Interim report Jan-Sep: Positive operating profit and completing restructuring with impairment of a holding in Brazilian associated company
- Order intake was 266.3 MSEK (309.0).
- Net sales amounted to 271.1 MSEK (322.3).
- Operating profit of 4.7 MSEK (12.0).
- Profit/loss after tax was -72.7 MSEK (8.2) including 71.6 MSEK impairment of participations in associated company charged to profits. Excluding this impairment, profit/loss was -1.1 MSEK.
- Earnings per share were -3.82 SEK (0.44).
- Order intake amounted to 811.4 MSEK (989.5).
- Net sales of 834.9 MSEK (1,041.6).
- Operating profit/loss -46.6 MSEK (62.9). P rofit was charged with non-recurring expenses of 50 MSEK (6.5).
- Profit/loss after tax was -117.4 (36.3). Excluding non-recurring expenses and impairment, profit was 4.2 MSEK.
- Earnings per share were -6.14 SEK (1.91).
COMMENTS FROM PRESIDENT AND CEO PER SAMUELSSON
“Beijer Electronics is now entering the final phase of the realignment it started at the beginning of the year. In the IAS business area, we have implemented a flatter and more customer-oriented structure. We are reducing our overheads as planned, which is having the intended effect on our earnings. Our focus on product development has resulted in new launches, and more product introductions will follow in 2017. Production has been rationalized, and half of our production in the US will be transferred to our Taiwanese unit, with the remainder put out to contract in the US.
As another element of this overhaul, the Board also decided to impair most, 71.6 MSEK, of the book value of our holding in Altus Sistemas of Brazil. This impairment, which was charged to third-quarter profits, is being executed against the background of the poor progress of the Brazilian economy and Altus’s exposure to the oil and gas sector. These circumstances had a big impact on Altus’s sales and profits. Accordingly, we regard its long-term value as uncertain. The impairment has no effect on liquidity.
Accordingly, we have laid the foundation for clear improvements in 2017. We are retaining our ambition to achieve the group’s long-term targets in 2018.
The trend of improving operating profit excluding restructuring expenses continued in the period, compared to the three previous quarters. Although our actuals of sales and profits were somewhat lower than expected, progress in the third quarter is still in the right direction.
The IDC business area achieved a profit improvement in the quarter, with profitability back at nearly 10%. The market for major projects, especially in the process industry, is slow, as investments have been deferred. However, one positive is IDC securing its first order on a major project, and a new customer in the Train segment placing its first order. Korenix of Taiwan is continuing its positive progress, with sales gains of over 10% in the quarter. In the period, Westermo started up a new sales enterprise in Australia. Investments in new technology were executed at Westermo’s production facility in Stora Sundby to assure quality and expand capacity.
The IAS business area largely progressed as expected. As previously, its order intake and sales were impacted by the discontinued partnership with Mitsubishi Electric and disposals of our operations in Finland and the Baltics. Our program of measures is having a good effect, with significantly lower overheads resulting, and modest positive profit for the quarter. We expect restructuring of our production in the US to further reduce our costs.
IAS launched its all-new product range, the X2 series, packaging soft and hardware for all panels. We expect this to impact positively on sales in 2017. We also previewed the business area’s new strategy for the Internet of Things (IoT) called “The Fast Track to the Cloud,” which was well received, with several solutions being launched progressively through 2017.
In the fourth quarter 2016, we expect group sales to be higher than in the previous quarter. We also expect operating profit to be better than the corresponding period of 2015 and the third quarter 2016.”
INVITATION TO CONFERENCE CALL
Today, October 20, 2016, a conference call will be held for press and analysts, where President and CEO Per Samuelsson and CFO Joakim Laurén present the company and comment on the report.
Time: Thursday October 20, at 10.30 a.m. CET
To participate in the conference please dial:
From Sweden: +46856642695
From UK: +442030089806
To access the presentation please use this link:
The report and the presentation will be available at Beijer Electronics’ website www.beijerelectronics.com/ir . 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 Joakim Laurén, tel +46 (0)40 35 84 96, mobile +46 (0)703 35 84 96.
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 by Annika Johnsson at 08:00 CET, October 20, 2016.
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 with 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.com