Hexagon Composites (HEX) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered steady performance amid macroeconomic headwinds, with revenue at NOK 912 million and EBITDA of NOK 44 million, yielding a 5% margin, though down from NOK 945 million and NOK 59 million year-over-year due to weak Mobile Pipeline volumes.

• Fuel Systems segment grew 64% year-over-year, driven by strong refuse sector demand, while Mobile Pipeline was impacted by delayed investments and RNG project slowdowns.

• Proactive cost-saving measures included a 6% workforce reduction and restricted CapEx to NOK 120–130 million for the year.

• Significant NOK 213 million multi-segment order received from a major North American refuse fleet, supporting fuel systems, Mobile Pipeline, and requalification services.

• Sale of Hexagon Ragasco completed in June 2024, returning NOK 1.2 billion and resulting in a NOK 715 million pre-tax gain; historical figures restated for comparability.

Financial highlights

• Q1 2025 revenue was NOK 912 million, nearly flat year-over-year, with EBITDA of NOK 44 million and a 5% margin.

• Group EBIT was NOK -26 million, with an EBIT margin of -3%, due to higher depreciation and lower volumes.

• Net loss from continuing operations was NOK -836 million, mainly from a NOK 509 million impairment on Hexagon Purus and further losses from associates.

• Liquidity reserve stood at NOK 1.1 billion at quarter-end, with net interest-bearing debt at NOK 1.14 billion.

• Free cash flow was negative due to weak EBITDA, partially offset by earn-out from Ragasco sale.

Outlook and guidance

• 2025 is described as a transition year with significant macro uncertainty and limited visibility; guidance for 2025 is paused or discontinued due to unpredictable customer spending and market conditions.

• Combined backlog and reported revenue at Q1 end was NOK 1.9 billion.

• CapEx for 2025 restricted to NOK 120–130 million, with inventory reductions aligned to sales.

• Confident in medium- and long-term growth, targeting 10X growth by 2030, especially with natural gas and RNG adoption and regulatory support.