BEIJER ALMA AB BEIJER ALMA INTERIM REPORT Q2 2023
- Net revenue increased to MSEK 1,819 (1,461)
- Adjusted operating profit increased to MSEK 218 (190), corresponding to an operating margin of 12.0 percent (13.0)
- Profit after net financial items was MSEK 168 (189)
- Earnings per share was SEK 2.05 (2.91)
- Order bookings increased to MSEK 1,809 (1,437).
- Cash flow from operating activities totaled MSEK 336 (247).
- Tollman Spring was acquired on April 14 and Finn Lamex was acquired on June 8
Summary of earnings
MSEK | 2023 | 2022 | Change | 2023 | 2022 | Rolling | 2022 |
Continuing operations | Q2 | Q2 | % | Jan-Jun | Jan-Jun | 12 months | Full-year |
Net revenue | 1,819 | 1,461 | 24.5 | 3,513 | 2,921 | 6,457 | 5,866 |
Adjusted operating profit, EBIT | 218 | 190 | 14.4 | 460 | 428 | 830 | 798 |
Adjusted operating margin, EBIT, % | 12.0 | 13.0 | 13.1 | 14.6 | 12.9 | 13.6 | |
Operating profit, EBIT | 224 | 190 | 17.6 | 466 | 403 | 837 | 773 |
Profit after net financial items, EBT | 168 | 189 | -11.4 | 359 | 395 | 668 | 704 |
Earnings per share** SEK | 2.05 | 2.91 | -29.4 | 4.46 | 5.88 | 14.50 | 15.92 |
Order bookings | 1,809 | 1,437 | 25.9 | 3,617 | 2,877 | 6,422 | 5,682 |
Cash flow from operating activities** | 336 | 247 | 380 | 163 | - | 485 | |
Net debt*, MSEK | 2,516 | 1,677 | 50.1 | 1,677 | - | 1,833 | |
Net debt/equity ratio*, % | 66.7 | 59.7 | 66.7 | 59.7 | - | 44.6 |
*Comparison periods not recalculated related to Discontinued operations **Includes Discontinued Operations in relation to 2022
BEIJER ALMA INTERIM REPORT Q2 2023 PAGE 1 (20)
CEO's comments
Varying demand, acquisitive growth and improved cash-flow
Group
Demand in the quarter was overall stable, but with variations in the Group's diversified customer base. Growth in the quarter was driven by acquisitions. Volumes in the industrial segments were lower, while certain other customer segments posted good growth. The Nordics, together with North America, were the strongest regions. Asia and the rest of Europe noted weaker performances, which also led to margin pressure that is being addressed with savings and other measures. Cash flow improved over the previous quarter, in part due to focused efforts throughout the Group to reduce inventory levels.
Subsidiaries
Lesjöfors noted mixed demand, with major variations between geographic regions and customer segments. The Chassis Springs business area posted good growth and has its peak season in the spring. Demand within Industrial Springs remained stable in the Nordics and the US, albeit with somewhat lower volumes compared with the previous year. In Asia and Central Europe, demand was generally weaker and varied significantly between different customer segments and countries. Demand in medical technology, for example, was good, while demand for springs was weaker among end customers within the construction industry. Last year's acquisitions of John Evans' Sons, Telform and Tollman Spring supported growth for the quarter.
Demand was stable in both of Beijer Tech's business areas. Order bookings increased, due in part to new projects but also to good demand in Sweden and Norway. Price increases led to profitable organic growth that was supplemented by the acquisitions of Botek and Finn Lamex.
Acquisitions
Two additional acquisitions were carried out within the Group during the quarter. Lesjöfors has with the acquisition of Tollman Spring Company in April advanced its position as a major spring group in the North American market. Tollman is a manufacturer of industrial springs with a well-established market position and long-standing customer relationships in attractive segments such as industry, defense and automotive.
In June, Beijer Tech acquired Finn Lamex, a niche manufacturer of complex laminated windscreens for the commercial vehicle, motorhome and industrial machine aftermarkets. The company has demonstrated profitable growth for quite some time and now local management and Beijer Tech together look forward to continuing along this path.
The operating environment is still characterized by uncertainty and with summer now here, I would like to thank our employees for all of their initiatives and efforts throughout the Group to ensure the best possible performance.
Henrik Perbeck
President and CEO
BEIJER ALMA INTERIM REPORT Q2 2023 PAGE 2 (20)
Group
Beijer Alma is an international, listed industrial group. Its business concept is to acquire, own and develop companies in profitable niches with strong growth potential. The companies in the Group specialize in component manufacturing and industrial trading. The Group has approximately 3,000 employees with operations in 20 countries. Its customer base is diversified and includes companies in various sectors, such as engineering, automotive, medical technology and infrastructure.
In this report, Habia Cable, which was divested on October 14, 2022, is recognized as a discontinued operation and is therefore not included in continuing operations.
Performance measures for the Group
MSEK | 2023 | 2022 | Change | 2023 | 2022 | Rolling | 2022 |
Continuing operations | Q2 | Q2 | % | Jan-Jun | Jan-Jun | 12 months | Full-year |
Net revenue | 1,819 | 1,461 | 24.5 | 3,513 | 2,921 | 6,457 | 5,866 |
Adjusted operating profit, EBITA | 236 | 199 | 18.7 | 496 | 445 | 896 | 846 |
Adjusted operating margin, EBITA, % | 13.0 | 13.6 | 14.1 | 15.2 | 13.9 | 14.4 | |
Adjusted operating profit, EBIT | 218 | 190 | 14.4 | 460 | 428 | 830 | 798 |
Adjusted operating margin, EBIT, % | 12.0 | 13.0 | 13.1 | 14.6 | 12.9 | 13.6 | |
Operating profit, EBIT | 224 | 190 | 17.6 | 466 | 403 | 837 | 773 |
Profit after net financial items, EBT | 168 | 189 | -11.4 | 360 | 395 | 668 | 704 |
Order bookings | 1,809 | 1,437 | 25.9 | 3,617 | 2,877 | 6,422 | 5,682 |
Second quarter
Order bookings in the quarter rose 26 percent year-on-year to MSEK 1,809 (1,437). Acquisitions contributed 16 percent and currency effects 6 percent, while organic growth amounted to 4 percent. Net revenue rose 25 percent to MSEK 1,819 (1,461). Acquisitions contributed 16 percent of this increase in revenue and fluctuations in exchange rates 6 percent, while organic growth was 3 percent.
The increase in the Group's revenue was mainly attributable to acquisitions and price increases, which was the case for both Lesjöfors and Beijer Tech.
Adjusted operating profit, EBIT, amounted to MSEK 218 (190), corresponding to a margin of 12.0 percent (13.0) for the quarter. Adjusted operating profit includes acquisition costs of MSEK 6, a market valuation of inventory in connection with acquisitions (so-calledstep-up) of MSEK 16 and a provision for a potential bad debt of MSEK 6. These items totaling to MSEK 28 was of a one-off nature and affects the margin -1.5 percent for the quarter.
During the first quarter of the preceding year, a provision of MSEK 25 was made for costs related to Lesjöfors's Russian operations. During the second quarter 2023, MSEK 6 of the reserve was reversed following a new assessment of the total need. The reversal has affected adjusted operating profit.
Net financial items amounted to an expense of MSEK -56(-2). The change was due to higher interest-bearing liabilities, higher interest rates, discounting effects of the additional purchase consideration for John Evans' Sons.
Earnings per share declined to SEK 2.05 (2.91), the return on shareholders' equity was 14.7 percent (19.2) and the return on capital employed excluding discontinued operations was 13.1 percent.
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Cash flow from operating activities totaled MSEK 336 (247). Cash flow from working capital was MSEK 182 for the quarter. At the end of the second quarter, the equity ratio was 39 percent (43) and the net debt/equity ratio excluding lease liabilities was 67 percent (60).
January-June
Order bookings increased 26 percent to MSEK 3,617 (2,877). The increase related to acquisitions was 15 percent and organic growth was 6 percent. Net revenue rose 20 percent to MSEK 3,513 (2,921). The increase from acquisitions was 14 percent, fluctuations in exchange rates was 5 percent and organic growth was 1 percent.
The accumulated adjusted operating profit was MSEK 460 (428), where profit increased MSEK 27 at Lesjöfors and MSEK 9 at Beijer Tech.
Operating profit totaled MSEK 466 (403) and profit after net financial items amounted to MSEK 360 (395). Earnings per share amounted to SEK 4.46 (5.88).
Cash flow from operating activities amounted to MSEK 380 (163), cash flow from investing activities before acquisitions and divestments to MSEK -131(-92) and cash flow from financing activities to MSEK -18 (25), among other things affected by dividends paid.
Net debt has increased by MSEK 683 since the beginning of the year and now amounts to MSEK 2,516. The increase is mainly related to acquisitions made during the period.
Number of employees
The number of employees at the end of the period was 3,051 (3,306), of whom 543 employees in the preceding year were Habia Cable employees.
Acquisitions
Lesjöfors' acquisition of Tollman Spring was completed on April 14 and Beijer Tech's acquisition of Finn Lamex on June 8.
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Subsidiaries
Lesjöfors
Lesjöfors is a full-range supplier of standard and customized industrial springs as well as wire and flat strip components. The company is the largest in the Nordics and a leading spring company in Europe and the USA. Lesjöfors has production in 17 countries in Europe, Asia and North America. Its operations are conducted in two business areas: Industry and Chassis Springs.
Performance measures for Lesjöfors
MSEK | 2023 | 2022 | Change | 2023 | 2022 | Rolling | 2022 |
Q2 | Q2 | % | Jan-Jun | Jan-Jun | 12 months | Full-year | |
Net revenue | 1,317 | 1,010 | 30.4 | 2,512 | 2,031 | 4,555 | 4,073 |
- Industry | 1,038 | 777 | 33.5 | 2,007 | 1,550 | 3,716 | 3,259 |
- Chassis Springs | 279 | 233 | 19.7 | 505 | 481 | 839 | 815 |
Adjusted operating profit, EBITA | 194 | 161 | 20.1 | 401 | 358 | 718 | 675 |
Adjusted operating margin, EBITA, % | 14.7 | 16.0 | 15.9 | 17.6 | 15.8 | 16.6 | |
Adjusted operating profit, EBIT | 180 | 156 | 15.1 | 374 | 347 | 668 | 641 |
Adjusted operating margin, EBIT, % | 13.6 | 15.4 | 14.9 | 17.1 | 14.7 | 15.7 | |
Operating profit, EBIT | 186 | 156 | 19.0 | 380 | 322 | 674 | 616 |
Order bookings | 1,278 | 976 | 30.9 | 2,503 | 1,983 | 4,542 | 4,022 |
Lesjöfors total | Industry | Chassis Springs | ||||||||||||||||||||||||||
1,400 | 4,800 | 1,100 | 4,000 | 400 | 1,400 | |||||||||||||||||||||||
1,300 | 4,400 | 1,000 | 3,600 | 350 | ||||||||||||||||||||||||
1,200 | 4,000 | 1,200 | ||||||||||||||||||||||||||
900 | 3,200 | |||||||||||||||||||||||||||
1,100 | ||||||||||||||||||||||||||||
3,600 | 800 | 300 | ||||||||||||||||||||||||||
1,000 | 2,800 | 1,000 | ||||||||||||||||||||||||||
3,200 | ||||||||||||||||||||||||||||
900 | 700 | 2,400 | 250 | |||||||||||||||||||||||||
2,800 | 800 | |||||||||||||||||||||||||||
800 | 600 | |||||||||||||||||||||||||||
700 | 2,400 | 2,000 | 200 | |||||||||||||||||||||||||
500 | ||||||||||||||||||||||||||||
600 | 2,000 | 1,600 | 600 | |||||||||||||||||||||||||
400 | 150 | |||||||||||||||||||||||||||
500 | 1,600 | |||||||||||||||||||||||||||
1,200 | ||||||||||||||||||||||||||||
400 | 300 | 400 | ||||||||||||||||||||||||||
1,200 | 100 | |||||||||||||||||||||||||||
300 | 200 | 800 | ||||||||||||||||||||||||||
800 | ||||||||||||||||||||||||||||
200 | 50 | 200 | ||||||||||||||||||||||||||
400 | ||||||||||||||||||||||||||||
400 | 100 | |||||||||||||||||||||||||||
100 | ||||||||||||||||||||||||||||
0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | ||
2021 | 2022 | 2023 | 2021 | 2022 | 2023 | 2021 | 2022 | 2023 | ||||||||||||||||||||
Net revenue, MSEK | Quarter | Rolling 12 months | ||||||||||||||||||||||||||
Second quarter
Lesjöfors conducts its operations in two business areas: Industry and Chassis Springs. Order bookings rose to MSEK 1,278 (976) during the second quarter, up 31 percent year-on-year. Organic growth was 2 percent, while acquisitions contributed 20 percent of the increase and currency effects 8 percent. Net revenue amounted to MSEK 1,317 (1,010), corresponding to an increase of 30 percent. This increase was mainly attributable to acquired operations, which contributed 20 percent, and currency effects of 8 percent, while organic growth accounted for 2 percent.
Adjusted operating profit, EBIT, for Lesjöfors amounted to MSEK 180 (156). The adjusted operating margin was
13.6 percent (15.4). Profit includes acquisition costs of MSEK 4, a market valuation of inventory in connection with acquisitions (so-calledstep-up) MSEK 16 related to the acquisition of Tollman Spring and a provision for a potential bad debt of MSEK 6. These items totaling to MSEK 26 was of a one-off nature and affects the margin -2.0 percent for the quarter. The acquisition of Tollman Spring, which was concluded in April 2023, contributed positive earnings for the quarter.
In operating profit, EBIT, MSEK 6 was reversed from the reserve related to the discontinuation of operations in Russia in 2022. The remaining reserve amounts to MSEK 14 and has been deemed sufficient to cover any additional costs.
The Chassis Springs business area has its peak season during the second quarter and revenue was MSEK 279 (233). Most markets performed well.
Industry continued to experience stable demand in the Nordic region and in North America. Demand in Central Europe and Asia was weaker. Central Europe was affected by weak demand within the construction segment and
BEIJER ALMA INTERIM REPORT Q2 2023 PAGE 5 (20)
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Beijer Alma AB published this content on 20 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 July 2023 17:47:09 UTC.
