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G & L Beijer AB Year-End Report 2012

- Net sales increased by 15 per cent to SEK 6,758.3M (5,897.3).

- Operating profit amounted to SEK 419.9M (428.1).

- Excluding one-time items, the period’s result amounted to SEK 293.1M (331.9). Including one-time items, the period’s result was SEK 310.6M (370.0).

- Profit per share amounted to SEK 6.66 (7.69) excluding one-time items and the divested operation. Including one-time items and the divested operation, profit per share amounted to SEK 7.08 (8.49).

- The Board of Directors proposes a dividend of SEK 4.75 per share (4.50).

G & L Beijer is a technology-oriented trading Group which, through a combination of added-value agency products and products of the company’s own development, offers competitive solutions within refrigeration and air conditioning.

G & L Beijer reported a stable trend and a significant increase in sales for the 2012 full year. The increase is mainly explained by the acquisitions of Toshiba’s operation within air conditioning and heating as well as United Refrigeration’s refrigeration wholesale operations in France and the United Kingdom during the fourth quarter of 2011.

Consolidated sales increased by 15 per cent to SEK 6,758.3M (5,897.3) for the 2012 full year. The acquisitions accounted for the sales increase during the period. Adjusted for currencies and excluding acquisitions, i.e. organic, sales fell by 2.7 per cent for the full year.

Sales amounted to SEK 1,543.3M (1,681.0) for the fourth quarter. The fall is explained by the generally lower demand which characterised the year and the stronger SEK. Organi­cally, sales fell by 5.9 per cent. The acquired Toshiba operation, which is included from the fourth quarter of 2011 and has a stronger business cyclical and seasonal component than G & L Beijer’s other operations, affected sales negatively during the fourth quarter compared with the corresponding quarter previous year.

The sales pattern from the first three quarters largely continued during the fourth quarter. Sales in southern Africa and Thailand continued to develop positively. The sales volumes in southern Europe, including France, Italy and Spain, were marginally lower. The volumes also declined in the Nordic countries and eastern Europe. In central Europe, including Belgium, Holland and Switzerland, the sales volumes increased slightly compared with the previous year.

The acquisitions contributed sales of SEK 1,591.6M in total for the full year. The acquisitions of United Refrigeration’s operations in France and the United Kingdom have been restructured which has resulted in lower expenses and increased profitability. Toshiba’s operation within air conditioning and heating has developed in line with the expectations, taking into account a slowdown in demand. The Toshiba operation’s sales for the 2012 full year fell compared with 2011.

During the year, a number of structural changes and cost savings were carried out aimed at parrying the reduced demand in the market. In Switzerland, the operations were merged from three into two companies. In the United Kingdom, an office in London was closed and the operation moved to Leeds. In Italy, Belgium and Holland, staff reductions were made. In Ireland, the recently acquired company, Gasco, was merged with the existing operation within Dean & Wood. The different measures are expected to generate annual cost savings of around SEK 40M.

During 2012, G & L Beijer initiated the establishment of a refrigeration wholesale operation in Germany with two offices, one in Ratingen and one in Leipzig.

Consolidated operating profit for the 2012 full year amounted to SEK 419.9M (428.1). The operating profit for the fourth quarter was SEK 88.7M (115.8). The result was positively affected by contributions from the acquired operations. However, the lower organic sales affected the results negatively. In addition, the result was charged with structural costs of SEK 5.8M for the closure of part of the operation in Switzerland during the fourth quarter and with setup expenses in Germany. The result was also affected negatively by a global price decrease of refrigerants during the year.

The Group’s financial income/expense amounted to SEK -11.0M (54.3) for the full year and to SEK -8,8M (-1.2) for the fourth quarter. Financial income/expense for the full year includes capital gains of SEK 22.0M from the divestment of a participation in the associated company, Förvaltnings AB Norra Vallgatan, during the first quarter of 2012. The first quarter of 2011 includes the divestment of shares in Beijer Alma of SEK 51.7M.

Profit before tax amounted to SEK 408.9M (482.4) for the full year and to SEK 79.9M (114.6) for the fourth quarter. Profit after tax amounted to SEK 310.6M (370.0) for the full year and to SEK 54.3M (100.4) for the fourth quarter. Profit per share was SEK 7.08 (8.49). Excluding one-time items and the divested operation, profit per share was 6.66 (7.69).

The Board of Directors proposes that the Annual Meeting of shareholders resolves that a dividend of SEK 4.75 (4.50) per share shall be paid for the 2012 financial year. This is equivalent to a total of SEK 201.4M if the shares currently held by the company are excluded.

Other financial information
Consolidated capital expenditure including acquisitions amounted to SEK 83.1M (1,004.8) for the full year. Liquid funds, including unutilised bank overdraft facilities, were SEK 538.0M (677.2). Shareholders’ equity amounted to SEK 2,419.3M (2,418.9) at the year end. The net debt was SEK 1,208.6M (1,161.1). The equity ratio amounted to 48.3 per cent (47.5). The average number of employees during the period was 2,142 (1,867).

Significant events
In January 2012, G & L Beijer acquired the Norwegian company, Ecofrigo AS. The company reports annual sales of approximately SEK 35M and has six employees. Ecofrigo is a project-oriented refrigeration distribution company which mainly operates within the planning and distribution of environment-friendly chillers and refrigerants. The acquisition complements G & L Beijer’s existing operation in Norway both geographically and product wise. Ecofrigo is included in G & L Beijer’s accounts from January 2012.

In June, G & L Beijer carried out a share split (2:1) which meant that each share was divided into two shares of the same class. After the split, G & L Beijer’s total number of shares amount to 42,478,230 distributed on 3,306,240 A shares and 39,171,990 B shares. The total number of votes amounts to 72,234,390 after the split.

In August, G & L Beijer acquired the Irish refrigeration company, Gasco Ireland Ltd. Gasco reports sales of approximately SEK 22M and has six employees. The acquisition was a step forward in the consolidation of the Irish market. Gasco is focused within refrigerants and complements G & L Beijer’s existing operation in Ireland, which has its main focus on refrigeration products and air conditioning. Annual sales in Ireland after the acquisition amount to approximately SEK 50M pro forma. The merger is expected to generate synergy gains through cost savings. Gasco Ireland Ltd is included in G & L Beijer’s accounts from 1 August 2012.

Risk assessment
The operations of the G & L Beijer Group are affected by a number of external factors, the effects of which on the Group’s operating profit can be controlled to a varying degree. The Group’s operations are dependent on the general economic trend, especially in Europe, which controls the demand for G & L Beijer’s products and services. Acquisitions are normally linked with risks such as, for example, staff defection. Other operating risks, such as agency and supplier agreements, product responsibility and delivery undertaking, technical development, warranties, dependence on individuals, etc., are continually being analysed and, when necessary, action is taken to reduce the Group’s risk exposure. In its operations, G & L Beijer is exposed to financial risks such as currency risk, interest risk and liquidity risk. The parent company’s risk picture is the same as that of the Group.

Financial information
- The Annual Report for 2012 will be published in April 2013.
- The Three-Month Report for 2013 will be published on 25 April 2013.

Malmö, 8 February 2013
G & L Beijer AB (publ)
Board of Directors

For further information, please contact:
Joen Magnusson
switchboard +46 40-35 89 00, mobile +46 709-26 50 91
Jonas Lindqvist, CFO
switchboard +46 40-35 89 00, mobile +46 705-90 89 04

This interim report has not been the subject of an examination by the company’s auditors.

Accounting principles
This interim report has been prepared in accordance with IAS 34, the Annual Accounts Act and RFR 2.
G & L Beijer AB continues to apply the same reporting principles and valuation methods as those described in the latest Annual Report.