Interim report January-September 2022: Best quarter to date – record for both sales and earnings

Third quarter

• Order intake increased by 24 percent to 621 MSEK (502).
• Net sales increased by 38 percent to 567 MSEK (412).
• EBIT more than doubled to 69.4 MSEK (31.9).
• The operating margin increased to 12.2 percent (7.8).
• Profit after tax rose to 51.3 MSEK (21.7).
• Earnings per share amounted to SEK 1.77 (0.75).
     

Nine months

• Order intake increased by 36 percent to 1,949 MSEK (1,433).
• Net sales increased to 1,540 MSEK (1,152).
• EBIT tripled to 138.4 MSEK (46.4).
• Profit after tax rose to 95.4 MSEK (25.2).
• Earnings per share increased to 3.29 SEK (0.87).
• Jenny Sjödahl is new President and CEO effective 1 March, 2022.
   

COMMENTS FROM CEO JENNY SJÖDAHL

“The third quarter of 2022 was beijer group’s best quarter ever for sales and earnings. Order intake for the period increased by 24 percent to 621 MSEK, which means that the level is stable above 600 MSEK for the third quarter in a row and has grown over seven quarters. As before, it is a broad improvement that covers all segments and geographies, where not least our strong position in fast-growing areas such as electricity distribution, electrification and infrastructure pave the way for new profitable business.

Sales increased by 38 percent to 567 MSEK for the quarter to a new record level, which both business entities contributed to. Westermo managed to handle the difficult supply situation better than during the second quarter of the year and increased its sales to 263 MSEK. For Beijer Electronics, sales increased by 45 percent to 306 MSEK, which means that it is now in balance with order intake. Even taking currency effects and price adjustments into account, the group managed to deliver an organic growth of approximately 20 percent.

The growth and the volume driven leverage contributed to an EBIT at a record level of 69 MSEK for BEIJER GROUP, which corresponds to an operating margin of 12.2 percent. I am proud and happy that both business entities show good profitability in the period. Westermo’s margin amounted to 14.5 percent and Beijer Electronics’ margin increased to 14.2 percent.

The global shortage of electronic components continues to affect our business. There is a 12–18-month lead time or many components. Demand continues to exceed supply, which leads to shortages that limit our production volume. The business entities’ intensive work to secure access to components continues, so does initiatives such as circuit board redesign to move away from unobtainable components. All in all, this leads to fluctuation in the production and complex managing of many change orders, which drags down productivity. It also contributes to increased inventory, which in turn has a negative effect on the capital tie-up.

However, we note, for the first time since the component crisis began, more positive tones from our suppliers of electronic components. Demand for especially consumer electronics is now falling, which in combination with the commissioning of new production facilities for semiconductors in the next few quarters should lead to a better balance between supply and demand in 2023.

The macro-economic situation is uncertain, and we are following developments closely. So far, we have succeeded well in compensating for the effects of cost inflation with our own price increases. Both business entities are planning additional price adjustments. Covid 19 has continued to have some impact on our business. While Taiwan opened for travel after the end of the period, China continues to be affected by lock downs in areas where the spread of infection is increasing.

The direct effect on the group of Russia’s war of invasion in Ukraine is very small. The energy crisis and the high electricity costs also have no significant impact on our cost base. Instead, investments in new electricity infrastructure and the continued electrification of society mean great business opportunities for us. Both Beijer Electronics and Westermo contribute strongly to a more sustainable society by supplying equipment necessary for the green transition. We see large investments in important community infrastructure such as railways and trains, smart electricity grids and charging stations for electric vehicles, which drives demand for our products in line with the group’s growth strategy.

After the end of the period, we entered into a new agreement on financing, which provides a stable foundation for the next three to five years, as well as gives muscles to carry out acquisitions in line with our strategy. We continuously evaluate possible complementary acquisitions for the two business entities.

Despite a turbulent world around us, we continue to see strong demand and there is great potential for our business entities. Westermo shows strength in trains and energy. Beijer Electronics also expects growth, albeit at a lower rate compared to the last twelve-month period. A record order book – which was built on further during the third quarter – and good demand contribute to optimism in the shorter perspective. Accordingly, we assess that BEIJER GROUP will achieve significantly better financial performance in 2022 than 2021.

In conclusion, I would like to extend a big thank you to all employees in the group who make efforts beyond the ordinary. It is their work that creates the foundation for our greatly improved result!”
   

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: Wednesday October 26, 09:00 CET

To participate in the conference please dial:

From SE: +46850558355
From UK: +443333009270
   

To access the presentation please use this link:
https://www.anywhereconference.com?Conference=425023653&PIN=62839512&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 26-10-2022 08:00 CET.