Hexagon Purus ASA: Results for the second quarter 2024

Key developments in Q2 2024:

• All-time high quarterly revenue of NOK 528 million in the second quarter of 2024, up 60% from the second quarter of 2023. YTD revenue as per the second quarter of 2024 stood at NOK 935 million, up 63% compared to the same period in 2023;
• EBITDA was NOK -97 million in the second quarter of 2024, compared to NOK -89 million in the same period last year. This corresponds to an EBITDA margin of -18% in the second quarter of 2024, up from -27% in the second quarter of 2023. YTD as per the second quarter of 2024, the EBITDA margin is -21%, up from -35% in the same period last year;
• The Hydrogen Mobility & Infrastructure (HMI) segment turned EBITDA positive during the second quarter, delivering EBITDA of NOK 17 million, equal to an EBITDA margin of 3%. This has also brought the year-to-date EBITDA into positive territory for the HMI segment;
• Launched the Tern RC8, a zero-emission truck to be delivered under the long-term agreement between Hexagon Purus and Hino Trucks for complete battery electric vehicles, to be distributed through Hino’s dealer network in the U.S;
• Announced serial production partnership with Toyota North America for supply of hydrogen storage systems and battery systems for Toyota’s fuel cell electric powertrain kit for commercial vehicles for the North American market;
• Exited the quarter with order backlog consisting of firm purchase orders of approximately NOK 1.0 billion, providing solid line-of-sight to full-year revenue target.

“We have just reported yet another record quarter for Hexagon Purus, adding to an already strong start to the year and keeping us well on track to deliver on our targets. We continue to expect that full-year 2024 will be a year of significant revenue growth and a large step in the right direction towards EBITDA breakeven in 2025.”, says Morten Holum, CEO of Hexagon Purus. “It is very encouraging to see that our hydrogen business in Europe and North America is already EBITDA positive for the first half of 2024, and we expect performance to further improve towards year-end as volume and scale increase”.

Hexagon Purus Q2 2024 consolidated financials

In the second quarter of 2024, Hexagon Purus (“the Company” or “the Group”) generated all-time high quarterly revenue of NOK 528 million, up 60% from the corresponding period in 2023. Hydrogen infrastructure and hydrogen mobility solutions were the main drivers of growth year-over-year. Year-to-date as of the second quarter of 2024, accumulated revenue stood at NOK 935 million, up 63% compared to the same period in 2023.

Total assets at the end of the second quarter of 2024 amounted to NOK 4,619 (3,818) million. The year-over-year increase in total assets is mainly driven by increases to property, plant and equipment and right-of-use assets resulting from the Company’s capacity expansion program, combined with an increase in working capital to cater for a higher activity level. Trade receivables increased to NOK 401 (256) million in the second quarter of 2024 and reflects the strong revenue growth experienced in the quarter. Inventory stood at NOK 611 (449) million, and the year-over-year increase is partly driven by the ramp-up phase that the battery systems & vehicle integration (BVI) business is in. The Company’s working capital position reflects the Company’s sustained growth track-record, which is expected to continue going forward.

Net cash flow from operating activities in the second quarter of 2024 was NOK -232 (-172) million, of which NOK -120 (-71) million was due to an increase in net working capital, driven by an increase in inventory and trade receivables on the back of strong revenue growth.

Net cash flow from investing activities was NOK -180 (-264) million in the second quarter of 2024, of which NOK 133 million relates to investments in production equipment and facilities related to the Company’s capacity expansion program and NOK 43 million relates to the final earn-out payment related to the acquisition of Wystrach in 2021. Net cash flow from financing in the second quarter of 2024 was NOK -5 (56) million. Cash interest payments and repayment of lease liabilities amounted to NOK 26 (18) million in the second quarter of 2024.

Cash and cash equivalents stood at NOK 543 (973) million at the end of the second quarter of 2024.

Hydrogen Mobility and Infrastructure (HMI)

Revenue for the HMI segment in the second quarter of 2024 totaled NOK 526 million, up 71% year-over-year. Year-to-date as of the second quarter of 2024, revenue amounted to NOK 914 million, which represents growth of 69% compared to the corresponding period in 2023. 62% (59%) of the HMI segment revenue in the second quarter of 2024 stemmed from hydrogen infrastructure solutions, which grew 82% year-over-year. Hydrogen mobility, which covers revenue from the sale of type 4 hydrogen cylinders and cylinder systems for hydrogen-powered on-road and off-road vehicles, continued its strong growth momentum from the start of the year and made up 28% (11%) of HMI segment revenue in the second quarter of 2024. This represents 335% year-over-year growth.

EBITDA for the HMI segment in the second quarter of 2024 ended at NOK 17 (2) million, equivalent to an EBITDA margin of 3% (1%). Year-to-date as per the second quarter of 2024, EBITDA was NOK 1 (-32) million, equivalent to an EBITDA margin of 0% (-6%). It is highly encouraging to see that the HMI segment now has passed the point of EBITDA break-even, as higher volume with solid gross margins is increasing scale and fixed cost absorption, leading to improved profitability.

Historical financials for HMI are made available on www.hexagonpurus.com together with Q2 2024 report and presentation.

Battery Systems and Vehicle Integration (BVI)

Revenue for the BVI segment in the second quarter of 2024 totaled NOK 2 (11) million, and year-to-date as of the second quarter, revenue stood at NOK 21 million.

The segment’s revenue development is largely in line with expectations, and any significant revenue recognition related to the two major agreements signed for delivery of complete battery electric utility and heavy-duty vehicles to Hino Trucks and Daimler Trucks North America is not expected until the fourth quarter of 2024.

Historical financials for BVI are made available on www.hexagonpurus.com together with Q2 2024 report and presentation.

Outlook

The Company’s financial and operational performance in the second quarter of 2024 and year-to-date 2024 has developed in line with expectations, and the focus for the remainder of the year is to increase the capacity utilization of the new production footprint combined with operational improvements while minimizing further capital spend. 2024 is an important transitional year from a profitability perspective to reach Group EBITDA break-even in 2025. It is highly pleasing and encouraging to see that the profitability trend in 2024 has developed as expected and that the HMI segment is now EBITDA positive. This gives further confidence to the Group’s 2025 EBITDA break-even target. The current capacity expansion program will be mostly behind us by the end of this year, and beyond this, the level of investments in new production capacity will be tempered going forward.

The hydrogen infrastructure and mobility offering is expected to continue to be a key growth driver for revenue for the remainder of 2024. More significant revenue recognition related to the Company’s battery electric utility and heavy-duty vehicles for Daimler Trucks North America and Hino Trucks is expected to commence during the fourth quarter of 2024 and will be an important driver of revenue growth in 2025.

The Company’s order backlog, consisting of firm customer purchase orders, stood at approximately NOK 1.0 billion as of the second quarter of 2024, with about 86% due for execution in 2024 and the remaining 14% for execution in 2025. Combining the year-to-date revenue as of the second quarter of 2024 with the backlog for the rest of 2024, gives 90% coverage of this year’s revenue target. The backlog for 2025 is expected to increase significantly during the second half of 2024 as the planning for 2025 deliveries with the Company’s major hydrogen distribution customers will commence during the third quarter of 2024. The backlog dynamic is expected to change somewhat going forward as mobility applications becomes a larger part of the revenue mix. The Company’s mobility customers, compared to its hydrogen infrastructure customers, usually have much shorter lead-time from purchase order to delivery, which means backlog coverage far out in time will usually also be lower in relative terms.

For the full year 2024, the Company continues to expect revenue growth of at least 50% year-over-year, as well as significant year-over-year improvement in the Group’s EBITDA margin.

Presentation of the results

Hexagon Purus will present the Q2 2024 results at 08:30 CEST on Thursday 18 July and the presentation will be broadcast live via https://hexagonpurus.vivida.live.   

The presentation will be held in English and will be virtual. Recording of the presentation will be made available on www.hexagonpurus.com.

For more information:

Mathias Meidell, IR Director, Hexagon Purus ASA
Telephone: +47 909 82 242 | mathias.meidell@hexagonpurus.com

Salman Alam, CFO, Hexagon Purus ASA
Telephone: +47 476 12 713 | salman.alam@hexagonpurus.com

About Hexagon Purus ASA

Hexagon Purus enables zero emission mobility for a cleaner energy future. The company is a world leading provider of hydrogen Type 4 high-pressure cylinders and systems, battery systems and vehicle integration solutions for fuel cell electric and battery electric vehicles. Hexagon Purus' products are used in a variety of applications including light, medium and heavy-duty vehicles, buses, ground storage, distribution, refueling, maritime, rail and aerospace.

Learn more at www.hexagonpurus.com and follow @HexagonPurus on Twitter and LinkedIn.

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act

Attachments

• HPUR Q2 2024 Report
• HPUR Q2 2024 Presentation