Hexatronic Group Year-end report January – December 2020

Hexatronic Group AB (publ)
Year-end report January – December 2020

 

Events during the quarter

• Hexatronic acquired the fiber optic companies Baltronic Group OÜ, based in Estonia and the Canadian company Toronics Inc. (name changed to Hexatronic Canada Inc).
   
• Hexatronic acquired 90 percent of the shares in Qubix S.pA., an Italian supplier of structured cabling.
   
• Hexatronic won new submarine cable orders totalling approximately MSEK 115.
   
• Lennart Sparud announced that he is leaving his role as CFO in Hexatronic Group. The recruitment process for a replacement is in the final phase.

             

Events since the end of the period

• Hexatronic Hexatronic won new submarine cable orders totalling approximately MSEK 60.
   
• Hexatronic signed a strategic supply agreement with Vocus in Australia.
   
• The Board of Directors will propose a dividend of SEK 0.50 (0) per share for the financial year 2020 to the Annual General Meeting.
   
• Hexatronic adjusted the profitability target to 10 percent EBITA on rolling 12 months basis (from 9 percent).

             

COMMENTS FROM THE CEO

Strong profitability growth and high acquisition activity

2020 was a year of strong growth in profitability for Hexatronic. The EBITA margin increased from 7.4 percent last year to 9.8 percent, well above the target of at least 9 percent. Compared to last year, EBITA rose by 51 percent and earnings per share by 87 percent. 

The quarterly EBITA margin of 11 percent was very strong and resulted in an increase in EBITA of 139 percent compared to the corresponding period last year. The strong development in profitability during the year is primarily attributable to scale effects: our production plants have seen higher capacity utilisation, and we have reduced costs of materials by using new materials, and thanks to reduced material prices.

Sales continue to develop well, even though we did not achieve our growth target of at least 20 percent. Sales growth totalled 13 percent, of which organic growth 11 percent. Our assessment is that we lost 5 to 10 percent of sales during the year due to the COVID-19 pandemic.

Sales growth in Europe excluding Sweden was 24 percent, primarily driven by continued strong development in the UK, as well as Germany and Norway. There has been high activity on the British market during the year, with many operators now building or planning FTTH networks. The German market, which lags behind the British one in terms of investment activity, showed clear signs of gathering momentum.