Quarterly Report • Apr 28, 2016
Quarterly Report
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Demand from industrial customers remains sluggish
After five consecutive quarters of increased year-on-year earnings, the Group's profit declined during the first quarter of the year. We are seeing the effects of continued sluggish demand from industrial companies worldwide. During the preceding year, this was offset by strong demand in the nuclear power segment in Habia and the Chassis Springs business area in Lesjöfors. While demand from customers in the nuclear power sector remained strong at the beginning of 2016, Chassis Springs reported a weaker trend. Overall, this meant that sales during the first quarter declined approximately 1 percent and that profit after net financial items fell from MSEK 112 to MSEK 107. The operating margin declined from 12.6 percent to 12.1 percent during the quarter.
Cash flow after capital expenditures amounted to a negative MSEK 2 (neg: 34). As in the preceding year, this negative cash flow was mainly attributable to higher accounts receivable in Lesjöfors due to a seasonal sales increase in the Chassis Springs business area. Net debt totaled MSEK 205 (490). Net debt for 2015 was impacted by the payment of dividends. This year, dividends were paid after the close of the quarter.
Lesjöfors's invoicing fell 5 percent to MSEK 510. The company's two business areas – Chassis Springs and Industrial Springs – experienced an equal decline. Within Chassis Springs, which grew substantially in 2015, both invoicing and order bookings decreased. This decline was primarily attributable to the UK market, which displayed the fastest growth during 2015. These operations are strongly seasonal in nature, with peak sales in the first and second quarters. The level of incoming orders also indicates a slightly weaker trend at the beginning of the second quarter. Industrial Springs continued to feel the impact of the declining demand in general industry. Similar trends were reported in all geographic regions. Order bookings were in line with invoicing in both Industrial Springs and Chassis Springs.
Operating profit amounted to MSEK 90, compared with MSEK 100 in the year-earlier period, and the operating margin declined slightly. This decline in earnings was mainly attributable to the Industrial Springs business area.
Habia's invoicing increased 8 percent to MSEK 204. This increase in invoicing was mainly attributable to higher sales of cables to customers in the nuclear power industry. The company's other customer areas reported unchanged invoicing compared with preceding year. Order bookings were higher than invoicing and significantly higher than order bookings in the preceding year. This year-on-year improvement was attributable to customers in the telecom, nuclear power and defense industries, while order bookings from customers in general industry declined.
Operating profit totaled MSEK 22, compared with MSEK 21 in the year-earlier period, which means that the operating margin was largely unchanged.
Beijer Tech's invoicing amounted to MSEK 188, which was unchanged compared with the preceding year. Fluid Technology reported weak growth and unchanged profitability. Industrial Products reported slightly lower sales than in the year-earlier period and weaker earnings. Profit was mainly impacted by the trend in the offshore sector in Norway.
Operating profit totaled MSEK 4 (1). It should be noted that the first quarter of the preceding year was charged with severance expenses of approximately MSEK 4 related to the change of President.
The trend noted in the first quarter of the year continued into the beginning of the second quarter. Demand in the operating areas impacted by the general economy remained weaker than in the yearearlier period. Sales in Lesjöfors's Chassis Springs business area were also weaker than in 2015. This was partly offset by the strong performance of certain other segments, such as nuclear power cables in Habia. Overall, the comparative data for the second quarter is challenging.
Bertil Persson President and CEO
During the period, order bookings increased 1 percent to MSEK 916 (903). Invoicing totaled MSEK 902 (915), down 1 percent. Fluctuations in exchange rates had a negative impact of 2 percent on order bookings and invoicing.
Operating profit amounted to MSEK 109 (115) and the operating margin was 12.1 percent (12.6). Profit after net financial items totaled MSEK 107 (112). Earnings per share amounted to SEK 2.69 (2.80). Fluctuations in exchange rates and forward agreements had a positive impact of approximately MSEK 4 on earnings, evenly distributed between Lesjöfors and Habia.
Cash flow after capital expenditures was a negative MSEK 2 (neg: 34). Net debt totaled MSEK 205 (490) and the net debt/equity ratio was 10.8 percent (30.8).
Lesjöfors is a full-range supplier of standard and specially produced industrial springs, wire and flat strip components. The company is a dominant player in the Nordic region and one of the largest companies in its industry in Europe. Lesjöfors has manufacturing operations in Sweden, Denmark, Finland, Germany, Latvia, the UK, Slovakia, the US, Mexico and China.
During the quarter, order bookings declined 5 percent to MSEK 511 (540). Invoicing amounted to MSEK 509 (538), down 5 percent. Adjusted for fluctuations in exchange rates, order bookings and invoicing fell 3 percent. Operating profit totaled MSEK 90 (100).
Habia Cable is one of Europe's largest manufacturers of custom-designed cables for customers in the telecom, transport, nuclear power, defense and other industries. The company has manufacturing operations in Sweden, Germany, China and Poland, and conducts sales worldwide.
Order bookings declined MSEK 221 (175) during the year period, up 26 percent. Invoicing increased 8 percent to MSEK 204 (189). Exchange-rate effects had a negative impact of 2 percent on order bookings and invoicing. Operating profit amounted to MSEK 22 (21).
Beijer Tech specializes in industrial trading in the Nordic region and represents several of the world's leading manufacturers. The company's operations are conducted in two business areas: Industrial Products and Fluid Technology/Industrial Rubber.
During the quarter, order bookings and invoicing amounted to MSEK 188 (188). Operating profit totaled MSEK 4 (1).
The Parent Company, Beijer Alma AB, is a holding company that does not conduct external invoicing. The Parent Company reported an operating loss of MSEK 7 (loss: 8) for the quarter.
| Net revenues | |||||||
|---|---|---|---|---|---|---|---|
| MSEK | 2016 | 2015 | 2015 | 2015 | 2015 | 2015 | 2014 |
| Q1 | Q4 | Q3 | Q2 | Q1 | Full-year | Full-year | |
| Lesjöfors | 509.6 | 437.3 | 470.1 | 550.7 | 537.8 | 1,995.9 | 1,725.7 |
| Habia Cable | 204.5 | 205.9 | 198.2 | 171.6 | 189.4 | 765.1 | 790.2 |
| Beijer Tech | 187.6 | 197.4 | 170.3 | 204.9 | 188.0 | 760.6 | 782.1 |
| Parent Company and intra-Group | 0.1 | 0.1 | – | 0.1 | 0.1 | 0.3 | 0.2 |
| Total | 901.8 | 840.7 | 838.6 | 927.3 | 915.3 | 3,521.9 | 3,298.2 |
| Operating profit | |||||||
| MSEK | 2016 | 2015 | 2015 | 2015 | 2015 | 2015 | 2014 |
| Q1 | Q4 | Q3 | Q2 | Q1 | Full-year | Full-year | |
| Lesjöfors | 90.1 | 86.5 | 89.1 | 113.1 | 99.7 | 388.4 | 319.5 |
| Habia Cable | 22.0 | 31.0 | 29.7 | 17.8 | 20.5 | 99.0 | 93.6 |
| Beijer Tech | 4.0 | 3.4 | 6.0 | 7.4 | 0.7 | 17.5 | 44.1 |
| Parent Company and intra-Group | –6.8 | –5.5 | –6.9 | –9.8 | –5.4 | –27.6 | –29.7 |
| Total operating profit | 109.3 | 115.4 | 117.9 | 128.5 | 115.5 | 477.3 | 427.5 |
| Net financial items | –2.2 | –0.9 | –2.3 | –3.3 | –3.9 | –10.4 | –3.9 |
| Profit after net financial items | 107.1 | 114.5 | 115.6 | 125.2 | 111.6 | 466.9 | 423.6 |
No sales are conducted between segments.
The Annual General Meeting held on April 5, 2016 approved a dividend of SEK 9.50 (8.50) per share. The Meeting re-elected Carina Andersson, Marianne Brismar, Anders G. Carlberg, Peter Nilsson, Caroline af Ugglas, Anders Ullberg and Johan Wall as regular Board members. Johan Wall was elected as Chairman of the Board. Anders Wall declined re-election.
No significant events occurred after the end of the period.
The Group's material risks and uncertainties include business and financial risks. Business risks may include major customer exposures to individual industries or companies. Financial risks primarily pertain to foreign currency risks that arise because more than 95 and 87 percent of sales for Habia and Lesjöfors, respectively, are conducted outside Sweden, while approximately 60 percent of production takes place outside Sweden. Beijer Tech does not have a corresponding foreign currency risk since about 70 percent of its sales are conducted in Sweden.
Management of the Group's financial risks is described in Note 30 of the 2015 Annual Report. The Group is deemed to have a favorable risk spread across industries and companies and the assessment is that the risk situation has remained unchanged during the year.
| Group | |||||
|---|---|---|---|---|---|
| MSEK | 2016 | 2015 | 2015 | 2014 | 2013 |
| Q1 | Q1 | Full-year | Full-year | Full-year | |
| Net revenues | 901.8 | 915.3 | 3,521.9 | 3,298.2 | 3,066.5 |
| Cost of goods sold | –625.7 | –628.9 | –2,367.8 | –2,229.1 | –2,071.5 |
| Gross profit | 276.1 | 286.4 | 1,154.1 | 1,069.1 | 995.0 |
| Selling expenses | –90.1 | –90.0 | –366.1 | –343.3 | –325.0 |
| Administrative expenses | –77.6 | –81.7 | –313.2 | –300.8 | –276.8 |
| Other income | 0.6 | 2.0 | |||
| Profit from participations in associated companies | 0.9 | 0.8 | 2.5 | 1.9 | 1.1 |
| Operating profit | 109.3 | 115.5 | 477.3 | 427.5 | 396.3 |
| Interest income | 0.7 | – | 1.0 | 6.6 | 2.1 |
| Interest expenses | –2.9 | –3.9 | –11.4 | –10.5 | –13.7 |
| Profit after net financial items | 107.1 | 111.6 | 466.9 | 423.6 | 384.7 |
| Tax on net profit for the period | –25.9 | –27.3 | –113.2 | –104.3 | –95.7 |
| Net profit attributable to Parent Company shareholders | 81.2 | 84.3 | 353.7 | 319.3 | 289.0 |
| Other comprehensive income | |||||
| Items that may be reclassified to profit or loss | |||||
| Cash-flow hedges | 2.6 | 0.4 | 12.6 | –4.7 | –6.4 |
| Translation differences | –13.3 | 18.0 | –19.7 | 60.3 | 19.7 |
| Total other comprehensive income after tax | –10.7 | 18.4 | –7.1 | 55.6 | 13.3 |
| Total comprehensive income attributable to Parent Company shareholders |
70.5 | 102.7 | 346.6 | 374.9 | 302.3 |
| Other comprehensive income pertains in its entirety to items that may be reclassified to profit or loss. |
|||||
| Net earnings per share | |||||
| before and after dilution, SEK | 2.69 | 2.80 | 11.74 | 10.60 | 9.59 |
| Dividend per share, SEK | – | – | 9.50 | 8.50 | 8.00 |
| Includes amortization and depreciation in the amount of, MSEK |
28.2 | 27.7 | 110.6 | 98.4 | 86.7 |
| Parent Company | |||||
| MSEK | 2016 | 2015 | 2015 | 2014 | 2013 |
| Q1 | Q1 | Full-year | Full-year | Full-year | |
| Administrative expenses | –11.2 | –12.2 | –45.8 | –41.0 | –40.4 |
| Other operating income | 4.6 | 4.6 | 18.2 | 18.2 | 18.2 |
| Operating loss | –6.6 | –7.6 | –27.6 | –22.8 | –22.2 |
| Group contributions | – | – | 52.1 | 26.0 | 40.0 |
| Income from participations in Group companies | – | – | 270.0 | 246.0 | 209.0 |
| Interest income and similar revenues | 0.1 | 0.1 | 0.6 | 0.6 | 1.8 |
| Interest expenses and similar expenses | –0.1 | –0.1 | –0.9 | –0.8 | –2.7 |
| Profit after net financial items | –6.6 | –7.6 | 294.2 | 249.0 | 225.9 |
| Tax on net profit for the period | 1.4 | 1.4 | –6.1 | –1.2 | –4.6 |
| Net profit/loss | –5.2 | –6.2 | 288.1 | 247.8 | 221.3 |
No items are attributable to other comprehensive income.
| Group |
|---|
| ------- |
| MSEK | 2016 | 2015 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|
| Mar 31 | Mar 31 | Dec 31 | Dec 31 | Dec 31 | |
| Assets | |||||
| Fixed assets | |||||
| Intangible assets | 507.6 | 542.0 | 508.6 | 546.6 | 504.8 |
| Tangible assets | 757.9 | 758.0 | 758.3 | 747.0 | 640.0 |
| Deferred tax assets | 18.7 | 25.8 | 18.6 | 25.6 | 23.9 |
| Financial assets | 29.1 | 29.5 | 28.7 | 27.8 | 23.8 |
| Total fixed assets | 1,313.3 | 1,355.3 | 1,314.2 | 1,347.0 | 1,192.5 |
| Current assets | |||||
| Inventories | 648.1 | 655.4 | 673.3 | 636.5 | 541.2 |
| Receivables | 734.0 | 769.7 | 630.1 | 568.9 | 560.5 |
| Cash and bank balances | 272.3 | 88.2 | 252.2 | 191.3 | 253.8 |
| Total current assets | 1,654.4 | 1,513.3 | 1,555.6 | 1,396.7 | 1,355.5 |
| Total assets | 2,967.7 | 2,868.6 | 2,869.8 | 2,743.7 | 2,548.0 |
| 2016 | 2015 | 2015 | 2014 | 2013 | |
| Mar 31 | Mar 31 | Dec 31 | Dec 31 | Dec 31 | |
| Shareholders' equity and liabilities | |||||
| Shareholders' equity | |||||
| Share capital | 125.5 | 125.5 | 125.5 | 125.5 | 125.5 |
| Other contributed capital | 444.4 | 444.4 | 444.4 | 444.4 | 444.4 |
| Reserves Retained earnings, including net profit for the |
15.2 | 51.2 | 25.8 | 32.8 | –22.8 |
| period | 1,320.8 | 970.2 | 1,239.6 | 1,142.0 | 1,063.8 |
| Shareholders' equity attributable to Parent | |||||
| Company shareholders | 1,905.9 | 1,591.3 | 1,835.3 | 1,744.7 | 1,610.9 |
| Non-controlling interests | 3.7 | 3.8 | 3.7 | 3.8 | 3.6 |
| Total shareholders' equity | 1,909.6 | 1,595.1 | 1,839.0 | 1,748.5 | 1,614.5 |
| Non-current liabilities to credit institutions | 194.2 | 244.6 | 206.0 | 229.1 | 181.3 |
| Other non-current liabilities | 51.6 | 80.3 | 56.3 | 84.8 | 117.9 |
| Current liabilities to credit institutions | 283.3 | 333.3 | 240.2 | 152.0 | 164.8 |
| Current non-interest-bearing liabilities | 529.0 | 615.3 | 528.3 | 529.3 | 469.5 |
| Total liabilities | 1,058.1 | 1,273.5 | 1,030.8 | 995.2 | 933.5 |
| Total shareholders' equity and liabilities | 2,967.7 | 2,868.6 | 2,869.8 | 2,743.7 | 2,548.0 |
| MSEK | 2016 | 2015 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|
| Mar 31 | Mar 31 | Dec 31 | Dec 31 | Dec 31 | |
| Assets | |||||
| Fixed assets | |||||
| Tangible assets | 1.1 | 1.1 | 1.1 | 1.1 | 1.0 |
| Financial assets | 532.2 | 532.2 | 532.2 | 532.2 | 532.2 |
| Total fixed assets | 533.3 | 533.3 | 533.3 | 533.3 | 533.2 |
| Current assets | |||||
| Receivables | 199.8 | 178.3 | 367.6 | 327.9 | 277.3 |
| Cash and cash equivalents | 139.8 | 0.3 | 9.3 | 1.4 | 41.1 |
| Total current assets | 339.6 | 178.6 | 376.9 | 329.3 | 318.4 |
| Total assets | 872.9 | 711.9 | 910.2 | 862.6 | 851.6 |
| MSEK | 2016 | 2015 | 2015 | 2014 | 2013 |
| Mar 31 | Mar 31 | Dec 31 | Dec 31 | Dec 31 | |
| Shareholders' equity and liabilities | |||||
| Share capital | 125.5 | 125.5 | 125.5 | 125.5 | 125.5 |
| Statutory reserve | 444.4 | 444.4 | 444.4 | 444.4 | 444.4 |
| Retained earnings | 299.1 | 11.0 | 11.0 | 19.3 | 39.1 |
| Net profit/loss for the period | –5.5 | –6.2 | 288.1 | 247.8 | 221.3 |
| Total shareholders' equity | 863.5 | 574.7 | 869.0 | 837.0 | 830.3 |
| Current liabilities to credit institutions | – | 122.5 | 19.1 | 6.0 | – |
| Current non-interest-bearing liabilities | 9.4 | 14.7 | 22.1 | 19.6 | 21.3 |
| Total shareholders' equity and liabilities | 872.9 | 711.9 | 910.2 | 862.6 | 851.6 |
| MSEK | 2016 | 2015 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|
| Full | Full | ||||
| Q1 | Q1 | year | Full-year | year | |
| Cash flow from operating activities before change in working | |||||
| capital and capital expenditures | 103.4 | 109.1 | 456.0 | 422.4 | 394.7 |
| Change in working capital, increase (–) decrease (+) | –80.6 | –111.7 | –92.7 | –19.8 | 7.6 |
| Cash flow from operating activities | 22.8 | –2.6 | 363.3 | 402.6 | 402.3 |
| Investing activities | –24.3 | –31.7 | –111.5 | –141.4 | –125.3 |
| Acquired companies less cash and cash equivalents | – | – | – | –115.2 | –76.9 |
| Cash flow after capital expenditures | –1.5 | –34.3 | 251.8 | 146.0 | 200.1 |
| Financing activities | 21.6 | –68.8 | –190.9 | –208.5 | –185.8 |
| Change in cash and cash equivalents | 20.1 | –103.1 | 60.9 | –62.5 | 14.3 |
| Cash and cash equivalents at beginning of period | 252.2 | 191.3 | 191.3 | 253.8 | 239.5 |
| Cash and cash equivalents at end of period | 272.3 | 88.2 | 252.2 | 191.3 | 253.8 |
| Approved but not utilized committed credit facilities | 618.5 | 467.0 | 630.8 | 645.0 | 461.0 |
| Available liquidity | 890.8 | 555.2 | 883.0 | 836.3 | 714.8 |
| MSEK | 2016 | 2015 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|
| Q1 | Q1 | Full-year | Full-year | Full-year | |
| Opening shareholders' equity attributable to Parent Company shareholders |
1,835.4 | 1,744.8 | 1,744.8 | 1,610.9 | 1,519.5 |
| Comprehensive income for the period | 70.5 | 102.6 | 346.6 | 374.9 | 302.3 |
| Dividend paid | – | –256.1 | –256.1 | –241.0 | –210.9 |
| Closing shareholders' equity attributable to Parent Company | |||||
| shareholders | 1,905.9 | 1,591.3 | 1,835.3 | 1,744.8 | 1,610.9 |
| Non-controlling interests | 3.7 | 3.8 | 3.6 | 3.8 | 3.6 |
| Total closing shareholders' equity | 1,909.6 | 1,595.1 | 1,838.9 | 1,748.6 | 1,614.5 |
| Retained earnings, including net profit |
|||||
|---|---|---|---|---|---|
| MSEK | Share capital | Other contributed capital | Reserves | for the period | Total |
| December 31, 2015 Comprehensive income for |
125.5 | 444.4 | 25.8 | 1,239.6 | 1,835.3 |
| the period | –10.6 | 81.2 | 70.6 | ||
| March 31, 2015 | 125.5 | 444.4 | 15.2 | 1,320.8 | 1,905.9 |
| 2015 | 2014 | 2013 | |
|---|---|---|---|
| Mar 31 | Dec 31 | Dec 31 | |
| Number of shares outstanding | 30,131,100 | 30,131,100 | 30,131,100 |
| Total number of shares, after full dilution | 30,131,100 | 30,131,100 | 30,131,100 |
| Average number of shares, after full dilution | 30,131,100 | 30,131,100 | 30,131,100 |
Of the total number of shares outstanding, 3,325,000 are Class A shares and the remaining shares are Class B shares.
Accounting policies
This interim report was prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European Union (EU). The presentation of the interim report complies with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act.
No new or revised IFRS that took effect in 2016 had a significant impact on the Group. Accounting policies and terms of calculation are unchanged compared with those applied in the 2015 Annual Report. Significant accounting and valuation policies are found on pages 48–51 of the 2015 Annual Report.
The fair value of financial assets and liabilities is deemed to correspond to the carrying amount.
The Parent Company, Beijer Alma AB, applies the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities. These accounting policies correspond with the preceding year and with the consolidated accounting policies where applicable.
The interim information on pages 1-3 are an integrated part of this financial report.
| 2016 | 2015 | 2015 | 2014 | 2013 | |
|---|---|---|---|---|---|
| Q1 | Q1 | Full-year | Full-year | Full-year | |
| Number of shares | 30,131,100 | 30,131,100 | 30,131,100 | 30,131,100 | 30,131,100 |
| Net revenues, MSEK | 901.8 | 915.3 | 3,521.9 | 3,298.2 | 3,066.5 |
| Operating profit, MSEK | 109.3 | 115.5 | 477.3 | 427.5 | 396.3 |
| Profit before tax, MSEK | 107.1 | 111.6 | 466.9 | 423.6 | 384.7 |
| Earnings per share after tax, SEK | 2.69 | 2.80 | 11.74 | 10.60 | 9.59 |
| Earnings per share after 22.0% standard tax, SEK | 2.77 | 2.89 | 12.09 | 10.96 | 9.96 |
| Cash flow after capital expenditures, excluding acquisitions per share, SEK |
0.05 | –1.14 | 8.36 | 8.66 | 9.19 |
| Return on shareholders' equity, % | 17.9 | 20.9 | 20.3 | 19.7 | 19.2 |
| Return on capital employed, % | 18.9 | 21.5 | 21.7 | 21.3 | 21.1 |
| Shareholders' equity per share, SEK | 63.25 | 52.81 | 60.91 | 57.91 | 53.46 |
| Equity ratio, % | 64.2 | 55.5 | 64.0 | 63.6 | 63.2 |
| Net debt/equity ratio, % | 10.8 | 30.8 | 10.6 | 10.9 | 5.7 |
| Cash and cash equivalents, including unutilized credit facilities, MSEK |
890.8 | 555.2 | 883.0 | 836.3 | 714.8 |
| Capital expenditures, MSEK | 31.1 | 30.5 | 35.2 | 140.0 | 126.4 |
| Interest-coverage ratio, multiple | 37.6 | 29.6 | 41.8 | 41.3 | 29.0 |
| Number of employees at end of period | 2,291 | 2,284 | 2,342 | 2,179 | 2,132 |
Uppsala, April 28, 2016
Beijer Alma AB (publ)
Bertil Persson President and CEO
This report has not been reviewed by the company's auditors.
Bertil Persson, President and CEO, Telephone +46 8 506 427 50, [email protected] Jan Blomén, Chief Financial Officer, Telephone +46 18 15 71 60, [email protected]
______________________________________________________________________________________
www.lesjoforsab.com www.habia.com www.beijertech.se
Next report date: Interim report on August 18, 2016.
Beijer Alma AB (publ)
Dragarbrunnsgatan 45, Box 1747, SE-751 47 Uppsala, Sweden. Tel: +46 18 15 71 60. Fax +46 18 15 89 87. Registered office: Uppsala. Corp. Reg. No: 556229-7480. www.beijeralma.se
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