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Beijer Ref Q4 2017

Strongest-ever fourth quarter

Net sales for the fourth quarter of 2017 increased by 9 per cent compared with the corresponding period in the previous year and amounted to SEK 2,401M (2 199).

Operating profit for the fourth quarter of 2017 amounted to SEK 179M (145). It is an improvement of 24 per cent compared with the same period last year.

Profit for the quarter amounted to SEK 146M (100).

Profit per share amounted to SEK 3.39 (2.29).

The acquisition of Tecsa (Pty) Ltd has now been approved by the competition authority in South Africa and the planned takeover date is expected to be 1 March 2018.

The Board of Directors proposes that the Annual Meeting of shareholders resolves that an increased dividend of SEK 5.75 (5.50) per share shall be paid.

Comments by the CEO

Strong end to the year brings record profit.

Beijer Ref ends 2017 with its strongest year and strongest fourth quarter so far. Net sales for the full year increased by 8.7 percent and reached almost SEK 10 billion, while we also achieved improved margins and a strong operating profit. Organic growth for the quarter was almost 11 percent. Earnings per share for the year exceeded SEK 12, which is a record for us.


A couple of factors stand out in the year and the quarter, both of which have a positive impact on the Group’s profit. The regulatory phasing-out of HFC refrigerants is one of them. The Climate Agreement signed in Paris in 2015 states that more than half of the HFC gases in EU Member States shall be phased out by 2020.Although it is our assessment that most countries will not be able to keep to that schedule, an intensive phase is expected in which many companies will need to upgrade their technology at the same time.

Beijer Ref is well-equipped to meet the market’s needs during the transition and can provide the market with alternatives to both maintain existing technology and upgrade to new technology. Above all, we are working actively to provide customers with green technology that is developed and manufactured within our OEM activities.

The economic upturn with low interest rates and high consumption has also contributed to the increase in the Group’s sales. Virtually all of Beijer Ref’s regions report growth compared with the fourth quarter last year.


Southern Europe, which is our biggest single region, grew by 16 percent. Activities in France had a strong quarter, with the HVAC segment accounting for most of the growth in sales. We have also been working to identify smarter solutions for logistics and purchasing. This is now starting to have an impact on the profit. The acquisition of the Toshiba distributor DX Por in Portugal has given us another market to operate in and has already made a positive contribution to our sales in Southern Europe.

The Central Europe region grew by 13 percent during the quarter. Our companies in the UK and Ireland continue to report improved profits, partly because of sales of refrigerants, which are gradually becoming more expensive because of the quota system. At the end of the year we opened a large new logistics centre in the Southern Netherlands, which will hold stocks of products and articles for the whole region, resulting in both cost savings and more efficient delivery flows in the years ahead.

Growth in the Nordic region grew by 3 percent. The off-shore business in Norway is still experiencing an economic downturn, bringing down the growth figure for the region, while the businesses in Sweden, Denmark and Finland have performed well. The transition to new environmental technology is part of the reason for increased sales. The trend indicates that demand for natural refrigerants will continue to rise even more quickly in 2018.

The Eastern Europe region grew strongly, by 27 percent. Here too, we see a general increase in consumption, leading to higher demand for environmental technology and comfort cooling.

Asia Pacific reports stable growth. Our own green air conditioning system, CUBO2 Smart, was recently installed for the first time in Australia. This is a good indication that our OEM activities have good prospects for growth there as well.

Africa is the only one of our regions not reporting growth. Consumption in general is being held back by the economic recession in South Africa. We still believe that Africa is an extremely interesting market for Beijer Ref. An expanding middle class will want to invest in comfort cooling again once the temporary downturn in the market has passed. It is therefore pleasing that the competition authority in South Africa has now announced that they have approved our acquisition of the air conditioning wholesaler TecsaReco. Formal approval is still being awaited from the competition authorities in Namibia and Botswana. But as they represent less than five percent of Tesca’s business, any possible impact will be marginal for us. We are preparing the takeover of the company, which is expected to be incorporated into our accounts as of 1 March this year.


We have a generally positive view of the future, with markets growing rapidly and continuing to demand our products more and more. We analyse acquisitions continuously and would like to add more companies that can supplement and enhance our presence in expansive markets.

In summary, 2017 was a record-breaking year for Beijer Ref, with both net sales and profit exceeding the previous year’s figures. Beijer Ref’s Board of Directors proposes an increased dividend of SEK 5.75 kronor (5.50), which reflects our strong year and good market prospects. We are well prepared to face 2018.

            Per Bertland

            CEO & President

Fourth quarter of 2017


Beijer Ref increased its net sales by 9.1 percent to SEK 2,401 million (2,199) in the fourth quarter of 2017. A favourable economic situation has resulted in continued strong growth in demand in our key European markets. Virtually all regions report growth in net sales during the fourth quarter. Adjusted for exchange rate changes and acquisitions, organic growth in net sales was 10.7 percent.

Net sales during the year increased by 8.7 percent to SEK 9,830 million (9,045). Adjusted for exchange rate changes and acquisitions, organic growth in net sales was 5.2 percent.


The Group’s operating profit totalled SEK 179 million (145) during the fourth quarter, an increase of 23.5 percent. The phasing-out of refrigerants has resulted in dramatic price rises in refrigerants with a high GWP value, which has had a positive impact on the profit in the period. Adjusted for exchange rate changes and acquisitions, the organic improvement in the operating profit was 25.6 percent.

The operating profit increased during the year by 22.3 percent to SEK 725 million (593). Adjusted for exchange rate changes and acquisitions, the organic increase in the operating profit was 19.4 percent. Group net financial items during the year totalled SEK -26 million (-33). The pre-tax profit was SEK 699 million (560). The profit for the year was SEK 521 million (399). Earnings per share totalled SEK 12.06 (9.17).


Cash flow from operating activities before change in working capital was SEK 635 million for the 12 months of 2017, compared with SEK 478 million during the corresponding period of the previous year. During 12 months, the working capital increased by SEK 135 million against an increase of SEK 413 million during the same period of the previous year. This results in cash flow from operating activities of SEK 500 million, compared with SEK 65 million in the previous year. The improved profit and greater focus on operating capital have contributed to an improved cash flow.


Group investments in fixed assets amounted to SEK 99 million (80) for the year.


The Board of Directors proposes that the Annual Meeting of shareholders resolves that a dividend of SEK 5.75 (5.50) per share shall be paid for the 2017 financial year. This is equivalent to a total of SEK 243.7M if the shares currently held by the company are excluded.


As part of Beijer Ref’s objective to be at the cutting edge of the transition to environmentally friendly refrigeration technology, the first environmentally friendly, carbon dioxide-based refrigeration system was delivered to Chile at the beginning of the year. This was the Group’s first supply in South America and is in line with Beijer Ref’s focus on carbon dioxide and other environmentally friendly refrigeration technology to contribute to lower impact on the greenhouse effect.

During the second quarter, Maria Rydén was appointed as the new CFO and member of the Group management team.

The assets of the Portuguese HVAC distribution company DX Por, which has its head office in Porto, were acquired in September. The company is a main distributor for Toshiba HVAC (Heating, Ventilation, Air Conditioning) in Portugal. DX Por is being integrated in Beijer Ref’s organisation and is included in the consolidated accounts from September 2017.

The refrigerants HCFC and HFC are being actively phased out in China. The German retail chain Metro AG has therefore selected Beijer Ref’s Italian subsidiary SCM Frigo to supply the chain’s first transcritical CO2 refrigeration system in China.

In October, Beijer Ref AB signed a contract to acquire Tecsa (Pty) Ltd and its assets. Tecsa (Pty) Ltd, owned by Westbrooke Investment and operating under the brand TecsaReco, is a wholesaler based in South Africa which offers a wide range of products and brands for commercial and comfort refrigeration and air conditioning and spare parts for white goods.

The parties have signed a binding contract, and the takeover is planned for 1 March 2018. The acquisition is estimated to have a long-term positive impact on both sales and profit. The competition authority in South Africa (CompCom SA) has examined the transaction and given its final approval. This confirms that the acquisition will not affect the competition situation in the South African air conditioning wholesale market. It is conditional upon the disposal of two branches in Polokwane and Rustenburg in South Africa. The competition authorities in Botswana and Namibia are expected to respond with their announcements shortly.


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, except as specified in the following. New and amended standards applied as from 1 January 2017 are not expected to have any material effect on the Group’s or Parent’s profit or financial position. For more information on future standards that have not yet entered into force, see page 43 of the 2016 Annual Report.


A number of new and amended standards are effective for periods beginning after January 1, 2018. The company has analyzed the consequences of the accounting standards “IFRS 9 Financial Instruments” and “IFRS 15 Revenue from Contracts with Customers”. None of these is expected to have a significant effect on the consolidated financial statements of the Group or the Parent company.

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

Malmö, 31 January 2018

Beijer Ref AB (publ)

Per Bertland, CEO

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.

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 31 January 2018.

Financial calendar 

-       The Annual Report for 2017 will be published in March 2018.

-       The Interim Report for the first quarter 2018 will be published on 23 April 2018.

-       The Interim Report for the second quarter 2018 will be published on 13 July 2018.

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

-       The Annual Meeting of shareholders will be held at 3 pm on 5 April 2018 in Malmö Börshus.