Sales rose 6 percent driven by a record quarter for Data Center
Highlights of the first quarter
- Net sales increased by 6 percent to SEK 1,882 million (1,782). Sales increased organically by 1 percent.
- EBITA increased by 10 percent to SEK 184 million (168), corresponding to an EBITA margin of 9.8 percent (9.4).
- Operating profit (EBIT) increased by 12 percent to SEK 155 million (138), corresponding to an operating margin of 8.2 percent (7.7).
- Profit for the period increased by 40 percent to SEK 86 million (61).
- Earnings per share after dilution amounted to SEK 0.42 (0.31).
- Net sales in Data Center increased by 41 percent.
- The leverage amounted to 1,9x, which is unchanged from 1.9 as of December 31, 2024.
- Cash flow from operating activities amounted to SEK -50 million (270).
- In January, it was announced that Rikard Fröberg had been appointed as the new President and CEO of Hexatronic Group, effective March 1, 2025.
- Hexatronic is introducing new business areas and segment reporting as of the first quarter of 2025 and has made changes to Group Management.
- The decision was made to start manufacturing fiber optic cables locally in the US. The new production lines are expected to be operational in the second quarter of 2026.
Events after the end of the quarter
- Hexatronic has refinanced its senior loans and revolving credit facility.
Comments from the CEO
Sales rose 6 percent, driven by a record quarter for Data Center
Hexatronic's sales increased by 6 percent to SEK 1,882 million in the first quarter, driven by a record quarter for Data Center, whose sales rose 41 percent. Harsh Environment continued to develop positively during the quarter, while we saw a slight decline in Fiber Solutions due to lower sales in North America.
The Group's EBITA margin improved to 9.8 percent in the quarter compared to 9.4 percent last year.
Stable sales in Europe for Fiber Solutions
In Europe, Fiber Solutions' sales were on par with the previous year. Growth in the UK and Finland offset lower sales in Sweden, among other countries. The focus has shifted from building fiber networks that pass households to building fiber networks that connect households. Our system solution has many advantages for this type of expansion, including easy and cost-effective installation.
In North America, sales were 9 percent lower than last year but increased sequentially. We note a continued strong interest in our FTTH solutions among US customers. Our US duct business continues to develop stably, which is in line with what we saw at the end of last year. Volumes are higher on an annual basis but are offset by lower price levels.
In the APAC region, the development was strong in the first quarter of the year, with growth of 16 percent.
Overall, sales in Fiber Solutions decreased by 2 percent in the first quarter.
Positive development for Harsh Environment
Sales in Harsh Environment rose 5 percent during the quarter. We continue to see good demand from existing and new customers and see that many projects tend to lead to more orders and new assignments. The Fehmarnbelt Fixed Link, the large tunnel being built between Denmark and Germany, is one such example. The work to streamline manufacturing at the subsidiary Rochester Cable will continue throughout the year. Some positive effects of this work were noted during the first quarter.
Strong start to the year for Data Center
Data Center has had a strong start to the year. Sales increased 41 percent compared to the previous year, with improvements in all units and a positive contribution from acquired businesses. We have assignments from several of the most prominent players in the data center area, and we see a continued strong market in this customer segment.
Refinancing of loan portfolio
After the end of the quarter, we signed new bank agreements, meaning we are refinancing all our long-term loans on the same terms as before. This gives us continued good flexibility in terms of investments and acquisition-driven growth. We reported a slightly negative cash flow during the first quarter due to increased accounts receivable and inventory build-up ahead of the summer months. At the same time, our leverage was unchanged at 1.9 times pro forma EBITDA (excluding IFRS16).
Limited impact of US tariffs
In line with what we previously communicated, we see limited direct effects of the implementation of import tariffs in the US. Our exposure corresponds to less than 5 percent of the Group's sales. Hexatronic has long had a strategy based on local production, and earlier this year, we decided to set up production of fiber optic cables in the US, starting in the second quarter of 2026, which will further reduce exposure.
Outlook
In Fiber Solutions, the challenging market situation in Europe is expected to persist in the coming quarters with low price levels. The outlook in the US is brighter, although there is uncertainty around tariffs and the macroeconomic environment. The major BEAD program, which aims to support the rollout of FTTH networks in rural America, is expected to reach the market later this year. The focus for the Data Center business area is continued strong growth. We are working to broaden the customer base and strengthen our offering and organization. Work is underway in the Harsh Environment business area to improve operational efficiency and profitability, primarily within the subsidiary Rochester Cable.
We continue to focus on efficiency improvements, including cost savings in Fiber Solutions, and are actively working to continue to broaden our business with new growth areas. We aim to complete one or more acquisitions during the year in Harsh Environment and Data Center. The order book at the end of the first quarter corresponds to approximately 2.5 months of sales.
All in all, this means that our cautiously optimistic view of 2025 remains.
Rikard Fröberg
President and CEO
Presentation
Hexatronic will present the interim report at a webcast conference call today, Tuesday, April 29, 2025, at 10.00 CEST. CEO Rikard Fröberg, CFO Pernilla Lindén and Deputy CEO Martin Åberg will participate.
Link to the webcast: https://hexatronic-group.events.inderes.com/q1-report-2025
For registration and participation via the teleconference:
https://conference.inderes.com/teleconference/?id=50051912
Webcast and presentation materials will be available on the Hexatronic website.
For more information, please contact:
Pernilla Grennfelt, Head of Investor Relations, + 46 702 90 99 55
About Us
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 AB (publ.) was founded in Sweden in 1993 and the Group is listed on Nasdaq Stockholm. Our global brands include Viper, Stingray, Raptor, InOne, and Wistom®.
This information is information that Hexatronic Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2025-04-29 07:00 CEST.
