Hexatronic Group AB (publ) Interim report January – March 2023
April 27 2023 - 1:00AM
Hexatronic Group AB (publ) Interim report January – March 2023
Hexatronic Group AB (publ)Interim report
January – March 2023
Events during the quarter
- Hexatronic invests 30 MUSD in a new duct and pipe production
facility in the Western USA.
- Hexatronic completed, on March 3, 2023, the previously
announced acquisition of Rochester Cable in the U.S., from TE
Connectivity.
- Hexatronic adjusted the profitability target to an EBITA-margin
of 15% to 17% over a business cycle. The previously set
profitability target was at least 12% EBITA-margin over a business
cycle.
- The Board of Directors will propose a dividend of 0.10 SEK
(0.10) per share for the financial year 2022 to the Annual General
meeting.
Events since the end of the quarter
- Hexatronic has signed a one-year,
with extension possibilities, Strategic Partner agreement with a
newly established, fully funded, network operator in the USA, to a
value of approximately 20 MUSD.
Comments from the CEOA record-breaking
quarter!
The first quarter of the year was a record-breaking quarter in
terms of both sales and profitability. In particular, sales in
North America and Europe, excluding Sweden, developed very
strongly. Total sales increased by 52%, of which 24% was organic
growth, compared with the corresponding period last year.
Profitability (EBITA) increased 98% to a margin of 17.2%.
Sales in our largest market, North America, continued to develop
very strongly, growing by 73%. The sales increase is explained by
both duct and our FTTH systems. The one-year agreement of 20 MUSD,
with the possibility of extension, signed with a new US Fiber To
The Home (FTTH) network operator after the end of the quarter, is
an example of the good development we see in North America. To meet
the increased demand for duct, our new factory in Clinton, South
Carolina, was inaugurated during the quarter, and the production
rate is increasing continuously. Full production in the factory
will be reached during the latter part of the third quarter. To
further respond to the increased demand for ducts we are seeing in
the North American market, it was decided in the quarter to invest
30 MUSD in a duct and conduit factory in Utah. With three
geographically dispersed factories, we will establish ourselves as
a national player who can efficiently deliver to customers
throughout the US.
Sales in Europe, excluding Sweden, also continued to develop
strongly, mainly thanks to the UK and Germany. Sales in the region
increased by 55% compared to corresponding period last year.
Sales in Sweden remained strong and increased by 15% compared to
corresponding period last year.
Sales in APAC (Asia Pacific) grew by 20%, mainly due to the
acquisition of KNET, which was consolidated from 1 December
2022.
During the quarter, we completed the acquisition of Rochester
Cable in the US, which strengthens our offering in the business
area Harsh environment (fiber optic solutions for harsh
environments). Rochester Cable was consolidated from 1 March
2023.
Order intake has continued to develop well. At the end of the
quarter, we have an order book that is organically 21% higher than
at the same time last year. In 2021 and 2022, the order book grew
partly due to increasing demand but also because of long delivery
times resulting from disruptions in various supply chains. The
uncertainty regarding delivery times has resulted in some customers
placing orders as far as 4-5 months before expected delivery,
compared to a more normal delivery time of 1-2 months. As supply
chains become more reliable, it is reasonable to expect the order
book to normalize in the future.
We have recently noted a shift in demand, where several of our
customers at the beginning of the year have prioritized connecting
customers to their networks over the general fiber rollout. This
has resulted in an increase in demand for blown fiber and
nanocables, while demand for micro cables has decreased. Because of
this shift in demand, it was decided at the beginning of April to
reduce staffing in micro cable production in Hudiksvall by 27
temporary employees. After the transition, we still have more
employees in Hudiksvall than we did on average in 2022. In the
total group, we have close to 2,000 employees compared to just over
1,300 employees a year ago.
We believe that the market for fiber expansion is to some extent
affected by increased inflation and rising financing costs for
those who invest in fiber networks. However, our assessment is that
it has a minor negative effect on our customers, and we see a
continued positive development during the year, with both existing
and new customers choosing Hexatronic as their partner.
Welcome to join us on our growth journey.Henrik Larsson
LyonPresident and CEO Hexatronic Group AB (publ)
Please direct any questions
to:Henrik Larsson Lyon, CEO Hexatronic
Group, +46 706 50 34 00Pernilla Lindén, CFO Hexatronic Group,
+46 708 77 58 32
The information was submitted for publication, through the
agency of the contact person set out above, at 07:00 CEST on March
27, 2023. This is a translation of the Swedish version of the
interim report. When in doubt, the Swedish wording prevails.
Hexatronic creates sustainable networks all over the world. We
partner with customers on four continents – from telecom operators
to network owners – and offer leading, high-quality fiber
technology for every conceivable application. Hexatronic Group
(publ.) was founded in Sweden in 1993 and the Group is listed on
Nasdaq OMX Stockholm. Our global brands include Viper, Stingray,
Raptor, InOne, and Wistom®.
- Hexatronic Group - Interim report Q1 2023
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