Hexagon Composites ASA: Fourth quarter and full year 2025

Hexagon Composites reported Q4 2025 revenue of NOK 831m (Q3 2025: NOK 538m) with reported EBITDA of NOK 156m and adjusted EBITDA of NOK 49m (Q3 adjusted: -NOK 45m), yielding a 6% adjusted EBITDA margin versus -10% in the prior quarter. For full-year 2025 revenues fell to NOK 2,955m (2024: NOK 4,877m) and full-year EBITDA was NOK 158m (2024: NOK 637m), with adjusted EBITDA of NOK 65m, reflecting macro uncertainty in North America offset by strong refuse-segment demand. Management is cautiously optimistic for gradual stabilization in 2026, expecting a modest H1 and improvement in H2 while prioritizing cost discipline and accelerating natural gas vehicle adoption.

Analysis

Market structure: Hexagon (HEX.OL) is a near-term beneficiary if heavy-duty fleets and refuse customers keep converting to CNG/LNG — Q4 showed sequential revenue up to NOK 831m and adjusted EBITDA margin recovery to 6% from -10%, signalling incremental utilization of existing capacity. Losers are pure-play heavy-duty BEV suppliers and commodity-exposed cylinder competitors who face price pressure; pricing power remains limited until North American demand recovers meaningfully (we need >10–15% QoQ order growth to sustainably lift margins). Cross-asset: USD/NOK moves and natural gas prices will drive translated revenues and demand; widening credit spreads would materially hurt valuation if Q1 bookings disappoint.

Risk assessment: Tail risks include a deeper North American demand shock (>-20% YoY orders), sudden regulatory tilt favoring battery solutions for long-haul (policy reversal within 6–24 months), or a raw-material spike (carbon-fiber +30%) that compresses gross margins. Immediate (days) risk is post-release volatility; short-term (weeks–months) is execution on H1 cost-savings and orderflow; long-term (quarters–years) is adoption curve for NGV vs BEV. Hidden dependency: large OEM/fleet concentrations in backlog — loss of one (>10% revenue) would halve improvement.

Trade implications: Direct: establish a modest 2–3% long position in HEX.OL, scale 50/50 now and on confirmation (Q1 revenue QoQ +10% or adjusted EBITDA margin >8%); set stop at -25% from entry. Options: buy a Dec-2026 call spread (~9–12 month tenor) sized 0.5–1% capital to capture H2 recovery; pair trade: long HEX.OL (2%) vs short Chart Industries (GTLS, 1%) to express NGV fleet recovery vs large LNG/cryogenics capex lag.

Contrarian angles: Consensus underestimates recurring-service revenue (refuse segment hit record demand) and the barrier to electrifying long-haul fleets — Hexagon’s installed base creates annuity-style service cashflows that can re-rate EBITDA once stability returns (12–24 months). Reaction may be overdone if market prices full-year revenue decline as permanent rather than cyclical; historical analog: equipment suppliers post-capex bust recovered sharply when fleet economics re-aligned (12–18 months). Unintended consequence: aggressive pivot into adjacent tech could dilute margins and strain cash if execution slips — monitor capex/investment cadence closely.

Key Decisions for Investors

• Establish a 2–3% long position in HEX.OL (size as % of total equity portfolio). Execute 50% now and 50% on confirmation of recovery: either Q1 revenue +10% QoQ or adjusted EBITDA margin >8%. Use a hard stop-loss at -25% of entry.
• Buy a limited-risk bullish options position: Dec-2026 call spread on HEX.OL (buy ATM call, sell call ~+20% strike) sized 0.5–1% of portfolio to capture H2 2026 upside; roll/close if H1 signals remain weak by end-June 2026.
• Pair trade: Long HEX.OL 2% vs Short Chart Industries (GTLS) 1% to express strength in NGV fleet/service annuity vs continued softness in large LNG/cryogenics capex. Rebalance if GTLS outperforms by >15% in 90 days.
• Reduce exposure by ~3–5% to pure-play heavy-duty BEV suppliers and battery/EV logistics names over next 60–90 days and rotate into industrial energy-transition names with positive free cash flow; add cash buffer of ~5% to deploy on H1 demand-confirmation triggers.
• Monitor specific catalysts over the next 30–90 days: US heavy-duty NGV fleet orders (>USD 25–50m per contract), published backlog growth >10% QoQ, and USD/NOK moves >±5% — these should be used as add/trim signals.