Hexatronic Group AB (publ) Interim report January – September 2025
Summary by AI BETAClose X
Shift to growth areas; performance improvement program underway
Events of the third quarter
- Net sales decreased by 3 percent to SEK 1,883 million (1,951). Sales increased organically by 2 percent, growth from acquisitions amounted to 1 percent and exchange rate effects had a negative impact of 6 percent.
- Adjusted EBITA amounted to SEK 146 million (230), corresponding to a margin of 7.7 percent (11.8).¹
- EBITA amounted to SEK -56 million (230), corresponding to an EBITA margin of -3.0 percent (11.8), which includes one-off items of SEK 202 million.
- Operating profit (EBIT) amounted to SEK -82 million (200), corresponding to an operating margin of -4.3 percent (10.2).
- Profit for the quarter amounted to SEK -123 million (107).
- Earnings per share after dilution amounted to SEK -0.59 (0.52).
- Net sales in Data Center increased by 43 percent.
- Adjusted leverage amounted to 2.0 times based on annualized adjusted EBITDA.¹
- Leverage was 2.3 times, based on annualized EBITDA, compared with 1.9 times on 31 December 2024.
- Cash flow from operating activities amounted to SEK 154 million (144).
- Hexatronic announced a performance improvement program in the Fiber Solutions business area, with consolidation of manufacturing footprint, organizational alignment in Europe and increased focus on selected growth areas. The total cost savings are estimated at SEK 122 million and the net effect on EBITA at SEK 110 million on an annual basis, which will be realized from the fourth quarter of 2025 and be fully realized by the end of the first quarter of 2026. Non-recurring items are estimated at SEK 230 million, of which SEK 125 million in cash effect. In the third quarter, SEK 202 million of non-recurring items were recognized.
- The Board adopted new financial targets for each business area during the quarter, to better reflect the potential of the group's different segments.
Events after the end of the quarter
- No significant events occurred after the end of the quarter.
Comments from the CEO
Continued strength in Data Center and Harsh Environment; Fiber Solutions performance improvement program underway
The third quarter saw business performance in line with our expectations with sales reaching 1.9B SEK, a +2 percent organic sales growth and adjusted EBITA margin of 7.7 percent. We saw strong performance in both Data Center and Harsh Environment business areas, again contributing to over half of the Group’s adjusted EBITA. The Fiber Solutions business area continues to be challenged by market headwinds, particularly FTTH market softness. As communicated in September, we have therefore launched a performance improvement program to align our costs and shift resources to future growth segments within Fiber Solutions. In conjunction with this, we have also introduced an updated strategy for growth and clarified that our ambition is to grow Data Center and Harsh Environment to approximately half of the Group's business by 2028.
Excellent performance in Data Center
The Data Center business area saw continued rapid growth in the quarter with sales reaching SEK 334 million, corresponding to organic growth of 39 percent and all entities contributing to their strong performance. Profitability was solid with an adjusted EBITA margin of 16.9 percent, which is 230 basis points higher than Q3 last year.
We continue to see strong demand from our larger customers and core segments. In addition, we are broadening our offering through the focused growth initiative in security system installations, audiovisual solutions and wireless networks for indoor environments.
Solid momentum for Harsh Environment
Sales in Harsh Environment reached SEK 314 million, up 15 percent organically in the quarter, and adjusted EBITA margin at 11.1 percent. It was particularly pleasing to see Rochester Cable delivering a clear margin improvement as the investment and improvement program there will continue. In the market, we continue to see robust activity and demand particularly in the defense and energy sectors.
Fiber Solutions performance program in full swing
As expected, market conditions in the Fiber Solutions business area remain challenged, particularly for the FTTH segment. Sales overall declined by -7 percent organically with declines in all three main geographies EMEA, North America and APAC. Adjusted EBITA margin of 5.4 percent was slightly below expectation, with continued headwinds from price pressure and lacking volumes in our factories.
To address this margin decline and overcapacity we have launched a three step performance improvement program. The first step – consolidating our footprint - is progressing well and the materialization of the program will gradually take effect with full run rate impact by end of Q1 2026. This step will lower our cost base by approximately SEK 110 million annually with one-time costs of SEK 202 million taken in Q3. The remaining communicated non-recurring items for the program are expected to be reported in the fourth quarter. In parallel, the program also targets broader operational excellence and growth opportunities beyond the FTTH space, such as transport networks and submarine cable where we see solid demand.
In the quarter, Hexatronic completed a global launch of Viper Ease® which is an upgrade to the popular Viper Micro cable with new-to-the-world technology such as tangle-free binder yarns and dry inner tubes. These innovations allow for a 50-70 percent reduction in time spent on cable preparation by the installer, therefore improving their TCO.
Robust cash flow and reduced net debt
We continue to have good financial flexibility for long-term value creation. During the third quarter, our interest-bearing net debt (excluding IFRS 16) decreased to SEK 1,706 million compared with SEK 1,802 million at the end of the second quarter, with a debt ratio of 2.0 times pro forma EBITDA. Our operating cash flow was SEK 154 million in the quarter, corresponding to cash conversion of 117 percent.
Updated financial targets and strategy presented
In September, we presented our updated strategy and plans to grow the business over the coming years. In our ongoing ambition to further improve transparency we introduced specific financial targets for our three business areas, showcasing our ambition to grow Harsh Environment and Data Center to about half of the total Group business by 2028.
Outlook
For Fiber Solutions, the challenging market situation is expected to continue during Q4 with the typical lower seasonal activity level. Our cost improvement program continues as planned and will reach full run rate by the end of Q1, 2026.
In Data Center, we expect the growth momentum to continue but with the traditional seasonally slower Q4. We are actively driving the business to further growth, looking to invest both organically and through acquisitions.
In the Harsh Environment business area, we see solid activity in the market and continue the work to gradually improve operational efficiency and profitability, primarily in the subsidiary Rochester Cable.
The order book at the end of the third quarter was in line with the previous quarter and amounted to around 2.5 months of sales.
Rikard Fröberg
President and CEO
Presentation
Hexatronic will present the interim report at a webcast conference call today, Friday, October 24, 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/q3-report-2025/register
For registration and participation via the teleconference:
https://events.inderes.com/hexatronic-group/q3-report-2025/dial-in
Webcast and presentation materials will be available on the Hexatronic website.
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