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Beijer Ref AB Q1-2020

Impact of Covid-19 in the first quarter

First quarter

Net sales increased by 1.3% in the first quarter compared to the same period last year and amounted to SEK 3,478 million (3,434). Acquisition effects amounted to 3.3%. Positive currency effects amounted to 1.2%, while organic growth was negative by -3.2%.

The operating profit for the quarter amounted to SEK 197 million (244), a decrease of 19% compared with the same period last year. The operating margin amounted to 5.7% (7.1%). The main reasons for this are the effects of Covid-19 and a lower share of refrigerant sales.

Profit before tax was SEK 182 million (228). Net financial items are in line with previous years despite increased borrowing in connection with the acquisition of ACD Trade.

Profit per share before and after dilution amounted to SEK 1.05 (1.33 and 1.32 respectively), a decrease of 21%.

The acquisition of the wholesale company ACD Trade in Australia was completed in the first quarter of 2020. The company has annual sales of SEK 540 million with 60 employees across 9 branches. The company is included in the consolidated accounts with effect from 1 February 2020.

The company's liquidity remained good during the quarter and the company's balance sheet is strong, with unutilised credits amounting to SEK 1,272million (1,588).

The second quarter will be affected by the effects of Covid-19. Measures have been taken in all parts of the business to fend off some of the effects. The action programme will have an effect in the second quarter and the company expects net savings of approximately SEK 250 million in 2020.

Due to the present uncertainty about the effects of Covid-19, the board has decided to postpone the Annual General Meeting and proposes that the dividend is halved to SEK 1.75. The new date for the Annual General Meeting is 25 June 2020.

Comments by the CEO

We shall come out of this crisis stronger

The first quarter of the year had a strong start before the Covid-19 pandemic made an impact on the global economy. It is a scenario that we could not have foreseen, but which is nonetheless a reality to which we must relate. As soon as we realised the extent of the situation, necessary measures were taken to address these new market conditions. Our strong cohesion that characterises the group plays an especially important role now, because such rapid changes require teamwork and loyalty from our employees. They are our greatest asset and their safety and well-being will always be of the highest priority.

Sales in the first two months of the quarter followed our expectations until the effects of Covid-19 became felt in the second half of March. Overall, net sales including acquisitions are slightly higher than in the same period last year.

The operating margin for the quarter has been negatively affected and two factors in particular have had an effect. Refrigerant prices have continued to fall and are at a lower level than in the previous year. However, we are beginning to sense some stabilisation of this trend and in historical terms prices are still at a high level. The effect of Covid-19 has obviously also had an impact, with most of the largest markets, which together make up about 70% of sales, being almost completely shut down during part of March. Nevertheless, sales of air conditioning have been relatively strong during the quarter, especially in Central Europe, Eastern Europe and Asia Pacific. Our HVAC product area has thus experienced growth during the quarter, including the effects of the acquisition of ACD Trade in Australia at the beginning of the year. In the OEM business we see a slight increase in sales during the quarter, despite the fact that our factories in China and Italy had to close for a short period in February and March respectively. Since Beijer Ref's business is considered to be essential to society – our products are necessary for the proper functioning of the food industry – most of our 450 branches are open in order to provide service and maintenance, in some cases in very restrictive forms.

Our assessment is that the effects of Covid-19 will have an even greater impact on the business in the second quarter. For this reason, we have taken measures in the form of cost savings. Examples of such measures are that management and most employees have voluntarily reduced their salaries. A large proportion of our employees have temporarily reduced working hours, the number of employees has been reduced and major investment projects have been temporarily paused. We have also negotiated improved terms with our suppliers. All in all, our cost base has been reduced in both the short and long term, while we will be able to gear up quickly again when the market turns up. We hope and believe that the third quarter will be more stable and that the market will return to a more normalised state by the end of the year.

Historically, Beijer Ref has come out stronger after a crisis. We are part of an industry that is important to society, which means that the business does not come to a stop despite the fact that we are in an extreme situation. In circumstances such as these, there may be acquisition opportunities that would otherwise not have been possible. Our e-commerce has increased significantly during this period, which gives us a clear indication that our initiatives in digitalisation have been well worth the investment costs and here we will of course continue to invest for the future.

Beijer Ref has always been and will remain a company that stands for stability, in both good and bad times. Due to the present Covid-19 crisis, the board has proposed halving the dividend and postponing the Annual General Meeting until the end of June. The group's strong balance sheet and cash flow provide us with security even in the present circumstances and we are determined to learn lessons from what we are going through now, in order to be even better in the future. 2020 will be challenging, but we see a bright future and will be strong on the day things turn.

Per Bertland, CEO

First quarter of 2020


Beijer Ref increased its net sales by 1.3 per cent to SEK 3,478 million (3,434) in the first quarter of 2020. Adjusted for exchange rate changes and acquisitions, organic growth in net sales was negative at -3.2 per cent (7.8).

The main reasons are falling refrigerant prices and the effect of Covid-19, with most of the largest markets, which together make up about 70% of sales, being almost completely shut down during part of March. The company estimates that sales have decreased by approx. SEK 200 million as a result of Covid-19. A weakened Swedish krona resulted in positive currency effects of SEK 41 million (104), corresponding to 1.2 per cent (4.3), since most of the company’s sales are in currencies other than Swedish kronor.


The group’s operating profit totalled SEK 197 million (244) during the first quarter, which is a decrease of 19 per cent. Positive exchange rate effects of SEK 3 million (8) are included in the operating profit figures. The operating margin amounted to 5.7 per cent (7.1).

The reduction in profit is due to lower prices of refrigerants, a shift in the mix to a higher proportion of air conditioning and the effects of Covid-19.

Profit before tax was SEK 182 million (228). Profit for the period was SEK 135 million (170). Profit per share before dilution amounted to SEK 1.05 (1.33).


Cash flow from current operations before changes in working capital amounted to SEK 218 million in 2020, compared with SEK 278 million in 2019. The change is due to lower earnings during the quarter and a higher proportion of tax paid.

Working capital increased by SEK 21 million during the quarter compared with SEK 42 million the previous year. This gives cash flow from current operations of SEK 197 million (236). The change in working capital between the years is due primarily to a smaller build-up of stocks during the quarter.

At the end of the period, the company had credit facilities amounting to SEK 4,044 million (4,114), of which unutilised credits amounted to SEK 1,272 million (1,588). Of the total credit facilities, 70% are due in November 2020 and the remainder in 2022 and 2023.


Cash flow from investment activities amounted to SEK -218 million (-27), which relates primarily to business combinations and investments in fixed assets. During the first quarter, the company acquired ACD Trade, while no acquisitions were made in the corresponding period last year.


The acquisition of the wholesale company ACD Trade in Australia was completed in the first quarter of 2020. The company has annual sales of SEK 540 million with 60 employees across 9 branches. The company is included in the consolidated accounts with effect from 1 February 2020. With the acquisition, Beijer Ref will be an even stronger player in Australia and the Asia Pacific region will account for about 20 per cent of the company's future sales.


The first quarter of the year has in many ways been marked by the new Covid-19 virus and its effects on society and the stock market. At the beginning of 2020, macroeconomic conditions were relatively good, although a slight slowdown could be observed. However, the spread of the Covid-19 virus changed the situation drastically and the market reacted with sharp stock market falls and lower interest rates. So far, the consequences have been significant and it is too early at present to assess the overall effects the outbreak will have on Beijer Ref. From mid-March onwards, markets representing 70% of the company's operations have been closed. In China, which was the first out, production is in full swing and demand is increasing. The factory in Italy is also open from 6 April and has a good stock of orders. The company estimates that sales have decreased by approx. SEK 200 million as a result of Covid-19. Measures have been taken to address the effects, including in the following areas:

• Adjusted purchasing and inventory build-up, as well as extended credit periods

• Postponed investment plans at the company's central warehouse in Lyon, France

• Negotiations with landlords

• Temporarily reduced working hours for employees

• Redundancies and reductions in pay

The action programme will have an effect from the second quarter onwards and the company expects net savings of approximately SEK 250 million during 2020.


The Annual General Meeting will be held in Malmö on 25 June 2020. The venue will be advised later. For safety reasons, the meeting will be kept as short as possible to reduce the risk of infection. In view of the present uncertainty caused by the Covid-19 pandemic, the board has decided to halve the dividend proposed to the Annual General Meeting.

It is the board’s ambition to call shareholders to an extraordinary general meeting later this year to decide on an additional dividend, if the market has stabilised and normalised.


Since 2 January 2019, Beijer Ref’s B share has been listed on Nasdaq OMX Stockholm's Large Cap list. The share capital in Beijer Ref totals SEK 371,685,513, made up of 127,434,690 shares, each with a quota value of SEK 2.92. There are two types of share, A shares and B shares, which represent ten and one votes respectively. Beijer Ref had 9,101 shareholders on 31 March 2020 (7,313). The proportion of foreign shareholders amounts to 4.5% (4.6), corresponding to a capital shareholding of 59.6% (54.8). As of 31 March 2020, there were 9,918,720 class A shares and 117,515,970 class B shares. The company's ten largest shareholders hold 78.6% (80.4) of the votes and 64.5% (67.5) of the capital. Average sales of the Beijer share in the quarter amounted to 184,243 shares (210,805) per day at an average purchase price of SEK 233 (150). The closing price on 31 March 2020 was SEK 179 (150). As of 31 March 2020, the market value was SEK 22.8 billion (19.4).


Beijer Ref group's operations are affected by a number of external factors whose effects on the group's operating profit can be monitored to varying degrees. The group's operations depend on general economic developments in Europe in particular, which govern demand for Beijer Ref's products and services.

Like other global companies, Beijer Ref is affected by pandemics and in 2020 the Group will be affected by Covid-19. Most of the largest markets, which together make up about 70% of sales, has been almost completely shut down during part of March. The company is taking the necessary steps to reduce its impact and is following the WHO recommendations.

Acquisitions are normally associated with risks, such as loss of key personnel. Other operating risks, such as agency and supplier agreements, product liability and delivery commitments, technical development, guarantees, dependence on individuals etc., are continuously analysed. If necessary, measures are taken to reduce the group's risk exposure. In its operations, Beijer Ref is exposed to financial risks such as foreign exchange risk, interest rate risk and liquidity risk. The parent company's risk pattern is the same as that of the group. For further information, see the group's annual report.


This interim report was prepared in accordance with IAS 34, the Swedish Annual Accounts Act and RFR 2. Beijer Ref continues to apply the same accounting policies and valuation methods as described in the most recent annual report. Information pursuant to IAS 34.16A, in addition to disclosure in the financial reports and their associated notes, also appears in other parts of the interim report.

Financial assets and liabilities by category and level of valuation

The group's financial assets and liabilities consist of financial assets measured at fair value through other comprehensive income and financial assets and liabilities valued at accrued acquisition value.

Financial assets valued at fair value through other comprehensive income consist of two holdings, one of which (SEK 6 million) refers to listed shares and is valued at market value on the balance sheet date (valuation level 1). The second holding (SEK 25 million) is an unlisted holding and is valued at estimated fair value (valuation level 3). Financial assets valued at accrued acquisition value, such as trade receivables and other receivables, as well as cash and cash equivalents, amount to SEK 3,731 million on the balance sheet date and financial liabilities valued at accrued acquisition value such as accounts payable, leasing liabilities and borrowings, as well as other long-term liabilities, amount to SEK 6,934 million.

Financial interest-bearing liabilities such as loans linked to financing are entered at accrued acquisition value and are considered to constitute a good estimate of fair value taking into account the fixed terms and the setting of interest rates.


The company invites investors, analysts and the media to attend a telephone conference at which CEO Per Bertland and CFO Maria Rydén will present the interim report for the first quarter of 2020. The presentation is held in English and lasts about 20 minutes. The meeting is on 21 April at 10.00 CET.

Follow the link:

Teleconference: Dial-in number

SE: +46 8 566 426 93

UK: +44 33 330 090 32

US: +1 833 526 83 81

The presentation will also be available on the company's web­site from 08.40 on 21 April.

This interim report for Beijer Ref AB (publ) has been submitted following approval by the Board of Directors.

Malmö, 21 April 2020

Beijer Ref AB (publ)

Per Bertland, CEO & President

For more information on this report:

Per Bertland, CEO – switchboard, +46 (0)40-35 89 00

Maria Rydén, CFO – switchboard, +46 (0)40-35 89 00

This report is information that Beijer Ref AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 08.30 CET on 21 April 2020.

This interim report has not been the subject of examination by the Company’s Auditors.

Beijer Ref in short

The Beijer Ref Group is focused on trading and distribution operations within refrigeration products, air conditioning and heat pumps. The product programme consists mainly of agency products from leading international manufacturers and, in addition, some manufacture of own products, combined with service and support for the products. The Group creates added value by contributing: technical competence to the products; accounting for knowledge and experience about the market; and by providing efficient logistics and warehousing.

Operations are carried out by region within the Beijer Ref, which comprises Beijer Ref ARW (Air conditioning, refrigeration, wholesale) and Toshiba’s distribution operation within air conditioning and heating. The Beijer Ref Group is a leading operator within the refrigeration sector in Europe and has a significant position within air conditioning in Europe. The operation is split into six geographic segments: Nordic countries, Southern Europe, Central Europe, Eastern Europe, Africa, and Asia Pacific. Growth is achieved both organically and through the acquisition of companies which supplement existing operations.

Seasonal effects

Beijer Ref’s sales are seasonally dependent as demand for refrigeration and air conditioning is at its peak during the warm months of the year. It means that demand in the northern hemisphere is at its peak during the second and third quarters whilst demand in the southern hemisphere is at its peak during the first and fourth quarters.

Financial calendar

• The new date for the Annual General Meeting is 25 June 2020.

• The Interim Report for the second quarter 2020 will be published on 15 July 2020.

• The Interim Report for the third quarter 2020 will be published on 20 October 2020.

• The Interim Report for the fourth quarter 2020 will be published on 28 January 2021.

This document is a translation of the Swedish language version.

In the event of any discrepancies between this translation and the original Swedish document, the latter shall be deemed correct.