Interim report January - March 2021

Increased profitable growth thanks to strong recovery and strict cost control.

Group

Demand was favorable in most of the Group’s customer segments and geographic regions during the first quarter. Order bookings and sales increased both sequentially compared with the fourth quarter and compared with the year-earlier period. The operating margin improved significantly thanks to a competitive cost base and a favorable product and segment mix. Combined, this led to the strongest results in the Group’s history. Our cash flow was also stronger than in previous first quarters and was positively impacted by our continued strict control of working capital.

Although the pandemic did not have a significant impact on our customers or on demand levels for the Group during the quarter, it did affect our way of working as our employees continued to work from home and travel remained limited, which also contributed to lower overheads. We are prepared to take action should we face any indirect effects of the pandemic, such as rising raw material and freight costs or component shortages among customers.

Subsidiaries

Lesjöfors increased both its order bookings and sales during the quarter, and production was in full swing in order to meet demand. The largest increase was reported in the Chassis Springs business area, driven by higher demand among end customers and a build-up of inventory among customers after a colder winter. Order bookings also increased in most geographic regions in the Industry business area, with Asia accounting for the largest increase.

Habia Cable’s order bookings and sales recovered compared with the preceding quarter, mainly among industrial customers. Combined with lower costs, a positive product mix in project sales and telecom resulted in a significantly improved operating margin during the quarter.

Beijer Tech also noted favorable demand in most customer segments during the quarter, and both order bookings and sales increased organically, mainly in the Fluid Technology business area and in Norway. Acquisitions also contributed to profitable growth.

Acquisitions

During the quarter, we continued our efforts to identify suitable new acquisitions in order to pursue profitable growth. Two new companies were acquired by Beijer Tech in early April: Noxon, which strengthens Beijer Tech’s offering in fluid technology and water treatment, and Novosystems, which complements the INU group geographically and will enable growth in building automation.

Although the pandemic is still not over, some of the uncertainty that dominated many of our markets has subsided, and we noted continued favorable demand early in the second quarter.