Interim report January – September 2021
Organic and acquisition-driven growth with favorable profitability
The strong demand in most customer segments and geographic regions continued in the third quarter. The Group reported robust growth, with strong organic order bookings and sales supplemented by additional growth through acquisitions. Operating profit before items affecting comparability reached a record-breaking level, and the margin remained at the same high level as in the first half of the year. The supply chains in the industrial sector are facing mounting pressure, mainly due to the supply of certain raw materials and input goods, but restrictions on electricity production may also impact production in certain markets. Overall, this is contributing to greater uncertainty about the future. Thanks to the Group’s diversified supplier and customer base, and healthy inventory levels, the impact on earnings during the quarter was limited.
Lesjöfors’s third quarter was characterized by a high activity level on many fronts. Order bookings, sales and production remained high. Growth was broad-based across the company’s geographic regions and business areas, with an impressive organic increase of 24 percent. During the quarter, the company acquired Alcomex, a leading and growing European manufacturer of door and industrial springs, which made a strong contribution to the business. A number of activities were initiated to realize synergies and identify new, joint business opportunities. At the same time, a business was divested in Germany, which had a negative, non-cash impact on the quarter but will strengthen Lesjöfors going forward.
Habia Cable had a strong quarter, with growth driven by favorable demand in industry and telecom. Production was at full capacity to compensate for the loss of production caused by the data intrusion in April. This resulted in an improved operating margin. Challenges related to material shortages and to electricity supply in China are expected to worsen during the autumn, although the impact of these challenges has so far been limited.
Beijer Tech continued to note favorable demand, particularly in Fluid Technology, but infrastructure projects in Norway also contributed to the company’s growth. Both order bookings and sales increased organically, while acquisitions contributed significant profitable growth. Despite challenges in the form of long lead times and price increases, which are expected to continue during the year, the operating margin improved.
The Group welcomed two new, well-managed companies during the quarter. In addition to Alcomex, Källström Engineering Systems was acquired, adding a profitable and growing company that supplements Beijer Tech’s Fluid Technology business area with filling solutions for the battery industry. The Group is continuing to focus on acquiring attractive companies that can contribute to our profitable growth. The level of activity both internally and in the market is high, and there are numerous exciting opportunities.
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