Hexatronic Group Ab · OMXSTO:HTRO
Hexatronic Group Ab — Investor Day (March 2025)
59 slides from Hexatronic Group Ab's investor day presentation, Mar 28, 2025
Slide 1: Investor Update 2025
Investor Update 2025 March 28
Slide 2: Rikard Fröberg, President and CEO
Rikard Fröberg President and CEO 2
Slide 3: Purpose of today's discussion
Purpose of today’s discussion Provide in-depth view of the Group’s business areas − Fiber Solutions − Harsh Environment − Data Center Present restated numbers for 2024 per business area Update on 2025 priorities
Slide 4: Agenda
Agenda 13:00 • Introduction Rikard Fröberg Martin Åberg Pernilla Lindén President & CEO Head of Hexatronic Group CFO • Fiber solutions Data Center • Data Center • Harsh Environment • Financial overview • Summary Jakob Skov Head of Hexatronic Christian Priess Head of Hexatronic Tomas Jendel Director
Slide 5: Hexatronic is a global Group with diversified exposure and multiple growth avenues
Hexatronic is a global Group with diversified exposure and multiple growth avenues 40 operating units No single customer accounted for more than North 3% of global America 18 production facilities, in 9 37% Europe countries APAC and 54% Rest of the Approx. 2,000 employees world Sales of SEK 7.6 bn i
Slide 6: A history of profitable growth
A history of profitable growth However, 2024 was a challenging year in our industry Net sales development EBITA development EPS development Sales, SEK m EBITA and EBITA margin, SEK m and % Earnings per share after dilution, SEK +43%* +36%* 8 150 4,17 +33%* 7 581 1 800 16,6% 18% 3,89 1 600 15,1% 16%
Slide 7: Establishing new business areas to further focus and power growth strategy
Establishing new business areas to further focus and power growth strategy Fiber solutions Engineered Essential services for connected solutions for and solutions for societies challenging data centers conditions 72% 15% 13% of Group sales of Group sales of Group sales 2024* 2024* 2024* 10.8% 10.3%
Slide 8: Global trends
Global trends Digital transformation Energy transition Sustainability Security Localized production
Slide 9: Hexatronic is well-positioned to leverage global trends and capture growth opportunities
Hexatronic is well-positioned to leverage global trends and capture growth opportunities Exposure to Manufacturing Complete attractive growth capability and system solutions markets capacity Strong Sustainable M&A brands operations pipeline
Slide 10: 2025 priorities
2025 priorities Grow the Fiber Solutions business − Win in the large US FTTH market − Leverage CAPEX investments to grow within current footprint − Explore growth opportunities like submarine cables, Security, Wireless − Continued focus on operational efficiency and innovation Margin improvement act
Slide 11: Fiber Solutions
® Hexatronic e Fiber Solutions
Slide 12: Session overview
Fiber Solutions Session overview • Overview • The markets • Customer case – Novos Fiber • Innovation Presenters Christian Priess Head of Hexatronic Fiber Solutions EMEA Tomas Jendel Director Product Portfolio of Fiber Solutions
Slide 13: Broad range of products and solutions that solve customer needs
The offering Broad range of products and solutions that solve customer needs FTTH and Submarine Conduit transport networks cables & pipes Instruments & Tools Wireless Training
Slide 14: Capacity expansion has enabled sales growth
Financial development Capacity expansion has enabled sales growth – signs of more stable markets towards the end of last year Fiber Solutions Quarterly Sales / LTM, 2021 to 2024, SEK m* 5.4 SEK bn 8 000 sales 2024 7 000 6 000 5 000 10.8% 4 000 3 000 EBITA 2 000 margin in 2024 1 000 0 Q4 Q1 Q2 Q3 Q4
Slide 15: Well-balanced portfolio and broad customer base
Market segments & drivers Well-balanced portfolio and broad customer base The leading solution, enabling Sales per geography Customer concentration fast & efficient deployment Top 10 APAC and Rest of the world Europe North America North America 36% of sales Top 10 customers account and growing for ~
Slide 16: Fiber Solutions has strong presence with local manufacturing in main markets
Presence worldwide Fiber Solutions has strong presence with local manufacturing in main markets HCI in Hudiksvall, Sweden, serves customers globally with fiber optic cables and submarine cables Production Sales companies Training companies
Slide 17: The North American fiber infrastructure market represents a major growth potential
Market segments & drivers The North American fiber infrastructure market represents a major growth potential in the coming years The market Hexatronic position North • Market is expected to show good • Strong position within conduits/pipes growth in the coming years America • Low share of fiber opti
Slide 18: Growing demand for submarine cables
Market segments & drivers Growing demand for submarine cables • Hexatronic produces submarine cables at the HCI facility in Hudiksvall, Sweden • Ideally fit for medium distances typically connecting countries in Europe – but also global business • Growing demand from offshore windmill parks – Europe
Slide 19: Hexatronic's system enables cost-efficient network deployment
Why Hexatronic Fiber Solutions Hexatronic’s system enables cost-efficient network deployment Complete system solution Close partnership High-end products Efficiency • Easy to install • Field support • In-house R&D • Optimized for low • Training and • Innovative, high-quality network TCO certificatio
Slide 20: Customer case – Novos Fiber
Customer case – Novos Fiber NOVOS FiBER About NOVOS FiBER • NOVOS FiBER began in 2022 in Texas to provide residential internet broadband service using fiber-to-the- • NOVOS FiBER selected Hexatronic as a strategic home (FTTH) technology supplier for their complete FTTH deployment in the • Network de
Slide 21: Emerging trends driving the demand for fiber optic solutions
Megatrends Emerging trends driving the demand for fiber optic solutions A new dimension added to our value Digitalization Massive investments in data centers Sustainability proposition where we help our customer and edge computing drive the need of reach their committed sustainability targets. & AI
Slide 22: Growth opportunities and strategic priorities
Fiber Solutions summary Annan bild med ljusare Growth opportunities and bakgrund strategic priorities • Focus on solutions to small and medium-sized customers • Innovation with easy-to-install, sustainable, and cost-efficient products with best TCO focus • Drive market share in the US via locally ma
Slide 23: Data Center
@ Seog Hexatronic *s Data Center
Slide 24: Session overview
Data Center Session overview • Deep dive into the offering • Growth strategy • Market overview Presenters Martin Åberg Head of Hexatronic Data Center Ben Parker CEO IDS / Hexatronic DC Services EMEA
Slide 25: On the journey to become an established player with strong profitability
Financial overview On the journey to become an established player with strong profitability 54% Sales CAGR** LTM Sales 2021 to 2024, SEK m* 1 200 1.0 SEK bn 1 000 Sales 2024 800 600 400 15.9% 200 EBITA margin 2024 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2021 2022 2023 2024 * Estimated historical ne
Slide 26: Hyperscale/Cloud outgrowing Enterprise segment, driven by long-term trends
Market segments & drivers Hyperscale/Cloud outgrowing Enterprise segment, driven by long-term trends Hyperscale Continued build out of AI Owned computing capacity. Increased adoption of cloud Hyperscale Leased 15-17%* computing annual growth Colocation Ever-growing digital storage Non-Hyperscale nee
Slide 27: Products and services offering
Products and services offering ICT Services Connectivity Containment LAN Design, installation, certification Bespoke connectivity solutions Passive airflow management Cables for data, video and and support to transform white for Data Centers designed to reduce energy transmission for LAN space to be
Slide 28: Revenue potential for our services throughout the data center life cycle
Services life cycle Revenue potential for our services throughout the data center life cycle ICT fit-out Mechanical and Design phase Decommissioning / electrical Managed services Relocation / migration Services “Gray-space” Client considered Capex Client considered Opex
Slide 29: Revenue generated across several customer segments with a large customer base
Sales breakdown Revenue generated across several customer segments with a large customer base Products & services Customer segment Customer breakdown breakdown concentration Top 10 ICT Services Connectivity Hyperscale Colo / Cloud Containment LAN Enterprise Other Services close to Cloud segment acco
Slide 30: Local presence in the US and several European countries
Geographical markets Local presence in the US and several European countries, balanced between products and services. 36% 62% USA EUROPE 55% 45% products services
Slide 31: Managing EMEA as borderless
EMEA services Managing EMEA as borderless • Same team no matter country • Agility, speed, flexibility • First to focus on hyperscale services in EMEA • Projects in close to 15 EMEA countries in 2024 • Design and operations centralized In EMEA the team has completed +2,500 projects over the past 10 y
Slide 32: Expand our service offerings through strategic acquisitions
M&A strategy Expand our service offerings through strategic acquisitions Primary Applications Segments focus segment Data center project management, cabling, Data centers rack and stack and installation services Campus voice and data cabling as well High-end commercial, offices and audio / visual so
Slide 33: Low-risk approach to M&A
M&A strategy Low-risk approach Fragmented service market in North America Proven track record in and EMEA. Mature and consolidated products M&A execution markets. • Strong teams and proven >200 small and mid-size 2020 businesses companies identified • Continued focus on North America & EMEA 2021 • E
Slide 34: Strong market outlook
Summary Strong market outlook Annual growth rate 2025-2029, % Hyperscale / Colocation 15-17% Enterprise 7-9% Other 2-3% Primarily acquisition-driven • Acquire service companies in Europe & NA • Continue proven, low-risk acquisition model • Attractive returns (5-7x EBITDA) Attractive financial profil
Slide 35: Harsh Environment
® Hexatronic e Harsh Environment
Slide 36: Session overview
Hars Environment Session overview • The business area footprint • Deep dive into the offering • The Dynamics offering Presenters Jakob Skov Head of Hexatronic Harsh Environment Philip Ashley CEO, Fibron
Slide 37: Applications and products
Applications and products Dynamic cables Connectivity solutions Critical sensing solutions Applications Products Rochester Cable and Fibron Cable Hexatronic Norway and Tech Optics Proximion
Slide 38: A strong global niche player positioned to grow and expand margins
Financial development A strong global niche player positioned to grow and expand margins 165% Sales CAGR** Harsh Environment LTM Sales 2021 to 2024, SEK m* 1 400 1 200 1.2 SEK bn 1 000 sales 2024 800 600 400 200 10.3% EBITA 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 margin 2024 2021 2022 2023 2024 * E
Slide 39: Revenue generation from markets with long investment cycles and recurring customers
Revenue generation from markets with long investment cycles and recurring customers Business area Customers segment Customer breakdown breakdown concentration The top 10 customers account for 40% of sales Dynamic Cable Connectivity Sensing Industry Defence Energy Dynamic cables > 80% Favorable mix o
Slide 40: Energy and defense markets expected to remain strong
Dynamic cable market segments & drivers Energy and defense markets expected to remain strong, driven by long-term global trends Growing global demand and • Renewables quest for more regional independence Energy markets • Oil & Gas • Services & Subsea engineering CAGR* to 2030: 5-8% Increased defense
Slide 41: ROVs facilitate deployment of subsea survey vessel
Customer case Service & subsea engineering A ROV cable in cross-section ROV’s facilitate deployment of Five-layer armor package Six 7 mm power conductors, two 2.5 mm power conductors, and one 12x subsea survey vessel fiber in steel tube • High-strength ROV cable designed for our customer Ocean Infin
Slide 42: Offshore windfarm charging cable - supports low-carbon operations
Customer case Renewables A charging cable in cross- section Offshore windfarm charging Polyester fiber braid and solid cable - supports low-carbon polyurethane jacket of 3 mm. Four 35 mm power conductors and two 8 mm ID hydraulic “cooling” tubes operations • Dynamic and flexible bespoke design cable
Slide 43: Growth strategy includes acquisitions
Growth strategy Growth strategy includes acquisitions – targets mainly dynamic cable and connector businesses For example, companies that are present in the following areas Applications Segments Umbilical and specialty fiber cables - Bolt-on and consolidate Off-shore energy services Connector soluti
Slide 44: Strong market outlook beyond 2030
Outlook and priorities Strong market outlook beyond 2030 • Underlying demand in the energy sector remains • Defense markets remain buoyant during the strategy period • Industries are increasingly embracing fiber optic solutions thanks to intrinsic properties • Dynamic cables − Improve profitability
Slide 45: Financial overview
Financial overview idexatronic
Slide 46: Session overview
Finance Session overview • Segment reporting • Financial overview Presenter Pernilla Lindén Group CFO
Slide 47: Reason for segment reporting
Reason for segment reporting Net sales Net sales – per region Net sales – per business area** Sales, SEK m Sales, SEK m Sales, SEK m +33%* 8 150 7 581 8 000 8 000 6 574 7 000 Sweden 7 000 6 000 6 000 5 000 Rest of Europe 5 000 Fiber Solutions 3 492 4 000 4 000 3 000 3 000 1 842 2 081 2 000 North Ame
Slide 48: Segment reporting structure
Segment reporting Segment reporting structure REPORTABLE OPERATING Fiber Solutions is the Group 's business in fiber optic cables, pipes and network products for FTTH connectivity, 5G, transport SEGMENTS networks, local city networks and submarine cables. Customers are mainly telecom operators, netw
Slide 49: Business Area Fiber Solutions
Business Area Fiber Solutions • 28 operating units based in US, Europe and Bridge Focus Area to Segment, SEK m Sales, SEK m APAC 1 457 1 430 -17,6% 1 255 1 299 -16,5% • Challenging 2024 6 602 • A broad range of products and solutions that solve customer needs -1 092 5 510 • Seasonality Q1 and Q4 wea
Slide 50: Business Area Harsh Environment
Business Area Harsh Environment Bridge Focus Area to Segment, SEK m Sales, SEK m • 5 operating units based in US and Europe 319 • More than 80% of total sales dynamic hybrid +61,6% 291 296 +50,9% 273 cables 1 178 • Favourable mix of attractive market 1 100 78 segments in Defense and Energy • Capital
Slide 51: Business Area Data Center
Business Area Data Center Bridge Focus Area to Segment, SEK m Sales, SEK m • 3 operating units based in US and Europe +18,7% 256 250 • 55% product sales and 45% service sales +18,6% 233 233 • Cloud segment account for close to 40% 971 1 972 • Seasonality effect H1 normally stronger than H2 152 • Cap
Slide 52: A history of profitable growth
A history of profitable growth However, 2024 was a challenging year in our industry Net sales development EBITA development EPS development Sales, SEK m EBITA and EBITA margin, SEK m and % Earnings per share after dilution, SEK +43%* +36%* 8 150 4,17 +33%* 7 581 1 800 16,6% 18% 3,89 1 600 15,1% 16%
Slide 53: Solid financial position
Solid financial position Investments are in the latter part of Leverage increased due to lower Continued good cash conversion the cycle EBITDA proforma Operating cash flow after WC changes (SEK m), % of Cash Capex investments (SEK m), % of net sales Net debt (SEK m) / EBITDA proforma incl. IFRS 16*
Slide 54: Operating Segments
Operating Segments SEK million Q1 2024 margin % Q2 2024 margin % Q3 2024 margin % Q4 2024 margin % Full Year margin % REPORTABLE OPERATING SEGMENTS Net Sales Fiber Solutions 1 255 1 457 1 430 1 299 5 441 The Group's reportable operating segments have been Harsh Environment 273 319 291 296 1 178 iden
Slide 55: Summary
Summary #-dexatronic
Slide 56: Summary
Summary • Continued focus on small and • Improve Rochester’s profitability • Expand our service offerings medium-sized customers through organic growth • Continue to approach defense, initiatives • Innovate for easy-to-install, energy, and process industries sustainable, and cost-efficient with opti
Slide 57: Key takeaways
Key takeaways • Hexatronic is a global business with diversified exposure and multiple growth avenues • New business areas enable us to further focus and power our growth strategy − Fiber Solutions − Harsh Environment − Data Center • Attractive M&A pipeline – focus on Harsh Environment and Data Cent
Slide 58: Q&A
Q&A You are welcome to ask your questions in the chat.
Slide 59: A lasting link to the future
eaxatronic A lasting link to the future.