Release Date: July 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hexpol AB (HXPLF, Financial) reported stable sales in Europe and growth in the engineered products segment.
- The company achieved a strong operating cash flow of SEK834 million, surpassing EBIT for the quarter.
- Hexpol AB (HXPLF) continues to focus on sustainability, with high interest in recycled products, particularly from the automotive industry.
- The acquisition of Kabkom has been successfully consolidated, contributing to growth in the wire and cable segment.
- Hexpol AB (HXPLF) maintains a strong financial position, with a net debt-to-EBITDA ratio of 1.27, allowing for potential future acquisitions.
Negative Points
- Overall sales were down 8% compared to the same period last year, primarily due to lower demand in North America.
- The company faced a negative FX impact of SEK340 million on sales.
- Lower organic demand was observed, particularly in the North American automotive segment.
- Operating margin decreased to 15.1%, affected by a less profitable product mix and higher operating expenses.
- There is ongoing uncertainty related to the US trade policy, impacting demand and creating a wait-and-see attitude among potential acquisition targets.
Q & A Highlights
Q: Given the market uncertainty and weaker demand, are there plans to reduce costs or adjust production?
A: Peter Rosén, Deputy CEO and CFO, stated that short-term adjustments will be made to production planning based on demand. If the situation persists, a review of the manufacturing footprint may be considered in the long run.
Q: How is the competitive landscape affecting Hexpol, and have there been any bankruptcies among competitors?
A: Klas Dahlberg, CEO, mentioned that Hexpol is not losing market share, and while some smaller competitors in Europe might be struggling, there is no specific information on bankruptcies. Hexpol remains the market leader in North America and Europe.
Q: Can you comment on the pricing impact on organic growth this quarter?
A: Peter Rosén explained that the lower organic sales development is primarily due to volume, with stable sales prices year-over-year and sequentially. There is a slight mix effect, but overall, prices remain stable.
Q: What gives Hexpol a positive view on the acquisition environment despite a short-term wait-and-see attitude among some companies?
A: Klas Dahlberg expressed confidence in the long-term acquisition pipeline, noting that while there is short-term uncertainty, the company is well-positioned financially to pursue acquisitions when the environment stabilizes.
Q: How are raw material prices and tariffs affecting Hexpol, and what is the outlook for the second half of the year?
A: Klas Dahlberg noted that there have been no significant changes in raw material prices, and any major price increases would be passed on to customers. The impact of tariffs has been limited, and the company does not foresee significant changes in the near future.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
