In an exclusive interview with InterGlobix Magazine’s Editor-in-Chief Jasmine Bedi, Hexatronic Group’s President and CEO Henrik Larsson Lyon reflects upon the company’s growth in 2020 and the road ahead. Lyon discusses in depth the company’s M&A, the importance of Swedish quality and new projects around the world.
Lyon joined Hexatronic Group as CEO in August 2014. He has more than 15 years of international management and sales management experience, with a track record of strategy development and execution.
Hexatronic recently published a very positive year-end report. Please share more about 2020 and the progress that’s already been made this year?
Strong sales and sales growth led to strong profitability last year. We entered 2021 with an order backlog that was 93 percent higher than the corresponding period the previous year. Forty-six percent of this related to submarine cables following significant contracts awarded throughout the year and into Q1 2021. Margins were approaching 11 percent at the end of 2020 and were almost 10 percent on a rolling 12-month basis.
We saw the most progress in our targeted markets in England, the US and Germany. Growth in England was the highest not only for Hexatronic but also for the market at large. Additionally, we made good use of our factories with a high level of capacity utilization across all manufacturing facilities, which allowed us to benefit from the pre-planned economies of scale. This, and the pursuit of cost reductions, led to strong margins and a strong bottom line. As a result of this headway, we have changed our long-term objectives, increasing our profitability target from 9 percent to 10 percent EBITA on a rolling 12-month basis.
You mentioned the growth from submarine cables. Please share updates from that side of the business.
In recent years, Hexatronic has seen its submarine cable business grow. Increasing bandwidth demands, the need for improved connectivity and subsea route diversity have all contributed. I am pleased to report that the team has secured a number of new and repeat customer orders. We are providing cable for new projects in Iceland, the Philippines, Sweden, Norway and Germany, to name a few places.
Our order book is a mixture of submarine cables for telecoms and offshore energy purposes or integrated fiber optic parts for power cables. Hexatronic’s range of cables for submarine installation is based on extensive experience in submarine cable projects. This includes design, project management and installation. Our offering is comprised of cables using a loose tube design for depths down to 3000m. Our investigations into lowering fiber attenuation are ongoing, aimed at allowing us to offer longer-reach submarine cable solutions. After the success of the virtual factory acceptance tests necessitated by COVID-19 restrictions, we look forward to welcoming visitors back to Hudiksvall.