Interim report January-June 2022: A strong quarter with order intake, sales and earnings at record levels

Second quarter

• Order intake increased by 30% to 667 MSEK (514).
• Net sales rose by 37% to 533 MSEK (390).
• EBIT improved to 40.8 MSEK (9.8).
• Profit after tax up to 28.1 MSEK (1.9).
• Earnings per share increased to 0.97 SEK (0.07).
• Strong earnings gains for the Beijer Electronics business entity, with an EBIT margin of 14%.

First half-year

• Order intake increased by 42% to 1,328 MSEK (932).
• Net sales rose to 973 MSEK (741).
• EBIT improved to 69.0 MSEK (14.5).
• Profit after tax up to 44.1 MSEK (3.6).
• Earnings per share increased to 1.52 SEK (0.12). 
• Jenny Sjödahl is new President and CEO effective 1 March 2022.
     

COMMENTS FROM CEO JENNY SJÖDAHL

“For BEIJER GROUP, the quarter featured continued high demand and positive progress, with a new record in order intake, which increased for the sixth consecutive quarter to 667 MSEK (514). The increase is not due to major individual orders, but is broad based, covering both business entities, and basically all segments and geographies. It demonstrates that our growth strategy is delivering: we’re well positioned in attractive segments, with healthy underlying growth, where we’re demonstrating our capability to outgrow the market.

Sales increased by 37% to 533 MSEK (390) for the period, which means the Group passed half a billion Swedish kronor of sales in a single quarter for the first time. There’s still a lag compared to order intake, but we’re starting to catch up, even if supply chain disruptions are affecting us. Beijer Electronics has dealt with its supply challenges well, reporting all-time high sales of 314 MSEK (184). Westermo’s sales, which were slowed by the component shortage, were 219 MSEK (206).

EBIT for the period increased to a record 41 MSEK (10), with a margin of 7.7% (2.5). Volume-driven leverage, combined with price increases and favorable currency effects contributed to the earnings gains. I’m delighted that the Beijer Electronics business entity’s positive progress is continuing, with a significant profitability improvement in the quarter. The business entity reported its best-ever earnings, with an EBIT of 44 MSEK (0). A margin of 14% for the period means Beijer Electronics is performing in line with our target of the business entities being capable of achieving minimum yearly growth of 10%, and achieving EBIT margins of 15%. Westermo reported EBIT of 7 MSEK (20). The semiconductor shortage that Westermo has struggled with over the past year, and has largely succeeded in overcoming, became critical early in the period, and caused delivery stoppages of several important product groups. This also resulted in an unfavorable product mix, which combined with high cost of materials meant an overall negative earnings impact of an estimated 13 MSEK in the period. Our opinion is that this is a temporary effect caused by a number of coinciding factors linked to the challenging supply chain situation. Westermo’s stable business model and good earnings capacity are sustaining, and we think its delivery capacity will be able to improve in the second half-year.

We’re still working intensively on dealing with the global shortage of electronic components and minimizing its negative impact on our business. Our business entities are maintaining a close dialogue with customers, and there is generally good understanding for these problems. The shortage situation is impacting the Group negatively in several ways: increased inventories tying up capital, higher purchasing costs, and production units needing to replan constantly, reducing efficiency. The business entities have implemented several rounds of price increases to mitigate the cost increases, and our view is that we have succeeded here, with some delay.

Covid-19 continued to affect operations in the second quarter through lockdowns in China, and continued Covid-related restrictions in Taiwan where Beijer Electronics has a production facility. Despite this, we’ve succeeded in serving our customers and limiting the impact on our business. I want to take this opportunity to recognize our colleagues who have given 100%, doing their utmost to maintain shipments and service to our customers in these challenging circumstances wherever they can. I’m proud of their efforts, and delighted that we’re clearly seeing the effects of this teamwork as we look back on the quarter.

Russia’s invasion of Ukraine has had a limited impact on the Group. At present, we’re not seeing any significant effect of the conflict on our component shipments.

We’re continuing to work in line with our strategy of strengthening our business entities, and continuously screening potential complementary acquisitions. The strong underlying growth that characterizes our focus segments of energy, rail, infrastructure and manufacturing are sustaining. Positives in the quarter include us being able to meet a lot of customers, participating in key trade events and conferences, which is valuable, not least for making contact with potential new customers.

In the quarter, the Beijer Electronics business entity secured several significant orders from customers using our products for electric vehicle charging infrastructure and energy storage. Combined with Westermo’s significant shipments for rail applications, this is helping reduce CO2 emissions, which is consistent with our ambitions in sustainability.

Macroeconomic conditions remain uncertain due to the conflict in the Ukraine, inflation pressure and persistent Covid-related disruptions, and we’re following progress closely. We think the component shortage will remain challenging for at least the current year. But at the time of writing, we see no signs of any slowdown in the demand for our products. Generally positive market conditions, a record orderbook and progress in the supply of critical components are encouraging more optimism for the full-year 2022. Accordingly, we assess that BEIJER GROUP will achieve significantly better financial performance in 2022 than 2021.”

INVITATION TO PRESENTATION OF THE REPORT

Today, a conference call will be held for press and analysts, where President and CEO Jenny Sjödahl and EVP and CFO Joakim Laurén present the company and comment on the report.

Time: Thursday, July 14, 13:30 CEST

To participate in the conference please dial:

From SE: +46851999383
From UK: +443333009030 
   

To access the presentation please use this link:
https://www.anywhereconference.com?Conference=425022569&PIN=95022808&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). The information was submitted for publication, through the agency of the contact person, on 14-07-2022 13:00 CET.

For more information please contact:

President and CEO, Jenny Sjödahl, tel +46 (0)16 42 80 00, mobile +46 (0)725 89 60 80
Executive VP and CFO Joakim Laurén, tel +46 (0)40 35 84 96, mobile +46 (0)703 35 84 96

Beijer Electronics Group AB is a global technology group offering sophisticated digital solutions for industrial data communication and for control and monitoring systems and IIoT. 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 1.6 billion SEK in 2021.

The company is listed on the Nasdaq Stockholm Main Market's Mid Cap List under the ticker BELE. www.beijergroup.com