Hexpol reports 12% earnings increase despite flat sales

Malmo, Sweden – Hexpol AB has posted a 12% year-on-year increase in its 2023 adjusted earnings (EBIT) to SEK3.6 billion (€318 million), on sales marginally lower at SEK22 billion.

Operating margin, meanwhile, improved from 14.7% in 2022 to 16.6% in 2023, helped by “better product and price mix”, the Swedish-based compounder said 26 Jan.

During the period, Hexpol's sales were in line with the prior-year level, falling marginally from SEK22.2 billion in 2022 to SEK22.0 billion last year.

By region, Hexpol's full-year sales decreased in Europe by 4% year-on-year, increased “slightly” in the Americas but rose sharply in Asia, posting a 7% increase.

Sales were bolstered by positive currency effects of SEK1.1 billion, as well as a 3% contribution of acquisitions.

Meanwhile, Hexpol saw falling raw material prices during the year, which it said ‘flattened out’ in the second half of the year.

Hexpol's Compounding business sales came in at SEK20.5 billion, down slightly from SEK20.8 billion the year before.

Adjusted for currency effects and acquisitions, segment sales fell to SEK19.5 billion, the group pointed out.

Hexpol noted that sales to automotive-related customers were showing "an improvement but still vary from market to market”.

Deliveries to the building & construction market, however, were “significantly lower in virtually all markets”, due to lower activity levels.

The compounding business also noted lower sales to consumer-related end customer segments, reflecting generally lower demand.

At the Hexpol Engineered Products business, sales grew 4% year-on-year from SEK1.40 billion to SEK1.46 billion in 2023.

In particular, operations in Asia and Americas developed positively during the period, the Swedish compounder said.

Looking ahead, Hexpol acting CEO and chief financial officer Peter Rosen said:  “Uncertainty remains high in terms of development of inflation, interest rates, Russia’s invasion of Ukraine as well as the unrest in the Middle East”

However, added Rosen, Hexpol’s customer focus and its geographical closeness to customers will enable it to “deal with disruptions and further strengthen the market position.”