Hexatronic Group (HTRO) Investor update summary

Strategic Direction and Business Area Focus

• The updated strategy emphasizes diversification across Fiber Solutions, Data Center, and Harsh Environment, each with tailored strategies and financial targets for 2028.

• Data Center and Harsh Environment are expected to represent half of group revenue and profits by 2028, while Fiber Solutions undergoes a turnaround.

• The company is transitioning from a European fiber cable provider to a global connectivity solutions provider.

Fiber Solutions: Turnaround and Growth Plan

• Performance improvement program targets SEK 110m EBITA impact and SEK 122m annual cost savings, including plant closure in the Netherlands and 120 FTE reductions, with most benefits realized by Q1 2026.

• 2028 targets: SEK 6bn sales and 10% EBITA margin, with growth driven by operational excellence, innovation, and expansion in the US, submarine cables, and transport networks.

• One-off costs of SEK 230m mainly impact Q3 2025; plant closure and FTE reductions to have limited top-line impact (<$50 million).

• Operational excellence actions include procurement, working capital programs, and postponement of fiber optic cable manufacturing in South Carolina to 2027.

• Market outlook for FTTH remains cautious due to overcapacity and soft demand, but U.S. infrastructure programs are expected to support growth from 2026.

Data Center: Growth and Profitability Outlook

• Data Center achieved a 46% sales CAGR and a 17.3% EBITA margin LTM, with services accounting for nearly half of revenue and a strong presence in the US and Europe.

• 2028 targets: SEK 3bn sales and 15% EBITA margin, with growth driven by organic initiatives and M&A.

• Focus on expanding services, especially in hyperscale leased and colocation segments, and strengthening presence in North America and Europe.

• M&A pipeline robust, with acquisition multiples expected at 5–7x EBITDA.