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Beijer Ref AB Q2-2019

Continued strong growth

Net sales increased by 14% in the second quarter compared to the same period last year and amounted to SEK 3,996 million (3,510). Organic growth was 4.4%.

The operating profit for the quarter amounted to SEK 373 million (345), an increase of 8% compared with the same period last year. The operating margin was 9.3% (9.8%), of which 0.2% is a positive IFRS 16 effect.

Profit for the period totalled SEK 265 million (255). Profit per share amounted to SEK 2.08 (1.98).

The company's liquidity is good and unutilised credit amounts to SEK 1427 million (393).

With effect from 1 January 2019, the company applies IFRS 16 with regard to the group's leasing

agreements and all figures for 2019 include this change. The conversion affected operating profit

positively by SEK 7 million and net profit by SEK 0.1 million. The equity ratio has decreased by 3.3 percentage points as a result of an increased balance sheet total.

Comments by the CEO

Environmentally-friendly refrigeration technology

and air conditioning drive growth

The market during the quarter was characterised by continuing strong demand and both sales and profit increased, both organically and through acquisitions. In total, net sales amounted to SEK 3,996 million (3,510), an increase of 14% of which 7% is acquired sales and more than 4% is organic growth. The operating margin, including the effect of IFRS 16, amounted to 9.3% (9.8%). The margin is slightly lower than in the previous year, mainly due to the price of refrigerants not being at the same high level as in 2018.

One of the main features of the quarter is that our OEM and HVAC segments are moving forward strongly, especially in Europe. Both segments are driven by the EU's phasing-out programme for HFC gases, which are being gradually replaced by environmentally friendly alternatives. The OEM segment grew in total by 32% during the quarter and accounted for 10% of the group's sales.

The warm summers of recent years in Europe have contributed to an increased interest in heat pumps, since these are also used for air conditioning. This, combined with a generally high demand, contributes to the strong development of the HVAC segment. Long-term partnerships with strong brands, such as Toshiba, Carrier and Mitsubishi Heavy Industries, give us a good market position. In total, sales in HVAC increased by 37% and now represent 41% of the group's sales.

The quarter has tough comparative figures, since 2018 was a year when the price of refrigerants was at a historically high level. From autumn 2018 and during the first half of 2019, prices have gradually fallen, which affects the commercial refrigeration segment negatively, although volume sales did not decline at the same rate. The decline in sales is well offset by the growth of other segments, which means that the importance for the group of the price trend for refrigerants is declining. The assessment is that the price of refrigerants will stabilise during the autumn. The phasing-out period runs until 2030, with the next major reduction in import quotas in 2021.

All of our geographical regions show growth apart from Eastern Europe, which has been most affected by the price trend for refrigerants. It is positive that the African market is showing growth after having previously been in recession, and we see potential for continuing improvement in earnings.

In general, we can see how more and more countries outside Europe are committing to resolutions that involve phasing out HFC gases. Recently, for example, Cuba became the 73rd country to sign the Kigali agreement and more are being added on an ongoing basis. The agreement means that the consumption of HFC gases is to be reduced by more than 80% over the next 30 years.

During the autumn, we will start a project to expand our production capacity in OEM in order to better meet the increasing demand for eco-friendly refrigeration technology. We will also invest in our own production line, which will handle natural, environmentally friendly refrigerants at the company's filling unit in Gothenburg.

Our market is growing globally and we have much left to do. The group's liquidity is good, which opens up opportunities for new acquisitions. Overall, we are entering the third quarter in excellent shape.

Per Bertland, CEO

Second quarter of 2019


Beijer Ref increased its net sales by 14 per cent to SEK 3,996 million (3,510) in the second quarter of 2019, 7% of which is explained by the acquisitions made in 2018. Adjusted for exchange rate changes and acquisitions, organic growth in net sales was 4.4 per cent. All regions except Eastern Europe show sales growth. Commercial refrigeration represents 49% of the company's sales, 41% is air conditioning and OEM accounts for 10% of total sales. The latter two show a 20% increase in sales during the quarter, while dependence on refrigerants has decreased.

A weakened Swedish krona resulted in positive currency effects of SEK 85 million (133), corresponding to 2.6% (5.8), since most of the company’s sales are in currencies other than Swedish kronor.


The group’s operating profit totalled SEK 373 million (345) during the second quarter, an increase of 8 per cent. The operating margin was 9.3% (9.8%), the main explanation for which is lower prices for refrigerants and that companies acquired during 2018 have a slightly lower margin. Adjusted for IFRS 16 effect, the company's net financial items are in principle unchanged compared with the previous year despite increased borrowing.

The pre-tax profit was SEK 359 million (342). Profit for the period was SEK 265 million (255). Profit per share amounted to SEK 2.08 (1.98).


Cash flow from current operations before changes in working capital amounted to SEK 381 million in 2019, compared with SEK 286 million in 2018. The increase is due to improved profits during the quarter and a positive effect of SEK 74 million attributable to depreciation of usage rights assets arising from the transition to IFRS 16 (leasing). The corresponding amount of SEK 74 m is reported as a decrease in financing activities.

Working capital increased by SEK 426 million during the quarter compared with SEK 275 million the previous year. This gives cash flow from operating activities of SEK -45 million, compared with SEK 11 million the previous year. The change in working capital from year to year is due primarily increasing capital build-up during the quarter. At the end of the period, the group had unutilised credit facilities totalling SEK 1,427 million (393).


The group’s investments in fixed assets including business combinations totalled SEK 40 million (626) during the quarter and refer primarily to investments in fixed assets. In the previous year, Kirby HVAC & Refrigeration Pty Ltd was acquired during the quarter.


No major acquisitions were made during the quarter, but the company is continuously evaluating new opportunities for growth and complementary acquisitions.

The group made a small asset acquisition in Switzerland of a distributor of insulation materials, Durissol, amounting to SEK 3.6 m, which gives the company exclusive rights to their products for five years.


The group has made a minor supplementary acquisition after the quarter of the remaining shares in AC & Ref Parts CQ Patton Pty Ltd in Australia and now owns 100% of the company. The company has annual sales of approximately SEK 25 million through two sales branches. The company is included in its entirety in the consolidated accounts with effect from 1 July 2019.


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, with ten and one vote respectively. Beijer Ref had 7,893 shareholders on 28 June 2019. At present there are 9,918,720 A shares and 117,515,970 B shares.


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 loss of key employees. 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 RFR 2. Beijer Ref continues to apply the same accounting policies and valuation methods as described in the most recent annual report.

IFRS 16 Leases 

IFRS 16 Leases, is applied from 1 January 2019. Beijer Ref has chosen to report the transition to the new standard using the simplified method. The relief rule not to create a comparative year has been applied. A discount rate has been defined per each country and are decided quarterly. Right of use agreements of less than 12 months are reported as short-term agreements and are therefore not included in the reported liabilities or rights of use. Right of use agreements with an acquisition value below USD 5,000 have been classified as low-value agreements and are not included in the reported liabilities or rights of use.

The lease portfolio contains approximately 1,500 contracts and comprises primarily operational leases for offices, warehouses, company cars, forklift trucks and office equipment. Beijer Ref has identified many agreements, primarily relating to properties, with the right to extend. As a result of these considerations, many leases have been deemed to be longer. All leases relating to properties that fall due in 2019 have been extended by three years.

Comparative information is not recalculated and is still reported in accordance with IAS 17 Leases and IFRIC 4 Determining whether an Agreement contains a Lease.

Financial assets and liabilities by category and measurement level

Financial assets and liabilities consist of financial assets valued at fair value and also financial assets and liabilities valued to discounted acquisition cost.

Financial assets valued at fair value consist of two holding, one of which (SEK 22 million) refers to listed shares and is valued at market value on the balance sheet date (measurement level 1). The second holding (SEK 25 million) is an unlisted holding and is valued at estimated fair value (measurement level 3). Financial assets valued at discounted acquisition cost, such as accounts receivables including other receivables and liquid funds, amount to SEK 4 131 million on the balance sheet date and financial liabilities, such as trade creditor including other liabilities, borrowing and other long-term liabilities, amount to SEK 7 432 million.

Financial interest-bearing liabilities such as borrowing linked to financing are valued at discounted acquisition cost and are considered representing a reasonable approximation of the fair value.


The company invites investors, analysts and the media to attend a web meeting at which CEO Per Bertland and CFO Maria Rydén present the interim report for the second quarter of 2019. The presentation will be held in English and lasts for about 20 minutes. The meeting is on 12 July at 10.00 CET.

Email your wish to participate at and a link will be distributed before the meeting. Internet connection is required. The presentation will be available on the company's website

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 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, 12 July 2019

Bernt Ingman


Peter Jessen Jürgensen

Board Member

Frida Norrbom Sams

Board Member

William Striebe

Board Member

Chris Nelson

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 12 July 2019.

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.