Interim Report January-September 2014: Increased Order Intake and Strategic Focus on the IDC Business Area in Q3
- Order intake increased by 4% to 341.4 MSEK (327.8), or by 10% for comparable units.
- Net sales were 334.6 MSEK (346.1).
- Operating profit was 28.6 MSEK (30.0) excluding non-recurring costs of 10.8 MSEK. Including non-recurring costs, profit was 17.8 MSEK.
- Profit after tax was 8.4 MSEK (18.4).
- Earnings per share were 0.41 SEK (0.96) including non-recurring costs.
- Major strategic focus on the IDC business area.
- Anna Belfrage was appointed acting CEO and President.
- Measures aimed at IAS announced after the end of the period.
- Order intake was 1,039.5 MSEK (1,049.2).
- Net sales rose by 3% to 1,036.2 MSEK (1,009.9).
- Operating profit increased to 99.7 MSEK (67.3) including capital gains of 32.9 MSEK and non-recurring costs of 10.8 MSEK. Excluding capital gains and non-recurring costs, profit was 77.6 MSEK.
- Profit after tax amounted to 53.8 MSEK (35.9).
- Earnings per share were 2.77 SEK (1.88).
COMMENTS FROM ACTING CEO ANNA BELFRAGE
“Beijer Electronics continued to make positive progress in the third quarter. Sales were largely unchanged adjusted for the sale of the Vehicle division, and profit excluding non-recurring costs for severance pay to the former CEO were in line with the previous year. Higher order intake in the third quarter made a particularly positive contribution—adjusted for the sale of the Vehicle division, order intake was up 10%. However, the economic recovery is sluggish and a number of markets are still characterized by uncertainty.
The IDC business area posted another strong quarter with a sharp increase in order intake, higher sales and improved profit. 2014 is expected to be a record year for IDC and against the background of the business area’s significant success in recent years, Beijer Electronics’ Board of Directors have decided to implement a major strategic initiative worth 175 MSEK over three years. The measures relate to Westermo, which represents just over 80% of the business area’s sales. Westermo’s robust solutions for demanding industrial segments such as the train, oil, gas and mining industries have had significant success. The additional investments are aimed at developing and extending Westermo’s product portfolio and strengthening the sales organization.
In addition to the focus on Westermo, the Board of Directors also resolved to continue to develop Korenix’s wireless and surveillance solutions.
The aim is for IDC to achieve sales approaching 800 MSEK and an operating margin in excess of 14% by 2017. We consider the investments to be relatively low-risk, partly because the underlying market is expanding sharply but also because a high proportion of the investments are focused on developing supplementary products aimed at existing customers such as Bombardier, Toshiba and ABB. The investments are expected to have moderate impact on business area profit in 2015 and 2016, although the effect on cash flow will be negative in the period.
The IAS business area is still struggling with a difficult market. Order intake, sales and profit decreased in the third quarter, partly due to the sale of the Vehicle division. A weak market in the Nordics and the rest of Europe is the main reason behind the decline in demand, while the US continues to make good progress and sales in China are up. At the same time, there were also positive progress in the third quarter and order intake was up 6% excluding the sale of the Vehicle division. Our new robust operator terminals, launched last spring, have also attracted considerable market interest.
IAS hasn’t reached anticipated sales volumes in recent years, leading to reduced profitability. In order to restore profitability over a three-year period, we announced a range of measures for IAS in October. The program includes an initial phase of cost-cutting measures intended to increase business area profit by 25 MSEK in 2015. The restructuring costs will mainly affect profit in the fourth quarter, but also the first half of 2015.”
INVITATION TO CONFERENCE CALL
Today a conference call will be held for press and analysts where acting President and CEO Anna Belfrage and acting CFO Joakim Nideborn present the company and comment on the report.
Time: Wednesday 22, at 1.00 p.m. CET
To participate in the conference please dial:
From Sweden: +46 851999030
From UK: +44 2076602077
To access the presentation please use this link:
The report and the presentation will be available at Beijer Electronics’ website www.beijergroup.com under Investors/Presentations. A recording of the conference call will also be available here after the event.
For more information please contact:
Acting President and CEO, Anna Belfrage, tel 46 (0)40 35 86 53, mobile 46 (0)706 35 86 53
Acting CFO, Joakim Nideborn, tel 46 (0)40 35 84 49, mobile 46 (0) 707 72 29 83
Beijer Electronics is a fast growing technology company with extensive experience of industrial automation and data communication. The company develops and markets competitive products and solutions that focus on the user. Since its start-up in 1981, Beijer Electronics has evolved into a multinational group present in 22 countries and sales of 1,376 MSEK 2013. The company is listed on the NASDAQ OMX Nordic Stockholm Small Cap list under the ticker BELE. www.beijerelectronics.se