Q4 2024 Hexpol AB Earnings Call Transcript
Key Points
- Hexpol AB (HXPLF) reported a strong operating cash flow of SEK1.2 billion, driven by efficient working capital management.
- The company raised its ordinary dividend to SEK4.26 per share, reflecting confidence in its financial stability.
- Hexpol AB achieved a significant milestone in sustainability, reaching a 65% reduction in CO2 emissions, with a target of 75% by 2025.
- The acquisition of Piedmont Resin Supply strengthens Hexpol's position in nylon compounding, a growing market with applications in electric vehicles and other industries.
- Hexpol's Engineered Products segment reported strong sales and a new sales record for wheels, with an 18% increase in operating profit and a higher EBIT margin of 16.8%.
- Overall sales for the quarter were down 4% compared to the previous year, with organic sales declining by 6%.
- The company experienced lower demand from the automotive sector, particularly in North America, impacting sales and margins.
- Hexpol's adjusted EBIT margin decreased to 13.4%, below the previous year's level, due to lower volumes and a less profitable product mix.
- The early shutdowns by North American customers in December led to a short sales month, affecting overall quarterly performance.
- The integration of Piedmont Resin Supply had a negative impact on Q4 margins due to the timing of the acquisition and seasonal sales patterns.
Good afternoon, everyone, and thank you for joining in on the Hexpol Q4 presentation. This is Klas Dahlberg speaking, and I'm here together with our CFO, Peter Rosen. Hello, Peter.
I will start with a business update. I will tell you about our latest acquisition, also Piedmont in the US. And I will also mention the efficiency measures we have taken within Rubber Compounding Americas. Peter will take you through the financials. And I will summarize the quarter and our focus areas going forward. After that, we are happy to answer your questions.
If you please turn to page 4. I was talking about the cash flow when the line was broken. So I said, the organization keeps close track on the working capital and that's mainly the reason that we have continued to have a strong operating cash flow close to SEK1 billion to SEK1.2 billion in the quarter. The Board decided on an ordinary dividend to be raised to SEK4.26 per share.
If we move on to demand and sales price, we can see that demand was down versus Q4 last year, mainly
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