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Beijer Ref AB Q4-2018

Increased profit and dividend

Net sales for the fourth quarter of 2018 increased by 37% compared with the corresponding period in the previous year and totalled SEK 3,293 million (2,401).

The operating profit for the fourth quarter of 2018 totalled SEK 229 million (179), an increase of 28% compared with the same period last year.

The profit for the period totalled SEK 164 million (146). Profit per share totalled SEK 1.28 (1.13).

During the fourth quarter, Beijer Ref AB issued a commercial paper scheme totalling SEK 700 million as part of the company’s existing financing.

Repurchases of 123,171 class B shares took place during the quarter. The company has now secured access to shares in accordance with the company’s long-term incentive scheme, which runs between 2018 and 2021.

As of 2 January 2019, the Beijer Ref share is being traded on Nasdaq Stockholm's Large Cap.

The Board of Directors is proposing an increased dividend of SEK 3.00 per share (1.92) to the AGM.

Comments by the CEO

2018 - a record year

2018 was a year of historical success for Beijer Ref. Net sales totalled just over SEK 13 billion, an increase of 32 per cent compared with the previous year. Organic growth was 13.4 per cent and the operating margin was 8.3 per cent. The profit for the year totalled SEK 780 million (521), an increase of 50 per cent. Profit per share totalled SEK 6.07 (4.02). This makes 2018 Beijer Ref’s strongest year to date.

During the fourth quarter, net sales increased by 37 per cent, 9.4 per cent of which comprised organic growth. The operating margin for the period was 6.9 per cent, slightly lower than in the previous year, primarily because the overseas share of sales increased due to the acquired companies in Africa, Australia and China. Comparative figures are also at a relatively high level, as the prices of refrigerants started to rise in the autumn of 2017. The profit represents the Group’s best-ever fourth quarter.

Both the full year and the fourth quarter were affected positively by the European phasing-out programme, which has driven demand for our green technology. It is now evident that the EU’s F-Gas regulation is starting to make its mark outside Europe. In December, the UN held its major climate meeting in Katowice, Poland. This confirmed the content of the Paris agreement, including the more than 200 Member States being subjected to increased control with regard to follow-up on the regulatory framework. It is my assessment that the outcome will have positive consequences for our business in the years ahead. We are seeing more and more interest in and curiosity about both green, natural refrigerants and newly developed, synthetic so-called HFOs on other continents. We have already sold our green technology to customers in Australia, China and South Africa. I am convinced that we have only seen the beginning of this transition. The new technologies will gradually become established outside Europe as well.

All of Beijer Ref’s regions are reporting good growth, and the strong growth trend of the previous period is continuing in the Nordic region and Europe. It is also pleasing to see South Africa reporting growth again. The Asia Pacific region is also reporting satisfactory sales figures. The integration of the acquisitions TecsaReco in South Africa and Heatcraft in Australia has gone well, and both companies are now contributing to our profit.

Both commercial and comfort cooling have seen strong growth during the period. The after-sales market is stable, and project activities in the OEM business area continue to have high order input for green refrigeration installations. Work to implement our green refrigeration technology outside Europe is under way, and the plan is for the first non-European systems to be manufactured in South Africa in early 2019. Work is continuing to expand European production capacity in order to meet the growing demand in Europe.

Comfort cooling has performed well during the quarter with growth of almost 50 per cent, of which 22 per cent was organic. Successful partnerships with our strategic suppliers Toshiba, Mitsubishi Heavy Industries and Carrier are having an effect. Together we have gained additional market shares.

Refrigerant prices have fallen slightly compared with the previous quarter, but they remain at a high level. Our earlier assessment, that prices will stabilise during the second quarter of 2019, still holds true.

We face 2019 with confidence. With a growing market and an increased need for our products and technology, opportunities for growth are good, both organically and through acquisitions. We are working continuously to analyse opportunities to add strategic companies to our Group. This year’s strong cash flow and balance sheet create the conditions for this.

All in all, 2018 was another record year. The Board of Beijer Ref proposes an increased dividend of SEK 3.00 (1.92).

Per Bertland, CEO

Fourth quarter of 2018


Beijer Ref increased its net sales by 37 per cent to SEK 3,293 million (2,401) in the fourth quarter of 2018, primarily due to a higher proportion of sales outside Europe, which has its high season during the winter months, and continued high prices, especially of refrigerants. All regions report growth in net sales. Adjusted for exchange rate changes and acquisitions, organic growth in net sales was 9.4 per cent. A weakened Swedish krona resulted in currency effects of SEK 117 million, corresponding to 5.3% since most of the company’s net sales take place in currencies other than Swedish kronor.

Net sales during the year increased by 32 per cent to SEK 13,015 million (9,830). Adjusted for exchange rate changes and acquisitions, organic growth in net sales was 13.4 per cent.


The Group’s operating profit totalled SEK 229 million (179) during the fourth quarter, an increase of 28 per cent. The company had a higher share of sales in Asia Pacific at lower margins during the quarter. Comparative figures for refrigerants are at a relatively high level, as prices had already started to rise in the autumn of 2017.

The operating profit increased during the year by 50 per cent to SEK 1,085 million (725). Adjusted for exchange rate changes and acquisitions, the organic increase in the operating profit was 36 per cent. During the year, the Group’s net financial items totalled SEK -31 million (-26) due to increased borrowing, mainly because of the acquisitions completed during the year. The pre-tax profit was SEK 1,055 million (699). The profit for the year was SEK 780 million (521). Profit per share totalled SEK 6.07 (4.02).


Cash flow from operating activities before change in working capital was SEK 949 million in 2018 compared with SEK 642 million for 2017, primarily due to the improved profit.

Working capital increased by SEK 282 million during the year compared with SEK 140 million the previous year. This produces cash flow from operating activities of SEK 667 million, compared with SEK 502 million the previous year. The change in working capital between the years is due primarily to growth in net sales and some build-up of stocks.

At the end of the year, the company has unutilised credit facilities totalling SEK 1,433 million (496).


The Group’s investments in fixed assets including business combinations totalled SEK 1,057 million (101) during the year and relate primarily to the acquisitions of TecsaReco, Heatcraft and Lumelco. During the year the company also invested SEK 87 million (0) in the repurchase of its own shares after deduction of the option premium received.


The Board of Directors proposes a dividend for 2018 of SEK 3.00 (1.92) per share, corresponding to a total dividend payment of SEK 380M (244) based on the number of outstanding shares at the end of 2018. It is also proposed that the dividend is to be paid in two installments, in April and October, in order to better match the Group's seasonality. The proposed record dates are 12 April and 11 October 2019 respectively.


No acquisitions were made during the quarter, but the company is continuously evaluating new opportunities for growth and complementary acquisitions. During the quarter, the integration of Heatcraft in Australia in particular was implemented, which is expected to produce additional profit improvements in future.

The company has 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 repurchased 123,171 shares during the quarter and now holds 897,980 shares at an average purchase value of SEK 111. The incentive scheme runs between 2018 and 2021. The total cost of the scheme is in line with the Board’s proposal and the AGM’s decision, i.e. SEK 8 million, and was charged to the company’s operating profit in 2018.

In the fourth quarter, Beijer Ref AB set up a commercial paper scheme with a financial envelope of SEK 1,500 million as part of Beijer Ref’s financing. The organiser of the scheme was Handelsbanken and the issuing agents are Handelsbanken and Nordea. The company has available credit facilities corresponding to the amount issued, which totalled SEK 700 million. The scheme will have a positive effect on the company’s net financial income.


The company's acquisition of TecsaReco in South Africa was completed on 1 March 2018, since when it has been included in the company’s accounts. Annual net sales total approximately SEK 450 million and the company has approximately 300 employees and 23 branches.

Beijer Ref acquired Heatcraft Australia Pty Ltd in May 2018. The company has just over 300 employees and net sales of approximately SEK 1.1 billion. The acquisition also included operations in China and Singapore.

In July 2018, Beijer Ref and Mitsubishi Heavy Industries Air Conditioning Europe Ltd completed the formation of the subsidiary 3D Plus, with Beijer Ref as the majority shareholder. The company only had a marginal impact on the profit in 2018.

The acquisition of the Spanish air conditioning company Lumelco S.A. is included in the company's accounts as of August 2018 and strengthens Beijer Ref’s position in the comfort cooling segment. The company has annual net sales of approximately SEK 400 million and over 60 employees. The acquisition is expected to generate long-term positive effects in terms of both net sales and profit.

All in all, these acquisitions represent an increase in net sales of approximately SEK 2 billion and 660 full-time equivalent employees.


As of 2 January 2019, the Beijer Ref share is being traded on Nasdaq Stockholm's Large Cap.


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.

Effects regarding the implementation of IFRS 15 - Revenue from Contracts with Customers and IFRS 9 - Financial Instruments have been analysed at both Group and subsidiary level. The new standards do not have any material impact on the Group’s financial statements other than increased disclosure requirements. The prospective method has been applied from January 2018.

Estimated effects of the transition to IFRS 16 Leases 

Beijer Ref has assessed the effect of the transition to the new accounting standard IFRS 16 Leases, which will be applied as of 1 January 2019. The initial assessment is that IFRS 16 will have a positive effect on the operating profit and a minor positive effect on the profit after financial items. The estimated effects on the balance sheet are described in the table below. 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.

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 for each per country. 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 a 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.

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

Malmö, 30 January 2019

Beijer Ref AB (publ)

Per Bertland, CEO & President

For more information:

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.

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 30 January 2019.

Financial calendar 

• The Annual Report for 2018 will be published in March 2019.

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

• The Interim Report for the first quarter 2019 will be published on 16 April 2019.

• The Interim Report for the second quarter 2019 will be published on 12 July 2019.

• The Interim Report for the third quarter 2019 will be published on 22 October 2019.

• The Interim Report for the fourth quarter 2019 will be published on 30 January 2020.