Interim report January-June 2015: Sales growth – record quarter for IDC

Second quarter

• Order intake of 337.0 MSEK (343.5*).
• Net sales up by 3% to 367.5 MSEK (355.4).
• Operating profit was 24.4 MSEK (55.7 and 22.8 excl. capital gains on Vehicle sale).
• Profit after tax was 12.9 MSEK (30.3 and 8.3 excl. capital gains on Vehicle sale).
• Earnings per share were 0.67 SEK (1.57 and 0.44 excl. capital gains on Vehicle sale).
• Per Samuelsson appointed new CEO and President.
• Distribution agreement with Mitsubishi Electric to terminate at year-end 2015.

First half-year

• Order intake of 680.4 MSEK (698.1*).
• Net sales up by 3% to 719.3 MSEK (701.5).
• Operating profit was 50.9 MSEK (81.9 and 49.0 excl. capital gains on Vehicle sale).
• Profit after tax was 28.0 MSEK (45.4 and 23.4 excl. capital gains on Vehicle sale).
• Earnings per share were 1.48 SEK (2.36 and 1.23 excl. capital gains on Vehicle sale).

* Includes a 10.2 MSEK downward adjustment of the order book relating to the divestment of the US Vehicle business in IAS.
   

COMMENTS FROM ACTING CEO ANNA BELFRAGE

"Beijer Electronics showed a small sales increase, and operating profit improved slightly in the quarter.

The IDC business area had another record quarter with sales growth of 24%. Westermo posted another record sales figure and is going from strength to strength. Operating profit was unchanged, although better than expected as IDC currently has substantially higher sales and development costs due to the strategic investment program initiated last fall, which is progressing as planned. IDC reached a milestone in the quarter, with sales exceeding 150 MSEK for the first time. On a 12-month rolling basis, annual sales for the business area amount to 542 MSEK, with a profit of some 60 MSEK, corresponding to a margin of 11%. This provides a positive indication that IDC’s target sales of just over 800 MSEK, with an operating margin in excess of 14% by 2017, are achievable.

The IAS business area is currently in a challenging phase. Continued weak development in the US oil and gas sector, coupled with a pronounced downturn in sales of Mitsubishi Electric’s products, have led to significantly lower sales than expected. Adjusted for divestments and positive exchange rate effects, overall sales volumes were down 9% in the second quarter. Nevertheless, IAS posted a slightly stronger underlying operating profit for the period. This was a result of the cost-saving measures initiated towards the end of 2014, which so far have generated savings of 19 MSEK in the first half-year.

In June, we announced that the long-term collaboration with Mitsubishi Electric will be terminated at the end of the year. Two agreements are affected, one relating to Beijer Electronics’ sales of Mitsubishi Electric’s products on the Nordic markets, and one relating to Mitsubishi Electric’s sales of Beijer Electronics’ operator terminals on the global market. The agreements correspond to total sales of some 190 MSEK. We estimate that this will generate a net sales shortfall of 160 MSEK in 2016. Profitability is not expected to be affected, this due to staff redcutions of 50-60 people which will be implemented this fall. The associated non-recurring costs will be presented in the next quarterly report, but are currently estimated at 5-10 MSEK. Our ambition is to bring our partnership with Mitsubishi Electric to a professional and smooth conclusion.

In the slightly longer term, the termination of the collaboration with Mitsubishi Electric means that we’re able to further focus and streamline the IAS business area. Our global offering has improved markedly in recent years and now comprises a complete offering of operator panels, from relatively basic units to advanced, rugged panels, all with sophisticated software. Looking ahead, this means that resources will be concentrated on our proprietary products sold globally, which will ultimately improve gross margins and ensure stronger profitability. The current initiatives aim to deliver profitability of 9-10% as early as 2017."
  

INVITATION TO CONFERENCE CALL

Today, July 14, 2015, a conference call will be held for press and analysts, where acting President and CEO Anna Belfrage and acting CFO Joakim Nideborn present the company and comment on the report.

Time:      Tuesday July 14, at 1.30 p.m. CET

To participate in the conference please dial:

From Sweden: +46 8 566 427 01
From UK: +44 20 342 814 08

To access the presentation please use this link:  https://www.anywhereconference.com/?Conference=103367264&PIN=391699 

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!
    

For more information please contact:

Acting President and CEO, Anna Belfrage, tel 46 (0)40 35 86 53, mobile 46 (0)706 35 86 53
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 1,402 MSEK 2014. The company is listed on the NASDAQ OMX Nordic Stockholm Small Cap list under the ticker BELE. www.beijerelectronics.se

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