HEXPOL Community

Risks -27% stock price drop over past year – industry-wide pressure Cyclicality – tied to industrial demand cycles Moderate growth – not a high-growth tech stock Assumptions Revenue by 2029: Estimate: ~SEK 26–28 billion Current Revenue: SEK 20.44 billion Expected Growth: ~4.3–7.2% annually Growth Drivers: Strong demand for polymer solutions in automotive, construction, and energy Growth in engineered products and thermoplastic elastomers Sustainability and recycling focus aligned with EU regulations (ESG boost) Earnings by 2029: Estimate: ~SEK 3–3.5 billion Current Earnings: SEK 2.22 billion Expected Growth: ~7.2% annually Key Factors: Stable gross margins (21–23%) Facility consolidation and improved operational efficiency Acquisitions (M&A) and shift toward high-margin products Catalysts Reliable dividend yield – 4.3% Low debt (Debt/Equity = 18.7%) Consistent growth through green innovation and acquisitions

Catalysts Historic Growth: HEXPOL has demonstrated robust growth over the years—expanding from modest beginnings in 2001 to achieving sales over 22 billion SEK in 2023—and its strong track record suggests that this momentum is likely to continue. Gross Margins: The company has maintained stable gross margins (18-23%) last five years, reflecting enduring pricing power vs customers.

Key Takeaways Consolidating facilities and focusing on sustainability may enhance operating margins and attract environmentally focused clients, aiding revenue growth. Strategic acquisitions and a strong financial position support market expansion, potentially boosting future earnings and profitability.