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Beijer Ref AB Q2-2018

All in all, our best quarter so far.

Net sales for the second quarter of 2018 increased by 32% compared with the corresponding period in the previous year and totalled SEK 3,510 million (2,657).

The operating profit for the second quarter of 2018 totalled SEK 345 million (223), an increase of 55% compared with the same period last year.

The profit for the period totalled SEK 255 million (154).

Profit per share for the quarter was SEK 1.98 (1.19).

The acquisition of Heatcraft Australia Pty Ltd is included in the company’s accounts as of 5 May.

The acquisition of the French HVAC distributor GH2C is included in the company’s accounts as of 1 May, but has little impact on the company’s profit and financial status.

A 3:1 share split was carried out on 25 April in order to increase the liquidity in the share.

Comments by the CEO

More good news.

Beijer Ref continues to develop strongly. Net sales increased by a total of 32 per cent compared with the corresponding period last year. At the same time, the profit for the period increased by 65 per cent. All European regions are seeing strong organic growth in excess of 20 per cent. All in all, this is our strongest quarter so far.

We are now seeing the F-gas regulation having a more and more of an impact on the European markets. This was particularly noticeable this quarter in the Nordic and Eastern European regions. Our biggest region, Southern Europe, is also performing strongly, which has a positive impact on profits. The ongoing regulation of F-gases and the time-specific phase-out programme benefit us. The fact that we have a large, eco-friendly offering for our customers during the actual transition phase means that we are well-positioned to meet the increasing demand in the market. Our OEM activities are also growing, the production of eco-friendly technology based primarily on natural refrigerants is running at full capacity, and we will continue to expand this production capacity. In addition to our existing plants in Europe, Africa and Asia, following the acquisition of Heatcraft we now also have production plants in Sydney, Australia and in Wuxi, China. We have a carefully considered plan describing how we will transfer our European knowledge in order to increase production in Asia Pacific, a process that is already under way. The same applies for South Africa, where we have production facilities in Johannesburg and Cape Town.

Another factor that is having a positive impact on the profit is price increases in certain refrigerants that took place because of the imbalance between supply and demand, which was caused by the F-gas regulation. We acted early here and made sure that we can offer our customers reliable deliveries. Furthermore, we have a strong range of air conditioning products that are winning market shares in a growing market. The acquisition of the French HVAC company GH2C, which was completed during the period, is a good fit with our strategy.

In the second quarter we completed the acquisition of one of Australia’s biggest refrigeration wholesalers, Heatcraft. Australia is in its winter period at the moment, and the company is therefore contributing primarily to increased net sales for Beijer Ref. At the same time, work on integration is going according to plan. The same applies for the acquisition of Tecsa in South Africa, which was incorporated into the books as of 1 March this year.

In July we completed the formation of our joint venture together with Mitsubishi Heavy Industries, which gives us exclusive rights, and the organisation is now in place to sell in the UK and Ireland.

The completion of two major acquisitions means that we have increased our borrowing. Despite this, I believe that there is plenty of scope for more transactions. The strategy of acquiring additional companies in our segments of refrigeration, HVAC and OEM is firmly in place. The acquisitions, combined with price rises of refrigerants, have resulted in a slight increase in tied-up capital. Despite this, the return on operating capital has increased from 14 to 16 per cent.

During the period we carried out a share split. Following this, both the share price and trading in the share increased, which meant that foreign interest in Beijer Ref has increased, which we feel is positive. After the AGM, key personnel were also offered the opportunity to participate in an option scheme. There is a high level of participation in the scheme, which I view as evidence that we are a cohesive team that believes in and is working for the development of Beijer Ref into an even more successful company.

Per Bertland 


Second quarter of 2018


Beijer Ref increased its net sales by 32 per cent to SEK 3,510 million (2,657) in the second quarter of 2018. A favourable economic situation and price rises, especially in refrigerants, have resulted in continued strong growth in demand, especially in Europe. All regions report an increase in net sales of more than 20 per cent in the second quarter. Adjusted for exchange rate changes and acquisitions, organic growth in net sales was 16 per cent.


The Group’s operating profit totalled SEK 345 million (223) during the second quarter, an increase of 55 per cent. The ongoing transition to eco-friendly refrigeration systems had a positive impact on the profit for the period and also increased demand for HVAC and OEM, which are future growth segments for Beijer Ref. Adjusted for exchange rate changes and acquisitions, the organic improvement in the operating profit was 47 percent.


Cash flow from operating activities before change in working capital was SEK 439 million during the first half of 2018 compared with SEK 308 million for 2017, primarily due to the improved profit. Working capital increased by SEK 387 million during the first half of the year compared with SEK 247 million the previous year. This produces cash flow from operating activities of SEK 52 million, compared with SEK 60 million the previous year. The change in working capital between the years is primarily due to the fact that working capital at the beginning of 2017 was at a higher than normal level, combined with some build-up of stocks.


The Group’s investments in fixed assets including business combinations totalled SEK 975 million (50) during the first half of the year and relate primarily to the acquisitions of Heatcraft and Tecsa, which were financed by external borrowing.


Beijer Ref has completed the agreement to acquire Heatcraft Australia Pty Ltd. The company has just over 300 employees and net sales in 2017 totalled approximately SEK 1.1 billion. Sales take place through a large distribution network with more than 65 branches. This transaction sees Beijer Ref doubling its net sales in the Asia Pacific region. The acquisition also includes an operation in Singapore and a manufacturing unit in China. The company’s profits are included in the company’s accounts as of 5 May. The company makes a positive contribution to the increase in net sales, albeit with a slightly lower operating profit than other sections.

Following a resolution at the Annual General Meeting, Beijer Ref carried out a 3:1 share split on 25 April, which increased interest in the company’s share and its liquidity. The company also exercised the AGM’s authorisation to repurchase its own shares following a decision on a long-term incentive scheme for senior executives. In total, the company bought back 331,650 shares during the quarter and now holds 593,250 shares.


After the end of the period, Beijer Ref completed the formation of 3D Plus, a joint venture with Mitsubishi Heavy Industries Air Conditioning Europe Ltd, and a new organisation has been appointed for sales in the UK and Ireland. Beijer Ref has a holding of 67 per cent in 3D Plus.


The Beijer Ref Group’s operations are subject to a number of business environment factors, the effects of which on the Group’s operating profit can be controlled to varying degrees. The Group’s operations depend on general economic trends, primarily in Europe, which determine demand for Beijer Ref’s products and services. Acquisitions are normally associated with risks, for example staff departures. Other operating risks, such as agency and supplier agreements, product liability and delivery commitments, technical development, warranties, dependence on key individuals, etc., are analysed continually. Where necessary, measures are taken to reduce the Group’s risk exposure. In its operations, Beijer Ref is subject to financial risks such as currency risk, interest rate risk and liquidity risk. The Parent’s risk profile 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 the Swedish Financial Reporting Board’s recommendation RFR 2 ‘Accounting for legal entities’. Beijer Ref continues to apply the same accounting policies and valuation methods as those described in the most recent annual report. For more information on accounting policies and future standards applied as from 1 January 2018, see note 2 of the 2017 Annual Report.

For more information:

Per Bertland, CEO – +46 (0)705-98 13 73

Maria Rydén, CFO - +46 (0)73-429 25 65

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

The Board of Directors and the President assure that the six-month report is prepared in accordance with generally accepted accounting principles for listed companies. The information provided corresponds with the actual conditions in the operation and nothing of significant importance has been left out which could affect the picture of the Group and the parent company that has been created by the six-month report.

Malmö, Sweden 13 July 2018

Bernt Ingman


Peter Jessen Jürgensen

Board Member

Frida Norrbom Sams

Board Member

William Striebe

Board Member

Ross B Shuster

Board Member

Monica Gimre

Board Member

Joen Magnusson

Board Member              

Per Bertland


This information 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 13 July 2018.

Financial calendar 

-       The Interim Report for the third quarter 2018 will be published on 22 October 2018.

-       The Interim Report for the fourth quarter 2018 will be published on 30 January 2019.

-       The Annual Meeting of shareholders will be held on 10 April 2019 in Malmö.

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.