MALMO, Sweden—Hexpol A.B. has reported an increase in both sales and operating profit for the first nine months of 2019, largely helped by its recent acquisitions.
Operating profit was up 5.6 percent year-on-year at $176 million on 15 percent higher sales of $1.2 billion, Hexpol said in its Oct. 24 report. The company attributed the increase in sales, particularly in the third quarter of the year, to recent acquisitions, mainly its most recent.
Hexpol, in July, purchased Preferred Compounding in a $239 million deal. Mikael Fryklund, CEO and president of Hexopl, said the company has initiated a restructuring at the Copley Township, Ohio-based company to optimize the operations and extract cost synergies.
"However, organically we had a negative sales development in the (third) quarter, and saw consequently a continued softening in demand," Fryklund said in the report.
With a strong operating cash flow of $194 million, up 40 percent compared to last year, the Hexpol CEO said his company is well equipped for further expansion.
Over the nine months to end of September, sales at the Hexpol Compounding business area rose 16 percent to $1.13 billion, while operating profit, excluding non-recurring items, was up 6 percent at $166 million.
Sales within the Hexpol Engineered Products business area were up 3 percent at $82.3 million, while operating profit fell 3.7 percent to $10.8 million.
Hexpol's consolidated sales in Europe and Americas increased by 25 percent and 11percent, respectively, while revenue in Asia fell 6 percent.