Hexagon Composites (HEX) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached NOK 1.15 billion, with EBITDA of NOK 137 million and a 12% margin, up from 9% year-over-year, driven by Hexagon Agility's strong performance.

• Sale of Hexagon Ragasco to Worthington for NOK 1,050 million generated a net gain of NOK 677 million, strengthening the balance sheet and focusing on core businesses.

• Major commercial milestones included a $60 million UPS order, a $13 million Mobile Pipeline order, and the launch of the Hexagon Purus Tern truck in the U.S.

• Acquisition of a 49% stake in Worthington SES for NOK 121 million expands presence in high-pressure gas storage and distribution.

• Science Based Targets initiative approved near-term and net zero emission targets, with 537,790 metric tons of CO2e avoided in H1 2024.

Financial highlights

• Q2 2024 revenue: NOK 1.15 billion; EBITDA: NOK 137 million, up NOK 27 million year-over-year; EBITDA margin: 12% (Q2 2023: 9%).

• Net debt at NOK 753 million; leverage reduced to 1.6x after Ragasco sale; liquidity reserves at NOK 1.4 billion.

• Hexagon Agility delivered NOK 140 million EBITDA on NOK 1.1 billion revenue (13% margin), highest since Q3 2021.

• Digital Wave revenues up 13% to NOK 45 million, with stable profit despite higher OpEx.

• Net gain from Ragasco sale was NOK 677 million, recognized in discontinued operations.

Outlook and guidance

• 2024 guidance: ~NOK 4.8 billion revenue, >NOK 500 million EBITDA, both adjusted for Ragasco sale.

• Expect continued margin expansion, higher second-half margins, and strong order pipeline for heavy-duty trucks and Mobile Pipeline.

• Long-term EBITDA margin target remains 15%, expected to be achievable by 2026.

• Digital Wave and Mobile Pipeline anticipate profitable H2 2024, with additional capacity coming online.

• Guidance adjusted for Ragasco divestment; consensus expectations for 2025 remain aligned.