Hexatronic Group (HTRO) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales increased 2% year-over-year to SEK 1,951 million, mainly from higher sales in North America and new focus areas, despite weak demand and price pressure in Europe.

• EBITA was SEK 230 million, down 22% from last year, but EBITA margin improved sequentially to 11.8% from 11.0% in Q2.

• Cash flow from operating activities reached SEK 144 million, with a cash conversion of 70%, up from SEK 107 million last year.

• CEO Henrik Larsson Lyon announced his decision to step down after over 10 years; recruitment for a successor is underway.

• The new duct and pipe factory in Ogden, Utah, began operations in October, expanding US manufacturing capacity.

Financial highlights

• Q3 net sales: SEK 1,951 million (+2%); EBITA: SEK 230 million (-22%); EBITA margin: 11.8% (Q3 2023: 15.4%).

• Gross margin increased to 43.1%, up 0.8 percentage points year-over-year.

• Cash flow from operations was SEK 144 million, up from SEK 107 million last year.

• Interest-bearing net debt (excl. IFRS 16/leases) was SEK 1,922 million at end of Q3; leverage ratio increased to 2.0x.

• For Jan–Sep 2024, net sales were SEK 5,757 million (-8%), EBITA SEK 621 million (-42%), and net result SEK 257 million (-61%).

Outlook and guidance

• Q4 sales expected to be below Q3 due to seasonality, with Q1 2025 also anticipated to be softer.

• Cautiously positive outlook for 2025, with signs of improved markets in several countries.

• US BEAD program anticipated to impact business from mid-2025, with most effects likely in Q3.

• Long-term growth supported by global fiber deployment, AI, defense, and energy investments.