Hexatronic Group (HTRO) Q1 2026 earnings summary

Executive summary

• Net sales reached SEK 1,698 million in Q1 2026, down 10% year-over-year, with organic sales down 2% due to FX headwinds and weak Fiber Solutions performance in Europe, while Data Center and Harsh Environment segments showed strong organic growth.

• Adjusted EBITA was SEK 146 million, with an 8.6% margin, down from 9.8% last year but improved sequentially after five quarters of decline.

• Data Center became the largest profit and EBITA contributor for the first time, driven by 20% organic growth and strong US demand, reflecting a strategic shift in business mix.

• Harsh Environment saw 9% organic growth, while Fiber Solutions faced continued challenges in Europe but showed recovery in the US and growth in APAC.

• The performance improvement program was completed ahead of schedule, delivering SEK 110 million in annualized cost savings, and the acquisition of JoWo/JOWO Systemtechnik AG in Harsh Environment was announced and closed after the quarter.

Financial highlights

• Net sales: SEK 1,698 million, down 10% year-over-year; adjusted EBITA: SEK 146 million (down 21%), margin 8.6%.

• Adjusted gross margin was 41.3%, stable year-over-year.

• Net income: SEK 92 million; EPS after dilution: SEK 0.45 (up from SEK 0.42).

• Net debt (excluding leases) increased to SEK 1.7 billion, with a net debt/EBITDA ratio of 2.2x.

• Cash flow from operating activities was SEK 29 million, with a 26% cash conversion rate.

Outlook and guidance

• Persistent headwinds expected in Europe for Fiber Solutions, offset by growth in North America; Data Center segment expected to see continued strong demand and a modest margin increase in Q2.

• Harsh Environment margins may remain muted in Q2 due to project mix and U.S. government shutdown effects, with normalization expected in the second half.

• Submarine cable order book is nearly full for 2026 and filling for 2027, with a shipment peak expected in Q3 2026.

• FX headwinds should abate, and leverage will temporarily increase in Q2 due to an earn-out payment.

• Continued focus on M&A, especially in Data Center and Harsh Environment.