Hexpol is a global leader in advanced polymer compounds (rubber and TPE) and engineered gaskets, a niche, capital-light, customer-embedded business with pricing power and a long M&A-driven growth record. Adjusted ROIC of 10.9% and +SEK 515M economic profit confirm genuine value creation.
The reverse-DCF fair value brackets the SEK 73 price (SEK 73 at GDP, SEK 76 at 5% growth) on a modest ~3% implied perpetual growth — fair for a steady, cash-generative compounder exposed to autos, construction and general industry.
Bridging adjusted NOPAT through SEK 2.8B net debt, reverse-DCF fair value runs SEK 69 (zero growth) to SEK 83 (10% growth) — bracketing the SEK 73 price. The equity is fairly valued for a 11%-ROIC niche compounder; upside depends on volume recovery and M&A.
Base SEK 76 (+4%) on modest recovery plus bolt-ons; bull SEK 86 (industrial/auto demand recovery and margin expansion); bear SEK 60 (industrial recession compresses volumes and margins).
The market pays today’s enterprise value for roughly 3.5% NOPAT growth over 5 years. The business earns 11% on capital against a 8% cost of capital (spread +2.9 pp); the no-growth value is SEK 69/share (94% of price), so the rest is priced-in growth.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | SEK 86 | ≥10% | +16% | 35% | Industrial/auto recovery + margin expansion |
| Base | SEK 76 | +5% | +3% | 40% | Fair: modest recovery + bolt-ons |
| Bear | SEK 60 | -7% | -19% | 25% | Industrial recession compresses volumes |
| Prob-weighted | SEK 76 | — | +2% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 96 | 104 | 110 | 119 | 125 | 142 |
| 7.25% | 81 | 86 | 90 | 96 | 101 | 111 |
| 8.00% (base) | 69 | 73 | 76 | 80 | 83 | 90 |
| 8.75% | 61 | 63 | 65 | 68 | 70 | 73 |
| 9.50% | 54 | 56 | 57 | 58 | 59 | 61 |
Green = fair value above the current price of SEK 73.95. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
Customer-embedded, specialised compounds support resilient margins.
Low capital intensity drives high returns and strong free cash flow.
A long record of accretive bolt-on acquisitions in a fragmented industry.
Exposure across autos, construction and general industry diversifies demand.
A conservative balance sheet supports continued acquisitions.
Hexpol is a high-quality, capital-light niche compounder at a fair price. We rate it HOLD with a slight positive tilt, medium conviction; base target SEK 76 (+4%) — accumulate on industrial weakness.
An industrial-demand pullback toward the high-SEK 60s, near the reverse-DCF floor, would be the better entry.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Source reports archived locally.
NOPAT adjustments: Not available from structured data
Company add-backs we reject: Not available without footnote extraction
Pages read — FY: — · Q: —
How the mttssn view has evolved — each prior dated note is preserved.