HEXPOL (HPOL) investor relations material

Executive summary

• Q4 sales were 4,254 MSEK, down 9% year-over-year, mainly due to negative FX effects, but volumes increased in Europe and North America, maintaining strong market positions despite a competitive environment.

• Engineered Products segment delivered stable performance with improved profitability and EBIT margin above 20%.

• Demand was higher in building and construction, wire and cable, and medical, offsetting a soft automotive market.

• Achieved 80% reduction in carbon footprint from own energy consumption, surpassing the 2025 target.

• Strategic focus remains on organic growth, M&A, and operational excellence, with a 2030 plan in place.

Financial highlights

• Q4 sales reached SEK 4.3 billion (4,254 MSEK), down 9% year-over-year, mainly due to a 9% negative FX effect.

• EBIT was SEK 508 million (margin 12%), impacted by SEK 61 million negative FX and unfavorable mix.

• Strong operating cash flow of 1,037 MSEK in Q4, driven by efficient working capital management.

• Net debt at year-end was 3,184 MSEK, with a net debt/EBITDA ratio of 0.95.

• Ordinary dividend proposed at 4.20 SEK per share, unchanged from last year.

Outlook and guidance

• Q1 is expected to be more normal, without the shutdowns that affected Q4, likely leading to improved margins.

• Management anticipates gradual improvement in market conditions and remains flexible to adapt footprint as needed.

• Strategic agenda for 2030 focuses on organic growth, M&A, and operational excellence.

• Updated sustainability strategy and new targets to be completed in Q1 2026.

• No general market improvement is expected in the near term due to ongoing global uncertainty and geopolitical concerns.