Hexatronic Presents Interim Report Q3 2021
Q3 from Hexatronic - Continued strong organic growth and several acquisitions
"The positive development of the first six months of the year gathered momentum during the third quarter, with growth of 69 percent, of which 35 percent was organic. In addition, 85 percent of total sales was from markets other than Sweden, which proves that our international strategy has worked well.
Profitability for the quarter continued on a positive trend. EBITA margin amounted to 11,7 percent, equating to an increase of 67 percent. Adjusted for a revaluation of MSEK 11 in outstanding share-based incentive programs, EBITA margin totaled 12,9 percent, corresponding to an increase of 84 percent,” says Henrik Larsson Lyon, CEO Hexatronic Group.
Read the full report here.
Events during the quarter
- Hexatronic has signed an agreement to acquire all the telecom activities of REHAU Group – one of the main players in the German microduct market.
- Hexatronic has acquired two Australian companies. Optical Solutions Australia Group, a national value-added distributor of telecom solutions and The Fiber Optic Shop that designs and manufactures fiber optic products.
- Hexatronic has acquired Weterings in the Netherlands. Weterings produces ducts for the telecommunication and agriculture market.
- Hexatronic has signed an agreement to acquire Data Center Systems who provides fiber connectivity solutions to the US data center market.
- Hexatronic has signed a strategic supplier agreement with Ting Internet in the US, with a projected value of over MUSD 50.
- Pernilla Lindén took office as CFO and member of the Group Management Team at Hexatronic Group as of August 9, 2021.
Events since the end of the period
- Hexatronic has signed two contracts with existing customers on the German market amounting to a total order value of MEUR 21.
Hexatronic CEO Henrik Larsson Lyon in interview about Q3, 2021
Comments from CEO
Continued strong organic growth and several acquisitions
The positive development of the first six months of the year gathered momentum during the third quarter, with growth of 69 percent, of which 35 percent was organic. In addition, 85 percent of total sales was from markets other than Sweden, which proves that our international strategy has worked well.
Profitability for the quarter continued on a positive trend. EBITA margin amounted to 11,7 percent, equating to an increase of 67 percent. Adjusted for a revaluation of MSEK 11 in outstanding share-based incentive programs, EBITA margin totaled 12,9 percent, corresponding to an increase of 84 percent.
We continue to see high costs for transport and raw materials, which burdens the gross margin for the third quarter and will probably also negatively impact the fourth quarter. In terms of profitability, the increased costs are compensated for by good scalability in our factories.
For the current rolling 12-month period, with 50 percent sales growth and 11,5 percent EBITA margin, we are exceeding our goals of 20% growth and an EBITA margin of at least 10%.
Sales in our largest market, North America, grew by 84 percent during the quarter, primarily driven by a strong underlying infrastructure market for duct. Our system sales for FTTH (Fiber to the home) also developed strongly.
Sales in Europe excluding Sweden showed a continued high growth rate of 138 percent. Particularly the Great Britain, Germany and Norway developed very well.
In Germany, since the end of the quarter we have had a breakthrough with our first two FTTH system orders, totaling MEUR 21.
Order intake have continued to develop strongly. We entered the fourth quarter with an order book that was 229 percent higher organically than at the same time last year, primarily driven by a good order intake in the USA. The contract with Ting, that was signed during the quarter, has already resulted in some large orders.
There has been high activity in acquisitions during the quarter with Weterings in the Netherlands, and Optical Solutions Australia Group and The Fiber Optic Shop in Australia. We also signed an agreement to acquire REHAU’s telecom business in microducts, as well as the data center company Data Center Systems in the USA. The acquisitions strengthen our geographical presence as well as it supplements our existing business, which overall makes us stronger.
With the strong order book and a continued positive view of the market’s development, we will continue to invest in more production capacity.
Welcome to join us on our growth journey.
Henrik Larsson Lyon
President and CEO
Hexatronic Group AB (publ)
Publication
This information comprises disclosures that Hexatronic Group AB (publ) must publish according to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication, under responsibility of the contact persons named below, on 2 November 2021 at 07:00 CET.
