Financial Statement 2017: Strong finish with high organic growth
- Order intake was 329.5 MSEK (331.1).
- Net sales increased by 13% to 322.6 MSEK (286.6).
- EBITDA increased to 25.6 MSEK (22.8).
- EBIT was 3.4 MSEK (7.3).
- Profit/loss after tax was -1.0 MSEK (-8.7).
- Earnings per share were -0.03 SEK (-0.31).
Full year 2017
- Order intake increased by 10% to 1,251.6 MSEK (1,142.5).
- Net sales rose by 8% to 1,205.9 MSEK (1,121.5).
- EBITDA increased to 90.3 MSEK (23.0).
Year-2016 earnings were charged with non-recurring expenses of 50 MSEK.
- EBIT was 18.0 MSEK (-39.4).
- Profit/loss after tax was -6.2 MSEK (-126.1).
- Earnings per share were -0.24 SEK (-4.41).
- 225 MSEK rights issue completed.
- The Board of Directors is proposing a dividend of 0 SEK per share (0).
COMMENTS FROM PRESIDENT AND CEO PER SAMUELSSON
“Beijer Electronics Group finished last year well, with high organic sales growth in the fourth quarter. Order intake remained high, even if it was unchanged due to strong comparative figures in the previous year. Overall, we continued to deliver according to our growth plan.
However, the Group’s EBIT remains at an unsatisfactory level. Westermo’s earnings increased and it attained a 10% margin, but has more to offer. Beijer Electronics returned a 2% margin, and Korenix posted an operating loss. In total, this means we are not satisfied with earnings overall.
The underlying earnings trend is also pointing in a positive direction—EBITDA increased in every quarter of 2017 year on year, and was up by 25% overall in the year. We also posted a positive cash flow after investments of 35 MSEK for the fourth quarter.
Meanwhile, EBIT was charged with increasing depreciation and amortization. An impairment loss taken in our Korenix business entity also meant that consolidated fourth-quarter EBIT was down year on year. But even excluding this impairment, EBIT remains low. Apart from increasing depreciation and amortization, it is primarily explained by extensive product development initiatives, and our focus on selective marketing and sales initiatives. Although this has a negative short-term earnings impact, we expect it to pay off over time.
The Westermo business entity is evidence of this. After a downturn in 2016, Westermo made a brisk rally, and reported a positive year in terms of order intake, sales and earnings. The Beijer Electronics business entity is definitely heading in the right direction with very promising sales of our new X2 terminals, several new software and hardware solution launches, and lots more in the coming year. Continued volume expansion will become evident in progressively improving earnings. The Korenix business entity had a challenging year, realigning its organization with an all-new management and extensive staffing changes. Nevertheless, Korenix succeeded in maintaining sales fairly well, although it was compelled to report a loss for the full year, some of which consisted of impairment and non-recurring expenses.
After the Group’s major realignment in 2016, with a number of structural moves, rationalization and an improved strategy with a sharper focus on software and customer orientation, 2017 featured extensive product development and marketing initiatives. Staffing in production and administration was downsized, while employee headcount in development, marketing and sales increased. In parallel, we executed a competence shift, matching downsizing with new hiring.
Many things fell into place in the year—fine-tuning of various sales channels on certain markets remain within Beijer Electronics. Westermo is honing its organization with aims including improved efficiency in production/logistics. Korenix is focusing on recovery in 2018.
It is noteworthy that the Group’s altered focus, with a higher share of proprietary products, brought better gross margins in the past two years compared to previously. This trend may accentuate with progressively increasing software content. Overall, this means we will secure better leverage in earnings given higher sales.
We are also satisfied with the outcome of the rights issue we completed at the beginning of the fourth quarter, raising 217 MSEK for the Group. This capital injection has strengthened the Group’s financial position, and gives us more room to maneuver for aggressive initiatives over and above those we have executed. Our plans including screening small-scale acquisitions.
Coincident with our aggressive strategy, we reinforced the Group’s management capability in the year. New executives are in place within the three business entities. At the end of 2017, we created a new Group Management, which includes the three heads of our business entities, while also appointing our Group CFO as Executive Vice President.
Beijer Electronics Group is converging on its targets of yearly growth of 7% and a 10% margin over a business cycle. We achieved our growth target in 2017. In 2018, we expect that the Group can increase sales and earnings compared to 2017.”
INVITATION TO CONFERENCE CALL
Today, a conference call will be held for press and analysts, where President and CEO Per Samuelsson and CFO/Executive Vice President Joakim Laurén present the company and comment on the report.
Time: Friday January 26, at 2.00 p.m. CET
To participate in the conference please dial:
From SE: +46856642697
From UK: +442030089804
To access the presentation please use this link:
The report and the presentation will be available at Beijer Electronics Group’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
CFO and Executive Vice President 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 26, 2018.
Beijer Electronics Group 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 Group has evolved into a multinational group with sales of 1.2 billion SEK 2017. The company is listed on the NASDAQ OMX Nordic Stockholm Small Cap list under the ticker BELE. www.beijergroup.com