HEXPOL (HPOL) Q4 2024 earnings summary

Executive summary

• Q4 2024 sales were SEK 4.7 billion (4,694 MSEK), down 4% year-over-year, with improved sales in Europe offset by declines in North America due to weak automotive demand.

• Adjusted EBIT for Q4 was SEK 631 million, a 25% decrease year-over-year, with a margin of 13.4%.

• Strong operating cash flow of SEK 1.2 billion (1,171 MSEK) was achieved, supported by efficient working capital management and efficiency initiatives.

• Ordinary dividend proposed at SEK 4.20 per share, a 5% increase from the prior year.

• Efficiency measures included the sale of the Muscle Shoals facility, closure of the Kennedale plant, and the acquisition of Piedmont Resin Supply, consolidated from November.

Financial highlights

• Q4 adjusted EBIT margin was 13.4% (down from 17.2%); full-year adjusted EBIT margin was 15.9%.

• Q4 profit after tax was 353 MSEK; full-year profit after tax was 2,220 MSEK.

• Adjusted earnings per share for Q4 was 1.28 SEK; full-year adjusted EPS was 6.70 SEK.

• Net debt at year-end was 2,235 MSEK, with a net debt/EBITDA ratio of 0.59 and equity/assets ratio at 64%.

• Operating cash flow for Q4 was 1,171 MSEK; cash flow per share for the year was 7.83 SEK.

Outlook and guidance

• Management maintains focus on efficiency, organic growth, acquisitions, and sustainability, with a positive M&A environment and strong financial resources.

• Expectation for North American volumes to normalize after a weak December; no full quarter forecast, but January figures support recovery.

• Sustainability efforts continue, with a 65% CO2 reduction achieved toward a 75% target by end of 2025.

• High interest in recycled products, especially from automotive customers.

• Demand from automotive remains weak, but building and construction segments show improvement.