Interim report January-June 2019: Continued positive progress, and acquisition of Swiss tech company
- Order intake amounted to 377 MSEK (371).
- Net sales increased by 6% to 381 MSEK (361).
- EBIT up to 21.5 MSEK (18.0).
- Profit after tax amounted to 13.7 MSEK (10.5).
- Earnings per share increased to 0.48 SEK (0.36).
- Acquisition of Neratec in Switzerland after the end of the reporting period.
- Order intake amounted to 745 MSEK (769).
- Net sales increased by 8% to 752 MSEK (698).
- EBIT up to 51.6 MSEK (36.0).
- Profit after tax amounted to 33.7 MSEK (20.1).
- Earnings per share increased to 1.18 SEK (0.70).
- Continued positive progress, and acquisition of Swiss tech company
COMMENTS FROM CEO PER SAMUELSSON
“BEIJER GROUP kept heading in a positive direction in the second quarter, largely following the strategic plan we set a few years ago. However, viewed in a longer perspective, the second quarter marked something of a pause in the Group’s continued expansion and aim to achieve long-term targets. Combined with increased costs resulting from our focused initiatives, growth somewhat below plan meant a limited pay-off in earnings. The continued improvement of gross margins was positive. Higher overheads worked in the opposite direction, and the EBIT increase was held at just below 20%.
The positive growth trend continued in the Westermo business entity, with increased order intake and sales. Since the quarter had no major orders, its core business achieved good organic growth. Meanwhile, overheads increased, due to continued production capacity expansion and initiatives in network solutions for the power distribution and rail infrastructure segments. The business entity was also charged with non-recurring expenses for the acquisition of Neratec. Overall, this meant earnings gains in the quarter were modest.
The Beijer Electronics business entity posted continued earnings and margin gains despite sales being unchanged. But we can also conclude that the numbers were lower than desired. As stated in the previous quarterly report, the phase-out of previous product families has created some irregularity between quarters, and that it’s now clear that exceptional large orders customers placed for products in phase-out before year-end did slow order placing and sales in the second quarter. These effects will gradually taper off. We have also seen a somewhat slower transition to new products in the US. Consequently, the business entity implemented a new organizational structure, appointing some new executives in the US to accelerate growth.
Basically, the Korenix business entity progressed as planned, with somewhat higher sales and improved earnings, and is thus nearing break-even. Korenix is focusing on regenerating its product range and achieving profitability in 2019. I can see that where the business cycle is heading is still uncertain, but for us, the underlying trend remains positive, and we haven’t seen any signs of a slowdown in customer activity. Our business entities are executing a number of major projects, which with positive outcomes, will make a good contribution to growth.
Westermo’s acquisition of Neratec in Switzerland is another step in our long-term strategic plan. Neratec is a complementary acquisition that is a good fit with, and enhances, Westermo’s product offering. It also contributes to increasing already healthy organic growth. The acquisition also marks the Group achieving a stability that enables resources to be freed up to increase expansion.
Our priority remains organic growth, but this can be supplemented by further acquisitions when the opportunity arises.
For the full year 2019, we reiterate our view that BEIJER GROUP will be able to increase sales and earnings compared to the figures for 2018.”
INVITATION TO CONFERENCE CALL
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: Friday July 12, at 14.00 CEST
To participate in the conference please dial:
From SE: +46850558359
From UK: +443333009274
To access the presentation please use this link: https://www.anywhereconference.com?Conference=301292644&PIN=33176776&UserAudioMode=DATA
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.
For more information please contact:
President and CEO, Per Samuelsson, tel 46 (0)40 35 86 10, mobile 46 (0)708 58 54 40
EVP and CFO Joakim Laurén, tel 46 (0)40 35 84 96, mobile 46 (0)703 35 84 96.
This information is such that Beijer Electronics Group AB (publ) is required to disclose in accordance with Swedish Securities Market Act (2007:528). The information was submitted for publication through the agency of the contact persons set out above at 14:00 CEST, July 12, 2019.
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 2018.
The company is listed on the NASDAQ OMX Nordic Exchange Stockholm’s Small Cap list under the ticker BELE. www.beijergroup.com