Hexpol reports improved performance in second quarter

Malmo, Sweden – Hexpol AB has seen sales and adjusted earnings grow in the second quarter of 2026, following a weak performance in the first quarter of the year.

For the three months to end of June, the Swedish group reported adjusted earnings (EBIT) of SEK772 million (€70 million), up 2.1% year-on-year, on 5.7% higher sales of SEK5.3 billion, said Hexpol 20 July.

Second quarter adjusted earnings margin fell slightly to 14.6%, from 15.1% reported last year, while adjusted profit after tax improved 2.8% year-on-year to SEK552 million.

For the first half of the year, however, Hexpol results remained weak with adjusted earnings down 7.6% at SEK1.47 billion, on 3.2% lower sales of SEK10.0 billion.

First half adjusted earnings margin stood at 14.7%, compared to 15.4% the year before, while adjusted profit after tax declined 7.0% to SEK1.0 billion.

“During the second quarter we delivered increased sales and results driven by strong organic growth, not least in the new business area Thermoplastic Compounding,” said acting CEO and CFO Peter Rosen.

According to the Hexpol executive, the group increased market share in various segments during the quarter, amid challenges such as “rapidly changing raw material prices” which he said the group “successfully handled.”

Over the three-month period, Hexpol also reported volume growth and “a visible recovery in most of our end customer segments.”

“We maintained and, in many cases, strengthen our positions in our main markets while also achieving a positive impact on our results through increased volumes,” he added.

In particular, Rosen reported increased volumes in the cable industry, building and construction and automotive sectors.

A strong Swedish krona, meanwhile, continued to negatively impact the result, albeit to a lesser extent compared to previous quarters.

The currency affected sales and earnings negatively by 3%, Rosen added.

In terms of raw materials prices, the acting CEO said the situation in the Middle East “remains turbulent.”

“This means continued significant volatility in both the prices and availability of our oil-based raw materials,” he added.

According to Rosen, during the quarter, Hexpol “invested significant resources” in monitoring the development and taking necessary measures to both ensure material supply and to implement the necessary price adjustments.

Furthermore, Hexpol reported “positive signs” within its largest business areas: Rubber Compounding and Thermoplastic Compounding.

The group reported “positive demand development from end customers” within the new business area Thermoplastic Compounding, which also includes Hexpol’s thermoplastic elastomers.

In particular, activities linked to customers within the product area wire & cable continued to grow.

Rosen stressed that Rubber Compounding will “for the foreseeable future” continue to constitute the largest part of Hexpol’s business.

During the quarter, that business area ‘gained market share’ and also took over parts of customers’ own compounding business.

“Our ambition is also to continue to grow with acquisitions. We are actively working on several possibilities, but at the moment the processes are affected by the uncertain market situation,” Rosen concluded.

Segment performance

Within Rubber Compounding, second-quarter sales rose 5.5% year-on-year to SEK3.6 billion, supported by 7% organic growth and a 1% contribution from acquisitions, despite a 3% negative currency impact.

The business reported increased volumes across most end-market segments, particularly in the cable industry, building and construction, and general industry, while the Kabkom acquisition contributed to growth in cable compounds.

Rubber Compounding earnings, however, fell 4.5% year-on-year to SEK546 million, with earnings margin declining to 15.2% from 16.8%, mainly due to higher overhead costs.

For the first half, sales declined 3.3% to SEK6.9 billion, although the business still delivered 2% organic growth and a 2% contribution from acquisitions, offset by a 7% negative currency effect.

First-half earnings fell 11.4% year-on-year to SEK1.07 billion, while the earnings margin narrowed to 15.5% from 16.9%.

Within Thermoplastic Compounding, second-quarter sales increased 9.4% year-on-year to SEK1.30 billion, driven by double-digit organic sales growth of 12% despite a 3% currency headwind.

The business reported higher volumes across most end markets, with particularly strong demand from building and construction, the cable industry and general industry.

Automotive and medical technology also recorded volume growth, while demand for consumer products recovered after a weaker first quarter.

Second-quarter earnings rose 42.2% to SEK155 million, with margin improving to 11.9% from 9.1%, supported by higher sales and a positive price/mix development.

For the first half, sales edged 0.6% lower to SEK2.41 billion, despite 5% organic growth, while earnings increased 13.8% to SEK272 million. The earnings margin improved to 11.3% from 9.8%.

The Engineered Products business reported a 4.0% decline in second-quarter sales to SEK386 million, reflecting a 3% decline in organic sales and a 1% negative currency impact.

The lower sales mainly reflected weaker demand in Sweden for both wheels and gaskets after "record levels" in the first half of 2025.

Earnings declined 5.3% year-on-year to SEK71 million, while the margin eased to 18.4% from 18.7%.

For the first six months, the business area reported a 10.0% declien in sales to SEK748 million, with earnings down 11.8% at SEK135 million and margin at 18.0%, down from 18.4% in the first half of 2025.