Hexatronic have long been a valued sponsor and supporter of Submarine Networks World, tell us what it is that attracts you to the event?
Here at Hexatronic we place a lot of importance on our submarine cable business. We have had a very constructive year to date with several new contracts awarded in the first half of 2020, including cable supply for subsea projects in Iceland, Colombia, the Philippines and Sweden. The team have also secured a number of orders for planned cable systems including three offshore wind farm projects in Norway and Germany. Conferences such as Submarine Networks World give us the opportunity to meet exclusively with our submarine cable customers and colleagues. With the significant number of opportunities that currently exist across the EMEA and Asia Pac regions, the new virtual event enables us to carry on with business as usual, despite today’s unusual circumstances.
We were delighted to see your name amongst the 1,000+ Chief Executive Officers who signed up to the United Nations Statement for Renewed Global Cooperation, can you tell us more?
Yes, Hexatronic was one of over a thousand companies from 100+ countries who recently demonstrated their support for the United Nations, and inclusive multilateralism, by signing a Statement from Business Leaders for Renewed Global Cooperation. The Statement, which says that cooperation must cross borders, sectors and generations in order to adapt to changing circumstances, has attracted signatures from some of the world’s largest brands participating in the corporate sustainability initiative UN Global Compact.
Obviously, this commitment comes at a time of unprecedented disruption and global transformation during which Hexatronic continues to focus on being accountable, ethical, inclusive and transparent. Last year we were ranked in the top 5% of sustainable listed companies in anti-corruption and in the top 25% of sustainable listed companies, in Sweden, in Agenda 2030. We take a holistic approach to sustainable development, this means respecting and protecting the environment, human rights, employee rights and good business ethics. We strive to continuously improve our operation and comply with rules and relevant requirements in all areas. Our intention is to work with contractors and suppliers who share our values when it comes to sustainability and business ethics.
Hexatronic recently published its Q2 Interim Report, how has 2020 been for the company and what can we expect to see for H2?
Between April and June the business saw 5% growth, and we estimate around 10% of sales were lost due to Covid-19 related causes. Year to date in June our EBITDA was at 8.0% and our target is 9% EBITA over a rolling 12-month period, so we were pleased with the quarter considering the circumstances. Growth in our strategic markets of FTTH, fiber & hybrid solutions for the 5G, WiFi, CCTV and the sensor industry, remained strong during the first half of 2020. For those of you that are not familiar with the wider Hexatronic business, we supply passive solutions for the FTTH market and are specialists in air blown installation, in addition, we offer products for metro and transport fiber networks. Our focus is high quality solutions that are easy and quick to deploy in order to reduce installation time, which is the largest part of fiber network investment. Our terrestrial product range includes numerous types of fiber optic cables including micro and nano cables, blown fiber, microducts, installation tools, etc, all of which we manufacture, provide and install using in-house capabilities. We also provide telecoms training in several of our active markets from our dedicated training companies.
As I mentioned, the submarine side of the business has had a very positive year to date. We see a significant number of opportunities across the EMEA region and also further afield such as in Asia Pac. Hexatronic will continue to support the power, offshore wind and oil & gas industries globally as well. Our focus on the subsea cable sector remains strong and we plan to continue working with our customers and partners embracing the significant global growth that we see across the market for the next few years. Overall Hexatronic’s financial position is healthy and grew even stronger during first half of the year.
What can we expect to see next from Hexatronic’s submarine cable product?
Our submarine team are extremely focused on creating premium quality, high fiber count, unrepeatered cable designs. Their current research is focused on working with smaller fiber diameters, circa 200µm, to enable us to further increase our fiber count to upwards of 192. Additionally, investigations into lowering fiber attenuation are ongoing, enabling us to offer longer reach submarine cable solutions. The subsea sea cable industry in particular is hugely reliant on high quality durable cable products due to harsh nature of the seabed and the requirement for high reliability over prolonged system lifetimes. Quality is the single most important feature of Hexatronic products and our technology department works systematically with the Six Sigma methodology to drive quality-related issues out of our processes.
Our approach to submarine cable supply is also well received by customers. Today’s busy subsea market means that many turnkey suppliers have over-loaded manufacturing lines and limited vessel availability. Hexatronic’s supply methodology means we can offer reduced lead times for cable. We are happy to partner with marine installers and equipment vendors in order to help our customers achieve an end to end solution that best suits their needs.
Hexatronic’s dedicated manufacturing facility in Hudiksvall, Sweden
And finally, what can we look forward to during Hexatronic’s ‘unrepeatered cable’ round table session (4th November at 20:30 SGT)?
For a while now Hexatronic have been pushing hard to move unrepeatered systems onto the main stage of industry conferences. With increasing capacity demands, the repeatered side of the subsea business has been the main focus of the market in recent years. Connecting Data Centers is the primary driver for new transoceanic systems, and existing unrepeatered systems have largely been able to support the growth by providing local interconnects. Improvements in repeatered system technology and the advent of SDM cables, coupled with the ageing and retirement of existing unrepeatered systems, has meant that there is fresh demand for new unrepeatered links. And as you know, unrepeatered systems have many other applications as well, such as providing telecoms connectivity to oil platforms, off-shore wind farms, etc, as outriders or integrals part of power cable systems and for island inter-connects, harbour, river and lake crossings.
Our roundtable will aim to bring together industry experts to discuss the latest advancements in cable design, market activity and the challenges that are specific to unrepeatered systems. We will also seek to review the many ways that unrepeatered systems benefit their owners including from an optical design, vessel operations, sensor potential and commercial perspective. I’m looking forward to a lively discussion.
Henrik Larsson Lyon is Chief Executive Officer of Hexatronic Group. Henrik joined Hexatronic Group and became the CEO of the group in August 2014, bringing more than 15 years of international management and sales management experience, with a track record of in strategy development and execution.