Interim Report January–March 2023: Record revenue and profit

First quarter

• Order intake amounted to 617.3 MSEK (661.6).
• Net sales rose by 42 percent to 623.2 MSEK (439.9).
• EBIT tripled to 85.2 MSEK (28.2).
• EBIT margin doubled to 13.7 percent (6.4).
• Profit after tax increased to 55.8 MSEK (16.1).
• Earnings per share improved to 1.95 SEK (0.56).
• Lena Westerholm was appointed as Head of Sustainability, starting in May.
     

Events after the end of the period

• Kristine Lindberg took office as new CEO of the Beijer Electronics business entity.
• Business entity Beijer Electronics acquires German software company Smart HMI.
• Proposal to the AGM to change the name of the Group to Ependion AB.
    

Comment from the CEO, Jenny Sjödahl

”Now that we have closed the first quarter of the year, we can state that Beijer Group’s development continues to be very positive, with records for both sales and earnings. During the period, Beijer Group encountered stable demand, although the overall picture was fragmented just as in the fourth quarter.

Order intake of 617 MSEK was lower than in the comparison period, but stronger than in the fourth quarter of 2022. Westermo’s order intake increased–partly because of extended order horizons with one larger costumer–and the business entity sees continued strong and broad demand. Beijer Electronics saw a lower order booking rate compared to the business entity’s record quarter last year. The change is expected and is mainly due to a normalized customer behaviour with shorter order horizons in combination with a certain uncertainty in the market. Order bookings for the Group were stable above 600 MSEK for the fifth quarter in a row. Despite the strong invoicing, the order book is unchanged and amounted to approximately 1.5 billion SEK at the end of the period.

Sales increased by 42 percent and reached a new record level of 623 MSEK, with both business entities contributing to the increase. For the Westermo business entity, which greatly increased deliveries thanks to an improved component situation, sales reached an all-time high with revenues of 335 MSEK. The Beijer Electronics business entity was at a stable level with revenues of 291 MSEK.

With a strong sales trend, the leverage paid off well: the operating result tripled to 85 MSEK for the period with the operating margin at a record high 13.7 percent. It shows that the financial goal of a 15 percent operating margin is achievable, even if there is more to be done to be able to deliver stable profits at that level. Both business entities contributed to the improvement in earnings. Westermo reached a record of 16.4 percent and Beijer Electronics 15.1 percent operating margin. I am pleased to note that the Beijer Electronics business entity is showing good profitability for the fourth consecutive quarter.

Price increases contributed to lifting the result, while expensive purchases on the spot market mainly affected Westermo’s result negatively. During the period, we saw an improvement in the general supply of electronic components, but a few suppliers still caused problems. A lesson learned from the shortage situation is that we have increased the inventory of certain critical key components, something that in the short term ties up capital and
negatively affects cash flow, but which strengthens our ability to deliver in the future.

During the period, two important recruitments were made to the Group’s management team: Kristine Lindberg was appointed as the new CEO of the Beijer Electronics business entity and assumed her position on 3 April. In addition, Lena Westerholm was appointed Head of Sustainability, a role she will have both for Beijer Group and for the business entity Westermo with the aim of developing the Group’s sustainability work.

After the end of the period, the acquisition of Smart HMI was completed. The German software company has developed its own technology platform - WebIQ - which is a web-based flexible HMI for visualization on traditional operator panels or mobile devices. The acquisition strengthens Beijer Electronics’ product portfolio and contributes to increased growth opportunities.

The quarter has also been characterized by a high level of marketing activities, both physical and digital in both business entities. We are happy to be able to meet our customers in person, which often facilitates our type of sales, largely characterized by problem solving together with the customer. When we work on relatively new segments, such as within Westermo’s energy investment, participation in trade fairs and seminars becomes important to create relationships and find new business opportunities. At the same time, the organization has become very sharp when it comes to usingdigital tools for meetings, training, and marketing, which saves both time, money, and the environment.

Finally, I would like to highlight the proposal, which requires a decision at the AGM, to change the name of the Group from Beijer Electronics Group AB to Ependion AB. The name change reduces the risk of confusion between the parent Group and the business entity Beijer Electronics, which will retain its name, and between Beijer Group and other groups with similar names. It also gives us the opportunity to clarify what the Group stands for and how we
create value. The name Ependion draws inspiration from the Greek word for investment and reminds us of the Group’s main mission: to invest in people, technologies and products that contribute to a secure and connected world.

Beijer Group continues to work with our long-term growth plans. In the medium and long term, we see very good growth in the markets and segments in which we operate. The geopolitical situation and global economic development are still uncertain at the time of writing and we are prepared for different scenarios. However, given the stable demand during the first quarter and a continued strong order book, we feel confident about the development in the near future.”
   

Invitation to presentation of the report

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

Time: Wednesday April 26, 13:30 CEST

To participate in the conference please dial:

From SE: +46200899189
From UK: +448006522435
  

To access the presentation please use this link: https://web.conferenceconsole.com/51512122
  
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 26-04-2023 13:00 CET.