HEXPOL (HPOL) Q1 2025 earnings summary

Executive summary

• Q1 2025 sales reached 5,381 MSEK, up 1% year-over-year, with stable sales in Europe and the U.S. and improvement in Asia, especially in Engineered Products.

• EBIT was 839 MSEK, down from 905 MSEK last year, with an EBIT margin of 15.6% versus 17.0%.

• Cash flow improved to 188 MSEK from 112 MSEK in Q1 2024, despite typical seasonal softness.

• Organizational changes were made to drive growth, including merging thermoplastics and TPE into one product area and integrating high-performance compounds into rubber compounding.

• Kabkom acquisition in Turkey strengthens position in wire and cable compounds; almaak minority share in Germany also acquired.

Financial highlights

• Sales: 5,381 MSEK (Q1'24: 5,312 MSEK), up 1% year-over-year; organic sales down 3%, offset by 3% growth from Piedmont acquisition.

• Adjusted EBIT of 839 MSEK, down 7% year-over-year, with margin at 15.6% (vs. 17% last year).

• Profit after tax: 602 MSEK (Q1'24: 654 MSEK); EPS: SEK 1.75 (Q1'24: SEK 1.90).

• Net debt increased to 2,346 MSEK, with net debt/EBITDA at 0.63 (Q1'24: 0.36), reflecting recent acquisitions.

• Equity/assets ratio at 62% (Q1'24: 66%); return on capital employed (R12) at 16.6% (Q1'24: 18.8%).

Outlook and guidance

• No material impact from U.S. tariffs in Q1, but direct and indirect effects expected in the U.S. due to raw material prices.

• Active mitigation includes alternative suppliers and price negotiations; margin protection expected to remain robust.

• M&A remains a focus, with a positive long-term view despite current market uncertainty.

• Capital Markets Day scheduled for November 4, 2025, in Stockholm.