Hexpol on growth track as sales, earnings improve

Malmo, Sweden – Swedish rubber compunder Hexpol AB has achieved strong growth in sales and adjusted earnings over the third quarter of 2022, the group reported 21 Oct.

Group sales rose 44% year-on-year to SEK5.9 billion (€530 million) during the three months to 30 Sept, while earnings (adjusted EBIT) grew 24% to SEK838 million, reported Hexpol.

Sales were strong in “all markets and all product areas”, with the Americas showing “continued strong development,” according to the third quarter statement. 

Global sales to automotive-related customers remained varied but Hexpol noted “a certain improvement” at the end of the quarter, mainly in the Americas.

However, the Swedish compounder noted “great uncertainty” in its European markets towards the end of the quarter, particularly within the building & construction industry.

Included in the group's positive sales development were effects from acquisitions, positive currency effects and increased sales prices.

In terms of earnings, Hexpol said it recorded positive currency effects of SEK112 million during the three-month period.

However, margins remained under pressure at 14.2%, down from 16.5% reported last year.

Hexpol linked the decline to “the need to constantly adapt production to rapidly changing demand from customers.”

In addition, the Swedish supplier said it still faced previously signalled challenges around “non-optimised recipes” due to raw material shortages.

Price increases for raw materials and energy also continued to affect gross margin negatively during the quarter.

In addition, Hexpol said its recently acquired companies continue to have lower margin compared to the parent group’s total profitability margin.

Breaking down the sectors, Hexpol Compounding business area’s sales increased by 45% during the quarter to SEK5.5 billion, reflecting a SEK673 million positive currency effect.

The Hexpol Engineered Products sales also increased 30% year-on-year to SEK367 million during the quarter.

Geographically, sales increased in the Americas by 48% compared to 2021, followed by Europe at 41% and Asia at 28%.