Skip to main content

AI assistant

Sign in to chat with this filing

The assistant answers questions, extracts KPIs, and summarises risk factors directly from the filing text.

Sign up Log in

Hexagon Composites Investor Presentation 2017

Nov 1, 2017

3619_rns_2017-11-01_caecc77a-403f-4890-8a0f-b8b49e406e1e.pdf

Investor Presentation

Open in viewer

Opens in your device viewer

Disclaimer and important notice

This company presentation (the "Presentation") has been prepared by Hexagon Composites ASA ("Hexagon" or the "Company").

The Presentation has not been reviewed or registered with, or approved by, any public authority, stock exchange or regulated market place. The Company makes no representation or warranty (whether express or implied) as to the correctness or completeness of the information contained herein, and neither the Company nor any of its subsidiaries, directors, employees or advisors assume any liability connected to the Presentation and/or the statements set out herein. This presentation is not and does not purport to be complete in any way. The information included in this Presentation may contain certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of the Company or its advisors or any of their parent or subsidiary undertakings or any such person's affiliates, officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. The Company and its advisors assume no obligation to update any forward-looking statements or to conform these forward-looking statements to the Company's actual results. Investors are advised, however, to inform themselves about any further public disclosures made by the Company, such as filings made with the Oslo Stock Exchange or press releases. This Presentation has been prepared for information purposes only. This Presentation does not constitute any solicitation for any offer to purchase or subscribe any securities and is not an offer or invitation to sell or issue securities for sale in any jurisdiction, including the United States. Distribution of the Presentation in or into any jurisdiction where such distribution may be unlawful, is prohibited. This Presentation speaks as of 1 November 2017, and there may have been changes in matters which affect the Company subsequent to the date of this Presentation. Neither the issue nor delivery of this Presentation shall under any circumstance create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that the affairs of the Company have not since changed, and the Company does not intend, and does not assume any obligation, to update or correct any information included in this Presentation. This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts with Oslo City Court as exclusive venue. By receiving this Presentation, you accept to be bound by the terms above.

Agenda

  • •Group highlights
  • •Group financials & segment overview
  • •Outlook
  • •Q & A

Highlights from Q3 2017

  • • Best third-quarter results since 2014 driven by
  • ‒74% revenue growth in the LPG segment versus Q3 2016
  • ‒Profitable High-Pressure EBITDA performance overall
  • • Strong Hydrogen volume growth versus Q3 2016
  • Commenced work on significant development contract for two new Fuel Cell Electric Vehicle (FCEV) models
  • •Strong Light-Duty Vehicles growth versus Q3 2016
  • • Solid Mobile Pipeline ® volumes within North America
  • ‒Awarded a significant new order within industrial sector
  • ‒Rest of world impacted heavily by project delays
  • • Launched Mobile Pipeline® regulatory requalification testing to improve customer value and minimize downtime
  • •Solid profitability within Agility Fuel Solutions

Financial highlights Q3 2017

  • • Key factors impacting EBITDA this quarter:
  • Strong LPG performance
  • Other income from Agility
  • • Solid underlying contribution below the line from Agility
  • Diluted by accounting adjustments
  • •Strong cash and liquidity
Gr
ke
f
ig
ou
p
ur
es		 Q
3
2
0
1
6		 Q
3
2
0
1
7
y
N
O
K
i
l
l
ion
m		 Re
te
d
p
or		 C
N
G
t
ca
rv
eo
u		 Pr
fo
o-
rm
a
ion
ex
xp
er		 Pr
fo
o-
rm
a
ion
ex
xp
er		 ion
xp
er		 Re
te
d
p
or
Op
t
ing
Inc
er
a
om
e		 2
6
6		 (
)
1
3
3		 1
3
3		 2
7
5		 7
8		 3
5
3
E
B
I
T
D
A		 5 (
2
0
)		 (
1
5
)		 4
8		 4 5
1
Ne
t p
f
i
t
/
(
los
)
ro
s		 (
1
1
)		 n.a n.a n.a n.a 1
6

Q3 2017 Group income statement

F
U
L
L
Y
E
A
R
N
O
K
M
I
I
O
N
L
L		 Q
3
2
0
1
7		 Q
3
2
0
1
6		 i
V
a
r
a
n
c
e		 2
0
1
6
O
t
i
I
p
e
r
a
n
g
n
c
o
m
e		 3
5
2.
8		 2
6
6.
2		 8
6.
5		 1
2
2
0.
5
O
i
t
p
e
r
a
n
g
e
x
p
e
n
s
e
s		 (
3
0
1.
)
5		 (
2
6
1.
6
)		 (
)
3
9.
9		 (
1
1
9
3.
8
)
E
i
l
G
i
t
c
e
p
o
n
a
a
n
s
x		 0.
0		 0.
0		 0.
0		 3
4
8.
2
E
B
I
T
D
A		 1.
2
5		 4.
6		 4
6.
6		 3
4.
9
7
D
i
t
i
t
i
b
l
e
p
r
e
c
a
o
n
o
n
a
n
g
e
s		 (
1
2.
2
)		 (
1
5.
8
)		 3.
5		 (
5
9.
8
)
A
i
i
d
i
i
t
t
t
m
o
r
s
a
o
n
a
n
m
p
a
r
m
e
n		 (
5.
2
)		 (
1.
3
)		 (
)
4.
0		 (
1
5.
8
)
E
B
I
T		 3
3.
8		 (
1
2.
4
)		 4
6.
2		 2
9
9.
3
S
f
f
/
(
)
f
h
i
t
l
i
t
a
r
e
o
p
r
o
o
s
s
r
o
m
a
s
s
o
c
a
e
s		 (
2.
1
)		 0.
0		 (
)
2.
1		 2.
1
f
A
t
i
t
i
i
t
i
t
i
b
l
m
o
r
s
a
o
n
o
a
s
s
o
c
a
e
s
n
a
n
g
e
s		 (
)
3.
3		 0.
0		 (
3.
3
)		 (
)
3.
6
O
t
h
f
i
i
l
i
t
(
t
)
e
r
n
a
n
c
a
e
m
s
n
e		 (
6.
6
)		 (
6.
0
)		 (
)
0.
6		 1
4.
1
P
f
i
t
/
(
l
)
b
f
t
r
o
o
s
s
e
o
r
e
a
x		 2
1.
8		 (
1
8.
4
)		 4
0.
2		 3
1
1.
9
T
a
e
p
e
n
s
e
x
x		 (
4
)
5.		 8
7.		 (
)
1
3.
2		 (
1
0
3.
6
)
P
f
i
/
(
l
)
f
t
t
t
r
o
o
s
s
a
e
r
a
x		 1
6.
4		 (
1
0.
6
)		 2
7.
0		 2
0
8.
3
E
B
I
T
D
A
%		 1
4.
5
%		 1.
7
%		 3
0.
7
%
E
B
I
T
%		 9.
6
%		 4.
7
%
-		 2
4.
5
%
O
/
(
O
S
S
)
N
E
T
P
R
F
I
T
L
%		 4.
6
%		 4.
0
%
-		 1
7.
1
%

Revenue walk Q3 2017

Strong organic growth in both High and Low-Pressure segments

EBITDA walk Q3 2017

Solid organic EBITDA growth with significant improvement in High-Pressure segment

9

Segment shares Q3 2017 | Before Group eliminations*

Q3: High-Pressure segment

  • •Mobile Pipeline® deliveries to the oil and gas industry in North America
  • • Hydrogen continues exponential growth
  • Revenues from diverse applications
  • •Light-Duty highest revenue quarter so far in 2017
  • •MasterWorks sales volumes beginning to take-off
  • • Profitability improvement visible but still at low levels
  • Operational inefficiencies and Ohio plant incurred losses impacted negatively
  • Offset by positive net impact of other income received
O
O
N
K
M
I
L
L
I
N		 S
U
M
M
A
R
Y
F
I
N
A
N
C
I
A
L
S
Q
3
2
0
1
7		 Q
3
2
0
1
6		 Va
ian
r
ce
Op
t
in
In
er
a
g
co
m
e		 1
8
9.
7		 1
7
3.
4		 1
6.
3
Op
ing
t
era
ex
p
en
se
s		 (
1
7
2.
0
)		 (
1
8
8.
4
)		 1
6.
4
E
B
I
T
D
A		 1
7.
7		 (
1
5.
0
)		 3
2.
7
De
ia
ion
i
b
les
t
ta
p
rec
o
n
ng		 (
)
7.
5		 (
1
0.
0
)		 2.
5
Am
t
isa
t
ion
d
im
irm
t
or
a
n
p
a
en		 (
2
)
5.		 (
1.
3
)		 (
)
4.
0
E
B
I
T		 1
5.		 (
2
6.
2
)		 3
1.
2

Agility investment is a significant part of the Group balance sheet

Agility Fuel Solutions represents a significant portion of Hexagon Composites' total balance sheet – where P&L contribution from this investment is not included in EBIT

Legacy Hexagon: Pre xperion acquisition Mobile Pipeline®, Light-Duty, Hydrogen and LPG xperion acquisition: Closed in Q4 2016 for purchase consideration of NOK 293m in cash and contingent earn-out of up to NOK 103m Agility Fuel Solutions: Closed in Q4 2016 at value of NOK 971m

Agility Fuel Solutions Q3 2017

  • •Solid quarter for revenues and margin
  • • Good cash and working capital position Fully-funded
  • • Solid Heavy-Duty Truck deliveries in quarter
  • Year-over-year growth significant vs. weak 2016
  • • Bus volumes relatively soft in quarter Year-over-year decline vs. strong 2016 in US
  • •Refuse Truck sales picked up in quarter
  • First time in 2017 with Year-over–year growth for the quarter
  • • Powertrain Systems (propane) on track to business plan

Revenues and adjusted EBITDA (USDm)*

Q3 2017 EBITDA to profit before tax (USDm) walk

Effects for Group reporting Q3 2017

  • • Underlying Agility investment contribution is significantly higher than as recorded in Group results
  • We eliminate 50% of other income received from Agility, approximately NOK 11 million
  • • The level of the share-based compensation P&L charge is driven by legacy company valuations
  • The accounting "non-cash" cost deviates significantly from the "cash" value
  • • Intangible assets from Agility deal are amortized over their lifetime

Agility impact to Group P&L (NOKm)

Positive underlying contribution from operations

Q3: Low-Pressure segment

  • •74% year-over-year sales growth
  • • Record third-quarter revenues Volume driven
  • •Deliveries primarily to the Middle East
  • • On-track with capex programs
  • ‒Year to date spend of NOK 31 million
N
O
K
M
I
L
L
I
O
N		 S
C
S
U
M
M
A
R
Y
F
I
N
A
N
I
A
L
Q
3
2
0
1
7		 Q
3
2
0
1
6		 ian
Va
r
ce
Op
in
In
t
er
a
g
co
m
e		 1
6
8
5.		 9
1
5.		 7
0.
7
Op
t
ing
era
ex
p
en
se
s		 (
1
2
9.
6
)		 (
7
6.
9
)		 (
)
5
2.
6
E
B
I
T
D
A		 3
6.
2		 1
8.
2		 1
8.
0
De
ia
t
ion
ta
i
b
les
p
rec
o
n
ng		 (
6
)
4.		 (
6
)
5.		 1.
0
Am
t
isa
t
ion
d
im
irm
t
or
a
n
p
a
en		 0.
0		 0.
0		 0.
0
E
B
I
T		 3
1.
6		 1
2.
5		 1
9.
1

Financial position vs previous quarter

O
O
N
K
M
I
L
L
I
N		 B
A
L
A
N
C
E
S
H
E
E
T
3
0.
0
9.
2
0
1
7		 3
0.
0
6.
2
0
1
7		 C
ha
ng
e
In
ta
i
b
le
ts
ng
as
se		 5
5
6.
1		 5
6
7.
6		 (
1
1.
6
)
Ta
i
b
le
f
ixe
d
ts
ng
as
se		 2
3
9.
9		 2
5
2.
9		 (
1
3.
0
)
Inv
tm
ts
in
J
Vs
d
ia
te
es
en
a
n
as
so
c
s		 9
0
8.
5		 9
6
0.
4		 (
1.
8
)
5
O
t
he
t a
ts
r n
on
-c
ur
re
n
ss
e		 1.
6		 2.
0		 (
)
0.
4
To
ta
l
No
t
As
ts
n-
cu
rre
n
se		 1
0
6.
1
7		 1
8
2.
9
7		 (
)
7
6.
8
Inv
to
ies
en
r		 2
6
0.
2		 2
6
4.
0		 (
)
3.
9
Re
iva
b
les
ce		 2
4
8.
0		 2
7
8.
8		 (
)
3
0.
8
Ba
k
de
i
ts
h
d
im
i
lar
n
p
os
ca
s
an
s
,		 2
3
3.
7		 1
5
7.
0		 7
6.
7
Cu
To
ta
l
t
As
ts
rre
n
se		 7
4
1.
8		 6
9
9.
8		 4
2.
0
To
ta
l
As
ts
se		 2
4
4
7.
9		 2
4
8
2.
7		 (
)
3
4.
7
To
ta
l
Eq
i
ty
u		 1
3
5
4.
8		 1
3
6
7.
4		 (
1
2.
6
)
Lo
in
be
ing
de
b
-te
te
t-
t
ng
rm
re
s
ar		 4
3
6.
8		 4
4
5.
6		 (
)
8.
9
O
he
l
ia
b
i
l
i
ies
t
t
t
r n
on
-c
ur
re
n		 3
0
0.
5		 3
0
5.
9		 (
)
5.
3
To
ta
l
No
t
L
ia
b
i
l
i
t
ie
n-
cu
rre
n
s		 7
3
7.
3		 7
5
1.
5		 (
1
4.
2
)
S
ho
in
be
ing
de
b
t-
te
te
t-
t
r
rm
re
s
ar		 1
4.
1		 1
4.
5		 (
)
0.
4
O
he
l
ia
b
i
l
i
ies
t
t
t
r c
ur
re
n		 3
4
1.
8		 3
4
9.
3		 (
)
7.
5
To
ta
l
Cu
t
L
ia
b
i
l
i
t
ie
rre
n
s		 3
5
5.
9		 3
6
3.
8		 (
9
)
7.
To
ta
l
L
ia
b
i
l
i
t
ie
s		 1
0
9
3.
2		 1
1
1
5.
3		 (
2
2.
1
)
To
ta
l
Eq
i
ty
d
L
ia
b
i
l
i
t
ie
a
n
s
u		 2
4
4
7.
9		 2
4
8
2.
7		 (
3
4.
)
7
  • • Significant reduction in USD:NOK rate impacting held value of Agility investment
  • •Otherwise no significant changes for the quarter

Solid balance sheet

Reported NOK 217m net interest bearing debt and 55% equity ratio

Group cash movements Q3'17

Strong contribution from underlying operations and positive working capital movements

Mobile Pipeline®

  • • Strong market interest in North America
  • ‒Industrial sector and O&G
  • • Currently low order intake outside North America
  • Long prospect list
  • • Numerous new application opportunities, e.g:
  • ‒Flare gas capture, gas utilities and biogas plants in North America
  • ‒"Gas islands" in Brazil
  • ‒Gas transportation by sea
  • •Launch of rental services in North America

Modal Acoustic Emission (MAE) requalification testing

  • • Minimizing downtime
  • ‒Near the customers
  • ‒Avoiding disassembly of systems
  • • U.S. Department of Transportation (DOT) permit received
  • ‒ Substantial number of modules up for regulatory requalification from 2018 –First order from NG Advantage for Q4 2017 delivery

MAE testing technology collects data from each cylinder and provides a comprehensive evaluation of its structural integrity

Battery Electric Vehicles do little for the climate near term

Estimated CO2-equivalent emissions in grams per kilometer of a battery electric passenger car

Source: IEA, EIA, NGVA, OECD, EU Commission, ssb.no, energimyndigheten.se, energy-charts.de, gov.uk, bilan-electrique-2016.rte-france.com, powermin.nic.in , energypedia.info, Hexagon analysis

g-Mobility – the fastest way to CO2 emissions reduction in the transportation sector

Golf TGI CO2 emissions g/km

"Thanks to the high availability, lower CO2 emissions and economic costs, natural gas and biogas (renewable natural gas) can already help to make the car more climate friendly."

Opel development engineer, Christian Müller

g-Mobility

Several recent g-Mobility (natural gas & biogas) initiatives introduced alongside strong e-Mobility push

Golf TGI introduced to the Italian market

New Opel Astra CNG launched with Hexagon tanks 1.0 SEAT Ibiza TGI manufactured on the same

production line as the rest of the range

Light-Duty Vehicles CNG

  • • Healthy Q4 market outlook
  • Deliveries to a new CNG model commenced in Q3 with ramp-up expected from Q1
  • • Longer term demand expected to be strong
  • – The Volkswagen Group committed to increasing its NGV population in Germany tenfold by 2025 to 1 million vehicles*

Compressed natural gas – or CNG for short – is increasingly being mentioned as an alternative to conventional fuels. It most commonly takes the form of natural gas, a naturally clean fuel.

Volkswagen Group

* Signed a joint declaration in 2017 together with CNG refueling station operators and gas networks. Other signers include E.ON Gas Mobil, Gazprom NGV Europa, TOTAL Deutschland among others. Declaration also commits to more than doubling CNG stations from 900 to 2000.

BEV and FCEV – complimentary routes to vehicle electrification

Several OEMs committed to Fuel Cell Electric Vehicle (FCEV) platforms

• Of the view that a zero emissions future will require both battery electric (BEV) and hydrogen fuel cell electric (FCEV) solutions

v. N T
ыш
The State

27

Hydrogen – vibrant market space

  • •High volume of requests in all segments
  • •Hydrogen trucks and buses emerging fast
  • • California leading the way
  • 3,000 FCEVs sold and leased
  • 31 open retail Hydrogen Refueling Stations (HRS)
  • 30 retail HRS in development
  • • Power-to-gas
  • ‒storage of surplus solar power energy as hydrogen

Hydrogen class 8 truck successfully completed more than 4,000 miles (6,440 km). First Toyota proof-of-concept trucks equipped with Hexagon high-pressure tanks

HYON – an integrated solutions provider

  • • Hyon AS, the JV with NEL and PowerCell, operational from September
  • ‒Managing Director and Marine Technology Director recruited
  • • Maritime opportunities
  • ‒ Ferries, cruise and river cruise vessels, short-sea shipping and other small to medium-sized vessels
    • First hydrogen-powered ferry in 2021
  • ‒Onboard auxiliary power in larger vessels mainly for port use
  • •Big potential also in other sectors

Tomas Tronstad, Managing Director and Arild Eiken, Marine Technology Director, at Hyon AS

The Hydrogen Council – ready for scale

  • •USD 10.7 bn investment plan over next 5 years by original council members
  • • The Hydrogen Council totals 24 members including supporting members Mitsui & Co. is a supporting member of the Hydrogen Council

"The impressive growth in the Hydrogen Council corporate membership shows that hydrogen technology has the widespread support it needs to scale up and soon, nobody will be able to imagine life without it"

Takeshi Uchiyamada, Co-Chair of the Hydrogen Council and Chairman of Toyota Motor Corporation (7 September 2017)

Agility Fuel Solutions

  • • US Heavy-Duty Vehicle market remains relatively soft ‒Uncertainty going into 2018, but higher oil prices a positive factor
  • • Strong focus on plant optimization and synergies to ensure profits
  • • Powertrain Systems business unit (propane) on track for growth
  • • Further internationalization and other growth initiatives will be launched in 2018

LPG

  • • Full order book for Q4
  • ‒Complex product mix affecting productivity
  • ‒Maintenance break in December
  • • Solid order backlog for 1st half of 2018
  • Strong order base from European customers
  • • Continued good traction in the Middle East –Launch in Lebanon

Lebanon launch on 27 October 2017

Expansion program on track

  • • MNOK 75 investment program (2017-2019) for further product differentiation
  • • Automation of processes enables improved quality consistency
  • • Incremental increase of uptime and thus higher real production capacity
  • •Higher capacity leads to lower unit cost

Capacity increase to ~2m in 2019

Construction work at Raufoss, October 2017

Outlook – Summary

  • •Mobile Pipeline® set to grow
  • •Continued positive development expected for Light-Duty Vehicles
  • •High Hydrogen activity
  • • Softer Q4 for Agility
  • ‒Uncertainty going into 2018, but higher oil prices a positive factor
  • • Strong LPG order book
  • Q4 profitability will be impacted by unfavorable product mix and maintenance stop

Questions Please

Jon Erik Engeset, CEO David Bandele, CFO

More from Hexagon Composites

Major Shareholding Notification 2026
May 27
Proxy Solicitation & Information Statement 2026
May 13
Proxy Solicitation & Information Statement 2026
May 13
Major Shareholding Notification 2026
May 8
Major Shareholding Notification 2026
May 8
Capital/Financing Update 2026
May 8
Capital/Financing Update 2026
May 7
Capital/Financing Update 2026
May 7
Regulatory Filings 2026
May 7
Interim / Quarterly Report 2026
May 7
View all filings →