Strong cash flow and acquisition-driven growth with lower volumes in industrial segments
Demand in the quarter was varied across the Group’s diversified customer base. Growth in the quarter was driven by acquisitions. Volumes in the broad industrial segments were somewhat lower, while several other customer segments posted good growth, such as the automotive aftermarket, medical technology and other niches. Lower volumes resulted in margin pressure in certain operations, which was addressed with savings and restructuring measures. Cash flow remained strong as a result of our focus on gradually improving our inventory levels and working capital as well as more stable supply chains.
Lesjöfors noted mixed demand, with major variations between customer segments. The Chassis Springs business area posted strong growth. Volumes remained high in the beginning of autumn, driven by stable demand from end customers and normalized inventory levels among wholesale customers. Within Industrial springs, demand decreased somewhat in the Nordics, the US and Asia. In Europe, the UK posted growth while several operations in Central Europe faced greater margin pressure. A number of measures were taken, such as savings and local restructuring, to ensure positive profitability and growth over the long term. The situation varied between customer segments. For example, demand in medical technology was good, while demand for springs was weaker among end customers in the construction industry and automotive manufacturing. The acquisitions of Telform, Amatec and Tollman Spring over the past year supported growth for the quarter.
Demand was stable in both of Beijer Tech’s business areas. Order bookings increased organically, primarily due to new projects, but volumes in industrial trading also remained at favorable levels. Several of our niche companies noted good demand, driven by trends outside of industry. The year’s acquisitions of Botek and Finn Lamex are examples of this, and have had an excellent start in our Group.
Strategy and acquisitions
The operating environment remains dominated by uncertainty regarding demand, higher inflation and interest rates. This means that, overall, we are continuously performing a balancing act between growth initiatives and savings. The Group is strong and robust thanks to our diversified global customer base. No new acquisitions were made in the quarter, but our acquisition strategy is long term. We are continuing to build relationships with attractive companies that can strengthen the Group with future profitable growth.
Henrik Perbeck, President and CEO