Financial Statement 2019: Westermo driving the Group’s sales and earnings performance
- Order intake amounted to 407 MSEK (452).
- Net sales rose by 9% to 415 MSEK (381).
- EBIT up by 9% to 22.0 MSEK (20.2).
- Profit after tax was 12.5 MSEK (12.5).
- Earnings per share were 0.44 SEK (0.44).
- Acquisition of Virtual Access of Ireland.
- Strategic deal worth over 150 MSEK.
Full year 2019
- Order intake amounted to 1,557 MSEK (1,593).
- Net sales rose by 10% to 1,559 MSEK (1,417).
- EBIT up by 40% to 103.5 MSEK (74.0).
- Profit after tax was 65.0 MSEK (43.5).
- Earnings per share were 2.27 SEK (1.52).
- Acquisition of Neratec of Switzerland in July 2019.
- The Board of Directors proposes a dividend of 0.50 SEK (0.50) for the financial year 2019.
Comments from President and CEO Per Samuelsson:
“BEIJER GROUP's Westermo business entity continued its convincing progress in the fourth quarter, setting new records for order intake, sales and earnings in the full year 2019. In this context, I’d like to highlight the successes of the long-term goal-oriented strategic initiative that Westermo commenced in 2015. Over a three-year period, this has resulted in average yearly organic growth of 18%, and boosted EBIT by 43% per year.
Westermo became the Group’s largest business entity in the fourth quarter, representing some 45% of the Group’s sales and 65% of our business entities’ aggregate EBIT for the full year. Our acquisition of Virtual Access of Ireland in the fourth quarter put another piece of our long-term strategic plan into place.
Virtual Access, alongside the acquisition of Neratec earlier in the year, injects annualized sales of 180-190 MSEK. These acquisitions and initiatives in the power distribution and rail infrastructure segments, coupled with new product launches with superior performance mean that Westermo has paved the way for continued profitable growth.
The Beijer Electronics business entity’s agreement to provide display solutions for US elevator manufacturer Otis was another keynote event in the quarter. This deal covers deliveries worth over a five-year period, starting spring 2020. Our partnerships with global corporations demonstrate our international competitiveness, and that we can satisfy their demanding standards.
For the Group as a whole, our operating results in the fourth quarter were mixed. The Group’s order intake was in line with previous quarters of the year, but lower than the strong numbers of the corresponding period of 2018, while sales and EBIT are continuing to increase. We were also able to report healthy free cash flow of over 70 MSEK in the quarter.
In approximate terms, Beijer Electronics is following its long-term plan, and was able to report increased sales and better earnings for the full year 2019. Its transition to the new X2 series and old product phase-outs have caused fluctuations between quarters, which impacted order intake, sales and earnings, so quarterly results were not at a satisfactory level. This pattern will sustain for another few quarters, but earnings will stabilize as the share of X2 products increases.
In 2020, we expect the business entity to generate a sales surplus from its new platform for the Internet of Things acirro+ which we launched in the fourth quarter. In addition, our shipments to Otis will commence in the spring. So overall, Beijer Electronics has good potential to continue its positive progress.
Korenix is in an intensive phase developing a new platform with software and hardware based on a modular design. All products should will be upgraded to this new platform in 2020 and 2021.
But meanwhile, we noted that this business entity did not achieve the sales volumes necessary to achieve profitability in 2019, partly due to some of our customers wanting shipments deferred till after year-end. As previously announced, an expanded and intensified partnership with the Beijer Electronics business entity has been initiated. This setup expands Beijer Electronics’ offering to the market, so both business entities can sell more, due to greater coordination. Simultaneously, Korenix gets access to Beijer Electronics’ stronger marketing organization, especially in Europe. We’re also working on coordination gains between these entities in segments such as manufacturing and supply chains, with the aim of reducing the Group’s cost base.
BEIJER GROUP delivers products to customers whose businesses include elements of project sales, which means that order intake can vary between quarters. The long-term trend is important. Since we set our strategic direction in 2016, BEIJER GROUP has grown organically by 11% per year, turning
an operating loss to an EBIT of over 100 MSEK in 2019.
The strategy of initiatives on extensive product regeneration, more focus on a customer-oriented marketing and sales organization, plus rationalization of manufacturing and logistics—to name a few measures—have all been clear successes. But things can, and should be, even better. As Westermo’s excellent progress and the opportunities we are presented with demonstrate. We’re also continuing our extensive product development initiatives, focusing on regenerating and expanding product ranges across the Group’s three business entities, with the aim of supporting continued profitable growth.
The current phase of the business cycle is presenting a mixed picture, with forecasts pointing in somewhat differing directions. We’ve seen some projects being delayed, while our pipeline of attractive projects is also filling up. Individual markets are still fairly stable without any wide fluctuations.
We’ve moved into the new year with a good order book. In 2019, we launched a number of new products, executed two strategic acquisitions and signed a major supply agreement with Otis. BEIJER GROUP thinks that overall, the Group can increase sales and earnings in the full year 2020.”
Invitation to conference call
Today a conference call is 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: Thursday January 30, 14.00 CET
To participate in the conference please dial:
From SE: +46856642706
From UK: +443333009035
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.
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.
This information is such that Beijer Electronics Group AB (publ) is required to disclose in accordance with EU's Market Abuse Regulation (MAR). The information was submitted for publication through the agency of the contact persons set out above at 13:00 CET, January 30th, 2020.
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 1.6 billion SEK in 2019.
The company is listed on the NASDAQ OMX Nordic Exchange Stockholm’s Small Cap list under the ticker BELE. www.beijergroup.com