Downturn – but the Group is standing strong for the future
As expected, the second quarter was affected by COVID-19 in the form of extensive lockdowns across all of society and a historic downturn in the global economy. For Beijer Alma, the primary effect was a sharp drop in order bookings and sales across several businesses. Earnings were also impacted by restructuring costs totaling MSEK 22. The Group has successfully addressed developments through a strong, clear focus on cash flow and through measures to reduce our costs, such as the application of furlough schemes in large portions of production. Throughout the spring, we continued to deliver to our customers thanks to robust supply chains and the extraordinary efforts made by our employees.
For Lesjöfors, the weakened global economy resulted in significantly reduced demand for chassis springs at the beginning of the quarter, since workshops in large parts of Europe were closed. As societies began reopening, sales increased toward the end of the quarter to the preceding year’s level. Sales of industrial springs did not decrease as drastically, but have not recovered as quickly, either. Demand from automotive customers in particular declined. New customers have also been gained thanks to the company’s agile and flexible production
The decrease in sales compared with the same period in the preceding year at Habia Cable was not primarily related to COVID-19, but rather to lower volumes in offshore projects. During the spring, restructuring was carried out at plants in Sweden and China and some redundancies were made to ensure future competitiveness.
The performance of Beijer Tech was mixed, with negative sales trends for certain products and customer segments. The lockdown in Norway due to the COVID-19 pandemic affected demand more than in other Nordic countries.
Financial strength and additional acquisitions
The development of the global economy was characterized by a great deal of uncertainty. Beijer Alma has the readiness and the financial strength to manage periods of low demand, but is also well prepared to take advantage of the opportunities that will arise when the economy rebounds. It is especially positive that at the beginning of July, we agreed to acquire the INU Group, a successful company in building automation systems. Beijer Tech is thus continuing to pursue its strategy of acquiring companies in attractive niches and this acquisition provides a platform for a new growth area.
Finally, I would like to welcome our new CFO, Erika Ståhl, who will assume her position on Monday, August 24.
Henrik Perbeck, President and CEO