Henrik Perbeck,  President and CEO Henrik Perbeck,  President and CEO

Braking and accelerating during an eventful year

2020 was an eventful year due to a turbulent operating environment, deeply impacted by the pandemic. We were particularly affected during the first wave of the pandemic and the second quarter. Order bookings, net revenues and operating profit for the full year declined, although not as severely as we initially feared thanks to a strong end to the year. Three acquisitions contributed to our growth.

Effects of COVID-19

The year began with a slowdown in the industrial economy. At the same time, the outbreak of COVID-19 had a limited impact due to the shutdown of our operations in China. When it became clear that the world was in the grip of a pandemic, which reached Europe and the US in the spring, both the global economy and demand were more drastically affected. For Beijer Alma, this meant lower order bookings and sales in many of our operations. However, this trend was not equally drastic in all areas, and we noted differences between our various subsidiaries and business areas and between different customer segments geographic markets.

Decisive actions were taken throughout the Group to handle the prevailing situation and apply the brakes in a controlled manner, without skidding off course! Our focus was on cash flow and cost savings with the aim of ensuring adequate liquidity and earnings. We utilized various tools at our disposal – opting, for example, to place employees on furlough leave rather than laying them off. Restructuring costs were also incurred in order to ensure our long-term competitiveness. At the same time, we paused certain investments for a period of time. Thanks to the extraordinary efforts of our employees, the Group companies succeeded in fulfilling their deliveries to customers throughout this entire period. This confirms the benefits of our companies always working close to our customers and remaining robust, reliable suppliers, even in the face of new, unexpected challenges.

Braking and accelerating at the same time

The Group’s financial strength enabled us to take decisive action while maintaining a long-term approach – our ambition being to apply the brakes and the gas at the same time. In parallel with our focus on cash flow and cost savings, for example, we also worked to maintain the right inventory levels in order to serve our customers and to implement new acquisitions.

The activity level in the M&A market slowed in the wake of the pandemic, particularly in the spring and summer. Nevertheless, we kept our foot on the gas in order to leverage any opportunities that arose and make forward-looking investments. A total of three companies were acquired in a cautious market, which later saw a gradual improvement in activity during the autumn. A number of long-term investments were also completed, including in Lesjöfors’s new plant in Latvia and a capacity expansion at the fire hose manufacturer Svebab.

Lesjöfors – different dynamics

Demand in Lesjöfors’s Industry and Chassis Springs business areas varied considerably and a change in dynamic was noted. Chassis Springs – which normally has a clear peak season in the spring – instead experienced an initial sharp slowdown as workshops across Europe closed. Demand recovered by the summer, and the activity that normally takes place during the peak season largely shifted to the autumn since the fundamental need to replace springs was only impacted to a marginal degree. Within Industry, demand in certain segments and markets declined significantly during the spring. This decline was particularly noticeable among customers in the automotive industry, many of which were forced to close their plants. There has been a gradual recovery since the summer, even surpassing the previous year’s levels toward the end of the year.

Habia Cable – secure profitability

Early in the year, Habia Cable continued to deliver on its project contracts, particularly in offshore. Demand from industrial customers remained favorable at the start of the second quarter. In response to a gradual decline in demand – both in terms of project contracts and among industrial customers – restructuring measures were implemented, mainly in China and Sweden. The aim of these measures is to help ensure that Habia remains profitable, even in periods of lower demand. At the same time, the company continued to invest in proprietary cable technology for exciting future applications in such areas as sustainable transportation.

Beijer Tech – platform for acquisitions

Beijer Tech mainly works with Nordic industrial companies, an area where a decline in demand was noted in the second quarter. As a result of well-adapted inventory levels – for example, in Fluid Technology – deliveries could be made without any disruptions, despite the company’s dependence on foreign supply chains. Growth in segments such as medical technology partially offset the decline in demand. The company also donated materials and processing capacity for the production of protective equipment for healthcare professionals at the start of the pandemic. Demand in Fluid Technology increased gradually during the autumn. Within Industrial Products, the Norwegian market was hit hardest, while the operations in Denmark and Finland were impacted by the pandemic to a lesser degree.

At the same time, Beijer Tech is an important platform for acquisitions, not least in new areas that broaden the operations and enable growth. One such example is INU-gruppen, which was acquired during the autumn. INU-gruppen is a reputable, well-managed company specializing in building automation systems, an exciting area where the need for energy-efficiency enhancement and improved air quality are strong drivers.

Continued focus on sustainability

The Group and the companies’ work related to sustainability continued, despite an unusual market situation. We have a strong focus on internal training related to corporate social responsibility and anti-corruption, and the number of employees who took part in this training increased in 2020. In terms of environmental improvements, solar panels have been installed at two plants to produce electricity needed to power the manufacturing operations.

Our sustainability objectives remain based on the UN Global Compact, the UN Sustainable Development Goals (SDGs) and the direct environmental impact of our Group companies. At the same time, we are part of a value chain in which the shift toward a clearer focus on sustainability among our raw material, energy and transport suppliers plays an important role and has an indirect impact on the Group. It is important that we report the results of our sustainability efforts. We do this through our participation in CDP, an organization that helps companies, including investors, to measure and disclose their environmental impact. I am pleased to report that we succeeded in improving our CDP rating during 2020.

Profitable growth

Despite these uncertain times, we all expect 2021 to be a better year than 2020. We know that the second wave of the pandemic has had a much less severe impact on the industrial sector than on society as whole. Our Group is stable and robust, not only financially, but also in terms of our close proximity to our customers, which in the long term will provide us with a strong business model – in a world where local and regional suppliers seem to be becoming increasingly important to industrial customers.

We also have a competitive cost base that can be leveraged, and will continue to focus on low costs and strong cash flow throughout 2021. At the same time, we must keep one foot on the gas, achieving profitable growth through further acquisitions and increasing our organic growth through investments in Group companies.

Over the past year, we have seen the powerful results that can be achieved when all of our employees do their utmost and work toward the same goals. As part of this work, a number of local initiatives have been carried out, proving that our decentralized way of working is an important asset for us. As we now put 2020 behind us, I would like to express my gratitude for the outstanding efforts of our employees over the year. I would particularly like to thank our CFO Jan Blomén, who has now retired after 34 years at Beijer Alma. With his years of experience, Jan was an invaluable support to me during my first two years as CEO.

Henrik Perbeck, President and CEO

4,250

Invoicing decreased 8 percent to MSEK 4,250 (4,622).

4,229

Order bookings decreased 6 percent to MSEK 4,229 (4 494).

515

Profit after net financial items amounted to MSEK 515 (557).

12.8%

Operating margin was 12.8 percent (12,6).

6.58

Earnings per share totaled 6.58 kr (7.15).

3.00

The Board proposes a dividend of SEK 3.00 (2.50) per share.

Invoicing (MSEK)

Profit after net financial items (MSEK)

BUSINESS MODEL

The development of the Group companies is based on long-term ownership and decentralized operational control. The Group’s growth initiatives, which are built on organic growth and corporate acquisitions, affect the environmental and social conditions in the areas where the Group conducts its operations. Active sustainability work is therefore carried out with aim of limiting the Group’s environmental impact, reducing costs and lowering risks as well as creating new business opportunities. This sustainability work focuses on efficient resource consumption, lower emissions and reduced waste management. Business ethics play a central role in the development of the companies’ growth potential. Bribes are prohibited, and Beijer Alma demands honesty and honorability not only from its own employees but also from its customers, suppliers and other stakeholders. At the same time, the Group is to have a positive impact on social conditions by respectinghuman rights, offering employees safe and stimulating workplaces, and supporting and collaborating with various organizations, schools and associations.
Read more about strategy and profitability
Read more about sustainability work

Strategy

Four strategies in focus:

  • high customer value, with customer-specific products increasing profitability.
  • international market coverage, which provides a return on the Group’s niche products.
  • strong market positions, with quality, service and customization providing a competitive edge.
  • broad customer and supplier base, which reduces our dependence and risks.

Read more about strategy and profitability

2,564

The Group has 2,564 employees in 16 countries.
Read more about the company

60 markets

Sales in over 60 markets – the Nordic region, other European countries, Asia and North America.
Read more about the company

Decentralization

Henrik Perbeck, President and CEO:
“Decentralization paves the way for a culture of responsibility in the Group. We have enterprising local management teams that not only take ownership of their earnings performance, but are also an effective driving force behind everything from growth to employee issues.”

CONTINUED JOURNEY OF GROWTH

Beijer Tech became the majority shareholder in the Swedish INU-gruppen during the summer. The company offers technical solutions to customers in the property sector to improve indoor environments. After the acquisition, the previous principal owners will remain in their operational roles.
“For us, this feels like a natural step in our ongoing journey of growth. In Beijer Tech, we have found the right strategical partner for the longterm ownership and development of the company alongside new and existing customers,” says INUstyr President Anders Eriksson.
Read more about Beijer Tech

130 kWh

Investments in the fire hose manufacturer Svebab continue. Two new weaving machines went into operation this year. This increased capacity significantly. Another two machines will go into operation in early 2021. Investments were also made in the environment. In 2021, a solar power facility was installed with a capacity of 130 kWh. These solar panels will meet a large portion of the production operations’ energy needs during the summer.
“Investments are based on our local expertise regarding the industry and environment in which we operate. Our short decision-making channels mean that we can act quickly, that our decision-making processes are transparent and that our
employees can be involved, which provides positive added value,” explains Henrik Palmu,
President of Svebab.
Read more about Beijer Tech

GOVERNANCE AND CONTROL

Decentralization is also connected to active governance and control. All operations are evaluated monthly by reviewing performance measures and market developments. The dramatic effects of the COVID-19 pandemic during part of 2020 led to more intense reviews. Focus on liquidity and cost adjustments increased during this period, with all units reporting on a weekly basis and measures being taken regularly.
Read more about strategy and profitability

MSEK 27

The family-owned company PA Ventiler sells valves, primarily to the pulp and paper industry as well as the chemical and petrochemical industry. The company generates revenues of MSEK 27 with favorable profitability. Beijer Tech acquired the operation in the beginning of the year and it is now a part of the Fluid Technology business area. Key employees in the previous owner family will remain in place as the head of
the operations.
“We are confident that we will strengthen PA Ventiler’s market position as a supplier to Swedish industry together with Beijer Tech,” says President Fredrik Karlsson.
Read more about Beijer Tech

40%

Lesjöfors advanced its position in the UK springs market through the acquisition of Metrol Springs, a leading manufacturer of gas springs. The UK is its main market. About 40 percent of its products are exported to markets in Europe, Asia and the US. Customers include companies in the industrial and automotive markets.
“We appreciate Lesjöfors’s decentralized organization and look forward to staying and continuing to develop the company,” says Robert Lamb, President of Metrol Springs.
Read more about Lesjöfors

ACQUISITIONS DURING THE YEAR

During the first quarter, Lesjöfors acquired all of the shares in the UK-based company Metrol Springs Ltd and, during the same period, Beijer Tech acquired all of the shares in the Swedish company PA Ventiler AB. In the third quarter, Beijer Tech acquired the Swedish company INUInvest AB, including the operations of INUstyr AB and its sister companies. The acquisition was completed through a newly formed company, BeijerInu AB, with Beijer Tech acquiring 75 percent of the shares.
Read more about our subsidiaries:
Lesjöfors
Habia Cable
Beijer Tech

2020 in summary

2020 full-year 2019 full-year Change %
Net revenues, MSEK 4,249.8 4,621.7 –8.0
Operating profit, MSEK 544.8 582.6 –6.5
Operating margin, % 12.8 11.7
Profit after net financial items, MSEK 515.2 557.4 –7.6
Earnings per share, SEK 6.58 7.15 44.00
Order bookings, MSEK 4,229.1 4,493.6 –5.9
Net liabilities, MSEK 572.6 720.9 –20.6
Net debt/equity ratio, % 23.0 30.0 –23.3
Cash flow after capital expenditures, excl aquisitions, MSEK 596.1 385.5 54.6

Net revenue per segment (subsidiaries) MSEK

2020 full-year 2019 full-year Change %
Lesjöfors 2,448.7 2,563.5 –4.5
Habia Cable 804.0 977.8 –17.8
Beijer Tech 997.1 1,080.1 –7.7
Parent company and intra-group 0.2
Total Group 4,249.8 4,621.6

Operating profit per segment (subsidiaries) MSEK

2020 full-year 2019 full-year Change %
Lesjöfors 441.2 441.3
Habia Cable 53.7 80.1 –33.0
Beijer Tech 69.7 81.4 –14.4
Parent company and intra-group –19.8 –20.2
Total 544.8 582.6

NEXT REPORT

The next interim report for January–March will be published on March 26. For more information about the company’s activities, visit our calendar