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Beijer Ref AB Q4-2019

Increased profits, acquisition and increased dividend

Fourth quarter

Net sales increased by 4.3% in the fourth quarter compared to the same period last year and amounted to SEK 3,435 million (3,293). Organic growth amounted to 0.9% and the rest of the increase represents positive currency effects.

The operating profit for the quarter amounted to SEK 256 million (229), an increase of 11.8% compared with the same period last year. The operating margin amounted to 7.4% (6.9%). Net profit totalled SEK 183 million (164). Profit per share amounted to SEK 1.42 (1.28).

The company's cash flow has been strong during the quarter. Unused credit amounts to SEK 1,631 million (1,433).

After the quarter, ACD Trade in Australia with an annual net turnover of SEK 540 million has been acquired.

Full year 2019

Net sales increased by 13.9% in 2019 compared to the previous year and amounted to SEK 14,817 million (13,015). Organic growth amounted to 4.4%, acquisition effects to 6.3% and the rest represents positive currency effects.

The operating profit for the year amounted to SEK 1,230 million (1,085) despite fall in refrigerant prices. This is an increase of 13% compared with the previous year. The operating margin amounted to 8.3% (8.3%).

Net profit totalled SEK 873 million (780). Profit per share amounted to SEK 6.82 (6.07).

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 Board of Directors proposes to the Annual General Meeting an increased dividend of SEK 3.50 per share (3.00).

Comments by the CEO

Strong end to a good year

2019 was yet another strong year for Beijer Ref. The group's net sales amounted to SEK 14.8 billion, an increase of almost 14% compared with the previous year. Organic growth for the year amounted to 4.4%. The operating margin was 8.3%, which is in line with previous years, despite the fact that both prices and volume of the refrigerants have gradually fallen during the year. Operating profit increased by 13.3% compared with the previous year.

The fourth quarter began somewhat slowly, while the second half was significantly stronger. During the period, the group's sales and profit increased compared with the same quarter the previous year. Net sales increased by 4.3%. The increase in sales is mainly due to increased sales of HVAC and OEM. The operating margin was 7.4%, which is 0.5 percentage points better than the previous year. The period does not contain any acquisition effects.

Both the quarter and the year as a whole have been marked by a fall in the price level of refrigerants and a decrease in demand for refrigerants, which has had a negative impact on Beijer Ref's earnings. At the same time, HVAC and OEM have developed well during the quarter. Commercial cooling, apart from refrigerants, is stable and together with HVAC and OEM more than well compensates for the negative development of refrigerants. Nevertheless, it is reasonable to assume that refrigerant prices will be at a historically high level until 2030 when the phasing-out of F-gases under EU regulations will be completed. Meanwhile, Beijer Ref is well equipped to provide the market with environmentally friendly alternatives. Demand for such solutions is increasing and we act accordingly; among other things, we are doubling our OEM production capacity by investing in a new plant in Padua, Italy. We are also investing in our plant in Gothenburg to meet the increased demand for natural refrigerants such as CO2 and propane. At the same time, we are expanding the group's educational academies, where we are increasing knowledge about natural refrigerants. During the year we have opened new academies in Europe and China, which is also a good way to build relationships with our customers and suppliers.

All regions show sales growth in the fourth quarter, in particular Africa and Asia Pacific, which had peak season during the period. The acquisition of Tecsa Reco in South Africa has developed well and is now contributing to improving the group’s margins. In Australia, the restructuring of Kirby has gone according to plan, which has led to improved margins compared to the same period in the previous year. During the quarter, it became clear that our Australian operations will be coordinated under one headquarters and one distribution and logistics centre, an initiative that will provide synergies in an important market. Southern Europe has also had a positive increase in sales and profit during the quarter, which is mainly driven by demand for air conditioning. The Nordic region, Central Europe and Eastern Europe have been the most affected by lower refrigerant prices. However, the Nordic region remains our most profitable region, and it is also the most advanced in conversion to new environmental technologies.

Acquisitions are always high on our list of priorities. 2018 was an acquisition-intensive year and 2019 was largely devoted to consolidating the new companies into our group structure. It therefore feels good to start the new year with the acquisition of ACD Trade in Australia. A highly interesting company with annual sales of approximately SEK 540 million that distributes well-known HVAC brands. With a strong cash flow and a strong balance sheet behind us, we have every opportunity to continue to grow, both organically and through acquisitions. Together with cost control and a growing market in great need of our products, we are entering 2020 with confidence.

Finally, I am pleased to confirm to our shareholders that Beijer Ref's Board of Directors proposes an increase in dividend to SEK 3.50 (3.00).

       Per Bertland, CEO

Fourth quarter of 2019


Beijer Ref increased net sales by 4.3 per cent to SEK 3,435million (3,293) in the fourth quarter of 2019, of which 0.9% was organic sales growth. All regions demonstrate an increase in sales. Both Australia and Africa show strong sales growth during the quarter, which offsets the Group's seasonal variations.

Commercial refrigeration represents 54% (56%) of the company's sales, 35% (33%) is HVAC and OEM accounts for 11% (11%) of total sales. The latter two show organic growth of approximately 7% and 6% respectively during the quarter. Refrigerants’ share of total business continues to decline.

A weakened Swedish krona resulted in positive currency effects of SEK 111 million (117), corresponding to 3.4% (5.3%), since most of the company’s sales are in currencies other than Swedish kronor.


The group’s operating profit totalled SEK 256 million (229) during the fourth quarter, which is an increase of 12%. The operating margin amounted to 7.4% (6.9%). Adjusted for IFRS 16 effects, the company's net financial items are SEK -6 million (-12), which is lower than the previous year in spite of increased borrowing.

The pre-tax profit was SEK 242 million (216). The effective tax rate for the full year is 25.7% (26.1%). Net profit was SEK 183 million (164). Profit per share amounted to SEK 1.42 (1.28), an increase of 11%.


Cash flow from current operations before changes in working capital amounted to SEK 1,280 million in 2019, compared with SEK 949 million in 2018. Operating profit is higher in the quarter, but non-cash items increased by SEK 297 million in respect of depreciation of usage rights assets due to the transition to IFRS 16. Tax paid during the quarter is also higher, due to higher profits.

Working capital increased by SEK 231 million during the quarter, compared with a decrease of SEK 326 million the previous year. This gives a positive cash flow from operating activities of SEK 481 million, compared with SEK 447 million the previous year. The change in working capital between the years is mainly explained by a lower build-up of stocks. The company has not extended SEK 150 million for the certificate programme, which was launched at the end of 2018.

At the end of the period, the group had unutilised credit facilities totalling SEK 1,631 million (1,433).


The group's net investments in fixed assets including operating acquisitions amounted to SEK 33m (70) during the quarter and mainly relate to investments in ongoing new installations at the company's production unit and a new ERP system in the Netherlands and Australia.


The company continuously evaluates new acquisition opportunities but has not completed any acquisitions during the period. For further information, see significant events after the quarter.


Beijer Ref AB has entered into an agreement to acquire the shares of the Australian HVAC company ACD Trade. ACD Trade is a leading company in HVAC distribution in Australia with some 60 employees. The company provides the market with well-known brands and a wide product range that includes both plant and components. Sales are made via a distribution network with nine branches. Reported annual sales amount to approximately SEK 540 million. Beijer Ref acquires ACD Holding Company Pty Ltd. from Cliplight US Holdings, Inc.

The group is already established in Australia through Beijer Ref Australia and Kirby. The acquisition strengthens the group's presence in the Asia Pacific region. The parties have reached a binding agreement with effect from 27 January and the takeover is scheduled for 31 January 2020. ACD Trade will continue to be run in its existing form and will be included in the company's accounts with effect from 1 February 2020. The acquisition is not expected to significantly affect the group's earnings or financial position, but makes a positive contribution to the company's profit development.

Beijer Ref has decided to build a common central warehouse at the company's distribution centre in Lyon, France. Construction begins in autumn 2020 and the plant will be completed by the end of 2022. The investment is estimated to amount to approximately €10M. The facility will have a clear green profile.


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 vote respectively. Beijer Ref had 8,750 shareholders on 31 December 2019 (6,721). The proportion of foreign shareholders amounts to 4.4% (4.7%), corresponding to a capital shareholding of 57.6% (54.4%). As per 31 December 2019, there are 9,918,720 A shares and 117,515,970 B shares. The company's ten largest shareholders hold 63.8% (68.9%) of the votes and 78.3% (81.2%) of the capital. Average sales of the Beijer share in the quarter amounted to 207,819 shares (190,930) per day at an average purchase price of SEK 252 (149). The closing price on 31 December was SEK 275 (149).


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 16 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 3 466 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 6 256 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 telephone conference at which CEO Per Bertland and CFO Maria Rydén will present the interim report for the fourth quarter of 2019. The presentation is held in English and lasts about 20 minutes.

The meeting is on 30 January at 10.00 CET.


Teleconference: Dial-in number

SE: +46 8 566 426 95

UK: +44 33 330 090 30

US: +1 833 526 83 83

The presentation will also be available on the company's web­site

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

Malmö, 30 January 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 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 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

• Annual Report 2019 will be published on 26 March 2020.

• AGM will be held in Malmö on 16 April 2020.

• The Interim Report for the first quarter 2020 will be published on 21 April 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.