Malmo, Sweden – Hexpol AB has seen a significant rebound in fourth quarter operating profit and a strong cashflow which could support the rubber group’s “acquisition agenda.”
During the three months to 31 Dec, operating profit rose 47% year-on-year to SEK622 million (€61.5 million), on 10% lower sales of SEK3.4 billion, Hexpol announced 29 Jan.
For the full year, the Swedish compounder posted sales down 13.4% year-on-year to SEK13.4 billion, with operating profit coming in 5.2% lower at SEK1.9 billion.
Hexpol linked its “best quarterly result ever” to increased sales volumes over the final three months of last year, and a reduced cost-base.
The decline in sales, meanwhile, reflected a 7% negative currency impact and lower sales prices, according to the group’s report.
Volumes ‘clearly increased’ to automotive customers and construction industry during the quarter, commented Georg Brunstam, president and CEO.
Here, he said, Hexpol’s “large geographical coverage” and proximity to customers were “a clear competitive advantage.”
Meanwhile, measures to reduce direct and indirect costs bolstered operating-margin, which reached 18.3% in the final three months of the year.
Brunstam added that a “very good cashflow” left Hexpol in a strong position for “continued growth and intensified acquisition agenda.”
Hexpol has been on the acquisition trail for the past two years, as seen with its full takeover of Italian rubber compounder Mesgo Group last year.
In North America, Hexpol’s recent moves have included the 2019 acquisition of Preferred Compounding with six production facilities across the US and Mexico.