Continued strong demand and several new acquisitions

Group

Demand remained strong in most customer segments and geographic regions during the second quarter and the summer. The high level of activity in the industry has put a strain on supply chains, both in terms of raw materials and components. The Group reported a very strong improvement in order bookings, sales and operating profit relative to the first quarter of last year, which was affected by the pandemic. Cash flow remained at a favorable level. Order bookings and sales also increased compared with the first quarter. Operating profit was negatively affected by the data intrusion at Habia, but was nonetheless the second highest in the Group’s history.

Subsidiaries

For Lesjöfors, order bookings and sales remained at the previous quarter’s record-breaking levels. Demand in the automotive aftermarket for the Chassis Springs business area was especially strong during the second quarter, which is also normally the peak season. High capacity utilization contributed to a high operating margin for Lesjöfors.

Habia Cable also experienced strong demand during the second quarter, with healthy order bookings. Operations were significantly affected by a data intrusion at the company in early April, which resulted in a loss of production and a negative product mix. Thanks to an extraordinary effort from management and employees to minimize the effect on customers, the systems could promptly go back online. Since then, production has been ramped up to meet demand and compensate for the production loss. This will continue during the autumn.

Demand in Beijer Tech’s markets was stable and high, in Fluid Technology as well as Industrial Products. Lead times and purchase prices have increased in many product groups within industrial trading. The companies have managed to offset these through price increases, without significant impact on deliveries to customers. Two profitable companies were acquired early in the quarter, contributing to growth.

Acquisitions

The Group has prioritized a strategy of driving profitable growth through acquisitions, which gratifyingly resulted in two acquisitions during the second quarter and two more thereafter. In April, Beijer Tech acquired Noxon within Fluid Technology and Novosystems within building automation. In July, an agreement was signed to acquire Källström Engineering Systems, a well-managed and profitable company in the field of filling solutions for the fast- growing battery industry. In the same month, Lesjöfors carried out its largest acquisition to date: the Alcomex Group, a leading and growing European manufacturer of door and industrial springs, and an attractive platform for continued profitable growth.

Henrik Perbeck, President and CEO

1,336

Net revenues increased to MSEK 1,336 (963).

197

Operating profit rose to MSEK 197 (79).

14.7%

Operating margin rose to 14.7 percent (8.2).

186

Profit after net financial items increased to MSEK 186 (75).

2.45

Earnings per share increased to SEK 2.45 (0.98).

1,416

Order bookings increased to MSEK 1,416 (880).

Invoicing (MSEK)

Profit after net financial items (MSEK)

Beijer Alma in brief

Order bookings rose 61 percent to MSEK 1,416 (880) during the quarter. The increase comprised 60 percent organic growth and 5 percent growth from acquisitions offset by 4 percent negative currency effects. Net revenues increased 39 percent to MSEK 1,336 (963) compared with the year-earlier period which was, to a large extent, affected by the COVID- 19 lockdowns. The increase comprised 37 percent organic growth and 6 percent growth from acquisitions offset by 4 percent negative currency effects.

Operating profit increased to MSEK 197 (79) and profit after net financial items to MSEK 186 (75). The operating profit includes acquisition costs of MSEK 3.5 for Beijer Tech and a deductible of MSEK 1.5 for an expected insurance payment for additional costs directly related to the data intrusion at Habia Cable. Earnings per share increased to SEK 2.45 (0.98). At the end of the second quarter, the equity ratio was 51.4 percent (52) and the net debt/equity ratio was 26.7 percent (31.9).

Cash flow from operating activities totaled MSEK 175 (304). The increase in working capital was due primarily to higher accounts receivable on account of the rise in sales. Cash flow after capital expenditures, excluding corporate acquisitions, amounted to MSEK 144 (258).

During the first half of the year, order bookings rose 33 percent to MSEK 2,746 (2,064). The increase comprised 35 percent organic growth and 3 percent increase from acquisitions offset by 5 percent negative currency effects. Net revenues rose 20 percent to MSEK 2,619 (2,179). The increase comprised 21 percent organic growth and 4 percent growth from acquisitions offset by 5 percent negative currency effects.

Operating profit increased to MSEK 411 (226) and profit after net financial items amounted to MSEK 395 (212). Earnings per share increased to SEK 5.18 (2.76).

Cash flow from operating activities totaled MSEK 256 (362). Cash flow after capital expenditures, excluding corporate acquisitions, amounted to MSEK 195 (264).

The number of employees during the period increased to 2,764 (2,614).

Equity ratio

51.4%

Net debt/equity ratio

26.7%

Number of employees

2,764

Lesjöfors in brief

Order bookings rose to MSEK 815 (475) during the quarter, corresponding to an increase of 72 percent. The increase comprised 78 percent organic growth offset by 6 percent negative currency effects. Net revenues amounted to MSEK 792 (510) during the quarter, corresponding to an increase of 55 percent. The increase comprised 61 percent organic growth offset by 6 percent negative currency effects. Operating profit during the second quarter increased to MSEK 179 (63).

Net revenues for Industry amounted to MSEK 542 (392) during the quarter, corresponding to an increase of 38 percent. Demand remained strong in all markets and production capacity was high to meet demand.

Chassis Springs, which had a more typical seasonal effect compared with the delay of last year, more than doubled net revenues, amounting to MSEK 250 (118) due to strong demand and new customers. Chassis Springs was the Lesjöfors business area hit hardest by the COVID-19 lockdowns in the preceding year.

During the first half of the year, order bookings rose to MSEK 1,632 (1,148), an increase of 42 percent. The increase comprised 49 percent organic growth offset by 7 percent negative currency effects. Net revenues amounted to MSEK 1,570 (1,236), up 27 percent. The increase comprised 33 percent organic growth offset by 6 percent negative currency effects. Net revenues in Industry increased to MSEK 1,096 (931) and to MSEK 474 (305) in Chassis Springs. Operating profit for the period increased to MSEK 350 (186).

Habia Cable in brief

Order bookings for Habia Cable increased 30 percent in the quarter to MSEK 242 (186). In organic terms, adjusted for negative currency effects of 3 percent, the increase was 33 percent. Net revenues decreased 13 percent and amounted to MSEK 193 (221). The decrease comprised 11 percent organic decrease and 2 percent due to negative currency effects.

Habia Cable’s operating profit totaled MSEK 0 (13). Habia’s operations were significantly affected by the data intrusion in April, which resulted in a disruption to production for a period. This primarily affected the most sophisticated products, which resulted in a negative product mix for the quarter. Operating profit includes a deductible of MSEK 1.5 for expected compensation from insurance companies for additional costs directly related to the data intrusion. The claim, which also includes establishing the final loss in income, has not yet been fully resolved.

Order bookings increased to MSEK 440 (425) for the first half of the year, corresponding to an increase of 3 percent. In organic terms, adjusted for negative currency effects of 4 percent, the increase was 7 percent. Net revenues amounted to MSEK 396 (449), down 12 percent. The decrease comprised 8 percent organic decrease and 4 percent due to negative currency effects.

Operating profit totaled MSEK 25 (29), corresponding to an operating margin of 6.4 percent, unchanged compared with the preceding year.

Beijer Tech in brief

During the quarter, order bookings increased 64 percent to MSEK 360 (219). The increase comprised 43 percent organic growth and 22 percent growth from acquisitions and 1 percent negative currency effects. Net revenues amounted to MSEK 352 (232), up 52 percent. The increase comprised 28 percent organic growth and 24 percent growth from acquisitions. Operating profit totaled MSEK 24 (10). Operating profit includes transaction costs of MSEK 3.5.

Net revenues for Industrial Products amounted to MSEK 209 (127), up 65 percent. Novosystems, which was acquired during the quarter and operates within INU Group, was reported under this business area.

Net revenues for Fluid Technology amounted to MSEK 143 (105), up 36 percent. This includes the company Noxon, which was acquired during the quarter.

Order bookings increased to MSEK 674 (491) for the first half of the year, an increase of 37 percent. The increase comprised 24 percent organic growth and 14 percent growth from acquisitions offset by 1 percent negative currency effects. Net revenues amounted to MSEK 653 (494), up 32 percent. The increase comprised 16 percent organic growth and 17 percent growth from acquisitions offset by 1 percent negative currency effects. Net revenues increased to MSEK 391 (277) for Industrial Products and to MSEK 262 (218) for Fluid Technology. Operating profit rose to MSEK 47 (23) during the period.

Corporate acquisitions during Q2

Noxon. On April 1, Beijer Tech acquired 100 percent of the shares in Noxon AB. The company provides decanter centrifuges, polymer machines, control systems and supplementary services related to wastewater treatment in several applications. The company has 38 employees and revenues of approximately MSEK 70.

Novosystems. On April 6, Beijer Tech’s subsidiary BeijerInu AB (in which Beijer Tech holds 75 percent of the shares) acquired 100 percent of the shares in Novosystems AB, Novosystems Östergötland AB and Novosystems Småland AB. They are active in building automation systems and offer energy-efficient solutions for public and private customers in Sweden. The company group has 18 employees and revenues of approximately MSEK 50.

Q2 in summary

	2021 Q2	2020 Q2	Change %	2020 full-year
Net revenues, MSEK	1,336.4	962.7	38.8	4,249.8
Operating profit, MSEK	196.5	79.0	148.7	544.8
Operating margin, %	14.7	8.2	–	12.8
Profit after net financial items, MSEK	186.5	75.4	147.3	515.2
Earnings per share, SEK	2.45	0.98	44.00	6.58
Order bookings, MSEK	1,416.3	880.2	60.9	4,229.0
Net liabilities, MSEK	699.0	765.4	–8.7	572.6
Net debt/equity ratio, %	26.7	31.9	–16.3	22.9
Cash flow after capital expenditures, excl aquisitions, MSEK	143.8	258.1	–44.3	596.1

Net revenue per segment (subsidiaries) MSEK

	2021 Q2	2020 Q2	Change %	2020 full-year
Lesjöfors	792.0	510.4	55.2	2,448.7
Habia Cable	192.6	220.7	–12.7	804.0
Beijer Tech	351.8	231.6	51.9	997.1
Parent company and intra-group	–	–0.2	–	–
Total Group	1,336.4	962.5	–	4,249.8

Operating profit per segment (subsidiaries) MSEK

	2021 Q2	2020 Q2	Change %	2020 full-year
Lesjöfors	178.5	62.9	183.8	441.2
Habia Cable	–0.3	12.8	–102.3	53.7
Beijer Tech	23.9	10.1	136.6	69.7
Parent company and intra-group	–5.6	–6.8	–	–19.9
Total	196.5	79.0	–	544.7

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Q2: President’s statement