in contract liabilities 29 12.7 16.4
Change in other non-cash items and other net operating assets 75.2 84.4
Cash flow from operating activities 573.4 610.7
Capital expenditure on intangible assets 7 (169.9) (157.4)

Capital expenditure on property, plant and equipment 8 (163.9) (131.6)
Acquisition of subsidiaries 5 (3.7) (127.0)
(Increase)/decrease in financial investments 1.5 (5.9)
Disposal of intangible assets 0.1 1.9
Disposal of property, plant and equipment 4.0 6.9
Cash flow from investing activities (331.9) (413.1)
Proceeds from long-term borrowings 1.5 4.6

Repayment of long-term borrowings (0.5) (3.1)
Proceeds from (repayment of) short-term borrowings 28 43.8 (20.8)
Proceeds from issuance of bonds 23 – 200.0
Repayment of bonds 23 (111.6) (116.2)
Increase/(decrease) in liability to shareholder 0.2 0.1
Dividend paid 20 (263.6) (243.3)
Cash flow from financing activities (330.2) (178.7)
Exchange differences (20.6) 7.5
Total increase/(decrease) in cash and cash equivalents (109.3) 26.4
Cash and cash equivalents at January 1 1,140.2 1,113.8

Cash and cash equivalents at December 31 1,030.9 1,140.2
Cash flow from operating activities includes

Interest received 5.6 4.0
Interest paid (31.3) (29.3)
Income tax paid (101.0) (89.3)
* See note 2.2

Notes to the Consolidated Financial Statements
otes to the Co nsolidated Financial Statem ents

(1) General information
(2) Sum mary o f signi ficant acco unti ng policies
(1) General information The Hilti Group (the Group) comprises the Hilti Corporation and its domestic and foreign
subsidiaries. The Group supplies the worldwide construction industry with technologically
leading products, systems and services that provide construction professionals with innovative
solutions and superior added value. Its product range includes equipment and systems covering
drilling and demolition, direct fastening, diamond and anchoring, firestop and foam, installation,
measuring, screw fastening, and cutting and sanding.
The Hilti Corporation is a limited liability company incorporated and domiciled in the Principality
of Liechtenstein. The Group’s headquarters and the address 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 and
development locations worldwide. The Group operates in over 120 countries and has over
29,000 employees worldwide.
These consolidated financial statements were approved for issue by the Board of Directors on
March 13, 2019.
(2) Summary of significant The principal accounting policies applied in the preparation of these consolidated financial
accounting policies statements are set out below. These policies have been consistently applied to both years
presented, unless otherwise stated.
(2.1) Basis of preparation These consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS). Preparation of the financial statements in accordance
with IFRS meets the requirements of Liechtenstein’s corporations law, the ‘Personen- und
Gesellschaftsrecht (PGR)’.
The consolidated financial statements have been prepared under the historical cost convention,
as modified by the revaluation of certain financial assets and financial liabilities (including
derivative financial instruments) at fair value through profit or loss.
The preparation of financial statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management to exercise its judgment in the
process of applying the Group’s accounting policies. The accounting estimates and judgments
reflected in the 2018 consolidated financial statements that are critical in the context of the
Group’s financial position and financial performance are explained in note (3).
(2.2) Changes in accounting With effect from January 1, 2018, the following new IFRS standards were applied, using the full
policies and estimates retrospective method:
IFRS 9 Financial Instruments

IFRS 15 Revenue from Contracts with customers
As a result of the changes in the entity’s accounting policies, prior-year financial statements
had to be restated. The following tables show the adjustments recognized for each individual
line item. The adjustments are explained in more detail by standard below.
Adoption of IFRS 9 Financial Instruments
On January 1, 2018 (the date of initial application of IFRS 9), the Group’s management has
assessed which business models apply to the financial assets held by the Group and has
classified its financial instruments into the appropriate IFRS 9 categories. The impacts of IFRS
9 on the Groups financial statements are as follows:

Categories
The previous categories for financial assets and liabilities have been replaced by amortized
costs and fair value through profit or loss (FVP&L). The classification depends on the related
business model for managing the financial assets and the contractual terms of the cash flows.
Following the Group’s management assessment, no material changes were identified in the
classification of financial assets and liabilities.
Impairment
The impairment changed from an incurred loss model in IAS 39 into a forward-looking expected
credit losses (ECL) model also considering the geographical region. The accounting policies on
impairment for trade receivables are outlined in detail in note (2.8). That change had an impact
on the valuation of trade receivables with significant financing component only. The impact on
the trade receivables without significant financing composed was not material.
Adoption of IFRS 15 Revenue from Contracts with Customers
On January 1, 2018 (the date of initial application of IFRS 15), the Group has implemented a
five-step model applicable to all contracts with customers. The new standard is based on the
principle that revenue is recognized when control of a good or service is transferred to a
customer.
The adoption of the standard resulted in changes in accounting policies and adjustments to the
amounts recognized in the financial statements. In accordance with the transition provisions in
IFRS 15, the Group has adopted the new rules using the full retrospective method without using
the practical expedients and has restated comparatives for the 2017 financial year.
The Group disaggregated revenue from contracts with customers into the following categories
of revenue recognition patterns: sales contracts of goods, warranties (covering repairs) and
services. These categories were analyzed with the five-step approach to identify all performance
obligations and to allocate the transaction price to each performance obligation. The revenue
related to the service warranty is considered as revenue recognized over a period of time, all
other revenues are recognized at a point in time.
Net sales of goods and services

In the course of the IFRS 15 implementation the Group standardized the point in time when
revenue for sold goods is recognized. Revenues are recognized at a point in time, upon delivery
of goods or when the services are rendered, when the control of the product has been
transferred to the customer and the Group satisfied the performance obligation. Revenues
related to goods for which the control has not yet been transferred to the customer will be
recognized only in the following period. Following the IFRS 15 implementation, certain deliveries
were reconsidered and the related impact on inventory, account receivables, sales and cost of
goods is illustrated in the table below.
Service warranty
The Group offers its customers a warranty covering all repairs for a certain period after the sale.
These warranty obligations are considered as a separate performance obligation. While in the
past a provision was recognized for the estimated cost of the warranty, upon adoption of the
IFRS 15 the provision was fully released, the revenue related to the warranty is deferred and the
contract liabilities are shown in a separate line item on the balance sheet and are split in current
and non-current.
Summary of impacts
The following tables summarize the impacts resulting from the above changes in accounting
policies on relevant positions of the Group’s financial position, comprehensive income and cash
flows.

CONSOLIDATED BALANCE SHEET AS AT JANUARY 1, 2017
in CHF million Reported Adjustment Adjustment Restated

IFRS 15 IFRS 9
ASSETS
Intangible assets 471.7 – – 471.7

Property, plant and equipment 812.8 – – 812.8
Investment property 1.9 – – 1.9
Deferred income tax assets 158.3 15.0 1.3 174.6
Other financial investments 11.0 – – 11.0
Trade and other receivables 481.3 – – 481.3
Derivative financial instruments 7.0 – – 7.0
Total non-current assets 1,944.0 15.0 1.3 1,960.3
Inventories 542.5 5.8 – 548.3

Trade and other receivables 1,014.2 (18.7) (4.7) 990.8
Current income taxes receivable 22.4 – – 22.4
Accrued income and prepayments 47.9 – – 47.9
Financial assets at fair value through profit or loss 23.5 – – 23.5
Cash and cash equivalents 1,113.8 – – 1,113.8
Total current assets 2,770.2 (12.9) (4.7) 2,752.6
TOTAL ASSETS 4,714.2 2.1 (3.4) 4,712.9


IFRS 15 IFRS 9
Non-controlling interests 4.6 (4.4) – 0.2

Equity attributable to equity holders of the parent 2,507.6 (41.4) (3.4) 2,462.8
Total equity 2,512.2 (45.8) (3.4) 2,463.0
Provisions 70.4 (54.0) – 16.4

Employee benefits 582.4 – – 582.4
Deferred income tax liabilities 48.3 – – 48.3
Bonds 242.4 – – 242.4
Long-term bank borrowings 28.4 – – 28.4
Contract liabilities – 55.6 – 55.6
Trade and other payables 21.9 – – 21.9
Total non-current liabilities 993.8 1.6 – 995.4
Provisions 70.1 (54.6) – 15.5

Current income taxes payable 124.4 – – 124.4
Accrued liabilities and deferred income 415.5 – – 415.5
Bonds 117.1 – – 117.1
Short-term bank borrowings 86.0 – – 86.0
Total current liabilities 1,208.2 46.3 – 1,254.5
Total liabilities 2,202.0 47.9 – 2,249.9
TOTAL EQUITY AND LIABILITIES 4,714.2 2.1 (3.4) 4,712.9

CONSOLIDATED BALANCE SHEET AS AT DECEMBER 31, 2017

IFRS 15 IFRS 9
ASSETS
Intangible assets 732.0 – – 732.0

Property, plant and equipment 866.3 – – 866.3
Investment property 1.9 – – 1.9
Investments in associates and joint ventures 2.6 – – 2.6
Deferred income tax assets 141.1 11.4 1.6 154.1
Other financial investments 11.5 – – 11.5
Trade and other receivables 579.4 – – 579.4
Total non-current assets 2,340.4 11.4 1.6 2,353.4
Inventories 630.9 6.7 – 637.6

Trade and other receivables 1,243.4 (22.8) (5.9) 1,214.7
Current income taxes receivable 11.6 – – 11.6
Accrued income and prepayments 55.4 – – 55.4
Financial assets at fair value through profit or loss 25.0 – – 25.0
Cash and cash equivalents 1,140.2 – – 1,140.2
Total current assets 3,112.2 (16.1) (5.9) 3,090.2
TOTAL ASSETS 5,452.6 (4.7) (4.3) 5,443.6


IFRS 15 IFRS 9

Equity attributable to equity holders of the parent 2,926.0 (50.5) (4.3) 2,871.2
Total equity 2,932.0 (55.0) (4.3) 2,872.7
Provisions 70.6 (54.1) – 16.5

Deferred income tax liabilities 98.1 (6.2) – 91.9
Bonds 334.4 – – 334.4
Long-term bank borrowings 30.9 – – 30.9
Total non-current liabilities 1,125.5 3.9 – 1,129.4
Provisions 78.0 (69.3) – 8.7

Current income taxes payable 122.1 – – 122.1
Accrued liabilities and deferred income 470.1 – – 470.1
Bonds 111.7 – – 111.7
Short-term bank borrowings 117.7 – – 117.7
Total current liabilities 1,395.1 46.4 – 1,441.5
Total liabilities 2,520.6 50.3 – 2,570.9
TOTAL EQUITY AND LIABILITIES 5,452.6 (4.7) (4.3) 5,443.6

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDING

DECEMBER 31, 2017
IFRS 15 IFRS 9
Net sales 5,133.0 (20.4) – 5,112.6

Other operating income 114.9 – – 114.9
Total operating income 5,247.9 (20.4) – 5,227.5
Change in inventory 49.6 0.9 – 50.5

Material costs (1,493.0) 8.9 – (1,484.1)
Personnel expenses (2,109.9) – – (2,109.9)
Depreciation and amortization (173.5) – – (173.5)
Losses on trade and other receivables (35.1) – (0.9) (36.0)
Other operating expenses (793.9) – – (793.9)
Total operating expenses (4,555.8) 9.8 (0.9) (4,546.9)
Operating result 692.1 (10.6) (0.9) 680.6
Other income and expenses (net) (9.3) – – (9.3)

Finance costs (27.6) – – (27.6)
Net income before income tax expense 655.2 (10.6) (0.9) 643.7
Income tax expense (125.6) 2.3 0.2 (123.1)
Net income 529.6 (8.3) (0.7) 520.6
Attributable to:
Equity holders of the parent 528.0 (8.0) (0.7) 519.3

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE

YEAR ENDING DECEMBER 31, 2017
IFRS 15 IFRS 9
Net income 529.6 (8.3) (0.7) 520.6
Net movement on cash flow hedges (4.5) – – (4.5)

Deferred tax on net movement on cash flow hedges 0.6 – – 0.6
Foreign currency translation differences 55.5 (0.9) (0.2) 54.4
Deferred tax on foreign currency translation differences (0.5) – – (0.5)
Items that may be subsequently reclassified to the income
statement 51.1 (0.9) (0.2) 50.0
Remeasurements on employee benefits 96.1 – – 96.1

Deferred tax on remeasurements on employee benefits (13.7) – – (13.7)
Items that will never be reclassified to the income statement 82.4 – – 82.4
Other comprehensive income (OCI) 133.5 (0.9) (0.2) 132.4
Total comprehensive income 663.1 (9.2) (0.9) 653.0
Attributable to:
Equity holders of the parent 661.7 (9.1) (0.9) 651.7

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

IFRS 15 IFRS 9
Equity at January 1, 2017 2,512.2 (45.8) (3.4) 2,463.0

Net income recognized in income statement 529.6 (8.3) (0.7) 520.6
Cash flow hedges (3.9) – – (3.9)
Remeasurements on employee benefits 82.4 – – 82.4
Foreign currency translation differences 55.0 (0.9) (0.2) 53.9
Total comprehensive income 663.1 (9.2) (0.9) 653.0
Dividend paid (243.3) – – (243.3)

Equity at December 31, 2017 2,932.0 (55.0) (4.3) 2,872.7

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDING

DECEMBER 31, 2017
IFRS 15 IFRS 9
Net income 529.6 (8.3) (0.7) 520.6

Depreciation and amortization 173.5 – – 173.5
(Increase)/decrease in inventories (49.6) (0.9) – (50.5)
(Increase)/decrease in trade receivables (60.1) 4.0 – (56.1)
(Increase)/decrease in finance lease receivables (144.1) – 0.9 (143.2)
Increase/(decrease) in trade payables 65.6 – – 65.6
Increase/(decrease) in contract liabilities – 16.4 – 16.4
Change in other non-cash items and other net operating assets 95.8 (11.2) (0.2) 84.4
Cash flow from operating activities 610.7 – – 610.7
Cash flow from investing activities (413.1) – – (413.1)
Cash flow from financing activities (178.7) – – (178.7)
Exchange differences 7.5 – – 7.5
Total increase/(decrease) in cash and cash equivalents 26.4 – – 26.4
Cash and cash equivalents at January 1 1,113.8 – – 1,113.8

Cash and cash equivalents at December 31 1,140.2 – – 1,140.2

(2.3) Method of consolidation
Subsidiaries Subsidiaries are all entities over which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over the entity. Subsidiaries are fully
consolidated from the date when control is transferred to the Group. They are deconsolidated
from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is the fair values of the assets
transferred, the liabilities incurred to the former owners of the acquiree and the equity interests
issued by the Group. The consideration transferred includes the fair value of any asset or liability
resulting from a contingent consideration arrangement. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are measured initially at
their fair values at the acquisition date. The Group recognizes any non-controlling interest in the
acquiree at the non-controlling interest’s proportionate share of the recognized amounts of
acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred for the amount of any non-controlling interest in the
acquiree and the fair value at the acquisition date of any previous equity interest in the acquiree
over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total of
consideration transferred, non-controlling interest recognized and previously held interest
measured is less than the fair value of the net assets of the subsidiary acquired in the case of a
bargain purchase, the difference is recognized directly in the income statement.
Intercompany transactions, balances and unrealized gains and losses on transactions between
Group companies are eliminated. Accounting policies of subsidiaries are changed, where
necessary, to ensure consistency with the policies adopted by the Group.
Disposal of subsidiaries When the Group ceases to have control, any retained interest in the entity is remeasured to its
fair value at the date when control is lost, with the change in carrying amount being recognized
in ‘other income and expenses (net)’ in profit or loss. The fair value is the initial carrying amount
for the purposes of subsequently accounting for the retained interest as an associate, joint
venture or financial asset. In addition, any amounts previously recognized in ‘other
comprehensive income (OCI)’ in respect of that entity are accounted for as if the Group had
directly disposed of the related assets or liabilities. This may mean that amounts previously
recognized in OCI are reclassified to ‘other income and expenses (net)’ in profit or loss.
Associates Associates are all entities over which the Group has significant influence but not control,
generally representing a shareholding of between 20% and 50% of the voting rights.
Investments in associates are accounted for using the equity method of accounting and are
initially recognized at cost.
Joint operations and joint Investments in joint arrangements are classified as either joint operations or joint ventures
ventures depending on the contractual rights and obligations of each investor.
The Group has joint operations and as a joint operator accounts for the assets, liabilities,
revenues and expenses in relation to its interest in a joint operation in accordance with the
IFRSs applicable to the particular assets, liabilities, revenues and expenses.
The Group has a joint venture arising from the changes in the organizational structure of Hilti
South Africa and as a joint venturer accounts for that investment using the equity method in
accordance with IAS 28 Investments in Associates and Joint Ventures.

(2.4) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision-maker. The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of 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 and services are relevant for all customers and the EB
steers the business on Group level as one unit. In accordance with IFRS 8 Operating Segments
the Group therefore operates in only one single operating segment. The single operating
segment disclosure is accordingly set out in the balance sheet, income statement, statement of
comprehensive income, statement of changes in equity and the cash flow statement.
Breakdown of the segment information in terms of products, services and geographical areas
is provided in note (37).
(2.5) Foreign currency translation
Functional and presentation Items included in the financial statements of each of the Group’s companies are measured using
currency the currency of the primary economic environment in which the entity operates (the functional
currency). The consolidated financial statements are presented in Swiss francs, which is the
functional and presentation currency of the Hilti Corporation.
Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates
of monetary assets and liabilities denominated in foreign currencies, excluding long-term
intercompany accounts receivables and payables, are recognized in the income statement.
Foreign exchange gains and losses relating to long-term intercompany foreign currency loans
are regarded as part of the net investment in the foreign entity and are recognized in OCI.
Translation differences on non-monetary items, such as equities held at fair value through profit
or loss, are reported as part of the fair value gain or loss.
Translation on consolidation The results and financial position of all the Group’s companies that have a functional currency
different from the Group’s presentation currency are translated on consolidation into the
Group’s presentation currency as follows:
• assets and liabilities at the closing spot exchange rates at the balance sheet date
(closing rate) and
• income and expense items at year-to-date sales-weighted average exchange rates
(average rate) (to provide a reasonable approximation of the cumulative effect of the
rates prevailing on the transaction dates).
Gains and losses arising from the translation of the financial statements of foreign operations
are recognized in OCI.
On the foreign operation’s disposal, applicable exchange differences are reclassified to the
income statement and recognized as part of the gain or loss on disposal. When a foreign
operation is acquired, any applicable goodwill and fair value adjustments are treated as assets
and liabilities of the foreign entity and are translated at the closing rate.

The following exchange rates of principal currencies were applied for translation into Swiss
francs:
in CHF Average rates Closing rates

2018 2017 2018 2017
1 CAD 0.755 0.759 0.722 0.778

1 EUR 1.155 1.112 1.127 1.170
1 GBP 1.307 1.269 1.260 1.319
100 JPY 0.886 0.878 0.895 0.867
100 RUB 1.554 1.684 1.414 1.686
1 USD 0.978 0.984 0.984 0.976
(2.6) Intangible assets Goodwill is considered to have an indefinite useful life and is accordingly not amortized. Goodwill
is tested for impairment annually, or when indicators of impairment exist, and recognized at cost
less any accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains
and losses on the disposal of an entity include the carrying amount of any goodwill relating to
the entity sold.
Development costs are recognized as an asset only when the prerequisite criteria under IAS 38
Intangible Assets are met. In substance, these criteria include the condition that there will be
probable future benefits that are directly attributable to the costs. In practice, only costs on
certain product development projects that are subjected to a stringent review process, meet this
condition. Such assets are normally amortized on a straight-line basis over a five-year period.
All other development costs are recognized directly as an expense when incurred.
Other intangible assets consist of database and application software as well as manufacturing
patents, which are recognized at historical cost less accumulated amortization and accumulated
impairment losses, if any, and of customer contracts, patents, trademark and licenses, which
were acquired as part of a business combination and initially recognized at fair value at the date
of acquisition. They are amortized on a 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.
(2.7) Property, plant and Land is valued at historical cost less accumulated impairment losses, if any. Other property,
equipment plant and equipment are recognized at historical cost less accumulated depreciation and
accumulated impairment losses, if any. Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Historical cost may also include transfers from equity
of any gains/losses on qualifying cash flow hedges of foreign currency purchases of tangible
fixed assets.
Depreciation is calculated using the straight-line method to allocate the historical costs of assets
over their estimated useful lives. The estimated useful lives of depreciable property, plant and
equipment are:
Buildings 20 to 40 years
Plant and machinery 5 to 15 years
Other operating assets 2 to 7 years

(2.8) Financial assets 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 (FVP&L).
The classification is based on the business model for managing the respective financial assets
and their contractual cash flow characteristics. Management determines the classification of its
financial assets at initial recognition and re-evaluates this designation when, and only when, it
changes the business model for managing the related financial assets.
Financial assets measured A financial asset is measured at amortized cost if:

at amortized cost • it is held within a business model whose objective is to hold financial assets to
collect contractual cash flows, and
• the contractual terms give rise to cash flows that are solely of payments of principal
and interest (SPPI).
This category includes loans and receivables, which are non-derivative financial assets with fixed
or determinable payments that are not quoted in an active market. They arise when, in the
ordinary course of business, the Group provides money, goods or services directly to a debtor
with no intention of trading the receivable. They are included in current assets, except for
maturities greater than 12 months after the balance sheet date. These are classified as non-
current assets. Loans and receivables are included in ‘trade and other receivables’ (see note
(2.10)).
Financial assets measured This category has two subcategories: financial assets held for trading and those mandatorily
at fair value through profit measured at fair value through profit or loss. A financial asset is classified as held for trading if
or loss acquired principally for the purpose of selling in the short-term or if so designated by
management. Derivatives are also categorized as held for trading unless they are designated as
hedges. A financial asset is mandatorily measured at fair value through profit or loss if:
• it is not held within a business model whose objective is to hold financial assets to
collect contractual cash flows or to hold them to collect contractual cash flows and
sell, and/or
• the contractual terms of the financial asset do not meet the SPPI conditions, and/or
• it is not held for trading.
Assets in this category are classified as current assets if they are either held for trading or are
expected to be realized within 12 months of the balance sheet date. Further information
concerning financial assets measured at fair value through profit or loss is given in notes (12)
and (17).
Accounting policies applied The accounting policies applied to financial assets are as follows:
to financial assets
For all classes of financial assets, purchases and sales are recognized on the trade date (the
date on which the Group commits to purchase or sell the asset). Financial assets at fair value
through profit or loss are initially recognized at fair value with applicable transaction costs
immediately recognized in the income statement. Financial assets measured at amortized costs
are initially recognized at fair value plus directly attributable transaction costs. Trade receivables
that do not have a significant financing component are initially measured at their transaction
price. Financial assets are derecognized when the rights to receive cash flows from the assets
have expired or have been transferred and the Group has transferred substantially all risks and
rewards of ownership.
After initial recognition, loans and receivables are measured at amortized cost determined using
the effective interest method less allowances for expected credit losses (ECL). Financial assets
at fair value through profit or loss are subsequently measured at fair value, with realized and

unrealized gains and losses arising from changes in the fair value recognized in the income
statement in the period they arise.
Financial assets and liabilities are offset and the net amount reported in the balance sheet, when
there is a legally enforceable right to offset the recognized amounts and there is an intention to
settle on a net basis or realize the asset and settle the liability simultaneously.
The fair values of quoted investments are based on current bid prices. If current bid prices are
not available, fair value is determined using other information such as that derived from the
market prices of other similar instruments, discounted cash flow analysis and option pricing
models refined to reflect the issuer’s specific circumstances.
ECL are recognized for financial assets measured at amortized cost and receivables with
significant financing component. 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, discounted at the
original effective interest rate. ECL are measured in a way that reflects an unbiased and
probability-weighted amount that is determined by evaluating a range of possible outcomes, the
time value of money and available, reasonable and supportable information.
For trade receivables and contract assets that do not contain a significant financing component
in accordance with IFRS 15, the Group elected to adopt the simplified approach, which allows
entities to use a provision matrix to recognize lifetime ECL. The provision matrix is based on
historical loss patterns, reflecting the customers’ payment behavior in the different countries,
adjusted for forward-looking estimates.
Trade receivables are identified according to one of the three following categories: normal,
doubtful, bad. The amount of the loss allowances is measured at initial recognition and
throughout the life of the receivable, using an aging calculation applied to all trade receivables,
which reflects the expected credit losses that result from all possible default events over the
expected life of the receivable. When information has been obtained indicating that non-
collection risk exists on the financial asset the trade receivables are fully impaired. A write-off is
made when all or part of the financial asset is deemed uncollectible or forgiven.
For receivables with significant financing component the Group elected to calculate the 12-
month expected credit loss model based on the historical default rates.
(2.9) Inventories Inventories are stated at the lower of cost and net realizable value. Cost is determined using the
standard 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 of current conditions. Cost determined under
this method approximates cost determined under the FIFO method.
(2.10) Trade receivables Trade receivables (see the financial assets measured at amortized cost category of financial
assets in note (2.8) above) are recognized initially at their transaction price and subsequently
measured at amortized cost using the effective interest method, less allowances for the expected
credit losses.
(2.11) Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks and other
short-term highly liquid investments with original maturities of three months or less.
(2.12) Borrowings Borrowings are recognized initially at fair value net of transaction costs incurred. Borrowings are
subsequently measured at amortized cost with any difference between the amount at initial

recognition and the redemption value being recognized in the income statement over the period
of the borrowings using the effective interest method. Borrowings are classified as current
liabilities unless the Group has an unconditional right to defer settlement of the liability for at
least 12 months after the balance sheet date.
The Group capitalizes borrowing costs directly attributable to the acquisition, construction or
production of a qualifying asset as part of the cost of that asset.
(2.13) Income taxes The tax expense for the period comprises current and deferred tax. Tax is recognized in the
income statement, except to the extent that it relates to items recognized in OCI or directly in
equity. In this case, the tax is also recognized in OCI or directly in equity, respectively.
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 to interpretation.
It establishes provisions where appropriate on the basis of amounts expected to be paid to the
tax authorities.
Deferred income taxes Deferred income taxes are provided in full, using the liability method, on temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the
consolidated financial statements. However, if the deferred income tax arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the
time 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 enacted or
substantially enacted by the balance sheet date and are expected to apply when the related
deferred income tax asset is realized or the deferred income tax liability is settled. Deferred
income tax assets are recognized to the extent that it is probable that 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 is probable that the temporary difference will not reverse in the foreseeable
future.
(2.14) Employee benefits
Pension obligations Group companies operate various post-employment schemes, including both defined benefit
and defined contribution pension plans. These schemes are generally funded through payments
to insurance companies or trustee-administered funds, determined by periodic (every one to
three years) actuarial valuations.
Long-service benefits Some Group companies provide jubilee and other similar long-service benefits. The entitlement
to these benefits is usually conditional on the completion of a minimum service period. The
expected costs of these benefits are accrued over the 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 expense for 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.

(2.15) Provisions Major types of provisions recognized by the Group include provisions for restructuring costs,
product liability and legal claims. Provisions for restructuring costs mostly comprise expected
lease termination penalties and employee termination benefit payments. Where provisions relate
to a number of similar obligations the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is then recognized
even if the likelihood of an outflow with respect to any one item included in the same class of
obligations may be low.
(2.16) Trade and other payables Trade and other payables are recognized initially at fair value and subsequently measured at
amortized cost using the effective interest method.
(2.17) Revenue recognition and The Group manufactures and develops a range of products and services for the construction
contract liabilities and energy sectors. Further detailed information concerning the revenue recognition and
contract liabilities is given in note (2.2). Revenue from the sale of goods is recognized in the
income statement at a point in time, when control of the products has transferred, typically when
the products are delivered to the customer and there is no unfulfilled obligation that could affect
the customer’s acceptance of the products. Revenue from services rendered is recognized at a
point in time, or over a period of time depending if the performance obligation is satisfied at a
point in time or over a period of time. All revenues from sales of goods and services rendered
are recognized at normal selling price less applicable trade discounts and rebates, individually
determined in the markets.
Service warranty offered to customers is considered a separate performance obligation and

recognized over a period of time. 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.
Revenue from sales of goods with significant financing component relates to finance lease and
is recognized, in accordance with IAS 17 Leases, in the period the lease commences while the
applicable interest income is recognized on an actuarial basis over the lease term. Revenue from
operating leases is recognized over the lease term.
(2.18) Dividend distributions Dividend distributions to the Hilti Corporation’s shareholders are recognized as liabilities in the
Groups financial statements in the periods in which the dividends are approved by the
Corporation’s shareholders.
(2.19) Financial risk management The Group’s activities expose it to a variety of financial risks: market risk (including currency risk,
interest rate risk and other price risks), credit risk and liquidity risk. The Group’s overall risk
management program focuses on the unpredictability of financial markets and seeks to minimize
potential adverse effects on the Group’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) under
policies approved by the Board of Directors. Corporate Treasury identifies, evaluates and hedges
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 and non-derivative financial instruments, managing market risk,
credit risk and investing excess liquidity.

Market risk Currency risk
The Group operates globally and is exposed to risk arising from various currency exposures.
Currency risk arises from future commercial transactions, recognized assets and liabilities and
net investments in foreign operations.
Currency risk arising from future operating transactions (sales and purchases of goods and
services) and recognized assets and liabilities is managed 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 the subsequent 12 months. For hedge accounting
purposes, forward contracts are designated against the relevant amounts of projected
intercompany sales by the parent company and 100% (2017: 100%) of projected sales qualify
as ‘highly probable’ forecast transactions.
Currency risks arising from net investments in foreign operations are only hedged in exceptional
cases.
Currency exposures arising from open balances with third parties and/or Group companies in
trade and other receivables, trade and other payables, and bonds are reduced through the
natural hedging (currency matching) of these items as well as managed using hedging
instruments. Currency exposures arising from cash and cash equivalents are reduced by limiting
non-Swiss franc denominated investments to the main currencies of the operative business of
the Group and by limiting the proportions of investments in these currencies.
At December 31, if the Swiss franc had strengthened/weakened by 10% against the US dollar,
euro and all other currencies with all other variables held constant, net income for the year would
have been affected as follows:
in CHF million Swiss franc Swiss franc

strengthened (+10%) weakened (–10%)
2018 2017 2018 2017
USD (2.6) (4.7) 2.6 4.7

EUR (0.9) 0.3 0.9 (0.3)
All other currencies (2.5) (5.1) 2.5 5.1
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.
At December 31, if the Swiss franc had strengthened/weakened by 10% against the US dollar,
euro and all other currencies with all other variables held constant, OCI would have been affected
as follows:
in CHF million Swiss franc Swiss franc

strengthened (+10%) weakened (–10%)
2018 2017 2018 2017
USD 2.2 1.5 (2.2) (1.5)

EUR – – – –
All other currencies 7.8 6.2 (7.8) (6.2)
These effects result from changes in the values (due to the respective Swiss franc movements)
of CHF 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, mostly consisting of bonds the Group itself has issued. Interest-bearing assets and
borrowings subject to variable rates or held for trading expose the Group to cash flow interest
rate risk. Interest-bearing assets and borrowings 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 amortized cost. The interest-bearing assets are denominated primarily in Swiss
franc and euro investments and the bond liabilities are effectively denominated in a combination
of Swiss franc and euro. Interest rate risk arising from long-term financing (banking and capital
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 between
40% and 60% of the Group’s relevant interest exposure.
Based on December 31 levels of borrowings subject to variable rates and interest-bearing assets
subject to variable rates or held for trading, an increase/decrease of one hundred basis points
would have affected net income as follows:
in CHF million Increase of hundred Decrease of hundred

basis points basis points
2018 2017 2018 2017
All currencies 6.9 8.1 (6.9) (8.1)
Separate simulations of the impact of interest rate changes on each of the Swiss franc, euro and
US dollar investment holdings have not been completed since an increase/decrease of one
hundred basis points is considered reasonably possible for each of the three currencies.
Due to interest rate derivatives, OCI would have been impacted as follows:
in CHF million Increase of hundred Decrease of hundred

basis points basis points
2018 2017 2018 2017
CHF (5.5) (5.8) 5.5 5.8
Credit risk Credit risk is managed on a Group basis. Virtually all credit risk arises from cash and cash
equivalents (which primarily consist of demand deposits with first-class financial institutions)
and from trade receivables (which represent credit exposures to customers).
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 major counterparty banking institutions a minimum credit rating of ‘A’ is required. The Group
regularly reviews the counterparties’ creditworthiness based on the ratings issued by Standard
& Poor’s. Management does not expect any losses from non-performance by these
counterparties.
For trade receivables, the Group has policies in place to ensure that credit sales of products are
made to customers with appropriate credit histories. In addition, an active credit management
focus is maintained in all the Group’s market organizations to ensure that the impact of credit
risk is minimized. Details of the impairment estimates of trade receivables are given in note (14).
The Group has no significant concentrations of corresponding credit risk with trade receivables.

Liquidity risk Cash flow forecasting is performed in the operating companies of the Group and aggregated by
Corporate Treasury. Corporate Treasury monitors rolling forecasts of 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 the Group
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, compliance with internal balance sheet ratio targets and, if applicable, external
regulatory or legal requirements – for example currency restrictions.
Surplus cash held by the operating companies over and above the balance required for working
capital management is transferred to Corporate Treasury. Corporate Treasury deposits surplus
cash in current accounts and time deposits, choosing instruments with appropriate maturities
or sufficient liquidity to provide sufficient headroom as determined by the above-mentioned
forecasts. At the reporting date, the Group held liquid funds of CHF 1,030.9 million (2017: CHF
1,140.2 million).
The table below 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:
in CHF million Less than 1 Between 1 Between 2 Over 5 years

year and 2 years and 5 years
At December 31, 2018

Bonds and borrowings 190.6 19.2 118.4 204.3
Finance lease liabilities 0.1 0.9 0.7 –
Trade and other payables 478.9 4.0 23.3 8.0
in CHF million Less than 1 Between 1 Between 2 Over 5 years

year and 2 years and 5 years

Bonds and borrowings 234.0 59.0 17.6 304.3
Finance lease liabilities 0.1 0.8 0.5 –
Trade and other payables 479.0 8.1 26.5 4.7
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 719.9 million (2017:
CHF 714.8 million) and undiscounted contractual cash outflows of CHF 728.0 million (2017:
CHF 728.1 million). All of the non-trading Group’s derivative financial instruments are in hedge
relationships and are disclosed in note (16).

NET DEBT RECONCILIATION
Non-cash changes
January 1, Cash flow Change in Exchange Other December
2018 scope of differences non-cash 31, 2018
in CHF million consolidation changes
Bonds 446.1 (111.6) – (1.4) – 333.1

Long-term borrowings 30.9 – – (1.1) (2.2) 27.6
Financial leasing liabilities 1.6 0.1 – – – 1.7
Other long-term loans 22.3 0.9 – (1.3) – 21.9
Short-term bank borrowings 117.7 43.8 0.3 (10.2) 2.3 153.9
Total liabilities from financing activities 618.6 (66.8) 0.3 (14.0) 0.1 538.2
Non-cash changes
January 1, Cash flow Change in Exchange Other December
2017 scope of differences non-cash 31, 2017
in CHF million consolidation changes
Bonds 359.5 83.8 – 3.0 (0.2) 446.1

Long-term borrowings 28.4 – – 2.5 – 30.9
Financial leasing liabilities 1.2 0.2 0.1 – 0.1 1.6
Other long-term loans 4.5 1.3 – (0.5) 17.0 22.3
Short-term bank borrowings 86.0 (20.8) 52.2 0.4 (0.1) 117.7
Total liabilities from financing activities 479.6 64.5 52.3 5.4 16.8 618.6

(2.20) Capital structure risk The Group’s primary objective when managing capital is to add sustainable value for investors
management while ensuring the independence of the Group. In order to maintain or adjust the capital
structure, the Group maintains a flexible 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. The Group’s objective is
to maintain a sufficiently high equity ratio primarily to ensure independence from the influence of
external creditors as well as to maintain a high external credit rating to help minimize the cost of
debt 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. Following
is equity ratio information at the balance sheet date:
in CHF million 2018 2017*
Total equity 3,075.1 2,872.7

Total equity and liabilities 5,611.9 5,443.6
Total equity in % total equity and liabilities 54.8% 52.8%
Based on the Group’s credit profile and outlook as assessed by the Credit Suisse Banking Group
during 2018 on the basis of the Group’s 2017 Financial Report a credit rating of ‘High A stable’
was assigned (2017: ‘High A stable’) (see Credit Suisse: Swiss Corporate Credit Handbook
September 2018).
(2.21) Fair value estimation The table below analyzes financial instruments carried at fair value, by valuation method. The
different levels have been defined as follows:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
• Inputs other than quoted prices included within level 1 that are observable for the
asset or liability, either directly (that is, as prices) or indirectly (that is, derived from
prices) (level 2).
• Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs) (level 3).
The following table presents the Group’s assets and liabilities that are measured at fair value:
in CHF million Level 1 Level 2 Level 3 Total

Assets
Financial assets at fair value through
profit and loss 23.0 – – 23.0
Derivatives used for hedging – 11.9 – 11.9
Liabilities

in CHF million Level 1 Level 2 Level 3 Total

Assets
Financial assets at fair value through
profit and loss 25.0 – – 25.0
Liabilities
There were no transfers between levels 1 and 2 during the year.
(2.22) Accounting for derivative Derivatives are only used for economic hedging purposes and not as speculative investments.
financial instruments and They are presented as current assets or liabilities to the extent they are expected to be settled
hedging activities within 12 months after the end of the reporting period.
Derivatives are initially recognized at fair value on the date a derivative contract is entered into
and are subsequently remeasured at their fair value. The method of recognizing the resulting
gain or loss depends on whether the derivative is designated as a hedging instrument, and if so,
the nature of the item being hedged. The Group designates certain derivatives as one of:
• hedges of the fair value of recognized assets or liabilities or a firm commitment (fair
value hedges)
• hedges of highly probable forecast transactions (cash flow hedges) and
• hedges of net investments in foreign operations (net investment hedges).
At the inception of the hedge relationship the Group documents the economic relationship
between hedging instruments and hedged items, as well as its risk management objective and
strategy for undertaking various hedge transactions. The Group also documents its risk
management objective and strategy for undertaking its hedge transactions.
The fair values of various derivative instruments used for hedging purposes and the Group’s
hedging reserves reconciliation are disclosed in note (16).
Hedge effectiveness is determined at the inception of the hedge relationship, and through
periodic prospective effectiveness assessments to ensure that an economic relationship exists
between the hedged item and hedging instrument. For hedges of foreign currency purchases,
the Group enters into hedge relationships where the critical terms of the hedging instrument
match exactly with the terms of the hedged item. The Group performs a qualitative assessment
to identify any changes in circumstances affecting the critical terms. The Group enters also into
interest rate swaps, where the hedged item is identified proportionally to the outstanding loans
up to the notional amount of the swaps. As based on effectiveness assessment all critical terms
matched at any time, the economic relationship was 100% effective.

(3) Critical accounting estimates and judgments
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year
are discussed below.
(3.1) Trade receivables
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 observable data, including financial health of specific customers and market sectors or collateral values.
Detailed information concerning trade receivables is given in notes (2.8) and (14).
(3.2) Inventories
Write-downs of inventories are recognized for particular items when net realizable value falls below cost. The determination of net
realizable value is made using a valuation process based on the aging of items with aging parameters set based on estimates of historical
loss experience. This process assumes a linear realizable value reduction based on age. Detailed information concerning inventories is
given in note (13).
(3.3) Impairment of goodwill; development costs capitalized under intangible assets; property, plant and equipment
Intangible assets that have an indefinite useful life or intangible assets not ready to use are not subject to amortization and are tested
annually for impairment. Other intangible assets and property, plant and equipment are reviewed for impairment annually or whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the
amount by which an asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair
value less costs of disposal and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are largely independent cash flows (cash-generating units). For impairment of goodwill the recoverable amounts of cash-
generating units (CGUs) are determined based on value-in-use calculations which require medium- and long-term estimates. The
methodology for goodwill impairment testing is based on a discounted cash flow model that is most sensitive to the following key
assumptions: i) forecasts of free cash flows in years one to four and ii) changes in the long-term growth rate, which are based on internal
planning data, as well as iii) changes in the discount rates, which are based on external data. Detailed information concerning the annual
goodwill impairment test is given in note (7).
(3.4) Employee benefits
The status of various defined benefit plans depends on long-term actuarial assumptions that may differ from actual future developments.
The calculation of the discount rate, future increases in salaries/wages and pensions, and mortality are important assumptions in actuarial
valuations. Detailed information concerning the defined benefit plans is given in note (22).
(3.5) Income taxes
The measurement of current and deferred income tax liabilities or assets is dependent on the interpretation of income tax laws and
regulations in the respective countries. Additionally, in tax audits the judgment made by management and tax consultants is finally
checked and adapted. As a consequence deviations between the initial assumptions and the final determination of income taxes may
lead to material changes to current or deferred income tax expense of the period in which income tax is definite. Furthermore, the
recognition of deferred tax assets on tax loss carryforwards depends on the probability of future taxable profits of Group companies.
Several internal and external factors are used in the estimation of such future profits. Detailed information concerning income taxes is
given in notes (11) and (36).

(3.6) Other critical accounting estimates and judgments
In the ordinary course of business, the company is or may be involved in lawsuits, claims, investigations and proceedings, including
product liability, commercial, environmental, health and safety matters, etc. The company is currently not aware of any such matter that
either individually or in the aggregate could likely have a material adverse effect on the company’s future financial position or results of
operations.
(4) New standards, amendments and interpretations not yet adopted by the Group
During 2018, the Group has not early adopted the requirements of the following IFRS standards, which at December 31, 2018, have
been issued but are not effective for the 2018 Group financial statements. The Group intends to adopt these standards, if applicable,
when they become effective.
Standard/ Effective date Content Importance for the Group

Amendment to
Standard
IFRS 16 Leases January 1, IFRS 16 will result in almost all leases being recognized on The Group intends to apply the
2019 the balance sheet, as the distinction between operating simplified transition approach.
and finance leases for lessees has been removed. Under Based on the assessment under-
the new standard, an asset (the right to use the leased taken to date, upon adoption of
item) and a financial liability to pay lease payments are the IFRS 16, the Group expects
recognized. Short-term and low-value leases may be assets and liabilities to increase by
exempted. approximately CHF 400 million.
IFRS 17 Insurance January 1, IFRS 17 applies to all types of insurance contracts, as well Based on the assessment under-
Contracts 2021 as certain guarantees, regardless of the type of entities taken, no impact is expected.
that issue them, and defines clear and consistent rules that
will increase the comparability of financial statements of
insurers. Under IFRS 17, the general model requires
entities to measure an insurance contract at initial
recognition at the total of the fulfilment cash flows and the
contractual service margin.
IFRIC Interpretation 23 January 1, The interpretation clarifies the accounting for income taxes Based on the assessment under-
Uncertainty over 2019 when tax treatments involve uncertainty. The interpretation taken to date, no significant im-
Income Tax Treatment particularly addresses: (i) whether an entity considers pact is expected but actual
uncertain tax treatments separately; (ii) the assumptions an implications are currently further
entity makes about the examination of tax treatments by evaluated.
taxation authorities; (iii) the determination of taxable profit
(tax loss), tax bases, unused tax losses, unused tax
credits, and tax rates; and (iv) how an entity considers
changes in facts and circumstances.
Amendments to IAS January 1, The amendments to IAS 19 address the accounting when Based on the assessment under-
19: Plan Amendment, 2019 a plan amendment, curtailment or settlement occurs taken to date, no impact is
Curtailment or during a reporting period. The amendments specify that expected.
Settlement when such an event occurs during the annual reporting
period, an entity is required to use updated assumptions
to determine current service cost and net interest for the
remainder of the period. The amendments also clarify the
effect of a plan amendment, curtailment or settlement on
the requirements regarding the asset ceiling.

(5) Business combinations and transactions with non-controlling interests
(5.1) Business combinations
On February 8, 2018, the Hilti Group has acquired the Austrian ‘bst Brandschutztechnik Döpfl GmbH’ (bst) as well as its sales organization
in Germany effective January 31, 2018. With this, Hilti has expanded its offering of fire protection system solutions for the energy and
industry sectors. Bst, headquartered near Vienna, Austria, employed 15 people in development, manufacturing and sales and since 2011
had supplied Hilti with sealing solutions for cable penetrations. This transaction had no material impact on the Groups financial
statements.
With regards to prior-year business combinations, on August 23, 2017, Hilti AG acquired 100% of the share capital of Oglaend System
Group, a leading manufacturer of cable management solutions and multidiscipline support systems headquartered in Kleppe, Norway
with a headcount of 400 in 15 subsidiaries around the world. The acquisition further strengthens Hilti’s position and differentiation in the
offshore market. The acquired business contributed revenues of CHF 38.0 million and a net loss of CHF 4.6 million to the Group for the
period from August 23, 2017 to December 31, 2017. This loss includes negative one-time effects mainly due to the market valuation of
inventory for the opening balance sheet. If the acquisition had occurred on January 1, 2017, Group revenue would have increased by
further CHF 107.4 million and net income would have been increased by CHF 6.9 million.
Details of net assets acquired are as follows:
in CHF million 2017
Purchase consideration
Cash paid 154.5
Deferred payment of purchase price to sellers 19.0
Total purchase consideration 173.5
The instruments for hedging the foreign exchange risks were released on the closing and reflected in the acquisition price.
Acquisition-related costs
(included in other operating expenses in the consolidated income statement for the year ended December 31, 2017) 4.9
The assets and liabilities as of August 23, 2017, arising from the acquisition are as follows:
in CHF million 2017
Fair value
Cash and cash equivalents 27.5
Property, plant and equipment 7.5
Intangible assets 69.4
Inventories 34.9
Deferred tax assets 1.4
Trade and other receivables 22.6
Other assets 6.0
Bank loans (52.2)
Trade and other payables (18.4)
Other liabilities (18.0)
Deferred tax liabilities (15.7)
Fair value of net assets 65.0
Goodwill 108.5
Total purchase consideration 173.5
Purchase consideration settled in cash (154.5)

Cash and cash equivalents in subsidiaries acquired 27.5
Cash outflow on acquisition (127.0)

The goodwill is attributable to the assembled workforce, commercial synergies and access to the offshore market. It will not be deductible
for tax purposes. The fair value of acquired trade and other receivables is CHF 22.6 million. The gross contractual amount for trade and
other receivables due is CHF 23.8 million, of which CHF 1.2 million is expected to be uncollectible.
(5.2) Transactions with non-controlling interests
Effective from September 27, 2018, to strengthen the Broad-Based Black Economic Empowerment in South Africa, the organizational
structure of Hilti South Africa has been changed, resulting in no material impact in the non-controlling interests recognized. The Hilti
Group has established Hilti Africa Holding (Pty) Ltd (‘HAH – HoldCo’), a wholly owned holding company, and Hilti SA Holding (Pty) Ltd
(‘HSH – BEECo’), which own respectively 75% and 25% of Hilti South Africa Pty Ltd (Hilti SA – OpCo), the existing operating company,
previously wholly owned by Hilti AG. As HAH – HoldCo has a joint control over HSH – BEECo with the Hilti Empowerment Trust South
Africa, which owns 51% of HSH – BEECo, this arrangement was classified as a joint venture. Further details on method and scope of
consolidation are given in notes (2.3) and (44).
During 2017 there were no transactions with non-controlling interests.
(6) Financial assets and liabilities
Financial assets and liabilities listed according to the measurement categories identified under IFRS 9 Financial Instruments: recognition
and measurement and the corresponding balance sheet items are as follows:
Financial assets
Financial assets at fair value through profit or loss
Held for trading 23.0 25.0
Mandatorily measured at fair value through profit or loss 12.2 11.5
Derivative financial instruments

Used for hedging 7.3 7.3
Held for trading at fair value through profit or loss 4.6 4.0
Financial assets measured at amortized cost

Trade and other receivables 1,927.7 1,794.1
Cash and cash equivalents 1,030.9 1,140.2
Total financial assets 3,005.7 2,982.1
Financial liabilities
Derivative financial instruments
Used for hedging 0.8 3.0
Held for trading at fair value through profit or loss 2.2 4.7
Financial liabilities measured at amortized costs

Trade and other payables 515.9 519.7
Bonds 333.1 446.1
Bank borrowings 181.5 148.6
Total financial liabilities 1,033.5 1,122.1
The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned
above.

(7) Intangible assets
in CHF million Goodwill Develop- Other Total

ment costs intangible
assets
Cost 2018
Opening balance at January 1, 2018 105.6 878.1 204.5 1,188.2
Change in scope of consolidation – – 3.5 3.5
Additions – 158.1 11.8 169.9
Disposals – (0.9) (12.6) (13.5)
Currency translation adjustment (5.0) – (4.4) (9.4)
Closing balance at December 31, 2018 100.6 1,035.3 202.8 1,338.7
Accumulated amortization 2018

Opening balance at January 1, 2018 – (339.9) (116.3) (456.2)
Additions – (73.8) (14.3) (88.1)
Impairment losses – (0.9) – (0.9)
Disposals – 0.9 12.5 13.4
Currency translation adjustment – – 1.4 1.4
Closing balance at December 31, 2018 – (413.7) (116.7) (530.4)
Net book values at December 31, 2018 100.6 621.6 86.1 808.3
in CHF million Goodwill Develop- Other Total

ment costs intangible
assets
Cost 2017
Opening balance at January 1, 2017 – 751.8 125.8 877.6
Change in scope of consolidation 108.5 0.6 68.8 177.9
Additions – 144.7 12.7 157.4
Disposals – (19.0) (2.1) (21.1)
Currency translation adjustment (2.9) – (0.7) (3.6)
Closing balance at December 31, 2017 105.6 878.1 204.5 1,188.2

Opening balance at January 1, 2017 – (297.1) (108.8) (405.9)
Change in scope of consolidation – – – –
Additions – (59.6) (8.7) (68.3)
Impairment losses – (0.3) – (0.3)
Disposals – 17.1 2.1 19.2
Currency translation adjustment – – (0.9) (0.9)
Closing balance at December 31, 2017 – (339.9) (116.3) (456.2)
Net book values at December 31, 2017 105.6 538.2 88.2 732.0

Of intangible assets, only development costs are internally generated, all other intangible assets are acquired. Other intangible assets
consist mainly of patents, brands, customer lists and database/application software licenses. Additions to accumulated amortization
and impairment losses are included in depreciation and amortization.
The goodwill of CHF 100.6 million (2017: CHF 105.6 million) arises from the acquisition of the Oglaend Group in 2017. In accordance
with IAS 36, goodwill is tested annually for impairment or when indicators of impairment exist. Based on the assessment made in 2018,
no impairment loss has been recognized in the Group’s 2018 financial statements.
For impairment testing purposes, goodwill is solely allocated to the Group’s offshore business as the cash-generating unit (CGU). To
test for possible impairment of goodwill, the recoverable amount, calculated as discounted value of the estimated future cash flows of
the CGU (its ‘value in use’), is compared with its carrying amount. The future cash flows are estimated on the basis of the business plan
approved by management in general covering a four-year forecast period – 2019 to 2022 – and a constant growth rate assumption of
2.0% for the terminal value beyond 2022. The value in use of the CGU is based on a post-tax discount rate of 9.6%.
The calculation of value in use is most sensitive to the below assumptions that were tested for sensitivity by applying a reasonably
possible change.
• Projected cash flows: These largely depend on management’s expectations concerning the development of the offshore
market and the planned business focus by the Group on this area of operation.
• Discount rate: The discount rate used reflects specific risks to the CGU offshore and is derived from its weighted cost of
capital (WACC).
• Long-term growth rate: The long-term growth rate is based upon management’s expectations corroborated by external
information sources and does not exceed the long-term average growth rate customarily used for the relevant countries and
markets.
Under all scenarios, reasonably possible changes in key assumptions did not result in an impairment of goodwill.
(8) Property, plant and equipment
in CHF million Land and Plant and Other Assets Total

buildings machinery operating under con-
assets struction
Cost 2018
Opening balance at January 1, 2018 850.5 826.0 581.0 53.3 2,310.8
Change in scope of consolidation – – 0.1 – 0.1
Additions 9.6 26.1 50.0 78.2 163.9
Disposals (8.7) (23.7) (62.8) – (95.2)
Other transfers 14.2 15.3 25.9 (55.4) –
Currency translation adjustment (14.6) (18.3) (18.4) (1.8) (53.1)
Closing balance at December 31, 2018 851.0 825.4 575.8 74.3 2,326.5
Accumulated depreciation 2018

Opening balance at January 1, 2018 (356.2) (668.9) (419.4) – (1,444.5)
Change in scope of consolidation – – – – –
Additions (22.4) (38.8) (52.2) – (113.4)
Disposals 8.3 22.9 60.8 – 92.0
Other transfers 0.1 – (0.1) – –
Currency translation adjustment 6.9 13.9 12.6 – 33.4
Closing balance at December 31, 2018 (363.3) (670.9) (398.3) – (1,432.5)
Net book values at December 31, 2018 487.7 154.5 177.5 74.3 894.0

in CHF million Land and Plant and Other Assets Total

buildings machinery operating under con-
assets struction
Cost 2017
Change in scope of consolidation – 4.8 2.4 0.3 7.5
Additions 12.7 26.0 53.7 39.2 131.6
Disposals (17.6) (41.2) (40.0) – (98.8)
Other transfers 5.0 10.7 6.3 (18.6) 3.4
Currency translation adjustment 30.0 30.0 19.2 2.0 81.2

Opening balance at January 1, 2017 (332.7) (643.7) (396.7) – (1,373.1)
Additions (22.0) (38.1) (44.8) – (104.9)
Disposals 12.4 40.2 37.7 – 90.3
Other transfers – (3.7) 0.3 – (3.4)
Currency translation adjustment (13.9) (23.6) (15.9) – (53.4)
Closing balance at December 31, 2017 (356.2) (668.9) (419.4) – (1,444.5)
Other operating assets consist mainly of office equipment, testing instruments, leasehold improvements and vehicles.
Capital expenditure, shown as additions to cost, relates primarily to manufacturing facilities enhancements and extensions of sales
organizations. Additions to accumulated depreciation are included in ‘depreciation and amortization’.
(9) Investment property
The Group has no material investment property.
(10) Investments in associates and joint ventures
The Group has not acquired new ownership interests in associates during the reporting period. For joint ventures refer to note (5.2).

(11) Deferred income taxes
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current
tax liabilities and when the deferred income taxes relate to the same fiscal authority. The net book values are as follows:
Recovery of deferred tax balances

More than 1 year (124.5) (84.0)
Less than 1 year 137.3 146.2
Total 12.8 62.2
Components of deferred tax balances

Inventories 53.4 54.4
Fixed and intangible assets (3.6) 3.2
Provisions and employee benefits 72.3 64.5
Receivables (182.8) (140.7)
Tax losses 9.5 9.1
Trade payables and contract liabilities 37.4 44.5
Other 26.6 27.2
Total 12.8 62.2
of which recognized as deferred tax assets 128.8 154.1
of which recognized as deferred tax liabilities (116.0) (91.9)
The movements in net deferred tax assets (liabilities) during the reporting period are as follows:
in CHF million Inventories Fixed and Provisions Receivables Tax Trade Other Total
intangible and losses payables
assets employee and
benefits contract
liabilities
Net deferred income tax

assets/(liabilities)
Opening balance at January 1, 2018 54.4 3.2 64.5 (140.7) 9.1 44.5 27.2 62.2
Changes in scope of consolidation – (0.9) – – 0.2 – – (0.7)
(Charged)/credited to income statement 1.0 (3.2) 7.7 (48.5) 0.5 (5.7) 0.1 (48.1)
(Charged)/credited to OCI – – 1.0 – – – – 1.0
Currency translation adjustment (2.0) (2.7) (0.9) 6.4 (0.3) (1.4) (0.7) (1.6)
Closing balance at December 31, 2018 53.4 (3.6) 72.3 (182.8) 9.5 37.4 26.6 12.8
Opening balance at January 1, 2017* 57.0 16.6 78.7 (107.9) 12.8 38.0 31.1 126.3
Changes in scope of consolidation 0.2 (15.7) 0.6 0.3 – – 0.3 (14.3)
(Charged)/credited to income statement (3.2) (4.0) (2.9) (21.0) (3.8) 4.5 (3.8) (34.2)
(Charged)/credited to OCI – – (13.7) – – – – (13.7)
Currency translation adjustment 0.4 6.3 1.8 (12.1) 0.1 2.0 (0.4) (1.9)
Closing balance at
December 31, 2017* 54.4 3.2 64.5 (140.7) 9.1 44.5 27.2 62.2

The category inventories includes the tax effects of temporary differences arising on unrealized intercompany profits, as well as those
arising on differences between tax and accounting treatment regarding inventory measurements at the legal entity. The category fixed
and intangible assets includes the tax effects of temporary differences arising both on intangible assets and property, plant and
equipment. The category provisions and employee benefits includes items charged/credited to OCI which are tax effects of temporary
differences arising on remeasurements on defined benefit pension plans. The category receivables includes tax effects on temporary
differences arising on fleet management sales/receivables due to the different treatment in some tax legislations (operating lease) and
IFRS (finance lease), as well as on differences between tax and accounting treatment regarding receivable measurements at the legal
entity. The category ‘accounts payable and contract liabilities’ mainly includes tax effects on temporary differences arising on contract
liability due to different treatment of revenue recognition in some tax legislations. The category ‘other’ mainly includes tax effects on
temporary differences arising on accruals and financial instruments.
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 as follows:
in CHF million 2018 2017
Tax loss carryforwards recognized in deferred tax 52.2 46.9

Unused tax loss carryforwards 23.8 34.7
Total tax loss carryforwards 76.0 81.6
Expiration of unused tax loss carryforwards:

Expiration < 1 year 3.8 4.5
Expiration > 1 year to < 5 years 1.6 3.3
Expiration > 5 years or no expiration date 18.4 26.9
Tax effect of unused tax loss carryforwards 8.3 10.4

Unremitted earnings subject to withholding tax or other taxes 205.0 113.0
Deferred income tax liabilities have not been recognized for the withholding tax and other taxes that would be payable on the unremitted
earnings of certain subsidiaries totaling CHF 205.0 million (2017: CHF 113.0 million). Such amounts are permanently reinvested.
(12) Other financial investments
Other financial investments comprise mainly other investments in equities and are classified as at fair value through profit and loss.
(13) Inventories
Raw materials 66.5 55.6

Work in progress 10.1 8.8
Finished goods 602.0 573.2
Total inventories 678.6 637.6
The change in inventories includes a currency translation adjustment which decreases the inventories by CHF 16.4 million in 2018. This
is due to the change in closing rates in 2018 compared to those in 2017.
The allowance made for possible inventory losses due to age and obsolescence totals CHF 54.7 million (2017: CHF 45.9 million). The
change in the allowance recognized in the income statement is CHF -10.6 million (2017: CHF -5.5 million). This change is included in the
line ‘change in inventory’.

(14) Trade and other receivables
Trade receivables 1,928.6 1,780.9

Less adjustment for impairment of trade receivables (127.0) (121.6)
Trade receivables net 1,801.6 1,659.3
Other receivables 126.1 134.8
Total trade and other receivables 1,927.7 1,794.1
Current portion 1,244.2 1,214.7

Non-current portion 683.5 579.4
Maturity of non-current portion

1 to < 2 years 345.1 290.9
2 to < 3 years 220.1 175.8
3 to < 4 years 95.3 80.0
4 to < 5 years 15.7 19.4
>= 5 years 7.3 13.3
Total non-current trade and other receivables 683.5 579.4
The closing loss allowances for trade receivables and receivables with significant financing component as at December 31, 2018
reconcile to the opening loss allowances as follows:
Opening balance of adjustment for the impairment of trade receivables at January 1 121.6 105.8
Additional impairment adjustment charged to income statement during year 34.0 39.0
Write-offs of trade receivables charged to impairment adjustment account during year (28.6) (23.2)
Closing balance of adjustment for the impairment of trade receivables at December 31 127.0 121.6
Currency denominations of the carrying amounts of trade and other receivables

EUR 942.9 866.1
USD 233.7 210.9
Other 751.1 717.1

The Group provides for credit losses against trade receivables as follows:

Normal Doubtful Total Normal Doubtful Total
Gross carrying amount receivables without significant

financing component 827.5 62.4 889.9 849.1 56.1 905.2
Gross carrying amount receivables with significant
financing component 1,146.0 18.8 1,164.8 993.4 17.1 1,010.5
Loss allowance provisions 52.8 74.2 127.0 49.6 72.0 121.6
The change in trade and other receivables includes a currency translation adjustment which decreases the trade and other receivables
by CHF 67.0 million in 2018 (2017: increased by CHF 68.9 million). This is due to the change in closing rates in 2018 compared to those
in 2017.
The net change in the adjustment for the impairment of trade receivables is recognized in the income statement in the line ‘losses on
trade and other receivables’.
Receivables totaling CHF 62.7 million (2017: CHF 179.9 million) serve as security for bank borrowings of CHF 62.7 million (2017:
CHF 77.8 million) (see notes (24) and (28)).
Other receivables primarily consist of VAT and tax refunds receivables totaling CHF 41.4 million (2017: CHF 56.0 million), deposits totaling
CHF 33.0 million (2017: CHF 24.9 million), advances totaling CHF 19.8 million (2017: CHF 17.6 million) and vendors with debit balances
totaling CHF 13.8 million (2017: CHF 15.9 million).
Details of the finance receivables with significant financing component included in trade receivables are as follows:

Gross Net Gross Net
investment Unearned investment investment Unearned investment
in the finance in the in the finance in the
lease income lease lease income lease
< 1 year 564.9 84.7 480.2 510.6 66.1 444.5

1 to < 5 years 756.4 72.0 684.4 619.4 54.9 564.5
>= 5 years 0.2 – 0.2 1.5 – 1.5
Total at December 31 1,321.5 156.7 1,164.8 1,131.5 121.0 1,010.5
Accumulated allowance for uncollectible finance lease receivables with

significant financing component (38.7) (35.2)
(15) Accrued income and prepayments
Accrued income and prepayments cover mainly prepayments for property, plant and equipment and prepaid operating expenditure to
be allocated as expense in the next accounting period.

(16) Derivative financial instruments
(16.1) Derivative contracts to hedge the foreign currency risks
The Group enters into derivative contracts to hedge the foreign currency risks arising from forecasted foreign currency sales and
purchases transactions and foreign currency investment positions. The applicable derivative contracts are designated as cash flow, fair
value and net investment hedges, respectively. The accounting treatment is described in the accounting policies, notes (2.21) and (2.22).
Details of derivative contracts outstanding at the balance sheet date are as follows:
in CHF million USD EUR Other Total
2018
Contract face amounts
Foreign currency forward contracts 350.0 29.1 335.2 714.3
Contract values
Foreign currency forward contracts 1.2 (0.1) 2.5 3.6
Recognition of contract values

Contract values recognized in income statement during current and prior years 1.0 (0.1) 1.4 2.3
Contract values recognized in the cash flow hedging reserve in equity 0.2 – 1.1 1.3
Total 1.2 (0.1) 2.5 3.6
Movements of contract values recognized in the

cash flow hedging reserve in equity
Opening balance at January 1 – – (1.7) (1.7)
Gains/(losses) on cash flow hedges taken to equity 0.2 – 1.1 1.3
(Gains)/losses on cash flow hedges reclassified from equity to income statement – – 1.7 1.7
Closing balance at December 31 0.2 – 1.1 1.3
Movements of contract values recognized in the net investment hedge (CTA)

Opening balance at January 1 (0.5) – – (0.5)
Gains/(losses) on net investment hedge taken to equity (CTA) (3.6) – – (3.6)
(Gains)/losses recycled from equity to income statement during year 4.1 – – 4.1
Closing balance at December 31 – – – –

in CHF million USD EUR Other Total
2017
Foreign currency forward contracts 374.8 1.9 348.9 725.6
Contract values
Foreign currency forward contracts 1.7 (0.1) (3.6) (2.0)

Contract values recognized in income statement during current and prior years 0.9 (0.1) (1.9) (1.1)
Contract values recognized in the cash flow hedging reserve in equity – – (1.7) (1.7)
Contract values from net investment hedge recognized in foreign currency translation
reserve 0.8 – – 0.8
Total 1.7 (0.1) (3.6) (2.0)
Movements of contract values recognized in the

cash flow hedging reserve in equity
Opening balance at January 1 (0.8) – 2.2 1.4
Gains/(losses) on cash flow hedges taken to equity – – (1.7) (1.7)
(Gains)/losses on cash flow hedges reclassified from equity to income statement 0.8 – (2.2) (1.4)
Closing balance at December 31 – – (1.7) (1.7)
Movements of contract values recognized in the net investment hedge (CTA)

Opening balance at January 1 (1.5) – – (1.5)
Gains/(losses) on net investment hedge taken to equity (CTA) 1.0 – – 1.0
Closing balance at December 31 (0.5) – – (0.5)
There was no ineffectiveness to be recognized in the income statement.
All contracts have a maturity of less than 12 months.

(16.2) Derivative contracts to hedge interest rate risks
The Group enters into derivative contracts to hedge the interest rate risks arising from loans with variable interest rates. The applicable
derivative contracts are designated as cash flow hedges. Gains and losses recognized in the cash flow hedging reserve in equity on
interest rate swap contracts will be continuously released to the income statement until the repayment of the bank borrowings. The
accounting treatment is described in the accounting policies, notes (2.21) and (2.22). Details of the contract outstanding at balance sheet
date, all denominated in Swiss francs, are as follows:
in CHF million Total
2018
Outstanding interest rate swaps
Contract face amounts 60.0

Contract values recognized in the cash flow hedging reserve in equity 5.3
Movements of contract values recognized in the cash flow hedging reserve in equity
Opening balance at January 1 5.6
Gains/(losses) on cash flow hedges taken to equity 1.2
(Gains)/losses on cash flow hedges reclassified from equity to income statement (1.5)
Closing balance at December 31 5.3
in CHF million Total
2017
Outstanding interest rate swaps
Contract face amounts 60.0

Contract values recognized in the cash flow hedging reserve in equity 5.6
Movements of contract values recognized in the cash flow hedging reserve in equity
Opening balance at January 1 7.0
Gains/(losses) on cash flow hedges taken to equity 0.1
(Gains)/losses on cash flow hedges reclassified from equity to income statement (1.5)
Closing balance at December 31 5.6
The fixed interest rate is 1.9% (2017: 1.9%) and the floating rate is LIBOR.

(16.3) Reconciliations
in CHF million Foreign Interest Total

currency rate risks
risks
2018
Current assets 6.6 – 6.6
Non-current assets – 5.3 5.3
Current liabilities (3.0) – (3.0)
Non-current liabilities – – –
Total net book value derivative financial instruments at December 31 3.6 5.3 8.9
Cash flow hedging reserve in equity 1.3 5.3 6.6
Gains/(losses) on cash flow hedges taken to equity 1.3 1.2 2.5

(Gains)/losses on cash flow hedges reclassified from equity to income statement 1.7 (1.5) 0.2
in CHF million Foreign Interest Total

currency rate risks
risks
2017
Current assets 5.7 – 5.7
Non-current assets – 5.6 5.6
Current liabilities (7.7) – (7.7)
Non-current liabilities – – –
Total net book value derivative financial instruments at December 31 (2.0) 5.6 3.6
Cash flow hedging reserve in equity (1.7) 5.6 3.9
Gains/(losses) on cash flow hedges taken to equity (1.7) 0.1 (1.6)

(Gains)/losses on cash flow hedges reclassified from equity to income statement (1.4) (1.5) (2.9)
The cash flow hedging reserve in equity net of tax amounts to CHF 5.8 million (2017: CHF 3.4 million).
The Group enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade
credit ratings of at least ‘A’ according to Standard & Poor’s.
(17) Financial assets at fair value through profit or loss
The following financial assets at fair value through profit or loss are classified as held for trading.
• Investments in deposits and equities restricted to (1) the funding of losses arising from damages to assets and losses arising
from product-related obligations and (2) the funding of a deferred compensation plan for employees.
These financial assets are all classified as current assets because they are expected to be traded within 12 months of the balance sheet
date.

(18) Cash and cash equivalents
Cash includes cash on hand and demand deposits. The movement in cash and cash equivalents is shown in detail in the cash flow
statement.
The Group has legal or economic restrictions on CHF 5.8 million (2017: CHF 7.4 million).
(19) Assets classified as held for sale
At the 2018 and 2017 balance sheet dates no assets are classified as held for sale.
(20) Equity
As per year ending 2018 the share capital consists of 253,440 registered shares with a par value of CHF 500 each (2017: the share
capital consists of 176,000 registered shares with a par value of CHF 500 each and the participation capital consists of 774,400
participation certificates with a par value of CHF 50 each. The participation capital has no voting rights).
The extraordinary General Meeting held at March 6, 2018 resolved to convert the participation capital of Hilti Corporation into share
capital. The 774,400 participation certificates with a par value of CHF 50 each are converted to 77,440 registered shares with a par value
of CHF 500 each. The share capital now consists of 253,440 registered shares with a par value of CHF 500 each. The total capital has
not changed and continues to amount to CHF 126.7 million. All the capital is fully paid in and is entitled to dividends.
The capital reserve contains the share premium from capital increases and capital accruing from merges in previous years.
A dividend in respect of the year ended December 31, 2018, of CHF 1,075 per share, amounting to a total of CHF 272.4 million (financial
year 2017: CHF 263.6 million), is to be proposed at the Annual General Meeting. This future proposed dividend is not recognized in these
financial statements.

The disaggregation of changes of OCI by each type of reserve in equity is shown below:
in CHF million Foreign Cash flow Retained Non- Total

currency hedging earnings controlling
translation reserve interests
reserve
2018
Gains/(losses) on cash flow hedges taken to equity – 2.5 – – 2.5
Deferred tax on gains/losses on cash flow hedges taken to equity – (0.3) – – (0.3)
(Gains)/losses on cash flow hedges reclassified from equity to income
statement – 0.2 – – 0.2
Deferred tax on gains/losses on cash flow hedges reclassified from equity
to income statement – – – – –
Foreign currency translation differences (59.1) – – (0.2) (59.3)
Deferred tax on foreign currency translation differences 0.8 – – – 0.8
Items that may be subsequently reclassified to the income statement (58.3) 2.4 – (0.2) (56.1)
Remeasurements on employee benefits – – (25.3) – (25.3)

Deferred tax on remeasurements on employee benefits – – 1.0 – 1.0
Items that will never be reclassified to the income statement – – (24.3) – (24.3)
Total other comprehensive income 2018 (58.3) 2.4 (24.3) (0.2) (80.4)
in CHF million Foreign Cash flow Retained Non- Total

currency hedging earnings controlling
translation reserve interests
reserve
2017*
Gains/(losses) on cash flow hedges taken to equity – (1.6) – – (1.6)
Deferred tax on gains/losses on cash flow hedges taken to equity – 0.2 – – 0.2
(Gains)/losses on cash flow hedges reclassified from equity to income
statement – (2.9) – – (2.9)
Deferred tax on gains/losses on cash flow hedges reclassified from equity
to income statement – 0.4 – – 0.4
Foreign currency translation differences 54.4 – – – 54.4
Deferred tax on foreign currency translation differences (0.5) – – – (0.5)
Items that may be subsequently reclassified to the income statement 53.9 (3.9) – – 50.0
Remeasurements on employee benefits – – 96.1 – 96.1

Deferred tax on remeasurements on employee benefits – – (13.7) – (13.7)
Items that will never be reclassified to the income statement – – 82.4 – 82.4
Total other comprehensive income 2017* 53.9 (3.9) 82.4 – 132.4

(21) Provisions
Opening balance at January 1 25.2 31.9

Change in scope of consolidation – 0.7
Additions 13.5 11.2
Amounts used (9.6) (16.0)
Unused reversals (5.8) (3.0)
Currency translation adjustment (0.3) 0.4
Closing balance at December 31 23.0 25.2
Current portion of total provisions 9.4 8.7

Non-current portion of total provisions 13.6 16.5
Total provisions at December 31 23.0 25.2
Provisions are amongst others built up for obligations regarding legal claims, product liability, assurance warranty, restructuring and job
accidents, which are individually immaterial.

(22) Employee benefits
Employee benefits creating obligations of the Group to its employees comprise defined benefit plans, other long-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: It covers employees of the parent company as well as of the
Swiss and other Liechtenstein-based Group companies (the ‘Swiss pension plan’). The Swiss pension plan accounts for 79.2% (2017:
77.8%) of the Group’s total defined benefit obligation and 87.9% (2017: 87.2%) of the Group’s plan assets.
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 a state supervisory body. The pension plan’s most senior governing body (Board of Trustees) must be composed
of equal numbers of employee and employer representatives. The Board of Trustees is responsible for the investment of the assets.
When defining the investment strategy, it takes into account the pension fund’s objectives, benefit obligations and risk capacity. The
investment strategy is defined in the form of a long-term target asset structure (investment policy). The Board of Trustees delegates the
implementation of the investment policy – in accordance with the investment strategy – to an Investment Committee. The cash funding
of the plan is designed to ensure that present and future contributions should be sufficient to meet future liabilities. Further on, the Board
of Trustees is able to adapt the contributions and benefits. There is a stop-loss insurance which covers the risk from a certain excess
amount (e.g. for disability or death).
The Swiss pension plan contains a cash balance benefit formula and is therefore accounted for as a defined benefit plan. Employer and
employee contributions are defined in the pension fund rules in terms of an age-related sliding scale of percentages of remuneration.
Under Swiss law, the pension fund guarantees the vested benefit amount as confirmed annually to members. Interest may be added to
member balances at the discretion of the Board of Trustees (i.e. 1.0% in 2018 and 2.0% in 2017). At retirement date, members have the
right to take their retirement benefit as a lump sum, an annuity or part as 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 in Austria, 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 2016–2018 with payment to be made in 2019. Historically the level of outflows
concerning other long-term employee benefits (excluding the long-term incentive) has been constant each year.
Short-term employee benefits
Short-term employee benefits such as short-term variable compensation are included in ‘accrued liabilities and deferred income’ (see
note (27)).
Defined contribution plans
The employer’s contribution totals CHF 39.2 million (2017: CHF 35.4 million).

(22.1) Employee benefit obligations (defined benefit plans and other long-term benefits)

Funded Unfunded Total Funded Unfunded Total
Switzerland
Fair value of plan assets 870.0 – 870.0 871.5 – 871.5
Present value of defined benefit obligation (1,153.5) – (1,153.5) (1,111.8) – (1,111.8)
Net defined benefit (liability)/asset at December 31 (283.5) – (283.5) (240.3) – (240.3)
Other plans
Present value of defined benefit obligation (241.0) (61.4) (302.4) (260.2) (57.3) (317.5)
Net defined benefit (liability)/asset at December 31 (121.6) (61.4) (183.0) (132.2) (57.3) (189.5)
Total
Present value of defined benefit obligation (1,394.5) (61.4) (1,455.9) (1,372.0) (57.3) (1,429.3)
Net defined benefit (liability)/asset at December 31 (405.1) (61.4) (466.5) (372.5) (57.3) (429.8)
Present value of other employee benefits – (161.9) (161.9) – (129.8) (129.8)

Total net book value employee benefits at December 31 (405.1) (223.3) (628.4) (372.5) (187.1) (559.6)
Current portion of total net book value employee benefits (105.6) (8.7)
Non-current portion of total net book value employee benefits (522.8) (550.9)
Total net book value employee benefits (628.4) (559.6)
(22.2) Reconciliation of fair value of plan assets

Switzerland Other plans Total Switzerland Other plans Total
Opening balance at January 1 871.5 128.0 999.5 819.6 115.5 935.1

Interest income on plan assets 6.5 3.1 9.6 6.1 3.0 9.1
Return on plan assets excluding interest income (13.6) (3.9) (17.5) 37.2 4.0 41.2
Contributions by employer 23.9 4.8 28.7 23.4 4.4 27.8
Contributions by plan participants 16.1 0.1 16.2 15.2 0.1 15.3
Benefits paid (34.4) (6.2) (40.6) (30.0) (6.1) (36.1)
Settlements – (1.2) (1.2) – (0.3) (0.3)
Currency translation adjustment – (5.3) (5.3) – 7.4 7.4
Closing balance at December 31 870.0 119.4 989.4 871.5 128.0 999.5

(22.3) Reconciliation of present value of defined benefit obligation

Opening balance at January 1 (1,111.8) (317.5) (1,429.3) (1,142.4) (294.8) (1,437.2)

Change in scope of consolidation – – – – (1.2) (1.2)
Current service cost (27.5) (9.3) (36.8) (28.5) (8.1) (36.6)
Interest expense on defined benefit obligation (8.4) (6.7) (15.1) (8.6) (6.5) (15.1)
Actuarial gains/(losses) (20.6) 12.8 (7.8) 55.1 (0.2) 54.9
Contributions by plan participants (16.1) – (16.1) (15.2) – (15.2)
Benefits paid 34.4 8.9 43.3 30.0 10.3 40.3
Past service cost (3.5) (2.7) (6.2) (2.2) 1.1 (1.1)
Settlements – 0.7 0.7 – 0.7 0.7
Currency translation adjustment – 11.4 11.4 – (18.8) (18.8)
Closing balance at December 31 (1,153.5) (302.4) (1,455.9) (1,111.8) (317.5) (1,429.3)
(22.4) Components of defined benefit costs recognized in the income statement

Current service cost (27.5) (9.3) (36.8) (28.5) (8.1) (36.6)

Past service cost (3.5) (2.7) (6.2) (2.2) 1.1 (1.1)
Gains/(losses) on settlements – (0.5) (0.5) – 0.4 0.4
Total service cost (31.0) (12.5) (43.5) (30.7) (6.6) (37.3)
Interest income on plan assets 6.5 3.1 9.6 6.1 3.0 9.1
Interest expense on defined benefit obligation (8.4) (6.7) (15.1) (8.6) (6.5) (15.1)
Net interest income/(expense) on defined benefit plans (1.9) (3.6) (5.5) (2.5) (3.5) (6.0)
Total defined benefit costs recognized in the income
statement (32.9) (16.1) (49.0) (33.2) (10.1) (43.3)
In the income statement, the various components of the defined benefit costs are included as follows:
• Total service cost – in ‘personnel expenses’ (see note (31)) and

• Interest income and expense – in ‘other income and expenses (net)’ (see note (34)).

(22.5) Remeasurements of the net defined benefit (liability)/asset

Actuarial gains/(losses) arising from changes in demographic

assumptions – (0.7) (0.7) – 0.2 0.2
Actuarial gains/(losses) arising from changes in financial
assumptions – 10.8 10.8 – (3.8) (3.8)
Actuarial gains/(losses) arising from experience adjustments (20.6) 2.7 (17.9) 55.1 3.4 58.5
Total actuarial gains/(losses) on defined benefit obligation (20.6) 12.8 (7.8) 55.1 (0.2) 54.9
Return on plan assets excluding interest income (13.6) (3.9) (17.5) 37.2 4.0 41.2
Total remeasurements recorded in other comprehensive
income (34.2) 8.9 (25.3) 92.3 3.8 96.1
(22.6) Plan asset classes at December 31

Quoted Non-quoted Quoted Non-quoted
Total % Total %
market price market price market price market price
Cash and cash equivalents 80.2 – 80.2 8.1% 82.3 – 82.3 8.2%
Equity instruments 265.7 – 265.7 26.9% 286.2 – 286.2 28.6%
Debt instruments (e.g. bonds) 194.4 – 194.4 19.6% 217.4 – 217.4 21.8%
Real estate 13.2 171.3 184.5 18.6% 11.5 158.1 169.6 17.0%
Investment funds 94.1 42.1 136.2 13.8% 98.9 44.2 143.1 14.3%
Others – 128.4 128.4 13.0% – 100.9 100.9 10.1%
Total plan assets at fair value 647.6 341.8 989.4 100.0% 696.3 303.2 999.5 100.0%
The Group does not make use of any assets held by pension plans.
Cash and cash equivalents are primarily invested in money market funds and current accounts with financial institutions that mostly have
at least an ‘A’ rating. The allocation to cash and cash equivalents of the Swiss pension plan is 9.1% (2017: 9.2%).
Equity instruments represent investments in equity funds and direct investments. They generally have quoted market prices in an active
market. The allocation to equities of the Swiss pension plan is 28.4% (2017: 30.4%). The pension plans’ assets do not include any shares
of Hilti Corporation.
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. The allocation to debt instruments of the Swiss pension plan is 22.3% (2017: 24.9%).
Real estate represents indirect and direct investments in residential and commercial properties. Indirect investments comprise listed and
unlisted real estate funds, investment foundations and unlisted real estate fund of funds. Direct investments are primarily held in
residential properties in Liechtenstein. Directly held real estate is periodically valued by an independent expert. The allocation to real
estate of the Swiss pension plan is 21.2% (2017: 19.5%).
Investment funds represent investments with an insurance company and a mandate with a bank which invests in alternative asset classes
(e.g. hedge funds and commodities). In case of investment funds, no quoted market prices in an active market are usually available. The
allocation to investment funds of the Swiss pension plan is 4.2% (2017: 4.4%).
The position ‘others’ primarily includes private equity investments, mezzanine investments and insurance-linked securities, among
others. Leveraging and short selling is prohibited. No quoted market prices in an active market are usually available. The allocation to
‘others’ of the Swiss pension plan is 14.8% (2017: 11.6%).

(22.7) Plan members at December 31
financial amounts in CHF million 2018 2017

Active Deferred Retired Total Active Deferred Retired Total
Plan members 5,924 830 1,599 8,353 5,810 891 1,590 8,291
Defined benefit obligation (715.0) (122.4) (618.5) (1,455.9) (674.7) (125.7) (628.9) (1,429.3)
Share in % 49.1% 8.4% 42.5% 100.0% 47.2% 8.8% 44.0% 100.0%
Average weighted duration in years 20.0 22.8 12.7 17.1 20.6 22.7 13.1 17.5
The employer’s best estimate of contributions expected to be paid to defined benefit plans for the financial year 2019 is CHF 24.7 million.
(22.8) 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 follows:
in % 2018 2017
Discount rate 0.75% 2.35% 1.08% 0.75% 2.16% 1.06%

Future salary increase 1.50% 1.39% 1.48% 1.50% 1.38% 1.47%
Future pension increase 0.00% 2.21% 0.46% 0.00% 2.22% 0.49%
Life expectancy is reflected in the defined benefit obligations by using mortality tables of the country in which the plan is located. The
generational tables BVG/LPP 2015 (2017: BVG/LPP 2015) have been used for Switzerland.
In general, the present value of the defined benefit obligations is determined annually by independent actuaries using the projected unit
credit method. Actuarial assumptions are required for this purpose.
The discount rate, future salary increase and life expectancy were identified as significant actuarial assumptions. The following impacts
on the defined benefit obligation are to be expected:
• A 0.25% increase/decrease in the discount rate would lead to a decrease/increase of 4.32% in the defined benefit
obligation.
• A 0.25% increase/decrease in expected future salaries would lead to an increase/decrease of 0.53% in the defined benefit
obligation.
• A one-year increase/decrease in life expectancy would lead to an increase/decrease of 2.74% in the defined benefit
obligation.
The sensitivity analysis is based on realistically possible changes as of the end of the reporting period. Each change in a significant
actuarial assumption was analyzed separately as part of the test. Interdependencies were not taken into account.

(23) Bonds
The bonds were issued by Hilti Corporation. Further details of the individual bonds are included in the key figures (see page 3).
Maturity
< 1 year 33.2 111.7
1 to < 2 years – 34.5
2 to < 3 years – –
3 to < 4 years – –
4 to < 5 years 100.0 –
>= 5 years 199.9 299.9
Total bonds 333.1 446.1
Currency
CHF 299.9 399.9
EUR 33.2 46.2
Total bonds 333.1 446.1
Further information
Fair values 342.8 460.5
Average effective interest rates (in %) 1.0 1.0
The euro bonds (‘Schuldscheindarlehen’) are not tradable on any recognized stock exchange. The Group opted for an early redemption
in 2018 of a nominal value of EUR 10.0 million.
The fair values of Swiss franc bonds totaling CHF 309.4 million (2017: CHF 412.8 million) are based on the quoted market prices and are
within level 1 of the fair value hierarchy. The fair values of the euro bonds totaling CHF 33.4 million (2017: CHF 47.7 million) are based
on the discounted cash flows using a market-based discount rate and within level 2 of the fair value hierarchy.
(24) Long-term bank borrowings
Maturity
1 to < 2 years 16.7 20.8
2 to < 5 years 10.9 10.1
Total long-term bank borrowings 27.6 30.9
All of the total long-term bank borrowings are denominated in euro and secured by receivables in the same amount (see note (14)).

(25) Trade and other payables
Trade payables 300.1 309.8

Other payables 215.8 209.9
Total trade and other payables 515.9 519.7
Current portion 479.0 479.1

Non-current portion 36.9 40.6
Maturity of non-current portion

1 to < 2 years 4.9 8.9
2 to < 5 years 24.0 27.0
>= 5 years 8.0 4.7
Total non-current trade and other payables 36.9 40.6
Currency denominations of the carrying amounts of trade and other payables

EUR 197.1 204.6
CHF 36.9 36.8
USD 66.7 65.1
Other 215.2 213.2
The change in trade and other payables includes a currency translation adjustment which reduces trade and other payables by CHF
14.3 million in 2018. This is due to the change in closing rates in 2018 compared to those in 2017.
Other payables primarily consist of liabilities for personnel expenses totaling CHF 7.9 million (2017: CHF 7.8 million), liabilities for social
contributions totaling CHF 28.7 million (2017: CHF 24.9 million), liabilities for source-deducted taxes and VAT totaling CHF 96.7 million
(2017: CHF 99.0 million) and customers with credit balances totaling CHF 32.5 million (2017: CHF 30.7 million).

(26) Current income taxes payable and receivable
Current income taxes payable and receivable consist of income taxes payable and refundable relating to the current or prior years.
Details concerning deferred income tax liabilities and assets are shown in note (11).
(27) Accrued liabilities and deferred income
Accrued liabilities and deferred income comprise short-term liabilities, which include estimates, short-term expense accruals and
deferrals of income already received but attributable to subsequent accounting periods.
(28) Short-term bank borrowings
Currency
EUR 35.4 35.3
USD 31.1 14.6
RUB 27.7 28.9
SAR 17.1 –
JPY 12.1 4.3
Other 30.5 34.6
Total short-term bank borrowings 153.9 117.7
In 2018, CHF 35.1 million (2017: CHF 34.2 million) of the total short-term bank borrowings are secured by receivables in the same amount
(see note (14)).
(29) Operating income
Categories of operating revenues are as follows:
Net sales of goods 5,286.6 4,795.1

Net sales of services 372.7 317.5
Total net sales 5,659.3 5,112.6
Other operating revenues 134.9 114.9
Total operating revenues 5,794.2 5,227.5
The above categories ‘net sales of goods’ and ‘net sales of services’ in terms of IFRS 15 ‘Revenue from Contract with Customers’
represent, respectively, revenue from sales of goods and revenue from rendering of services, such as logistics, repairs (including service
warranty), tests and trainings. Other operating income, amongst others, consists of finance lease interests including related risk
premiums.
A breakdown of net sales by geographical areas and by major countries is given in note (37).

The revenue recognized that was included in the contract liabilities balance at the beginning of the period totals CHF 109.6 million (2017:
CHF 100.7 million, restated, see note (2.2)).
The Group has recognized the following revenue-related contract liabilities from contracts with customers.
Opening balance at January 1 179.9 156.5

Additions 149.8 141.0
Amount released (137.1) (124.6)
Currency translation adjustment (6.3) 7.0
Closing balance at December 31 186.3 179.9
The following table shows the revenue recognition split into point in time and period of time. A contract liability is recognized until the
points are redeemed or expire.
Revenue recognized at a point in time 5,522.2 4,988.0

Revenue recognized over a period of time 137.1 124.6
Total revenue recognized at December 31 5,659.3 5,112.6
(30) Material costs
Materials (1,630.6) (1,466.1)

Outsourced manufacturing (18.3) (18.0)
Total material costs (1,648.9) (1,484.1)
Change in inventory 56.7 50.5
Total material costs including change in inventory (1,592.2) (1,433.6)
(31) Personnel expenses
Personnel expenses comprise wages and salaries and social contributions. Social contributions include expenses for pensions and
similar liabilities in addition to social security contributions.
Salaries and wages (1,894.6) (1,721.2)

Social contributions (445.9) (388.7)
Total personnel expenses (2,340.5) (2,109.9)

The breakdown of the number of employees of Group companies by function is as follows:
2018 2017
Sales 22,446 21,010

Research and development 1,609 1,494
Production 3,564 3,271
Administration 1,385 1,106
Total employees (as at December 31) 29,004 26,881
(32) Depreciation and amortization
This position comprises depreciation, amortization and impairment losses on intangible assets as well as property, plant and equipment.
(33) Other operating expenses
Major items included in other operating expenses are the below:
Expenditures for rent (194.2) (172.4)

Travel (167.9) (145.0)
Outward freight (137.4) (123.3)
Maintenance & repairs (100.9) (90.7)
Legal & consulting (87.1) (72.7)
Marketing & communication (63.5) (61.5)
Other (134.9) (128.3)
Total other operating expenses (885.9) (793.9)

(34) Other income and expenses (net)
Other income and expenses (net) comprise:
Gains/(losses) on disposal of foreign operations and investments (3.8) –

Interest and dividend income 5.6 4.1
Gains/(losses) arising from valuation changes on financial assets and fair value hedging instruments (0.3) (0.2)
Gains/(losses) on foreign currency hedging instruments (8.4) (1.6)
Gains/(losses) on foreign currencies (17.3) (5.6)
Net interest income/(expense) on defined benefit plans (5.5) (6.0)
Total other income and expenses (net) (29.7) (9.3)
(35) Finance costs
Finance costs are reported at the gross interest expense amount. Interest expense on financial liabilities measured at amortized cost
represents the total interest expense on financial liabilities not at fair value through profit or loss. Interest income from investments is
separately included in ‘other income and expenses (net)’.
(36) Income tax expense
Current tax (73.8) (89.7)

Deferred tax (47.4) (33.4)
Total income tax expense (121.2) (123.1)
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate
applicable to profits of the consolidated companies as follows:
Net income before income tax 667.6 643.7
Tax calculated at domestic tax rates applicable to profits in the respective countries (114.2) (106.6)
Income not subject to tax 3.9 4.1
Expenses not deductible for tax purposes (8.4) (9.5)
Utilization of previously unrecognized tax losses 1.5 11.3
Tax losses for which no deferred tax asset has been recognized (0.5) (0.2)
Tax attributable to prior years 2.3 8.7
Other effects (5.8) (30.9)
Income tax expense (121.2) (123.1)
Weighted average applicable tax rate 17.1% 16.6%
The line ‘Other effects’ includes the effects of changes in tax rates and expenses or incomes subject to different tax rates. In 2017, the
effect of the change in tax rates in the Group’s US companies resulted in a reduction of deferred tax assets of CHF 25.3 million.

(37) Segment information
In accordance with IFRS 8 Operating Segments the Group operates in only one single operating segment. Additional information
concerning products, services and geographical areas is as follows:
(37.1) Net sales information about products and services
Electric Tools & Accessories Products 2,548.5 2,276.4

Electric Tools & Accessories Services 328.7 277.4
Total Electric Tools & Accessories 2,877.2 2,553.8
Fastening & Protection Systems Products 2,738.1 2,518.7

Fastening & Protection Systems Services 44.0 40.1
Total Fastening & Protection Systems 2,782.1 2,558.8
Total Group 5,659.3 5,112.6
(37.2) Net sales information about geographical areas
in CHF million 2018 2017* Change in Change in

CHF (%) local
currencies
(%)
Europe excl. Eastern Europe 2,808.5 2,459.8 14.2 10.6

North America 1,331.3 1,213.2 9.7 10.4
Latin America 129.3 128.1 0.9 8.6
Asia/Pacific 741.1 696.6 6.4 7.0
Eastern Europe/Middle East/Africa 649.1 614.9 5.6 9.3
Total Group 5,659.3 5,112.6 10.7 9.8
Net sales information by geographical areas is based on the country of the third-party customer.
(37.3) Net sales information for major countries
USA 1,124.6 1,024.5

Germany 794.1 688.9
France 453.3 400.8
Liechtenstein (country of domicile) 81.9 72.9
Other countries 3,205.4 2,925.5
Total Group 5,659.3 5,112.6
Net sales by major countries are based on the country of domicile of the respective Group companies.
The Group has no customer exceeding the threshold of 10% of the Group’s net sales.

(37.4) Selected non-current assets information for major countries*
Liechtenstein (country of domicile) 997.7 910.7

Germany 199.8 185.7
Norway 157.5 174.1
Austria 78.0 80.1
Other countries 271.2 249.6
Total Group 1,704.2 1,600.2
* Excluding non-current financial assets and deferred taxes
(38) Contingent liabilities
Guarantees 6.9 7.0

Other contingent liabilities 1.8 2.0
Total contingent liabilities 8.7 9.0
Management considers the possibility of any outflow in settlement to be remote.
(39) Other commitments
Payment commitments arising from non-cancelable operating lease contracts are as follows:
< 1 year 137.2 118.2

1 to < 5 years 275.5 218.1
>= 5 years 85.4 65.2
Total at December 31 498.1 401.5
Capital commitments contracted for at the end of the reporting period but not yet incurred are as follows:
Intangible assets 0.2 5.8

Property, plant and equipment 11.5 15.8
Total at December 31 11.7 21.6
(40) Financial assets pledged as collateral
Details of receivables pledged as collateral for recognized liabilities are given in note (14). There are no other financial assets pledged as
collateral for recognized liabilities or for contingent liabilities.
(41) Research and development expenditure
Expenditure on research and development in the reporting period amounted to CHF 355.3 million (2017: CHF 310.6 million), thereof
CHF 158.1 million (2017: CHF 144.7 million) were recognized as intangible assets (see development costs in note (7)).

(42) Related party disclosures
(42.1) Key management personnel compensation
Details of compensation of key management personnel are as follows:
financial amounts in CHF million 2018 2017

Number of Remuner- Number of Remuner-
members ation members ation
Board of Directors 7 3.1 7 3.4

Corporate Management (Executive Board and Executive Management Team) 28 47.6 27 54.8
Total 35 50.7 34 58.2
Salaries and other short-term employee benefits 33.6 38.0

Post-employment benefits 3.9 3.9
Other employee benefits, mainly related to long-term incentive 13.2 16.3
Total employee benefits to key management 50.7 58.2
Employee benefits to key management include both fixed and variable components. The variable components are performance-linked
and include a long-term incentive which is payable only if certain predetermined specific financial targets linked to the sustainable
development and growth of the Group’s business are achieved. In accordance with IAS 19 Employee Benefits, the 2018 portion of the
estimated ultimate amount payable has been recognized as an obligation at December 31, 2018, under the heading of other employee
benefits (see note (22)).
(42.2) Ownership of parent
100% of the registered shares of the Hilti Corporation are owned by the Martin Hilti Family Trust.
(42.3) Other transactions and balances with the shareholder
The Hilti Corporation rendered accounting, administration, rental and other support services to the Martin Hilti Family Trust. The amount
invoiced was CHF 1.1 million (2017: CHF 1.1 million). These services were charged at cost. Additionally, the Hilti Corporation has a
current liability to the Martin Hilti Family Trust of CHF 0.6 million (2017: CHF 0.4 million).
(43) Events after the reporting period
There were no significant transactions after the reporting period.

(44) Group companies and joint arrangements
Country Company name and location Activity

S = sales
R = research
D = development
P = production
Se = services
H = holding
Parent company
Liechtenstein Hilti Corporation, Feldkircherstrasse 100, P.O. Box 333, 9494 Schaan, S, R, D, P, Se, H
Tel. +423 234 2111, www.hilti.group
100% owned consolidated Group companies (subsidiaries – including production plants and market organizations)
Albania Hilti Albania sh.p.k., Tirana S

Algeria Hilti Construction Equipements EURL, Alger S
Argentina Hilti Argentina S.R.L., Buenos Aires S
Australia Hilti (Aust.) Pty. Ltd., Rhodes New South Wales S
Oglaend System Australia Pty. Ltd., Perth S
Austria Hilti Austria Gesellschaft m.b.H., Vienna S
Hilti Holding GmbH, Vienna H
Hilti Aktiengesellschaft Zweigniederlassung Thüringen, Thüringen P
Eurofox GmbH, Lanzenkirchen P, D
bst Brandschutztechnik Gesellschaft m.b.H, Vienna S
Belarus Hilti BY FLLC, Minsk S
Belgium Hilti Belgium N.V., Brussels S
Bosnia-Herzegovina Hilti Systems BH d.o.o. Sarajevo, Sarajevo S
Brazil Hilti do Brasil Comercial Ltda., São Paulo S
Bulgaria Hilti (Bulgaria) EOOD, Sofia S
Canada Hilti (Canada) Corporation, Mississauga, Ontario S
Chile Hilti Chile Limitada, Santiago de Chile S
China Hilti (China) Ltd., Zhanjiang P, D
Hilti (China) Distribution Ltd., Shanghai S
Hilti (PEC Suzhou) Ltd., Suzhou P
Hilti (Shanghai) Ltd., Shanghai P, D
Oglaend Industries (Suzhou) Co., Ltd., Suzhou P
Oglaend System (Suzhou) Trading Co., Ltd., Suzhou S
Colombia Hilti Colombia S A S, Bogota D.C. S
Croatia Hilti Croatia d.o.o., Sesvete S
Czech Republic Hilti ČR spol. s r.o., Průhonice S
Denmark Hilti Danmark A/S, Hvidovre S
Øglænd System A/S, Haderslev S
Estonia Hilti Eesti OÜ, Tallinn S
Finland Hilti (Suomi) OY, Vantaa S
France Hilti France S.A., Magny-les-Hameaux S
Hilti Digital Marketing Services SAS, Magny-les-Hameaux Se
Germany Hilti Deutschland AG (Liechtenstein), Zweigniederlassung Deutschland, Kaufering S
Hilti GmbH Industriegesellschaft für Befestigungstechnik, Kaufering P

Hilti Entwicklungsgesellschaft mbH, Kaufering D

Hilti Kunststofftechnik GmbH, Nersingen P
Hilti Deutschland Logistik GmbH, Oberhausen Se
PEC Europe GmbH, Duisburg S
bst Brandschutztechnik GmbH, Würzburg S
Great Britain Hilti (Gt. Britain) Ltd., Manchester S
Oglaend System UK Limited, Wednesbury S
Greece Hilti Hellas S.A., Maroussi S
Hong Kong Hilti Asia Ltd., Kowloon, Hong Kong H, Se
Hilti (Hong Kong) Ltd., Kowloon, Hong Kong S
Hungary Hilti (Hungária) Szolgáltató Kft., Budapest S
Hilti Szerszám Kft., Kecskemét P, D
India Hilti India Private Ltd., Gurgaon S
Hilti Manufacturing India Private Limited, Mumbai P, D
Indonesia PT Hilti Nusantara, Jakarta S
Ireland Hilti (Fastening Systems) Ltd., Dublin S
Israel Hilti (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
Oglaend System Korea Co., Ltd., Busan S
Latvia Hilti Services Limited, Riga S
Liechtenstein Hilti Deutschland AG, Schaan S
Hilti Equipment Corporation, Schaan H
Hilti (International) Services, Ltd., Schaan Se
Hilti Service Corporation, Schaan Se
Hilti (Schweiz) AG, Zweigniederlassung Schaan, Schaan S
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 Hilti (Malaysia) Sdn. Bhd., Petaling Jaya S
Hilti Asia IT Services Sdn. Bhd., Petaling Jaya Se
Oglaend Industries Sdn Bhd, Petaling Jaya P, D
Mexico Hilti Mexicana, S.A. de C.V., Mexico City S
Hilti Operaciones de Mexico, S.A. de C.V., Matamoros P
Montenegro Hilti Montenegro d.o.o. Podgorica, Podgorica S
Morocco Hilti Maroc S.A., Casablanca S
Netherlands Hilti Nederland B.V., Berkel en Rodenrijs S
Hilti International Finance B.V., Berkel en Rodenrijs H, Se
Oglaend System BV, Ridderkerk S
New Zealand Hilti (New Zealand) Limited, Auckland S
Norway Øglænd Group Holding AS, Kleppe H
Øglænd Industrier AS, Kleppe H, Se
Øglænd System AS, Kleppe S, P, D
Panama Hilti Latin America S.A., Panama City S, Se
Transportes Continentales S.A., Panama City Se
Philippines Hilti (Philippines) Inc., Metropolitan Manila S
Poland Hilti (Poland) Sp. z o.o., Warsaw S

Portugal Hilti (Portugal) – Produtos e Serviços Lda., Porto S

Puerto Rico Hilti Caribe LLC, San Juan S
Romania Hilti Romania SRL, Bucharest S
Russian Federation Hilti Distribution Ltd., Moscow S
LLC "Oglaend System", Saint Petersburg S
Serbia Hilti SMN d.o.o. Beograd, Zemun S
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
Sweden Hilti Svenska AB, Arlöv-Malmö S
Ögländ System AB, Höllviken S
Switzerland Hilti (Schweiz) AG, Adliswil S
Hilti Befestigungstechnik AG, Buchs Se
Hilti-Finanz GmbH, Buchs H, Se
Taiwan Hilti Taiwan Co., Ltd., Taipei S
Thailand Hilti (Thailand) Ltd., Bangkok S
Turkey Hilti Insaat Malzemeleri Ticaret A.Ş., Istanbul S
Ukraine Hilti (Ukraine) Ltd., Kiev S
United Arab Emirates Hilti Middle East FZE, Jebel Ali-Free Zone, Dubai S, Se
USA Hilti Inc., Plano, Texas S
Hilti of America, Inc., Delaware H
Hilti Holdings Limited, Delaware H
Hilti US Manufacturing, Inc., Cypress, California P
Oglaend System US LLC, Houston S
Venezuela Hilti Venezuela, S.A., Caracas S
Vietnam Hilti Vietnam Company Limited, Ho Chi Minh City S
Less than 100% owned consolidated Group companies (subsidiaries)
Bahrain Hilti Bahrain Co. W.L.L., Manama (49%) S

Qatar Hilti Qatar W.L.L., Doha (49%) S
Saudi Arabia Hilti Saudi Arabia for Construction Tools LLC, Riyadh (75%) S
South Africa Hilti (South Africa) (Pty) Ltd., Johannesburg/Midrand (87.25%) S
United Arab Emirates Hilti Emirates LLC, Abu Dhabi (49%) S
Oglaend Industries Middle East LLC, Dubai (49%) S
Although the Group owns less than half of the voting rights of Hilti Bahrain Co. W.L.L., Hilti Qatar W.L.L., Hilti Emirates LLC and Oglaend
Industries Middle East LLC, management has determined that the Group controls these four companies. The Group has control, as
contractual agreements grant the Group the right to appoint and remove management responsible for directing the relevant activities. In
addition, the Group is entitled to appoint, remove and substitute a majority of members of the companies’ Board of Directors.

Joint operations
China Panasonic Eco Solutions Power Tools (Shanghai) Company Limited (49%) P
Germany HILLOS GmbH, Jena (50%) P
Hilti Seuffer Electronics GmbH, Calw (50%) P, D
Taiwan Racing Point Industry Co., Ltd., Kaohsiung (49%) P
USA Intelligent Construction Tools LLC, Delaware (50%) P, D
Joint venture
South Africa Hilti SA Holding (Pty) Ltd., Johannesburg/Midrand (49%) H

Auditors’ Report on the Consolidated Financial Statements
REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF

Auditors’ Report on the Co nsolidated Financial Statem ents
HILTI AKTIENGESELLSCHAFT, SCHAAN
Report on the audit of the consolidated financial statements
Opinion
We have audited the consolidated financial statements of Hilti Aktiengesellschaft and its subsidiaries (the Group), which comprise the
consolidated balance sheet, consolidated income statement, consolidated statement of comprehensive income, consolidated statement
of changes in equity, consolidated cash flow statement and notes, including a summary of significant accounting policies (pages 10 to
74), and the consolidated management report (pages 6 to 7) for the year ended 31 December 2018.
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31
December 2018 and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with
the International Financial Reporting Standards (IFRS) and comply with Liechtenstein law.
Basis for opinion
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 consolidated financial
statements” section of our report.
We are independent of the Group in accordance with the provisions of Liechtenstein law and the requirements of the Liechtenstein audit
profession, as well as the IESBA Code of Ethics for Professional Accountants, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Our audit approach
• Overall Group materiality: CHF 33 million

• We concluded full scope audit work at 20 reporting units in 19 countries.
Materiality
• Our audit scope addressed over 78% of the Group’s revenue and 75% of the Group’s
total assets.
• In addition, specified procedures were performed on a further 3 reporting units in 3
Audit
scope countries, representing a further 3% of the Group’s revenue and 4% of the Group’s total
assets.
• Further, we performed additional procedures to address any residual risk at other
Key audit locations as deemed appropriate.
matters
As key audit matter the following area of focus has been identified:
• Capitalization of internal development costs

Materiality
The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable assurance that the
consolidated financial statements are free from material mis-statement. 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 determined certain quantitative thresholds for materiality, including the overall Group
materiality for the consolidated 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 and extent of our audit procedures and to evaluate
the effect of mis-statements, both individually and in aggregate on the consolidated financial statements as a whole.
Overall Group materiality CHF 33 million

How we determined it 5% of profit before tax

Rationale for the materiality We chose profit before tax because, this is the most commonly used performance measure
benchmark applied for the industry in which the Group operates and it is a generally accepted benchmark.
Audit scope
We designed our audit by determining materiality and assessing the risks of material misstatement in the consolidated financial
statements. In particular, we considered where subjective judgements were made; for example, in respect of significant accounting
estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also
addressed the risk of management override of internal controls, including among other matters consideration of whether there was
evidence of bias that represented a risk of material misstatement due to fraud.
The Group consolidated financial statements are a consolidation of over 100 reporting units, comprising the Group’s operating
businesses and market organisations, production plants, research and development centres, and centralised functions.
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, the accounting processes and controls, and the industry in which
the Group operates.
Subsequently, we determined the type and level of audit work required from component auditors, from PwC network firms and
component auditors from other firms, in order that sufficient appropriate audit evidence had been obtained 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. Moreover, we were in regular contact with all relevant component auditors.
The Group’s reporting units vary significantly in size. We identified 20 reporting units where we require an audit of their complete financial
information. These accounted for 78% of the Group’s total revenue and 75% of the Group’s total assets. Specific audit procedures on
certain balances and transactions were performed at a further 3 reporting units, representing a further 3% of the Group’s total revenue
and 4% of the Group’s total assets.
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 of the 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 on these matters.
Capitalization of internal development costs
Key audit matter How our audit addressed the key audit matter
As set out in note 7, CHF 158.1 million of We assessed and tested the design and operating effectiveness of the key controls
internal development costs have been relating to the capitalization process, particularly those that:
capitalized under ‘Intangible assets’ in • Address whether costs are research or development in nature.
2018. • Address the risks relating to the ‘probable future economic benefit’ and ‘technical
We focussed on this area due to the high feasibility’.
amount of capitalized internal development • Ensure the correct, timely and complete capitalization of the internal employee
costs (CHF 621.6 million as of 31 December costs and any other project-related costs.
2018) and because significant judgement is • We held interviews with the business unit controllers and project managers, in
involved in assessing whether costs are particular to:
research or development in nature and • Gain an understanding of their development projects and why specific projects
whether the criteria set out in the accounting were considered to meet the requirements of the relevant accounting standards.
standards (as per IAS38) for the • Discuss specific project topics and risks and critically assess the responses.
capitalization of such costs have been met, Our work also included substantive audit procedures (e.g. reading the project
particularly: documentation, evaluating the project’s key assumptions, testing a sample of standard
• Generation of probable future hourly rates).
economic benefit; Overall, we could confirm that the capitalized costs meet the capitalization criteria set out
• Reliable measure of the attributable in the accounting standards and we identified no significant findings in relation to this
expenditure; and matter
• Technical feasibility of the project.

Other information in the annual report
The Board of Directors is responsible for the other information 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 of Hilti
Aktiengesellschaft 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 the other information in the annual
report and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
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 other information, we are required to report that fact. We have nothing to report in
this regard.
Responsibilities of the Board of Directors for the consolidated financial statements
The Board of Directors is responsible for the preparation of the consolidated financial statements that give a true and fair view in
accordance with IFRS and the provisions of Liechtenstein law, and for such internal control as the Board of Directors determines is
necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud
or error.
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 of accounting 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 the consolidated 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 report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit 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 to influence the economic decisions of users taken on the basis of these consolidated
As part of an audit in accordance with Liechtenstein law and ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error,
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.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness 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 Board of Directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant 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 such disclosures 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 the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and
whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and
performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors or its relevant committee, we determine those matters 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 unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our 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 consolidated management report is in accordance with the consolidated financial statements.
We recommend that the consolidated financial statements submitted to you be approved.
PricewaterhouseCoopers AG
René Rausenberger Gianluca Galasso
Auditors in charge
St. Gallen, March 13, 2019

Financial Statem ents Hilti Corporation
FINANCIAL STATEMENTS
HILTI CORPORATION
(INCLUDING BRANCHES)
Statements Hilti Corporation

Financial Statements Hilti Corporation
BALANCE SHEET
in CHF million Note 31.12.2018 31.12.2017
ASSETS
Intangible assets 4 25.8 25.0

Property, plant and equipment 5 383.1 401.5
Financial investments 6 1,908.9 1,852.7
Total non-current assets 2,317.8 2,279.2
Inventories 7 174.2 126.2

Trade and other receivables 8 745.5 833.6
Accrued income and prepayments 42.6 30.8
Cash and cash equivalents 488.5 466.2
Total current assets 1,450.8 1,456.8
TOTAL ASSETS 3,768.6 3,736.0
Share capital 126.7 88.0

Participation capital – 38.7
Legal reserves 108.4 108.4
Foreign currency translation reserve (14.8) (12.5)
Retained earnings brought forward 2,076.6 1,947.5
Total equity 9 2,677.7 2,562.8
Provisions 10 85.7 74.9

Borrowings, payables and other liabilities 11 909.9 990.2
Accrued liabilities and deferred income 95.3 108.1
Total liabilities 1,090.9 1,173.2
TOTAL EQUITY AND LIABILITIES 3,768.6 3,736.0

Financial Statements Hilti Corporation
INCOME STATEMENT
Net sales 2,984.4 2,731.2

Change in inventory of finished goods and work in progress – 0.2
Capitalized own production 0.9 1.6
Other operating revenues 11.4 14.4
Total operating revenues 2,996.7 2,747.4
Material costs 12 (1,500.5) (1,355.3)

Personnel expenses 13 (341.4) (320.2)
Depreciation and amortization 14 (54.8) (69.8)
Other operating expenses (826.5) (679.3)
Total operating expenses (2,723.2) (2,424.6)
Operating result 273.5 322.8
Financial revenues 15 173.0 142.0

Financial expenses 16 (32.4) (36.5)
Financial result 140.6 105.5
Net income before income tax expense 414.1 428.3
Tax expense (33.3) (35.6)

Notes to the Financial Statements Hilti Corporation
(1) General information
Hilti Corporation is a limited liability company incorporated and domiciled in the Principality of Liechtenstein. Its registered office is at
Feldkircherstrasse 100, 9494 Schaan, Liechtenstein. Hilti Corporation is the parent and main operating company of the Hilti Group. The
shareholders have an interest in the Group through their interest in Hilti Corporation. The accompanying Group’s consolidated financial
statements are the most significant indicator of the Group’s financial position and financial performance.
(2) Accounting policies
(2.1) Overview
In contrast to the Group’s consolidated financial statements, which have been prepared in accordance with International Financial
Reporting Standards (IFRS), the financial statements of Hilti Corporation have been 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, recognition and presentation differences are listed below. Apart from these differences, the
accounting policies adopted for the measurement, recognition and presentation of financial statement items in both sets of financial
statements are substantially the same.
(2.2) Differences in accounting policies to those of the Group
The following table identifies the relevant financial statement items and the corresponding treatments where the accounting policies
adopted for the measurement and recognition of items in the financial statements of Hilti Corporation are significantly different from
those adopted in the Group’s consolidated financial statements.
Relevant financial statement item Treatment in financial statements of Treatment in Group financial statements
Hilti Corporation
Valuation of property, plant and equipment In accordance with taxation rules pursuant At lower of market value and historical cost
and inventories to Article 1086 of the PGR. subject to adjustment for depreciation or
obsolescence based on economic esti-
mates.
Valuation of investments in associated At historical cost. In accordance with the equity method of
companies and joint ventures accounting.
Valuation of provisions Based on business risk criteria. In accordance with the best estimate of the
amounts required to satisfy existing obliga-
tions.
Reporting of derivative financial Recognized at fair value with value changes Recognized at fair value with value changes
instruments hedging anticipated operating reported directly in the income statement. reported as part of equity and reclassified
transactions (cash flow hedges) to the income statement when the
anticipated operating transactions occur.
Reporting of development costs All immediately expensed. For qualifying new product developments,
capitalized during the development phases
and subsequently amortized over the sales
lives of the new products while other
development costs are immediately
expensed.
Measurement of pension plan obligation Treated as defined contribution plan. Treated as defined benefit plan with cumu-
lative remeasurements recognized directly
in equity.

The following table identifies the significant presentation differences relating to items in the financial statements of Hilti Corporation and
the corresponding items in the Group’s consolidated financial statements.
Relevant financial statement item Presentation in financial statements of Presentation in Group financial statements
Hilti Corporation
Investments in deposits, bonds and equi- Included in ‘financial investments’. Included in ‘financial assets at fair value
ties restricted to the funding of losses through profit or loss’ under current assets
arising from damages to assets and losses heading.
arising from product-related obligations
Recognized values of derivative financial Included in ‘accrued income and prepay- Presented as a separate line item ‘derivative
instruments ments’ or ‘accrued liabilities and deferred financial instruments’ under each of the
income’ as applicable. current and non-current assets and
liabilities headings.
Short-term tax obligations Included in ‘provisions’. Presented as a separate line item ‘current
income taxes payable’ under current liabili-
ties heading.
(2.3) Changes in accounting policies
There have been no material changes in accounting policies in the 2018 financial statements of Hilti Corporation from those adopted in
2017.
(3) Exchange rates
For details of foreign exchange rates of principal currencies that have been applied for translation into Swiss francs, see note (2.5) of the
Group’s consolidated financial statements.

(4) Intangible assets
in CHF million Rights Other Prepay- Total

intangible ments or
assets assets
under de-
velopment
Cost 2018
Opening balance at January 1, 2018 12.5 97.4 – 109.9
Currency translation adjustment – – – –
Additions 0.1 10.4 – 10.5
Disposals (8.4) (3.4) – (11.8)
Closing balance at December 31, 2018 4.2 104.4 – 108.6

Opening balance at January 1, 2018 (11.5) (73.4) – (84.9)
Additions (0.2) (8.5) – (8.7)
Disposals 7.8 3.0 – 10.8
Closing balance at December 31, 2018 (3.9) (78.9) – (82.8)
Net book values at December 31, 2018 0.3 25.5 – 25.8

Net book values at December 31, 2017 1.0 24.0 – 25.0
(5) Property, plant and equipment
in CHF million Land and Plant and Other Prepayments Total

buildings machinery operating or assets
equipment under
construction
Cost 2018
Currency translation adjustment (2.2) (3.5) (0.7) (0.2) (6.6)
Additions 2.9 13.2 4.9 14.9 35.9
Disposals (8.0) (20.6) (38.9) (2.0) (69.5)
Transfers 12.8 3.2 – (16.0) –

Opening balance at January 1, 2018 (159.5) (427.7) (120.8) – (708.0)
Currency translation adjustment 1.2 2.7 0.7 – 4.6
Additions (21.6) (16.7) (7.8) – (46.1)
Disposals 5.6 20.3 37.4 – 63.3
Transfers – – – – –
Closing balance at December 31, 2018 (174.3) (421.4) (90.5) – (686.2)

(6) Financial investments
in CHF million Share- Loans to Other Total

holdings Group financial
companies investments
Cost 2018
Opening balance at January 1, 2018 1,852.5 32.8 20.9 1,906.2
Additions 59.7 – – 59.7
Disposals (0.1) (6.3) (2.3) (8.7)
Closing balance at December 31, 2018 1,912.1 26.5 18.6 1,957.2
Accumulated valuation allowance 2018

Opening balance at January 1, 2018 (53.5) – – (53.5)
Additions – – – –
Disposals 5.2 – – 5.2
Closing balance at December 31, 2018 (48.3) – – (48.3)
Net book values at December 31, 2018 1,863.8 26.5 18.6 1,908.9
Net book values at December 31, 2017 1,799.0 32.8 20.9 1,852.7
A list of Group companies, directly or indirectly held by Hilti Corporation, is included in note (44) of this Financial Report. Pursuant to
Article 1094 (3) of the PGR, some details relating to investments in Group companies have not been disclosed in this list.
(7) Inventories
Raw materials 20.4 19.1

Consumables 8.9 8.5
Production in progress 6.1 6.1
Finished products and goods held for resale 138.8 92.5
Total inventories 174.2 126.2
The increase in total inventories includes an increase in the provision for inventories of CHF 23.9 million (2017: CHF 6.8 million), which
is optional under PGR and tax rules. The total amount for this provision amounts to CHF 86.2 million (2017: CHF 62.3 million).

(8) Trade and other receivables

Short-term Long-term Total Short-term Long-term Total
Trade accounts receivables from third parties 25.2 – 25.2 28.4 – 28.4
Trade accounts receivables from Group companies 655.1 – 655.1 717.7 – 717.7
Total trade accounts receivables 680.3 – 680.3 746.1 – 746.1
Other accounts receivables from third parties 20.6 – 20.6 26.8 – 26.8
Other accounts receivables from Group companies 44.6 – 44.6 60.7 – 60.7
Total other accounts receivables 65.2 – 65.2 87.5 – 87.5
Total trade and other receivables 745.5 – 745.5 833.6 – 833.6
The contractual maturity of short-term receivables is less than one year and for long-term receivables over one year.
(9) Equity
in CHF million Share and Legal Foreign Retained Total

PC capital reserves currency earnings equity
translation
reserve
Equity at January 1, 2018 126.7 108.4 (12.5) 2,340.2 2,562.8

Dividend paid – – – (263.6) (263.6)
Foreign currency translation differences – – (2.3) – (2.3)
Net income – – – 380.8 380.8
Equity at December 31, 2018 126.7 108.4 (14.8) 2,457.4 2,677.7
As per year ending 2018 the share capital consists of 253,440 registered shares with a par value of CHF 500 each (2017: the share
capital consists of 176,000 registered shares with a par value of CHF 500 each and the participation capital consists of 774,400
participation certificates with a par value of CHF 50 each. The participation capital has no voting rights.).
The extraordinary General Meeting held at March 6, 2018 resolved to convert the participation capital of Hilti Corporation into share
capital. The 774,400 participation certificates with a par value of CHF 50 each are converted to 77,440 registered shares with a par value
of CHF 500 each. The share capital now consists of 253,440 registered shares with a par value of CHF 500 each. The total capital has
not changed and continues to amount to CHF 126.7 million. All the capital is fully paid in and is entitled to dividends.
The currency translation differences arise from the inclusion of the income statement and balance sheet items of plant Thüringen, Austria,
which are denominated in euro. The foreign currency translation reserve comprises the accumulated foreign currency gains and losses
recognized in equity since 2003.
(10) Provisions
Provision for employee benefits 45.1 33.8

Tax obligations 30.5 35.8
Other provisions 10.1 5.3
Total provisions 85.7 74.9
Other provisions relate mainly to product liability.

(11) Borrowings, payables and other liabilities

Short–term Long–term Total Short–term Long–term Total
Euro bonds 2012/2015-2019 33.2 – 33.2 11.7 34.5 46.2

0.875% bond 2013/2018 – – – 100.0 – 100.0
1.875% bond 2013/2023 – 100.0 100.0 – 100.0 100.0
0.200% bond 2017/2024 – 100.0 100.0 – 100.0 100.0
0.400% bond 2017/2027 – 99.9 99.9 – 99.9 99.9
Total bonds 33.2 299.9 333.1 111.7 334.4 446.1
Bank borrowings – – – – – –
Trade accounts payables third parties 158.0 – 158.0 175.8 – 175.8

Trade accounts payables Group companies 140.5 – 140.5 118.1 – 118.1
Total trade accounts payables 298.5 – 298.5 293.9 – 293.9
Other liabilities owing to third parties 35.8 23.9 59.7 10.8 25.5 36.3
Other liabilities owing to Group companies 218.6 – 218.6 68.2 145.7 213.9
Total other liabilities 254.4 23.9 278.3 79.0 171.2 250.2
Total borrowings, payables and other liabilities 586.1 323.8 909.9 484.6 505.6 990.2
The contractual maturity of short-term liabilities is less than one year and for long-term liabilities over one year.
(12) Material costs
Raw materials, consumables and bought-in goods for resale (1,486.3) (1,340.9)
Outsourced manufacturing (14.2) (14.4)
Total material costs (1,500.5) (1,355.3)
(13) Personnel expenses
Wages and salaries (285.0) (268.3)

Pension contributions (39.8) (36.5)
Other social contributions (16.6) (15.4)
Total personnel expenses (341.4) (320.2)
(14) Depreciation and amortization
This position comprises depreciation and amortization of intangible assets and property, plant and equipment.

(15) Financial revenues
Recovery of depreciation on financial assets 5.2 –
Financial investment revenues from third parties 1.7 2.1

Financial investment revenues from Group companies 166.1 139.9
Total revenues from financial investments 167.8 142.0
Revenues from cash and marketable securities invested with third parties – –
Revenues from cash and marketable securities invested with Group companies – –
Total revenues from cash and marketable securities – –
Total financial revenues 173.0 142.0
(16) Financial expenses
Depreciation on financial assets – (4.5)
Interest and similar expenses incurred to third parties (5.4) (17.9)

Interest and similar expenses incurred to group companies (3.2) (3.6)
Total interest and similar expenses (8.6) (21.5)
Operating currency and hedge gains/(losses) (23.8) (10.5)
Total financial expenses (32.4) (36.5)
(17) Tax expense
For income tax purposes, dividends received are tax-exempt.

(18) Derivative financial instruments
Hilti Corporation enters derivative contracts to hedge mainly foreign currency risks arising from forecast 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. on-balance sheet) derivative contracts are reported at fair value. 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:

Foreign currency forward contracts 711.0 714.7
Interest rate swaps 60.0 60.0
Total contract face amounts 771.0 774.7
Contract values
Foreign currency forward contracts 3.7 (1.7)
Interest rate swaps 5.3 5.6
Total contract values 9.0 3.9
Reporting of contract values

Contract values recognized (on-balance sheet) 9.0 3.9
Contract values unrecognized (off-balance sheet) – –
Total contract values 9.0 3.9
(19) Segment information
Pursuant to Article 1094 (2) of the PGR, a breakdown of net sales has not been disclosed.
(20) Contingent liabilities
Guarantees third parties – –

Guarantees Group companies 131.8 134.4
Total contingent liabilities 131.8 134.4
(21) Commitments
Payment commitments arising from operating lease contracts are as follows:
Expiring within 1 year 0.6 0.5

Expiring between 1 and 5 years 0.9 0.6
Total commitments 1.5 1.1

(22) Remuneration of the Board of Directors and the Corporate Management
For details of the remuneration of the Board of Directors and the Corporate Management, see note (42) of the Group’s consolidated
(23) Other transactions and balances with the shareholder
For details about other transactions and balances with the shareholder see note (42.3) within the notes to the consolidated financial
statements.
(24) Number of employees
The breakdown of employees by nationality is as follows:
Country 2018 % 2017 %
Austria 868 40% 831 40%

Germany 414 19% 408 20%
Liechtenstein 153 7% 159 8%
Switzerland 229 11% 225 11%
Other countries 513 23% 452 21%
Total employees 2,177 100% 2,075 100%
(25) Management report
Pursuant to Article 1121 (3) of the PGR, the management report of Hilti Corporation has been combined with the consolidated
management report. The consolidated management report is on pages 6 and 7 of this Financial Report.
(26) Appropriation of retained earnings
Profit brought forward 2,076.6 1,947.5

At the disposal of the General Meeting 2,457.4 2,340.2
Proposal by the Board of Directors

Dividend of CHF 1075 (2017: CHF 1040) per share 272.4 263.6
Appropriation to other reserves – –
Balance carried forward 2,185.0 2,076.6
Total 2,457.4 2,340.2

Auditors’ Report on the Financial Statements Hilti Corporation
REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF

HILTI AKTIENGESELLSCHAFT, SCHAAN
Report on the audit of the financial statements
Opinion
We have audited the accounting records and financial statements of Hilti Aktiengesellschaft, which comprise the balance sheet, the
income statement and notes (pages 81 to 91), and the management report (pages 6 to 7) for the year ended 31 December 2018.
In our opinion, the financial statements give a true and fair view of the financial position as at 31 December 2018, and its financial
performance and its cash flows for the year then ended in accordance with Liechtenstein law. Furthermore, the accounting records and
financial statements and the management report comply with Liechtenstein law and the company’s articles of incorporation.
Basis for opinion
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.
We are independent of the entity in accordance with the provisions of Liechtenstein law and the requirements of the Liechtenstein audit
profession, as well as the IESBA Code of Ethics for Professional Accountants and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Materiality
The scope of our audit was influenced by our application 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 the economic decisions of users taken on the basis of the
Based on our professional judgement, we determined certain 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 and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Overall materiality CHF 20.5 million

How we determined it 5% of profit before tax
Rationale for the materiality We chose profit before tax because, this is the most commonly used performance measure
benchmark applied for the company and it is a generally accepted benchmark.
Audit scope
We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements. In
particular, we considered where subjective judgements were made; for example, in respect of significant accounting estimates that
involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the
risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias
that represented a risk of material misstatement due to fraud.
Report on key audit matters
We have determined that there are no key audit matters to communicate in our report.

Responsibilities of the Board of Directors for the financial statements
The Board of Directors is responsible for the preparation of the financial statements in accordance with the provisions of Liechtenstein
law and the company’s articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable
the preparation of 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 entity’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board
of Directors either intends to liquidate the entity or to cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit 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 to influence the economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with Liechtenstein law and ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, 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.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’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 Board of Directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
entity’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 financial statements or, if such disclosures 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 the entity to cease to continue as a going concern.
We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors or its relevant committee, we determine those matters 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 these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our 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 management report is in accordance with the financial statements.
We further confirm that the proposed appropriation of available earnings complies with Liechtenstein law and the company’s articles of
incorporation. We recommend that the financial statements submitted to you be approved.
PricewaterhouseCoopers AG
René Rausenberger Gianluca Galasso
Auditors in charge
St. Gallen, March 13, 2019

Corporate Governance
CORPORATE GOVERNANCE

Election and term of office for the The members of the Board of Directors of Hilti Corporation are elected by the Annual General
members of the Board of Directors Meeting for three years. In principle, the term of office shall amount to not more than four terms
and the mandate of a member of the Board of Directors shall lapse with effect at the end of the
business year in which the relevant member reaches the age of 70.
Allocation of responsibilities and The Board of Directors is the supreme executive body of Hilti Corporation and responsible for
duties of the Board of Directors superintendence, supervision and control of the management. In addition to further legally
defined obligations, the Board of Directors adopts the fundamental 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
and supported it in a consultative capacity. The Board of Directors took a strategic focus and
was actively involved in projects concerning Group strategy. In several multiday Board meetings
and visits to major operating 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 the audit
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 with legal and regulatory requirements, the internal and external audit
processes as well as with its oversight of the risk management. The overall responsibility for the
tasks delegated to the Audit Committee remains with the Board of Directors. In 2018, the Audit
Committee consisted of Dr. Michael Jacobi (Chairman of the Audit Committee) and Dr. Daniel
Daeniker, who were appointed by the Board of Directors for a term of one year.
Internal audit The internal audit department, Corporate Audit, supports the Board of Directors by monitoring
the internal control status within Group companies. To achieve this, Corporate Audit conducts
audits focused on controls within major transaction cycles as well as on processes for
management of selected corporate risks. 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 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 their respective
risks to evaluate, implement, review and monitor compliance with the corresponding risk
mitigation measures. For financial and occurrence-oriented risks, the Corporate Risk Manager
is responsible for the risk reporting process and to ensure the reported content and identified
measures regarding the identified risks are plausible. Corporate Audit undertakes reviews of
selected risks as part of their internal control reviews in Group companies (see above) and in
corporate functions managed by the respective risk owners. For strategic risks, 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.

Shareholders’ rights Details of share capital are given in the Group financial statements (see note (20)). In principle,
resolutions of the General Meeting are passed by absolute majority of the voting shares
represented. A majority of at least three quarters of the voting shares represented at the General
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 form or the dissolution
of the company.
Auditors 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 April 2018 for the 2018 year. The auditor-in-charge has been
responsible for the mandate from 2012 following a partner rotation after the 2011 year. In
respect of the 2018 year, audit fees of PricewaterhouseCoopers amount to CHF 1.9 million
whereas the non-audit fees amount to CHF 0.1 million. Total audit fees of the Group, including
audits not performed by PricewaterhouseCoopers, amount to CHF 2.4 million.

Investor Information
INVESTOR INFORMATION
Investor Inform ation
Contact Investor relations Media relations

information
Felix Hess Matthias Hassler
Executive Vice-President Spokesperson
Finance & Controlling
Hilti Corporation Hilti Corporation

Feldkircherstrasse 100 Feldkircherstrasse 100
9494 Schaan 9494 Schaan
Liechtenstein Liechtenstein
Phone +423 234 4932 Phone +423 234 4949

E-mail: [email protected] E-mail: [email protected]
www.hilti.group www.hilti.group
Key dates Interim financial information May 15, 2019

January to April 2019
Interim financial information September 20, 2019

January to August 2019
Publication of the 2019 Financial Report March 13, 2020
Annual results media conference March 13, 2020

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2018

Group Financial Statements 9

Financial Statements Hilti Corporation 80

Investor Information 100

2018 Financial Report | 1

KEY FINANCIAL INFORMATION OF HILTI GROUP

financial amounts in CHF million 2018 2017 2016 2015 2014

Employees (as at December 31) 29,004 26,881 24,619 23,385 22,248

Information on bonds (nominal values)

* Before acquisition and disposal of subsidiaries

2018 Financial Report | 3

2018 Financial Report | 5

ACCELERATED SALES GROWTH AND RENEWED RISE IN PROFITABILITY

2018 Financial Report | 6

2018 Financial Report | 7

GROUP FINANCIAL STATEMENTS

2018 Financial Report | 9

CONSOLIDATED BALANCE SHEET

in CHF million Note 31.12.2018 31.12.2017 01.01.2017

Intangible assets 7 808.3 732.0 471.7

Inventories 13 678.6 637.6 548.3

TOTAL ASSETS 5,611.9 5,443.6 4,712.9

* See note 2.2

The notes are an integral part of these Group financial statements.

2018 Financial Report | 10

in CHF million Note 31.12.2018 31.12.2017 01.01.2017

EQUITY AND LIABILITIES

Non-controlling interests 3.7 1.5 0.2

Provisions 21 13.6 16.5 16.4

Provisions 21 9.4 8.7 15.5

Total liabilities 2,536.8 2,570.9 2,249.9

TOTAL EQUITY AND LIABILITIES 5,611.9 5,443.6 4,712.9

* See note 2.2

The notes are an integral part of these Group financial statements.

2018 Financial Report | 11

CONSOLIDATED INCOME STATEMENT

in CHF million Note 2018 2017

Net sales 29 5,659.3 5,112.6

Change in inventory 30 56.7 50.5

Operating result 728.4 680.6

Other income and expenses (net) 34 (29.7) (9.3)

Net income before income tax expense 667.6 643.7

Income tax expense 36 (121.2) (123.1)

Net income 546.4 520.6

* See note 2.2

The notes are an integral part of these Group financial statements.

2018 Financial Report | 12

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

in CHF million Note 2018 2017

Net income 546.4 520.6

Net movement on cash flow hedges 16 2.7 (4.5)

Remeasurements on employee benefits 22 (25.3) 96.1

Other comprehensive income (OCI) (80.4) 132.4

Total comprehensive income 466.0 653.0

* See note 2.2

The notes are an integral part of these Group financial statements.

2018 Financial Report | 13

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Dividend paid – – – – (263.6) (263.6) – (263.6)