Total sales was 8% above our forecast of SEK1,882m and amounted to SEK2,024m (2,258), corresponding to -10% growth y/y. The organic growth y/y was -18%, somewhat better than our forecast of -23% - and above the -27% in Q1. While the y/y numbers remain negative, sales grew by 14% q/q. Although Q2 is a seasonally stronger quarter than Q1, we believe there is an underlying sequential improvement. EBITA was SEK222m (405), corresponding to an EBITA margin of 11.0% (17.9). Despite the significant decline y/y, EBITA beat our forecast by 15%. The EBITA increased by 32%, and the EBITA margin expanded by 1.6% percentage points q/q.

The quarter’s development and the positive Q1 statements from many US peers indicate that the market has bottomed out in Q1. Although Hexatronic kept its market outlook unchanged – we believe some investors would expect more optimistic guidance given what US peers have said. But considering the strong share price reaction to the report, we were wrong. We are getting closer to the expected rebound in late 2024 and combined with the solid improvement q/q, data points toward Hexatronic gradually experiencing more positive market conditions and financial performance.

We increased our Base Case to SEK59 (40), following the increased forecast, primarily for 2025 and beyond. The share is currently trading somewhat above our Base Case and we believe the market has somewhat higher expectations on what a rebounded market will look like than us.