Hexagon Composites: the bridge finally has traffic — now comes the toll question

Hexagon Composites: the bridge finally has traffic

For four quarters, Hexagon Composites has been a cost-cutting story dressed up as a growth story. On 6 November it finally looked like the reverse. Revenue came in at NOK 929 million, up 73% year over year and 48% sequentially, with EBITDA of NOK 108 million and a 12% margin. The chief executive opened with the line the sell side has waited a year for: “Group revenues increased by astonishing 73% year-over-year.” — Philipp Schramm, CEO · 2026-11-06

The margin mechanics matter more than the headline. The CFO was explicit that this was operating leverage, not pricing: “EBITDA margins improved as higher volumes were absorbed by a relatively stable cost base.” — Eirik Lohre, CFO · 2026-11-06 That is the payoff from the cost base work that dominated 2025 — the same work that, in February, came with an explicit warning about covenant breach risk and a refusal to rule out an equity raise. “It would also be wrong given the market uncertainty for me to kind of categorically rule out a risk of being in a potential technical breach.” — Eirik Lohre, Chief Financial Officer (CFO) · 2026-02-12 Eight months later net interest-bearing debt has fallen to NOK 275 million from NOK 678 million in Q2, available liquidity sits around NOK 1.3 billion and the equity ratio is 56%. cash generation did the heavy lifting, helped by a NOK 127 million inventory release as finished goods built in the first half converted into deliveries — the inventory effect that had dragged on the prior quarter now running the other way.

Data centres: a year of slideware becomes a delivery schedule

The keyword history tells the story better than the press release. data centers sat outside the top ten for Hexagon as recently as late 2025, crept to fifth in early 2026, fourth last quarter, and now tops the company's keyword table. The reason is concrete: the USD 100 million Certarus order booked in July began delivering in August, lifting Mobile Pipeline revenue to NOK 320 million at a 16% segment margin — the strongest quarter since the record fourth quarter of 2024.

Management, to its credit, is selling this honestly rather than as a land grab.

We do not expect mobile pipeline to become the permanent primary source of fuel or behind the meter power generation for data centers. The opportunity is to bridge these infrastructure gaps.

But the order book is still one customer deep. Asked when a new large data centre contract might land, the CEO was candid: “We are in a lot of discussions. But as we would have announced, there is no order in, and it's way too early to say what will materialize.” — Philipp Schramm, CEO · 2026-11-06 There is a timing irony here. The global tape shows data-centre-linked equities among the sharpest 90-day and 30-day decliners — the market has spent a quarter de-rating the very build-out Hexagon is asking investors to underwrite. Hexagon is not a capex vendor to that complex, it is a molecule-logistics business renting out cylinders, so the correlation is loose. But it does mean the theme arrives with low expectations rather than euphoria, which is probably the healthier setup.

The truck that keeps not switching

The counterweight is the heavy duty truck market, which has now been the next big thing for roughly two years. “There is no question that the adoption is taking longer than we all have anticipated.” — Philipp Schramm, CEO · 2026-11-06 The pilots are real — fleets are testing routes, training maintenance departments, installing behind-the-fence refuelling — but orders are small, in the tens of trucks, and the broader US diesel market remains depressed by the cost of capital and uncertainty around EPA 2027 rules, which in August management flagged as a possible driver of a diesel pre-buy into early 2027. The economic case for the switch to natural gas is strong; the switching cost and inertia are stronger.

What is working is the boring stuff. Fuel Systems delivered NOK 526 million at a 12% margin on record global transit volumes, and the Agrale agreement in Argentina marks Hexagon's first major vehicle OEM partnership in South America — a genuine geographic option rather than a slide. The bus segment, refuse and aftermarket are being repositioned as the resilient core, which is management's way of saying the growth optionality lives in Mobile Pipeline and truck, not transit.

Guidance, mix, and a line drawn under Purus

Full-year EBITDA guidance of around NOK 300 million was reconfirmed with confidence in the higher side, but the CFO was careful to sandbag the optics: last year's Q4 was restated to roughly NOK 30 million after an accounting gain, and some volumes normally delivered in Q4 were pulled into Q3. “Some volumes that we typically expect in Q4 have now been pulled into Q3.” — Eirik Lohre, CFO · 2026-11-06 Read together with “we feel relatively good about achieving and exceeding that number” — Eirik Lohre, CFO · 2026-11-06, the message is a beat that is really a timing shuffle.

The more interesting shift is in Mobile Pipeline's profitability ceiling. In August the CFO called a return to the 20% margin of 2024 “probably a stretch” — Eirik Lohre, CFO · 2026-08-06 and warned of margin compression in the second half as mobile pipeline mix rose. Q3 delivered 16% — not 20%, but well ahead of that warning. If the segment can hold mid-teens on a repeatable order book, the group's 15% long-term margin target stops looking aspirational.

And the Hexagon Purus question, asked in some form for at least four consecutive calls, got its hardest answer yet: “We do not and will not inject any cash into Purus.” — Philipp Schramm, CEO · 2026-11-06 That contrasts with August's softer “we have contributed in the past, and we felt that this contribution should give them enough runway” — Philipp Schramm, CEO · 2026-08-06. The minority stake is being treated as a portfolio asset to be monetised, not a subsidiary to be defended.

The tell is Q4 order intake

The quarter was genuinely good, and the balance sheet transformation is the most under-appreciated part of it. But the equity story now rests on two unresolved questions: whether a second data centre customer converts discussion into a purchase order, and whether North American truck adoption ever crosses from pilots to fleet replacement. The CEO says he expects growth in 2027 on contracted Mobile Pipeline demand already in hand, and the core markets are described as normalising rather than recovering. That is a fair description of a business that has stopped shrinking. Whether it has started compounding is a Q4 order-book question, not a Q3 earnings question.