Hexatronic Group: First comment Q3, spot-on projections

The Q3 figures came in almost exactly as expected. The company grew their net sales by 20% and had an EBITDA margin of 10. 6%. The growth was fully driven by the earlier acquisitions.

The company continues to deliver strong growth and results in international markets, but Sweden continues to be softer. One major event after the period ended was the acquisition of the German-based based Opternus GmbH, which adds about 10% on the top-line and creates significant cross-selling opportunities for Hexatronic’s other products. We do not expect to make any significant changes to our projections, besides the effect of adding Opternus.

We continue to believe that the market misses the considerable opportunity the growth regions and puts too much focus on the short-term weakness in the Swedish market. 2018 is a “middle-year” in Sweden, but we believe this will change during 2019. Our current Base-case, before any adjustments following the acquisitions, amounts to 72 SEK per share.