Beijer Electronics Group — Interim / Quarterly Report 2013

Feb 6, 2014

January—December 2013

Increased sales and improved operating profit in the fourth quarter

Fourth Quarter

• • Order intake increased by 1% to 352.4 MSEK (349.3).
• • Net sales rose by 8% to 366.3 MSEK (340.6).
• • Operating profit increased by 7% to 20.0 MSEK (18.7).
• • The quarter was charged with restructuring expenses of 5.6 MSEK.
• • Profit after tax amounted to 8.5 MSEK (17.3).

Full Year

• • Order intake increased by 2%
• to 1,401.6 MSEK (1,373.4).
• • Net sales were MSEK 1,376.2 MSEK (1,367.2).
• • Operating profit was 87.4 MSEK (99.5).
• • Profit after tax amounted to 44.4 MSEK (53.4).
• • Earnings per share were 2.32 SEK (2.62).
• • The Board of Directors is proposing a dividend of 1,25 SEK (1.25) per share.

Financial Statement, Beijer Electronics AB

Comments from Fredrik Jönsson, Our CEO

"Beijer Electronics' operations continued to recover in the fourth quarter, with healthy sales growth and somewhat higher order intake. The same applies to operating profit, even if it was reduced by restructuring expenses in Germany and a temporary but unfavorable sales mix, which meant lower margins.

But the recovery is slow. Our external environment still features uncertainty, with a hesitant sentiment towards large-scale investments. Meanwhile, the geographical outlook is divided, with healthy demand in the US, certain bright spots in Europe, whilethings are progressing slowly in Asia. The group's different business areas also present a divided picture.

The IDC business area continued to impress in the fourth quarter, with robust sales gains, and doubled its operating profit. This business area secured its status as the leading vendor of high-quality communications solutions and now has a solid platform for continued growth.

Order intake and sales in the HMI Products business area made positive progress in thefourth quarter but profits are way off the business area's long-term target. Structural issues in Germany were rectified in the fourth quarter, which triggered a non-recurring expense of 5.6 MSEK. In the year, as in the fourth quarter, HMI Products was also affected by a small number of very large orders, with low margins in the US automotive segment.

The Automation business area is still encountering a problematic market. For example, demand from the marine side in Norway was very poor. Despite notably lower sales in thefourth quarter and full year, Automation has defended its margins creditably. Its new own-brand product range, launched in the fall, is another positive, gaining a good reception on the market, helping lift sales in the fourth quarter.

Overall, 2013 can be viewed as an off year in purely operational terms. Strategically, we consolidated our positioning with acquisitions like Petek Teknoloji of Turkey and 15% of Altus Sistemas de Automação of Brazil, and through a much-expanded own-brand product range, and continued brisk tempo of product development. The group's order intake has turned upwards, giving us some confidence of gradual stabilization and better demand growth in 2014."

Market and Surrounding World

The global industrial automation market continued to stabilize in the fourth quarter, even if the general demand outlook features caution. Meanwhile, as stated above, the differences between individual markets remain substantial. For example, a fading recovery in China and continued poor demand across parts of Europe was not fully offset by good growth on the American market.

The Group in the Fourth Quarter

The group's order intake increased by some 1% to 352.1 MSEK (349.3) in the fourth quarter of 2013. Sales increased organically by 8% to 366.3 MSEK (340.6). Currency adjusted, the sales increase was somewhat higher. IDC reported a robust sales increase. Similarly, HMI Products posted good sales gains, whilesales in Automation decreased.

Sales in Sweden and Finland increased, but decreased in Norway and Denmark. Overall, progress in the rest of Europe was somewhat more positive, with continued gains in the UK and France. Sales performance in Germany

	Sales Quarter 4			Operating Profit Quarter 4		Sales Full Year	Operating Profit Full Year
MSEK	1312	1212	1312	1212	1312	1212	1312	1212
Business Area Automation	108.0	123.3	7.1	8.2	442.9	479.0	28.9	30.4
Business Area HMI Products	172.2	154.2	3.6	7.7	616.9	620.3	26.8	58.7
Business Area IDC	111.1	89.9	10.3	5.2	409.0	370.3	37.9	27.3
Intra-group sales	-25.0	-26.8			-92.6	-102.4
Group adjustments			-1.0	-2.4			-6.2	-16.9
Beijer Electronics Group	366.3	340.6	20.0	18.7	1,376,2	1,367,2	87.4	99.5

Business Area Sales and Operating Profit

was positive. In the US, the upturn continued, albeit at a somewhat slower rate. Sales decreased in China, but increased in the rest of Asia.

The group's operating profit before depreciation increased by 2% to 36.4 MSEK (35.7) after restructuring expenses. Operating profit increased by 7% to 20.0 MSEK (18.7), mainly due to higher sales volumes. This equated to an operating margin of 5.5% (5.5). Excluding nonrecurring expenses, operating profit for the quarter was 25.6 MSEK, equating to 7%.Total development expenses were 30.0 MSEK (28.2).

Profit beforetax increased by 37% to 16.2 MSEK (11.8). Net financial income/expense was -3.8 MSEK (-6.9). Profit afterestimated tax was 8.5 MSEK (17.3). The group reported net tax revenue in the fourth quarter of 2012 as a consequence of an altered tax ratein Sweden and theensuing positive impact on the group's deferred tax liabilities. The corresponding effect did not occur in 2013. Earnings per share after estimated tax were 0.43 SEK (0.85).

in the full year. Currency adjusted, order intake increased by 4%.The group's sales increased by 1% to 1,376.2 MSEK (1,367.2). Currency adjusted, sales increased by 3%.

The group's operating profit before depreciation was 151.3 MSEK (158.7), equating to 11.0% (11.6). Operating profit was 87.4 MSEK (99.5), equating to an operating margin of 6.3% (7.3). The lower profit is due to nonrecurring expenses of 5.6 MSEK, higher depreciation and temporarily low margins in the US automotive segment. Total development expenses were 109.7 MSEK (111.5).

Profit before tax was 71.9 MSEK (73.1). Net financial income/expense was -15.5 MSEK (-26.4). Thetax expense for the full year 2013 was higher than 2012 due to a nonrecurring effect caused by the reduced tax rate in Sweden in 2012. Profit after estimated tax was 44.4 MSEK (53.4). Earnings per share after estimated tax were 2.32 SEK (2.62).

Dividend

The Group in the Full Year

Order intakeincreased by 2% to 1,401.6 MSEK (1,373.4)

TheBoard ofDirectorsis proposing a dividend of 1,25 SEK (1.25) pershareforthe financial year 2013.

The bars and left-hand scale indicate quarterly sales. The curve and righthand scale show rolling four quarter sales.

The bars and left-hand scale indicate quarterly profit after depreciation. The curve and right-hand scale show rolling four quarter profit after depreciation.

HMI Products Business Area

HMI Products' continued its order intake recovery in the fourth quarter. Sales continued to make positive progress, with upturns in the US and Europe. However, therecovery in Asia was slower. As previously reported, profit in the fourth quarter was charged with restructuring expenses of 5.6 MSEK. Profit was also reduced by lower margins in the US, explained above.

Fourth Quarter

Order intake increased by 10% to 148.8 MSEK (135.2). Sales increased by 12% to 172.2 MSEK (154.2). Operating profit before depreciation was 10.0 MSEK (13.5). Operating profit was 3.6 MSEK (7.7). The operating margin was 2.1% (5.0). This lower profit is explained by restructuring expenses in Germany, higher depreciation and the low margins in the US automotive segment. Excluding the non-recurring expenses in Germany, operating profit was 9.2 MSEK, equating to a margin of 5.3%.

Full Year

Business area order intake increased by 7% to 626.2 MSEK (585.1). Adjusted for negative currency effects, it increased by 9%. Sales decreased by just under 1% to 616.9 MSEK (620.3). Currency adjusted, sales increased by 2%. Operating profit before depreciation was 51.1 MSEK (81.4). Operating profit was 26.8 MSEK (58.7). This equated to an operating margin of 4.4% (9.5).

Sales by Geographical Market, HMI Products

Sales by geographical market for the full year 2013 compared to 2012.

Automation Business Area

The market in the Nordics for the Automation business area remained weak in thefourth quarter, mainly because of the absence of the major investment projects that featured throughout 2013. The whole market is featuring caution and longer decision processes. The downturn was especially apparent on the Marine side in Norway, and on the Danish market. The Swedish market also contracted, but at a slower rate, while the Finnish market rose somewhat.

The group completed its biggest product launch to date in the third quarter, presenting a substantially expanded and broader offering of Beijer Electronics-branded products. This launch was followed by intensive marketing efforts and extensive customer contacts during the fourth quarter. The new product range was well received on the market, having a positive impact on sales in the fourth quarter.

Despite a significant sales shortfall, through targeted activities, Automation was able to defend its profitability in the fourth quarter and the full year.

Fourth Quarter

Business area order intake was 113.6 MSEK (130.5), equating to a decrease of 13%. Automation's sales decreased by 12% to 108.0 MSEK (123.3). Operating profit before depreciation was 7.9 MSEK (9.1). Operating profit was 7.1 MSEK (8.2),equating to an operating margin of 6.6% (6.7). The lower figure is due to lower sales volumes.

Full Year

Order intake decreased by 10% to 436.6 MSEK (484.3). Sales decreased by 8% to 442.9 MSEK (479.0). Adjusted for currency effects, it decreased by 6%. Operating profit before depreciation was 32.2 MSEK (34.0). Operating profit was 28.9 MSEK (30.4), equating to an operating margin of 6.5% (6.3). The lower profit is due to lower sales volume.

Sales by Geographical Market, Automation

Sales by geographical market for the full year 2013 compared to 2012.

Sales, Automation

Industrial Data Communication Business Area

The IDC business area continued its brisk progress in the fourth quarter, achieving record order intake and sales for the second consecutive quarter. This positive performance is a result of the business area's goal-oriented and long term focus on Beijer Electronics' network technology with ownbrand software and selected segments.

Sales of newly developed products now represent 45% of IDC's total sales. Sales of network equipment to the oil and gas industry, the mining industry and rail segment continued to perform well. Westermo's start-up in China in 2012 has already achieved successes, with sales beating expectations in 2013. With sales of over 400 MSEK and good profitability, IDC has a solid platform for continued good growth.

Fourth Quarter

Business area order intakeincreased by 5% to 112.7 MSEK

(107.9). Sales increased by 24% to 111.1 MSEK (89.9). Operating profit before depreciation increased by 55% to 17.1 MSEK (11.0), equating to 15.4%. Operating profit almost doubled to 10.3 MSEK (5.2).The operating margin was 9.3% (5.8).Thesharp improvement in operating profit is due to higher sales volumes and increased productivity. Meanwhile, profit was charged with higher depreciation.

Full Year

Business area order intake was up by 7% to 435.1 MSEK (405.3).Currency adjusted, order intakeincreased by 10%. Sales increased by 10% to 409.0 MSEK (370.3). Operating profit before depreciation increased by 36% to 64.3 MSEK (47.2), equating to 15.7%. Operating profit increased by 39% to 37.9 MSEK (27.3). This corresponded to a margin of 9.3% (7.4). The sharp improvement in operating profit is due to higher sales volumes.

Other Financial Information

Group investments including capitalized development expenses and acquisitions amounted to 140.9 MSEK (49.8) in the full year. Cash flow from operating activities including changes in working capital was 207.9 MSEK (99.8). Equity was 391.4 MSEK (384.4) as of December 31, 2013. The equity ratio was 27.2% (28.5). Cash and cash equivalents were 147.9 MSEK (128.5). Net debt was 559.9 MSEK (521.6). The average number of employees was 776 (752).

Prospects for 2014

The group's sales and operating profit increased in the fourth quarter. However, uncertainty in the world around us remains substantial, and despite a stronger order book, Beijer Electronics expects no notable improvement to growth in the first quarter of 2014. However, there aresigns of gradual economic stabilization, resulting in cautious optimism regarding the full year 2014.

Significant Events

In April 2013, Beijer Electronics signed a three-year distributor agreement with Mitsubishi Electric. This agreement means this collaboration, which has been in place for over 30 years, will continue, with Beijer Electronics serving as main distributor of Mitsubishi Electric's automation products on the Nordic and Baltic markets.

Coincident with this new agreement, Beijer Electronics repurchased the15% minority stakethat Mitsubishi Electric held in the Automation business area. The repurchase streamlines therelationshipwith Mitsubishi Electric,which is a supplier and customer of Beijer Electronics.

In April 2013, Beijer Electronics acquired 15% of Altus

Sistemas de Automação S.A. of Brazil, with an option to acquire up to 49% of this company. Altus develops and manufactures high-technology control systems.The acquisition meant Beijer Electronics consolidating its presence on the Brazilian market, gaining access to high-quality control system products for the global market.

In May 2013, Beijer Electronics acquired Turkish automation company Petek Teknoloji. Petek, which has been Beijer Electronics' distributor in Turkey since 2005, is a full-range automation vendor, with annualized sales of 13 MSEK. The acquisition meant Beijer Electronics gained a direct channel to a growing market, with ongoing investment in the automotive and water and waste industries.

Segment Reporting 2014

Beijer Electronics will change its reporting of operating segments coincident with its first Interim Report for 2014. Current business areas Automation and HMI Products will be merged together into the Industrial Automation business area. Accordingly, reporting will be presented in the Industrial Automation and Industrial Data Communication (IDC) operating segments.

The Board of Directors Beijer Electronics AB (publ) Malmö, Sweden, February 6, 2013

For more information, please contact: CEO and President Fredrik Jönsson, tel +46 (0)40 35 86 10, +46 (0)70 517 1626 or CFO Anna Belfrage, tel +46 (0)40 35 86 53, +46 (0)70 635 8653.

Accounting Principles

For the group, this Financial Statement has been prepared in accordance with IAS 34 Interim Financial Reporting and applicableregulations of the Swedish Annual Accounts Act. The Financial Statement for the parent company has been prepared in accordance with the Swedish Annual Accounts Act's chapter 9, Interim Reporting. The accounting princip¬les applied for the group and parent company are consistent with those accounting principles used when preparing the latest annual accounts, with the exception of the accounting standard IAS 19 'Employee Benefits.'

The Amendment of accounting standard IAS 19 'Employee Benefits' means that since 1 January 2013, the group no longer applies what is termed 'the corridor met¬hod' when accounting for pension obligations. Actuarial gains and losses on pension obligations are now recognized in other comprehensiveincome as they arise. Dueto this change of principal, previous year's comparative figures, including key figures, have been restated, and theeffect of the amendment is disclosed separately in the Interim Report.

This Report has not been subject to review by the company's auditors.

Year in Summary

Income Statement—Group

SEK 000	Quarter 4 2013	Quarter 4 2012	Full Year 2013	Full Year 2012
Net turnover	366,333	340,608	1,376,187	1,367,163
Other operating revenue	1,160	1,250	1,509	-2,423
Operating expenses excluding depreciation and amortisation	-331,112,a)	-306,198	-1,226,383,a)	-1,206,085
Operating profit before depreciation and amortization	36,381	35,660	151,313	158,655
Amortization, intangible assets	-11,778	-11,361	-46,182	-40,822
Depreciation, property, plant and equipment	-4,585	-5,594	-17,764	-18,293
Operating profit	20,019	18,705	87,367	99,540
Net financial items	-3,838	-6,887	-15,493	-26,419
Profit before tax	16,181	11,818	71,874	73,121
Estimated tax	-7,676	5,451	-27,508	-19,765
Net profit	8,505	17,269	44,366	53,356
Attributable to equity holders of the parent	8,275	16,277	44,218	49,939
Attributable to minority interest	230	992	148	3,417
Earnings per share, SEK b)	0.43	0.85	2.32	2.62

a) Of which non-recurring items were -5,633,000 SEK

b) The number of shares of the company increased through the issue of 133,122 new shares, and is 19,067,586 (18,934,464). Earnings per share for previous periods have been restated.

Statement of Comprehensive Income—Group

	Quarter 4	Quarter 4	Full Year	Full Year
SEK 000	2013	2012	2013	2012
Net profit	8,505	17,269	44,366	53,356
Actuarial gains and losses	1,800	-2,565	9,714	-6,183
Translation differences	3,649	7,719	-11,706	-11,845
Comprehensive income	13,954	22,423	42,374	35,328
Attributable to equity holders of the parent	13,705	21,210	41,399	31,998
Attributable to minority interest	249	1,213	975	3,330

Balance Sheet—Group

SEK 000	Dec 31, 2013	Dec 31, 2012
Assets
Fixed assets	850,863	776,692
Current assets	458,020	518,834
Cash equivalents and short-term investments	147,926	128,469
Total assets	1,456,809	1,423,995
Liabilities and shareholders' equity
Shareholders' equity	391,363	384,400
Minority share of shareholders' equity	4,800	21,316
Long-term liabilities	544,766	545,613
Current liabilities	515,880	472,666
Total liabilities and shareholders' equity	1,456,809	1,423,995
Of which interest-bearing liabilities	707,776	650,091

Statement of Changes to Shareholders' Equity—Group

SEK 000	Dec 31, 2013	Dec 31, 2012
Attributable to equity holders of the parent
Opening balance, shareholders' equity, 1 January	415,843	420,265
Change of accounting principle	-31,443	-25,260
New share issue	45
Other paid-up capital	8,049
Dividend	-23,668	-42,603
Acquisitions	-18,862
Comprehensive income	41,399	31,998
Closing balance, shareholders' equity	391,363	384,400
Minority interest
Opening balance, 1 January	21,316	18,886
Acquisitions		-900
Dividend	-17,491
Comprehensive income	975	3,330
Closing balance	4,800	21,316

Key Figures—Group

	Dec 31, 2013	Dec 31, 2012
Operating margin, %	6.3	7.3
Profit margin, %	3.2	3.9
Equity ratio, %	27.2	28.5
Shareholders' equity per share, SEK	20.5	20.2
Earnings per share, SEK	2.32	2.62
Return on equity after tax, %	11.1	13.0
Return on capital employed, %	8.8	9.6
Return on net operating assets, %	14.0	15.1
Average number of employees	776	752

Cash Flow Statement—Group

SEK 000	Dec 31, 2013	Dec 31, 2012
Cash flow from operating activities before changes in working capital	115,803	93,331
Change in working capital	92,107	6,447
Cash flow from operating activities	207,910	99,778
Cash flow from investing activities	-140,871	-49,778
Cash flow from finance activities	-20,187	-53,421
Dividends paid	-23,668	-43,503
Change in cash equivalents	23,184	-46,924
Cash equivalents and short-term investments, opening balance	128,469	178,258
Exchange rate change, cash equivalents	-3,727	-2,865
Cash equivalents and short-term investments, closing balance	147,926	128,469

Operating Segments
SEK 000	Quarter 4	Quarter 4	Full Year	Full Year
	2013	2012	2013	2012
Net turnover
Automation	108,035	123,302	442,877	478,983
HMI Products	172,177	154,179	616,859	620,281
IDC	111,094	89,877	409,048	370,340
Group adjustments	-24,973	-26,750	-92,597	-102,441
Group	366,333	340,608	1,376,187	1,367,163
Operating profit before depreciation
and amortization
Automation	7,899	9,106	32,210	34,049
HMI Products	9,982*	13,521	51,099*	81,412
IDC	17,078	11,045	64,292	47,233
Parent company	-763	742	-6,110	-5,056
Group adjustments	2,185	1,246	9,822	1,017
Group	36,381	35,660	151,313	158,655
Operating profit
Automation	7,083	8,217	28,923	30,353
HMI Products	3,648	7,674	26,846	58,661
IDC	10,321	5,155	37,887	27,302
Parent company	-2,429	-1,725	-12,919	-10,841
Group adjustments	1,396	-616	6,630	-5,935
Group	20,019	18,705	87,367	99,540

* of which non-recurring items of SEK -5,633,000

Change of accounting principle

Since 1 January 2013, the group no longer applies what is termed 'the corridor method' when accounting for pension obligations. Actuarial gains and losses on pension obligations are now recognized in other comprehensive income as they arise. The effect of this change of principle on comparative figures is stated in the following table.

Effect of change of accounting principle	According to previous principle Dec. 31, 2012	Transition effect	According to new principle Dec. 31, 2012
Assets
Fixed assets	769,742	6,950	776,692
Current assets	518,834		518,834
Cash and cash equivalents and short-term investments	128,469		128,469
Total assets	1,417,045	6,950	1,423,995
Equity and liabilities
Equity attributable to parent company shareholders	415,843	-31,443	384,400
Non-controlling interests	21,316		21,316
Long-term liabilities	507,220	38,393	545,613
Current liabilities	472,666		472,666
Total equity and liabilities	1,417,045	6,950	1,423,995
Of which interest-bearing liabilities	618,498	31,593	650,091

Income Statement—Parent Company

SEK 000	Quarter 4 2013	Quarter 4 2012	Full Year 2013	Full Year 2012
Net turnover	15,175	16,652	60,701	64,359
Operating expenses	-17,604	-18,376	-73,620	-75,200
Operating profit	-2,429	-1,724	-12,919	-10,841
Net financial items *	9,496	17,247, a)	55,024	18,359,a)
Profit before tax	7,067	15,523	42,105	7,518
Appropriations	24,941	19,826	27,896	19,826
Estimated tax	-968	-3,581	-1,383	1,574
Net profit	31,040	31,768,a)	68,618	28,918,a)
*) of which is dividends from subsidiaries	12.0	20.0	67.0	38.8

SEK 000	Dec 31, 2013	Dec 31, 2012
Assets
Fixed assets	843,683	672,756
Current assets	47,674	33,569,a)
Cash equivalents and short-term investments	11,958	269
Total assets	903,315	706,594
Liabilities and shareholders' equity
Shareholders' equity	120,450	67,406,a)
Untaxed reserves	3,925	7,865
Long-term liabilities	500,213	398,341
Current liabilities	278,727	232,982
Total liabilities and shareholders' equity	903,315	706,594
Of which interest-bearing liabilities	626,064	570,194

a) The net profit of the parent company has improved by 20 MSEK since the Financial Statement for 2012, as a result of an anticipated dividend.

Beijer Electronics AB (publ)

Beijer Electronics is a fast-growing technology company active in industrial automation and data communications.The company develops and markets products and solutions that focus on the user. Since its start-up in 1981, Beijer Electronics has evolved into a multinational group present in 22 countries. The company is listed on NASDAQ OMX Nordic Exchange Small Cap list under the ticker BELE.

More Information

You can subscribe for financial information on Beijer Electronics via e-mail. Subscribe easily at our website, www.beijerelectronics.se. If you have any questions about the Beijer Electronics group, please call +46 (0)40 35 86 00, or send an email: info@beijerelectronics.se.

Financial Calendar

April 23, 2014Annual General Meeting
April 23, 2014Three-month Interim Report
July 11, 2014Six-month Interim Report
October 22, 2014Nine-month Interim Report

Interface with motion

In 2013 Beijer Electronics launched the iX HMI SoftMotion solution, delivering intuitive iX HMI with integrated CODESYS soft control and CODESYS soft motion. The operator panels are reliable platforms with powerful CPU, large memory capacity, a Windows CE operating system and with high-speed EtherCAT communication providing all the stability and speed necessary in motion applications.

Read more at www.beijer.se

Huvudkontor Beijer Electronics AB (publ) Box 426, Stora Varvsgatan 13a 201 24 Malmö, Sverige Org nr 556025-1851 www.beijerelectronics.se | +46 40 35 86 00