Interim report January-September 2021: Substantial earnings improvement driven by continued good demand
- Order intake increased by 62% to 502 MSEK (310).
- Net sales rose by 23% to 412 MSEK (335).
- EBIT up to 31.9 MSEK (4.7).
- Profit after tax of 21.7 MSEK (1.2).
- Earnings per share were 0.75 SEK (0.05).
- Major order worth over 50 MSEK from Stadler Rail.
- Order intake increased by 36% to 1,433 MSEK (1,052).
- Net sales rose by 6% to 1,152 MSEK (1,088).
- EBIT up to 46.4 MSEK (21.0).
- Profit after tax increased to 25.2 MSEK (5.6).
- Earnings per share were 0.87 SEK (0.21).
- Acquisition of ELTEC of Germany.
COMMENTS FROM CEO PER SAMUELSSON
“BEIJER GROUP’s business kept making positive progress in the third quarter. Several signals are pointing in the right direction, including generally positive demand. BEIJER GROUP’s order intake increased by over 60%, passing 500 MSEK for the second consecutive quarter. The upturn is broad based, covering all three of the Group’s business entities, and all geographical regions. Our order backlog is now at record levels, bringing confidence for upcoming quarters.
We have noted growing customer interest in the solutions and products spawned from the strategy we staked out a few years ago, which also contributes to customers’ sustainability work. Our offering comes at the right time, with its sharper focus on sustainability issues.
Increased order intake is feeding through to sales, which increased by over 20% in the third quarter. In turn, higher sales volumes made a positive impact on EBIT. Good control of our overheads paid off in the quarter, with EBIT of over 30 MSEK, and an EBIT margin approaching 8%.
I’m also pleased that Beijer Electronics has started making money again. This is important for us to achieve our targets and build value in BEIJER GROUP. With EBIT of 15 MSEK, this business entity was able to report a margin of over 8%. Westermo also increased profitability to nearly 13%. Korenix reported a modest loss, although this was less than in 2020.
In parallel with this positive progress, our operations were affected by the global shortage of certain key components, as in previous quarters. This meant that our products could not be fully completed, causing tangible supply chain disruptions. We estimate the loss of sales resulting from the component shortage at just over 40 MSEK, or some 10% of sales in the third quarter. This also meant a lost earnings contribution. In this context, I’d like to commend my colleagues, who make a difference every day.
The component shortage also caused significantly higher prices of certain components, which has also impacted earnings. To some extent, this was compensated by earnings being positively impacted by 9 MSEK due to waived Covid loans in the US. beijer group increased prices to customers on all markets, although there will be a delay before they take effect. This is because previous orders were placed at old prices, whose effect will taper off as the order backlog ships. We’re also monitoring progress on the market closely and will be implementing more price increases.
To parry the component shortages far as possible, we have decided to build up some product inventories to enable fast delivery once individual components are in hand.
Apart from the earnings impact, this inventory build-up did cause negative cash flow in the period, which goes positive after delivery. Otherwise, BEIJER GROUP’s total delivery capacity is positive with good potential to cope with volume increases.
The Group’s business entities performed positively in terms of order intake and sales. Westermos order intake was up by nearly 80% to 290 MSEK, with one major order from Swiss train manufacturer Stadler representing 50 MSEK. The Stadler order is the outcome of many years’ collaboration and the contract includes an option on further large orders. Westermo’s sales increased by 12% with acquisitions representing five percentage points of this increase. ELTEC of Germany, acquired in the second quarter, continued to progress positively.
Beijer Electronics’ order intake rose by 51%, and its sales increased by 36%. This upturn was broad based, and Asia has largely recovered after the pandemic. Demand in Europe has staged a good rally, while progress in the US was more cautious.
We’re satisfied with the excellent growth of the Group’s order intake and sales. Although earnings have increased, they have been impacted by the component shortage, and how long this will persist is still hard to assess. We’re doing our utmost to manage these problems and alleviate the negative effects. The position for Beijer Electronics has progressively improved, while a number of challenges remain for Westermo.
Our view for the full year 2021 has accentuated. BEIJER GROUP has good potential to achieve significantly better financial performance in 2021 than in 2020.”
INVITATION TO PRESENTATION OF THE INTERIM REPORT
Today a conference call will be held for press and analysts, where President and CEO Per Samuelsson and EVP and CFO Joakim Laurén present the company and comment on the report.
Time: Tuesday October 26, 13:30 CEST
To participate in the conference please dial:
From SE: +46856642693
From UK: +443333009273
To access the presentation please use this link:
The report and the presentation will be available at the company’s website www.beijergroup.com. A recording of the conference call will also be available here after the event.
Welcome to join!
This disclosure contains information that Beijer Electronics Group is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact persons, on October 26, 2021, at 13:00 CEST.
For more information please contact:
President and CEO, Per Samuelsson, tel 46 (0)40 35 86 10, mobile 46 (0)708 58 54 40
Executive VP and CFO Joakim Laurén, tel 46 (0)40 35 84 96, mobile 46 (0)703 35 84 96.
Beijer Electronics GroupAB (publ) is a growing powerhouse of innovators within mission-critical industrial digital technology and IIoT. With a strong focus on the connection between people, technology and data, we share a pride in having some of the world's leading global companies as our core customers. Since its start-up in 1981, BEIJER GROUP has evolved into a multinational group of complementary business entities with sales over 1.4 billion SEK in 2020.
The company is listed on the Nasdaq Stockholm Main Market under the ticker BELE. www.beijergroup.com