• Revenue: NOK 1.5 billion in Q4 2024, an all-time high.
• EBITDA: NOK 257 million in Q4 2024.
• EBITDA Margin: 17% in Q4 2024.
• Year-over-Year Revenue Growth: 21% in Q4 2024.
• Year-over-Year EBITDA Growth: 150% in Q4 2024.
• Leverage: 1.5x for Q4 2024.
• Available Liquidity: NOK 1.2 billion.
• Hexagon Agility Sales: Just under NOK 1.5 billion.
• Hexagon Agility EBITDA: NOK 255 million.
• Hexagon Digital Wave Sales: NOK 54 million in Q4 2024.
• Hexagon Digital Wave EBITDA Margin: 25% in Q4 2024.
• Annual Growth Since 2020: 20%.
• 2024 EBITDA Margin: 13%, up from 8% in 2023.
• Equity Ratio: 50%.
• CO2 Emissions Avoided: 1.84 million metric tons in 2024.

• Warning! GuruFocus has detected 6 Warning Signs with HXGCF.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Hexagon Composites ASA (HXGCF) achieved record high revenues of NOK1.5 billion in Q4 2024, marking a significant milestone for the company.
• The company reported an impressive EBITDA margin of 17% for the quarter, showcasing strong operational efficiency.
• Hexagon Composites ASA (HXGCF) has successfully positioned itself as a market leader in lightweight, high-pressure cylinders and power systems, with a proven track record in delivering sustainable energy solutions.
• The company has expanded its production capacity with new facilities in Lincoln, Nebraska, and Rialto, California, setting the stage for future growth.
• Hexagon Composites ASA (HXGCF) has a strong balance sheet with a 50% equity ratio and available liquidity of NOK1.2 billion, providing financial stability and flexibility for future investments.

Negative Points

• The company anticipates a soft first half of 2025, with growth expected to be back-end loaded, which could pose risks if there are delays in order fulfillment.
• Visibility into the first half of 2025 remains limited, particularly for the mobile pipeline and truck segments, which could impact revenue projections.
• Despite strong performance, the company faces challenges in the freight market, which has been historically low, affecting capital allocation and order sizes.
• Hexagon Composites ASA (HXGCF) has provided cautious guidance for 2025, reflecting uncertainties in market recovery and truck platform availability.
• The company has divested its LPG business, Hexagon Ragasco, which may impact its revenue streams and require strategic adjustments moving forward.

Q & A Highlights

Q: Can you provide more details on the guidance for 2025, particularly regarding segmental growth and visibility on contracts? A: David Bandele, CFO, explained that the guidance reflects a risk-balanced approach. The freight market and OEMs indicate a recovery in the second half of the year, with a soft first half. Mobile pipeline visibility remains strong, especially for oil and gas, and truck availability is expected to improve, supporting a recovery in the second half.

Q: Cummins mentioned 3,000 units for 2025, translating to significant sales for Hexagon. Do you see this as achievable? A: David Bandele, CFO, acknowledged the potential but noted that truck platform availability will significantly increase once Freightliner comes online. The exit rate for the back end of 2025 is expected to be significant, but visibility shows a difference between the first and second halves of the year.

Q: Does the guidance suggest flat growth year over year, and what factors are contributing to this? A: David Bandele, CFO, indicated that while growth is expected, it is back-end loaded. Mobile pipeline was strong throughout the previous year, and the cautious guidance reflects potential delays and the timing of sales.

Q: Will Hexagon contribute more capital to Hexagon Puris if needed? A: Philipp Schramm, CEO, stated that as a 38% shareholder, Hexagon expects Hexagon Puris to achieve cash flow breakeven with the current liquidity. There is no intention to provide additional funding, as they are confident in Puris's ability to meet its financial targets.

Q: What are the key factors influencing the guidance for 2025? A: David Bandele, CFO, highlighted a soft first half and a strong second half as key factors. The truck market is expected to improve with Freightliner coming online, and mobile pipeline demand is anticipated to rise, particularly in oil and gas. The guidance reflects a cautious approach to these moving parts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.