Hexpol reports double-digit earnings improvement

Malmo, Sweden – Hexpol AB has reported strong gains in both second quarter and first half of 2023, posting double-digit improvements in earnings (EBIT).

The Swedish group saw earnings rise 17% year-on-year to SEK1.9 billion (€165 million) in the first half of 2023, on an 8% increase in sales to SEK 11.7 billion.

Over the quarter to end of June, earnings rose 13% to SEK945 million, on a marginal 1% increase in sales to SEK5.7 billion, Hexpol announced 19 July.

Sales revenue during the second quarter improved due to a SEK383 million positive currency effect and a 2% contribution by the acquisition of US compounding business McCann, the group said.

The Hexpol Compounding business area’s sales increased 1% during
the quarter to SEK5.3 billion, reflecting a SEK363 million positive currency effect.

Sales to automotive-related customers showed an improvement but still varied from
market to market, said Hexpol.

Due to lower demand, sales to customers within building and construction were “significantly lower in virtually all markets”.

In addition, Hexpol said it saw lower sales to consumer-related end customer segments.

The Swedish group said its second quarter sales prices were lower compared to both the first quarter the year before due to lower prices on main raw materials.

“We have seen continued lower raw material prices during the quarter,” it added.

Hexpol Engineered Products saw sales increase 3% during the quarter to SEK373 million, with operations in Asia developing “positively”.

From a geographical perspective the group sales decreased in Europe by 6% compared to last year.

Revenue increase by 5% in Americas, and by 17% in Asia, Hexpol added.

On the short-term outlook, Hexpol CEO and president Georg Brunstam said uncertainty “remains high with high inflation and high interest rates”.

Furthermore, he noted that, “disturbances in supply chain” continue amid the ongoing war in Ukraine.

However, he said, Hexpol was well positioned to “deal with the disruptions and further strengthen market position”.

“The strong business model in combination with a clear acquisition strategy and strong financial position give us good conditions for continued growth,” he concluded.