Financial Statement 2015: IDC satisfies challenging expectations, and new restructuring program in IAS

Fourth quarter

• Order intake of 343.1 MSEK (358.7).
• Net sales were 333.0 MSEK (365.4).
• Operating profit was -10.7 MSEK (13.9).
• Profit after tax was -12.5 MSEK (8.9).
• Earnings per share were -0.66 SEK (0.47).
• Finnish operations divested at year-end.
    

Full year 2015

• Order intake was 1,332.6 MSEK (1,398.2).
• Net sales were 1,374.6 MSEK (1,401.6).
• Operating profit was 52.2 MSEK (113.6 and 80.7 excluding capital gain in 2014).
• Profit after tax amounted to 23.8 MSEK (62.7).
• Earnings per share were 1.26 SEK (3.24).
• The Board of Directors proposes a dividend of 1.25 SEK per share (1.25).
     

After the end of the financial year

• Extraordinary General Meeting convened to adopt a resolution regarding the divestment of the Baltic operations.
• Decision to implement a restructuring program for the IAS business area. The program is set to reduce costs by 50 MSEK annually, of which 30 MSEK effective in 2016. The cost of the package is estimated at 50 MSEK, which will be charged to profit in the first quarter 2016.
    

COMMENTS FROM PRESIDENT AND CEO PER SAMUELSSON

“The fourth quarter brought positive news, and some disappointments. While the IDC business area satisfied high expectations, the IAS business area made less positive progress than expected. Overall, this meant that the group posted a loss in the fourth quarter, and a clearly unsatisfactory full-year figure for 2015. The company will be executing far-reaching restructuring measures in IAS in order to create a secure platform for profitable future growth.

At the same time, IDC’s positive performance in 2015 confirms that the business area is well positioned to hit its sales and profit targets in 2016 and 2017. The business area’s ambitious investment and expansion program went as planned, particularly in the subsidiary Westermo. Sales for the year were above 500 MSEK, an important milestone for IDC. This implied growth of close to 20%. As previously announced, profit was reduced by major initiatives in product development and markets, and results are on target.

Westermo showed its strength as a world leader in the train segment in the fourth quarter, when Toshiba renewed a major order worth 4.2 MUSD for communication network equipment for the expansion of the Washington DC transit system. Westermo also won three new customers in the train segment in the period. Korenix secured a breakthrough order in the quarter for wireless networks for Taiwan Power. The order is worth 2.5 MSEK, with a 15 MSEK option in 2016.

The IAS business area faced a tough and challenging year on a difficult market, while also implementing savings programs. IAS was negatively affected by the substantial fall in demand in the US oil and gas sector, the termination of the Mitsubishi Electric contract and negative exchange rate effects, and sales dropped by just over 100 MSEK. It’s positive that the 2014 savings program went to plan, but it did not compensate for the lower gross profit. As previously communicated, the terminated Mitsubishi contract has resulted in organizational changes that will take effect in 2016. A review of operations concluded that this will not be sufficient to achieve satisfactory profitability in the business area.

Fundamentally, IAS has a strong platform for achieving long-term positive and profitable growth. We have a presence on the right geographical markets and have already done a great deal in terms of software product development for our intelligent HMI solutions. However, there is a need to supplement our strategy and improve implementation. We will now address this by creating a more efficient and focused organization, increasing the proportion of customized products and prioritizing software.

Accordingly, we plan to introduce a further restructuring program for IAS in 2016, described in more detail under ‘Significant events.’ The cost of the program is estimated at 50 MSEK and will be charged to profit in the first quarter of 2016. The program of measures is expected to generate cost savings of 50 MSEK annually, taking full effect in 2017.

We can conclude that our 30-year plus collaboration with Mitsubishi Electric is over. It’s now important to focus on sales of proprietary products and services, which will provide more than 90% of our sales going forward. Our goal is for IAS to achieve continuous growth for the long term and return an operating margin of some 10%.
  

INVITATION TO TELEPHONE CONFERENCE

Today, a conference call will be held for press and analysts, where President and CEO Per Samuelsson and acting CFO Joakim Nideborn present the company and comment
on the report.

Time:  Thursday January 28, at 2.00 p.m. CET

To participate in the conference please dial:

From Sweden: +46 8 566 426 69
From UK: +44 203 0089 801
  

To access the presentation please use this link:
http://www.anywhereconference.com?UserAudioMode=DATA&Name=&Conference=131666902&PIN=10344735 
  

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.

Welcome!
  

This information is such that Beijer Electronics AB (publ) is required to disclose in accordance  with the Swedish Financial Instruments Trading Act and/or the Swedish Securities Market Act. The information was submitted for publication at 1.00 p.m. CET, January 28, 2016.
   

For more information please contact:

President and CEO, Per Samuelsson, tel 46 (0)40 35 86 10, mobile 46 (0)708 58 54 40
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 19 countries and sales of 1,375 MSEK 2015. The company is listed on the NASDAQ OMX Nordic Stockholm Small Cap list under the ticker BELE. www.beijerelectronics.se

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