Hexagon Composites ASA: Results for the fourth quarter 2018

In the fourth quarter 2018 Hexagon Composites generated NOK 426.8 (358.5) million in operating income and made an operating profit before depreciation (EBITDA) of NOK 55.2 (39.9) million. Operating profit (EBIT) was NOK 19.2 (19.7) million and profit/loss before tax came to NOK 41.4 (2.2) million. EBIT in the fourth quarter 2017 was adversely impacted by an asset impairment adjustment of NOK 16.0 million. EBITDA for the quarter included a positive impact of NOK 18.4 million, triggered by a final reduction of the earn-out obligation related to the 2016 xperion acquisition.

Underlying operating results in the fourth quarter were positively impacted by strong contribution from Agility Fuel Solutions and strong sales volumes from Mobile Pipeline.

In the fourth quarter of 2018, Hexagon signed an agreement to acquire the remaining 50% share in Agility Fuel Solutions, the leading clean fuel systems and solutions provider. The transaction was closed on 4 January 2019. With this acquisition, Hexagon substantially strengthens its position as the globally leading gas fuel solutions provider.

Reported Group operating income for the year 2018 increased by 4% to NOK 1,486.5 million compared with 1,429.4 million in 2017, which was positively impacted by NOK 21.5 million from the sale of certain assets to related party Agility. Operating profit before depreciation (EBITDA) was NOK 234.6 (174.0) million. EBITDA for the year 2018 included a positive impact of NOK 108.5 million associated to the reduction of the earn-out obligation related to the xperion acquisition. Operating profit (EBIT) was NOK 140.2 (99.3) million, while profit before tax was NOK 167.6 (48.2) million.

Pro forma numbers including 100% of Agility
When considering the Group on a proforma basis, including 100% of Agility Fuel Solutions, the operating income in the year 2018 amounted to NOK 2,886 million. Reported EBITDA was NOK 364 million and EBITDA adjusted for stock compensation was NOK 398 million. Agility Fuel Solutions recorded a strong second half of the year, particularly driven by increased volumes from the Heavy-Duty Truck and Transit Bus segments.

KEY DEVELOPMENTS

• Signed agreement to acquire all outstanding shares in Agility Fuel Solutions
• Selected by a third OEM to supply hydrogen tanks for serial production of fuel cell electric vehicles (FCEV). Combined value for development and serial production in the range of MUSD 50-70 (approx. MNOK 420-590)
• Acquired technology company Digital Wave Corporation, integrating capabilities for unique testing and requalification of high-pressure cylinders
• New Flyer ordered hydrogen tanks for 25 hydrogen fuel cell transit buses
• Received U.S. DOT special permit for high-pressure vessel hydrogen transportation system
• Awarded an order for X-STORE® transport modules for the UK market from a leading industrial gas service company, with a total value of MEUR 6.8 (approx. MNOK 65)

 KEY DEVELOPMENTS AFTER BALANCE SHEET DATE

• Closed the Agility Fuel Solutions transaction on 4 January 2019
• Awarded order for TITAN® transport modules from Certarus Ltd. with a total value of MUSD 8.1 (approx. MNOK 70)
• Agility extended exclusive long-term agreement with New Flyer Industries with total value of MUSD 75 (approx. MNOK 640) 

For more information:
Jon Erik Engeset, CEO, Hexagon Composites ASA
Telephone: +47 916 30 550 | jon.erik.engeset@hexagongroup.com

David Bandele, CFO, Hexagon Composites ASA
Telephone: +47 920 91 483 | david.bandele@hexagongroup.com

Hiva Ghiri, VP Investor Relations, Hexagon Composites ASA
Telephone: +47 958 66 790 | hiva.ghiri@hexagongroup.com

About Hexagon Composites
Hexagon Composites delivers safe and innovative solutions for a cleaner energy future. We are adapting our leading composite pressure vessel technology for a wide range of mobility and storage applications.

For more information, please visit www.hexagongroup.com | Follow us on Twitter: @HexagonASA