Varying demand and acquisitive growth
Demand in the quarter varied between geographic regions and customer segments and was generally weaker than in earlier quarters. The Nordic region remained relatively strong with stable volumes, while demand in the rest of Europe and Asia declined, partly as a result of customers reducing their inventory levels. Inflation continued to fuel cost increases and higher inventory values. The focus was therefore on compensating with price increases and on readjusting inventory levels as the supply chains stabilized. At the start of the new year, we saw a return to more stable demand.
Lesjöfors noted mixed demand, although with major variations between geographic regions and customer segments. In the Chassis Springs business area, which has its low season in the fourth quarter, volumes were lower than in the year-earlier period, mainly due to the discontinuation of sales to Russia. Within Industrial Springs, the Nordics were the strongest region, along with the North American market. In Asia and Central Europe, demand was generally weaker and varied more between customer segments and countries. The acquired companies Alcomex, Plymouth Spring and John Evans’ Sons all contributed profitable growth.
For Beijer Tech, which operates in the Nordic market, demand was generally stable, with a certain slowdown in order bookings towards the end of the quarter. Price increases contributed to organic growth, and the acquired companies Swedish Microwave and Mountpac generated additional profitable growth.
Strategy and acquisition
In October, Lesjöfors acquired the Turkish company Telform, which manufactures industrial springs for a diversified domestic and European customer base. The acquisition is strategically important since it has enabled Lesjöfors to expand its production footprint and low-cost manufacturing capabilities.
Two additional acquisitions were carried out in January 2023. Amatec, a successful Dutch spring distributor, became part of Lesjöfors’s subsidiary Alcomex. Beijer Tech acquired Botek, a niched manufacturer of scales and RFID systems for waste management vehicles.
The company offers highly technical proprietary products and commands a strong position in the Nordic region and is exposed to an interesting and growing international market.
The divestment of Habia Cable was completed in October. As a result, we have strengthened the Group’s strategic focus and ensured continued scope for creating value through investments and acquisitions in Lesjöfors and Beijer Tech. At the same time, we are prepared to act quickly and adapt in an uncertain world, where new opportunities may arise.
Henrik Perbeck, President and CEO