Hexatronic Group AB (publ) Interim report January – March 2024

Hexatronic Group AB (publ)
Interim report January – March 2024

Continued strong operating cash flow and contribution from new focus areas

First quarter (January 1 – March 31, 2024)

• Net sales decreased by 16 percent to MSEK 1,782 (2,115). Sales decreased organically by 27 percent.
• EBITA decreased by 54 percent to MSEK 168 (365), corresponding to an EBITA margin of 9.4 percent (17.2).
• Operating profit (EBIT) decreased by 59 percent to MSEK 138 (340), corresponding to an operating margin of 7.7 percent (16.1).
• Net profit decreased by 73 percent to MSEK 61 (224).
• Earnings per share after dilution amounted to SEK 0.31 (1.09).
• Leverage ratio (net debt/EBITDA (pro forma), R12) amounted to 2.0x compared to 1.7x as of December 31, 2023.
• Cash flow from operating activities amounted to MSEK 270 (28).
  
  

Significant events during the quarter

• The Board of Directors proposes to the Annual General Meeting that no payment of dividend will be made for the financial year 2023.
• Hexatronic merges its two Swedish wholly-owned subsidiaries, Hexatronic Cable & Interconnect Systems and Hexatronic Fiberoptic, forming Hexatronic Sweden. The merger aligns with Hexatronic’s strategy to have a strong local fiber-to-the-home company in our selected markets.
• The Nomination Committee has informed the company that it intends to propose Magnus Nicolin for election as Chairman of the Board, at the Annual General Meeting on May 7, 2024.
  
  

Significant events since the end of the quarter

• Hexatronic announces changes in the company's executive management. Jakob Skov, Head of focus area Harsh Environment, will join the company's executive management as of April 2024 and in June 2024 Pernilla Grennfelt will join Hexatronic as Head of Investor Relations and join the company's executive management.
  
  

Comments from the CEO
Continued strong operating cash flow and contribution from new focus areas

During the first quarter we had a continued strong operating cash flow of MSEK 270, compared to MSEK 28 in the corresponding period last year, primarily driven by continued inventory optimization according to the strategy. As previously communicated, the market in Fiber Solutions is negatively affected by high financing costs, cost inflation and high inventory levels in some geographical markets. Combined with an very strong first quarter last year, the Group experienced negative growth in the first quarter of 16 percent compared to the corresponding period last year and 4 percent compared to the previous quarter. Our new focus areas Harsh Environment and Data Center, partly offset the decline in Fiber Solutions and are beginning to constitute an increasingly relevant part of the Group's total sales, with good profitability. This is an important sign that our diversification strategy is yielding positive results. Going forward, we will clarify the roles of these areas within the Group.