Interim report January-June 2021: Big boost to order intake sets a stable base for higher sales and improved earnings

Second quarter

• Order intake increased by 53% to 514 MSEK (335).
• Net sales rose by 9% to 390 MSEK (357).
• EBIT amounted to 9.8 MSEK (7.9).
• Profit after tax of 1.9 MSEK (-0.8).
• Earnings per share were 0.07 SEK (-0.03).
      

First half-year

• Order intake increased by 26% to 932 MSEK (741).
• Net sales of 741 MSEK (753).
• EBIT amounted to 14.5 MSEK (16.3).
• Profit after tax of 3.6 MSEK (4.4).
• Earnings per share were 0.12 SEK (0.16).
• Acquisition of ELTEC of Germany.
     

COMMENTS FROM CEO PER SAMUELSSON

“BEIJER GROUP’s order intake set a new record in the second quarter. With an increase of over 50%, we passed 500 MSEK order intake in a single quarter for the first time. This is a sign of strength, and evidence that our growth strategies are now paying off. We’ve also noted how the upturn is broad based,  covering all three of the Group’s business entities, and all geographical regions.

It is also a sign that the effects of the pandemic and Covid-19 on demand are starting to fade. However, the global shortage of certain key components does persist, which means that several products will not be fully complete according to plan, causing disruptions to supply chains. This impacted BEIJER GROUP’s shipments in the second quarter, and the first.

We think that the loss of sales resulting from the component shortage that have restricted shipments was 11-12% of sales in the second quarter, or nearly 50 MSEK. The Group was still able to increase sales by 9% to almost 390 MSEK in the period. In this context, I’d like to acknowledge how my co-workers have  succeeded in dealing with the challenges of the component shortage through flexibility, finding new solutions and re-planning. 

EBIT was up by 24%, but negatively impacted by the loss of sales. As CEO, I can state that earnings are too low, and that there is clearly some way to go to achieve our profitability targets. But I’m confident that we’re going in the right direction, and I’m optimistic about our future. Our earnings in the second quarter would have been significantly higher if we’d had a normal supply situation. The component shortage also caused increased costs for key  components, and price adjustments to our customers will feed through during coming quarters.

It’s also important to emphasize how delivery problems relate to the component shortage rather than any internal capacity problems. We decided to increase some product inventory so we can deliver quickly once the individual component is in hand. Apart from the earnings impact, this inventory build-up did cause negative cash flow in the period, which will go positive after delivery. We think that BEIJER GROUP's total delivery capacity, given normal flows of components, will more than exceed the rate of order intake in the second quarter.

The Group’s three business entities performed positively in terms of order intake and sales. Westermo’s order intake was up by 40%, and sales by 9%. The business entity secured a major order of 36 MSEK under a framework agreement with a North American train operator. ELTEC of Germany, acquired in the first quarter, has performed above expectations, making a positive contribution to Westermo’s business. This business entity’s EBIT was somewhat lower in the period, mainly due to rising component prices and deferred deliveries due to the component shortage.

Westermo also achieved a milestone in the quarter with the launch of new switches in the power distribution segment. Westermo now possesses a  competitive product portfolio for automating substations and digitalizing energy systems, which is consistent with the business entity’s growth strategy.

Beijer Electronics’ order intake grew by nearly 80%, and was over 200 MSEK for the second consecutive quarter. Sales increased by 7%, and EBIT went from negative to breakeven. Sales and earnings were negatively impacted by the component shortage and rising component prices. The Korenix business entity  also performed positively after significant re-orientation in recent years. Order intake and sales increased by nearly 30%, and the business entity was able to record breakeven earnings after a fairly heavy operating loss last year.

Overall, we’re satisfied with the excellent growth of the Group’s order intake. By the end of the second quarter, BEIJER GROUP's order book was at an all-time high of some 750 MSEK. After a dip during the pandemic, underlying demand has progressed strongly, especially in Asia. Europe has staged a gradually accelerating recovery, while the upturn in North America has been more cautious.

How long the component shortage will last is hard to estimate. We’re doing our upmost to manage these problems and alleviate the negative impacts. But viewed in a slightly longer perspective, we’re sure that the scale of our order book and excellent order intake, driven by strong demand, will translate into sales generating earnings at least in line with the EBIT margin target of 10%.

We are maintaining our view for the full year 2021. BEIJER GROUP has good potential to achieve better financial performance in 2021 than in 2020.”
   

INVITATION TO PRESENTATION OF THE REPORT

Today a conference call will be 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: Wednesday July 14, 09:30 CEST

To participate in the conference please dial:

From SE: +46850558357
From UK: +443333009264
   

To access the presentation please use this link:

https://www.anywhereconference.com?Conference=425010789&PIN=83312850&UserAudioMode=DATA
   

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.

Welcome to join!

This disclosure contains information that Beijer Electronics Group is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014) and the Swedish Securities Markets Act (2007:528). The information was submitted for publication, through the agency of the contact persons, on July 14, 2021, at 08:00 CEST.
    

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.

Beijer Electronics Group AB (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 1.4 billion SEK in 2020.

The company is listed on the Nasdaq Stockholm Main Market under the ticker BELE. www.beijergroup.com