Hexatronic Group Ab · OMXSTO:HTRO
Hexatronic Group Ab — Q4 2023 Earnings Presentation
27 slides from Hexatronic Group Ab's earnings presentation, Feb 9, 2024
Slide 1: Q4 2024 Presentation
Q4 2024 Presentation February 9, 2024 Henrik Larsson Lyon Pernilla Lindén Martin Åberg CEO CFO Deputy CEO
Slide 2: Agenda
Q4 2023 Presentation Agenda 1. Hexatronic at a glance 2. Q4 highlights 3. Financial overview 4. Business overview 5. Market outlook and Summary 6. Q&A 2
Slide 3: Hexatronic at a glance
Hexatronic at a glance 3
Slide 4: Hexatronic enables non-stop connectivity for communities worldwide
Q4 2023 Presentation Hexatronic enables non-stop connectivity for communities worldwide Proven track record of organic growth and solid profitability 8.2 BSEK 39% 15.1% Sales, R12* 5-year sales CAGR EBITA margin, R12* 1.2 BSEK 61% 1,961 EBITA, R12* 5-year EBITA CAGR* Employees * As per the end of Q4
Slide 5: Expanding market for fiber optic infrastructure
Q4 2023 Presentation Expanding market for fiber Reliable network is a optic infrastructure must in modern society • Low fiber penetration rates across strategic growth markets • 5G deployment drives the need for fiber networks • Increasing use of data-intensive technologies creates a growing need fo
Slide 6: Several government initiatives across strategic growth markets with low fiber penetration rates
Q4 2023 Presentation Several government initiatives across strategic growth markets with low fiber penetration rates Penetration rates (subscribers / no. of homes) USA - BEAD September 2022 Austria 4% High-speed broadband Total subsidies allocated Germany coverage 7% 9x Swedish households UK 11% 6x
Slide 7: Addressing several customer needs creates additional growth avenues and diversification
Q4 2023 Presentation Addressing several customer needs creates additional growth avenues and diversification 75 %* 13 %* 10 %* 2 %* Fiber solutions for Engineered solutions High-density solutions Wireless solutions for connected societies for harsh environments for data centers coming generations *
Slide 8: Q4 highlights
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Slide 9: Strong operating cash flow and continued growth in new areas
Q4 2023 Presentation Strong operating cash flow and continued growth in new areas Financial highlights • Net sales increased 4% to MSEK 1,861, of which -23% organic • Net sales growth driven by Harsh Environment and Data Center • EBITA down 45% to MSEK 170, EBITA margin of 9.1% . EBITA margin exclud
Slide 10: Significant events
Q4 2023 Presentation Significant events • Acquisition of USNet, to strengthen the exposure to the US Data Center market • New senior term loan facility agreement of MSEK 500 with existing lenders • After the end of the quarter, the Board of Directors proposes to the AGM that no payment of dividend w
Slide 11: Continuous sales and earnings growth
Q4 2023 Presentation Continuous sales and earnings growth Consistent growth year over year Strong EBITA development Long-term EPS growth Revenue (MSEK) EBITA (MSEK)/EBITA% Earnings per share after dilution, SEK 1 400 18% 61% 39% CAGR 16,6% 16% 1 200 15,1% CAGR 8 150 68% 14% 1 000 CAGR 6 574 12% 11,3
Slide 12: M&A update
Q4 2023 Presentation M&A update • Acquired US Data Center company USNet • Minor add-on acquisition of IDS subcontractor M Connect in the UK • Strong end of the year for Rochester Cable in terms of operations and profitability Acquired during the quarter • Strong quarter for 2023 H2 acquisitions Fibr
Slide 13: Financial highlights
Financial highlights 13
Slide 14: Growth primarily driven by Harsh Environment and Data Center
Q4 2023 Presentation Growth primarily driven by Harsh Environment and Data Center – profitability in line with short-term outlook October-December YTD Q4 Q4 Full year Full year EBITA Bridge (MSEK) 2023 2022 ∆% 2023 2022 ∆% Net sales 1 861 1 795 4% 8 150 6 574 24% Organic Growth -23% -3% Gross Margin
Slide 15: Strong operational cash flow
Q4 2023 Presentation Strong operational cash flow Strong cash conversion due to Cash flow bridge reduced working capital Latter part of investment cycle Operating cash flow after WC changes (MSEK) / Capex investments (MSEK) / % of revenue % of Cash flow from operating activities before changes in wo
Slide 16: Financial flexibility for long-term value creation
Q4 2023 Presentation Financial flexibility for long-term value creation Reduced net debt due to strong cash conversion – Leverage at 1.7x* (1.4x** excl. lease liabilities) Net debt (incl. IFRS 16) as of Q4 2023 (MSEK) Net debt (MSEK) / EBITDA proforma incl. IFRS 16 3 000 2 500 3 500 250% 2 000 2 774
Slide 17: Business overview
Business overview 17
Slide 18: Organic decline in Europe excl. Sweden mitigated by expansion in new areas
Q4 2023 Presentation % of Group revenue (R12) Organic decline in Europe excl. Sweden 47% mitigated by expansion in new areas Business development Net sales and net sales growth • Sales in line with corresponding period last year due to 1 200,0 acquisitions. 127% 122% 83% 60% 55% 47% 19% 0% 0% 1 000,
Slide 19: Continued initiatives to position the company for long-term growth in North America
Q4 2023 Presentation % of Group revenue (R12) Continued initiatives to position the company 36% for long-term growth in North America Business development Net sales and net sales growth • Growth of 15% driven by the acquisition of Rochester Cable, strong 900 184% 129% 159% 104% 73% 58% 4% 15% develo
Slide 20: Weaker FTTH market in Sweden impacted sales growth
Q4 2023 Presentation % of Group revenue (R12) Weaker FTTH market in Sweden 9% impacted sales growth Business development Net sales and net sales growth 300,0 • Sales decrease by 19% driven by lower FTTH sales and lower 22% 64% 45% 11% 15% -28% -15% -19% 0% sales to mobile operators during the quarte
Slide 21: Solid performance in APAC
Q4 2023 Presentation % of Group revenue (R12) 8% Solid performance in APAC Business development Net sales and net sales growth • Sales growth of 12% driven by the acquisition of Fibron, 200,0 117% 114% 22% -13% 20% 7% 34% 12% Rochester Cable and KNET 180,0 0% 160,0 140,0 -10000% 120,0 -20000% 100,0
Slide 22: Market outlook and Summary
Market outlook and Summary 22
Slide 23: Market outlook
Q4 2023 Presentation Market outlook • Overall market, lower demand for investments in fiber optic telecommunications infrastructure in the coming quarters, and then gradual increase in market demand in the second half of 2024. • Harsh Environment and Data Center markets expected to continue to grow
Slide 24: Summary
Q4 2023 Presentation Summary • Continued expansion in new areas drove total growth of 4% in Q4 − Harsh Environment and Data Center ~one third of sales in Q4 and mitigated softer conditions within Fiber Solutions − Negative organic growth mainly attributed to softer German FTTH market and US market f
Slide 25: Q&A
idexatronic Q&A
Slide 26: Q4 2023 Presentation
Q4 2023 Presentation 26
Slide 27: AAS
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