Hexagon Composites ASA (HEX.OL) | Investment Case

1. Company Snapshot

1.a. Company Description

Hexagon Composites ASA, together with its subsidiaries, produces and sells composite pressure cylinders and fuel systems in Norway, Europe, North America, South-East Asia, the Middle East, and internationally.The company operates through Hexagon Agility & CNG LDV, Hexagon Purus, Hexagon Digital Wave, and Hexagon Ragasco LPG segments.The Hexagon Agility & CNG LDV segment provides clean fuel solutions for commercial vehicles, passenger vehicles, and gaseous energy transportation.

Hexagon Purus segment provides high pressure cylinders, vehicle systems, and battery backs for fuel cell and battery electric vehicles.The Hexagon Digital Wave segment offers cylinder testing and monitoring technology solutions that reduce down-time and inspection costs while improving inspection accuracy.The Hexagon Ragasco LPG segment manufacturers composite liquefied petroleum gas (LPG) cylinders for leisure, household, and industrial applications.

Hexagon Composites ASA was incorporated in 1985 and is headquartered in Ålesund, Norway.

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1.b. Last Insights on HEX

Hexagon Composites ASA faced significant challenges in recent months. The company's Q3 2025 earnings report revealed a substantial decline in revenue to NOK 538 million, down from NOK 1,250 million in Q3 2024. EBITDA plummeted to -NOK 54 million, resulting in a -10% EBITDA margin, compared to 15% in Q3 2024. Furthermore, the company announced the departure of its CFO, David Bandele, who guided Hexagon through various growth phases and acquisitions. Additionally, Hexagon completed the acquisition of SES Composites and secured new orders for natural gas fuel systems.

1.c. Company Highlights

Last Price	7.24
Change Percentage	4.62%
Open	6.92
Previous Close	6.92
Market Cap ( Millions)	1639
Volume	3775178
Year High	48.25
Year Low	6.3
M A 50	8.6
M A 200	15.93

FCF Yield	-5.58%
Dividend Yield	0.00%
ROE	-45.59%
Debt / Equity	86.50%
Net Debt / EBIDTA	-204.91%
Price To Book	0.66
Price Earnings Ratio	-1.12
Price To FCF	-17.93
Price To sales	0.38
EV / EBITDA	-3.76

2. Hexagon Composites' Q3 Results: Navigating Macroeconomic Uncertainty

Hexagon Composites reported weak Q3 results, with revenues of NOK 538 million and an EBITDA of negative NOK 54 million. The company's EPS came in at '-0.8', missing estimates of '0.3'. The negative EBITDA margin was largely driven by the Mobile Pipeline segment, which saw a 49% negative margin due to weaker volumes and lower shale gas activity. The company's financial performance was impacted by macroeconomic uncertainty, which affected their cyclical segments, particularly Truck and Mobile Pipeline.

Publication Date: Nov -26

                                    📋 Highlights
                                    Weak Q3 Performance::
                                                Revenue NOK 538 million, EBITDA negative NOK 54 million; equity raise of NOK 590 million initiated to strengthen balance sheet.
Segment Resilience vs. Cyclical Challenges::
                                                Refuse and Aftermarket segments remain stable, while Truck and Mobile Pipeline (49% EBITDA margin loss) struggle with macroeconomic headwinds.
Cost Savings & Liquidity Focus::
                                                NOK 43 million CapEx, NOK 50 million in other investments; targeting NOK 200 million working capital release to preserve liquidity.
Recovery Drivers Identified::
                                                Aging truck fleet (7-year average), natural gas economic advantages, and European Mobile Pipeline growth expected to catalyze market rebound.
Outlook & Strategic Priorities::
                                                Q4 projected better than Q3; emphasis on natural gas vehicle adoption (CNG as diesel alternative) and geographic/cyclical diversification for long-term growth.

                                

Segment Performance

The Refuse and Aftermarket segments were resilient and provided stable cash flows, while the Truck and Mobile Pipeline segments were sensitive to the macroeconomic environment. The company's Mobile Pipeline division saw a significant decline in EBITDA margin due to weaker volumes and lower shale gas activity. However, the division's capacity expansion last year is expected to deliver $40 million in EBITDA in 2024 for a $3-4 million investment.

Cost Reduction and Cash Discipline

To mitigate the impact of the downturn, Hexagon initiated a major cost reduction program, focusing on preserving liquidity and improving EBITDA levels. The company expects at least NOK 200 million in working capital release and is committed to purchasing raw materials beyond 2026. The cost savings program and refinancing arrangements with banks have strengthened their balance sheet.

Valuation and Growth Prospects

Hexagon's current valuation metrics indicate a P/E Ratio of -0.99, P/B Ratio of 0.58, and EV/EBITDA of -3.56. Analysts estimate next year's revenue growth at 26.8%. Despite the current challenges, Hexagon remains confident in its long-term growth story, driven by the adoption of natural gas and diversification across geographic, customer, product, and end-market outreach.

Outlook and Recovery

The company expects Q4 to come in better than Q3, driven by cost savings and stable cash flows from the aftermarket and public service segments. Hexagon is preparing for a potential recovery in the market, driven by the increasing age of the fleet and the need for replacement in the Truck segment. The company is also seeing promising increases in Mobile Pipeline in other geographies, particularly in Europe.

3. NewsRoom

Hexagon Composites ASA: Changes in Executive Management

Nov -11

Source:

Hexagon Composites ASA (HXGCF) Q3 2025 Earnings Call Highlights: Strategic Moves Amid Market ...

Nov -06

Source:

Hexagon Composites ASA: Third quarter 2025

Nov -06

Source:

Hexagon Composites ASA: Invitation to third quarter 2025 results

Oct -23

Source:

Hexagon Composites ASA: Acquisition of SES Composites successfully completed

Oct -17

Source:

Hexagon Composites (OB:HEX): Revisiting Valuation Following Major Private Placement and Shareholder Dilution

Sep -20

Source:

Societe Generale: shares & voting rights as of 31 August 2025

Sep -09

Source:

Vaisala Corporation: Share Repurchase 9.9.2025

Sep -09

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.77%)

6. Segments

Hexagon Agility

Expected Growth: 9%

Hexagon Agility's 9% growth is driven by increasing adoption of lightweight composite tanks for CNG and hydrogen fuel cell vehicles, growing demand for sustainable transportation solutions, and expansion into new markets. Additionally, Hexagon Composites' strong brand reputation, innovative products, and strategic partnerships contribute to the segment's growth.

Hexagon Ragasco

Expected Growth: 7%

Hexagon Ragasco's 7% growth is driven by increasing demand for lightweight composite LPG cylinders, replacing traditional steel cylinders. Growing adoption in emerging markets, stringent safety regulations, and rising environmental concerns also contribute to growth. Additionally, Hexagon Composites' strong brand reputation, innovative products, and expanding distribution network further support the segment's growth.

Hexagon Digital Wave

Expected Growth: 10%

Hexagon Digital Wave's 10% growth is driven by increasing demand for lightweight, composite tanks in the clean energy sector, particularly in hydrogen fuel cell electric vehicles. Additionally, the company's innovative digitalization solutions and expanding partnerships with major OEMs are contributing to its growth momentum.

Corporate/Elimination

Expected Growth: 5%

Hexagon Composites ASA's Corporate/Elimination segment growth is driven by increasing demand for clean energy solutions, strategic acquisitions, and operational efficiency improvements. The company's focus on reducing costs and optimizing its organizational structure also contributes to growth. Additionally, investments in digitalization and innovation enable the company to stay competitive and capitalize on emerging trends.

7. Detailed Products

CNG Fuel Systems

Compressed Natural Gas (CNG) fuel systems for light and heavy-duty vehicles, providing a cleaner and more efficient alternative to traditional fuels.

Hydrogen Fuel Systems

High-pressure hydrogen storage systems for fuel cell electric vehicles, enabling zero-emission transportation.

LNG Fuel Systems

Liquefied Natural Gas (LNG) fuel systems for heavy-duty vehicles, offering a cleaner and more efficient alternative to diesel fuel.

Type 4 Cylinders

High-pressure composite cylinders for the storage of compressed gases, including CNG, hydrogen, and industrial gases.

Tanks and Pressure Vessels

Composite tanks and pressure vessels for the storage of liquids and gases, including CNG, LNG, and hydrogen.

8. Hexagon Composites ASA's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Hexagon Composites ASA is moderate due to the availability of alternative materials and products in the market.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of Hexagon Composites ASA's products and the lack of alternative suppliers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the presence of multiple suppliers in the market, but Hexagon Composites ASA's dependence on a few critical suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the composite materials industry, including the need for significant capital investment and technical expertise.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the market, leading to a competitive landscape.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	32.46%
Debt Cost	10.05%
Equity Weight	67.54%
Equity Cost	10.05%
WACC	10.05%
Leverage	48.05%

11. Quality Control: Hexagon Composites ASA passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Macfarlane

A-Score: 5.3/10

Value: 8.7

Growth: 5.0

Quality: 4.9

Yield: 7.5

Momentum: 1.5

Volatility: 4.0

1-Year Total Return ->

Zignago Vetro

A-Score: 5.1/10

Value: 5.6

Growth: 5.1

Quality: 4.3

Yield: 8.1

Momentum: 1.0

Volatility: 6.7

1-Year Total Return ->

Vetropack Holding

A-Score: 4.1/10

Value: 6.4

Growth: 1.8

Quality: 3.7

Yield: 6.2

Momentum: 1.5

Volatility: 5.0

1-Year Total Return ->

TFF

A-Score: 4.0/10

Value: 7.8

Growth: 4.6

Quality: 3.5

Yield: 4.4

Momentum: 0.0

Volatility: 3.7

1-Year Total Return ->

BEWi

A-Score: 2.8/10

Value: 8.0

Growth: 2.3

Quality: 2.2

Yield: 0.6

Momentum: 0.0

Volatility: 3.3

1-Year Total Return ->

Hexagon Composites

A-Score: 2.7/10

Value: 9.4

Growth: 3.2

Quality: 2.7

Yield: 0.0

Momentum: 0.0

Volatility: 1.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

33.83%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.05%

Hexagon Composites ASA - NO0003067902

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on HEX

1.c. Company Highlights

Weak Momentum

More Volatile

Lower Yield

Earnings Miss

Revenues Miss

Lower Growth

Average Quality

Strong Momentum

Higher Growth

Revenues Beats

Cheaper

Lower Quality

Earnings Beats

2. Hexagon Composites' Q3 Results: Navigating Macroeconomic Uncertainty

Segment Performance

Cost Reduction and Cash Discipline

Valuation and Growth Prospects

Outlook and Recovery

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.77%)

6. Segments

Hexagon Agility

Expected Growth: 9%

Hexagon Ragasco

Expected Growth: 7%

Hexagon Digital Wave

Expected Growth: 10%

Corporate/Elimination

Expected Growth: 5%

7. Detailed Products

CNG Fuel Systems

Hydrogen Fuel Systems

LNG Fuel Systems

Type 4 Cylinders

Tanks and Pressure Vessels

8. Hexagon Composites ASA's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Hexagon Composites ASA passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

7.24$

Current Price

7.24$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA