Hexatronic Group AB (publ) Interim report January – June 2023

Hexatronic Group AB (publ)
Interim report January – June 2023

Continued growth, improved profitability and cash flow

Second quarter (April 1 – June 30, 2023)

• Net sales increased by 36 percent to MSEK 2,258 (1,662). Organic growth amounted to 7 percent.
• EBITA increased by 45 percent to MSEK 405 (278), corresponding to an EBITA margin of 17.9 percent (16.8).
• Operating profit (EBIT) increased by 43 percent to MSEK 377 (264), corresponding to an operating margin of 16.7 percent (15.9).
• Net profit increased by 37 percent to MSEK 259 (189).
• Earnings per share after dilution amounted to SEK 1.27 (0.93).
• Cash flow from operating activities amounted to MSEK 348 (176).

Events during the quarter

• Hexatronic signs agreement with new network operator in the US to a value of 20 MUSD.
• Hexatronic has signed an agreement to acquire Fibron, a leading OEM manufacturer of electro-optical cables for harsh environments, thereby strengthening the opportunities in the Harsh Environment market.
• Hexatronic initiated and completed a repurchase program of its own shares with support from the authorization from the annual general meeting on May 9, 2023. Within the framework of the program, all 1,200,000 ordinary shares were repurchased.
• Hexatronic initiates the share savings program (LTIP 2023) decided by the Annual General Meeting on May 9, 2023.

Events since the end of the quarter

• No significant events occurred after the end of the quarter.
  
  

Comments from the CEO
Continued growth, improved profitability and cash flow

Hexatronic continued to grow during the second quarter. Sales increased by 36 percent, with 7 percent attributed to organic growth, and the EBITA margin expanded to 17.9 percent, surpassing our long-term targets of at least 20 percent sales growth and an EBITA margin within the range of 15-17 percent. At the same time, cash flow from operating activities developed positively due to reducing our inventories, and increased to SEK 348 million in the quarter.

North America continued to develop well and reached a sales growth of 58 percent driven by duct sales in Blue Diamond Industries and sales of our FTTH systems in the US and Canada. The factory in Clinton, South Carolina is gradually increasing its production and, as before, is expected to be fully operational in the latter part of the third quarter. The investment in a fourth duct factory in Ogden, Utah is proceeding according to plan and production is expected to start at the beginning of the third quarter of next year.