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G & L Beijer AB Year-End Report 2013

- Net sales amounted to SEK 6,595.4M (6,758.3).

- Operating profit before one-time items amounted to SEK 411.9M (425.7). Including one-time items, operating profit was SEK 377.7M (415.2).

- Excluding one-time items, net profit amounted to SEK 269.2M (293.0). Including one-time items, net profit amounted to SEK 244.2M (305.8).

- Profit per share amounted to SEK 6.10 (6.66) excluding one-time items. Including one-time items, profit per share amounted to SEK 5.51 (6.96).

- Continued positive trend during the fourth quarter with a sales increase of three per cent compared with the corresponding quarter in the previous year. Operating profit increased by 18 per cent for the same period.

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

- The South African refrigeration wholesale company, Eurocool, was acquired after the end of the reporting period.

G & L Beijer is a technology-oriented trading Group which, through added-value products, offers competitive solutions within refrigeration and comfort climate.

G & L Beijer enjoyed a stable performance during the year. After the first six months, when several markets were characterised by weak demand, the trend turned upwards. The third quarter of the year was the Group’s best so far, both from a point of view of sales and the results for the current operation. The fourth quarter remained positive which indicates some improvement in the market.

Consolidated net sales fell by two per cent to SEK 6,595.4M (6,758.3) for the 2013 full year. Organic sales were unchanged compared with the previous year.

Sales for the fourth quarter amounted to SEK 1,589.2M (1,543.3), an increase of three per cent in both reported and organic terms. Overall, the second half of 2013 was stronger than the first six months of the year, as well as in the same period previous year. South Africa is the region where sales improved most during the year.

The weak demand that previously prevailed in Europe has improved. The Scandinavian countries, as well as the United Kingdom and Ireland, enjoyed a positive development, which, above all, can be attributed to the second half of the year. Southern Europe also shows signs of stabilisation.

Consolidated operating profit excluding one-time items for the 2013 full year amounted to SEK 411.9M (425.7). Including one-time items of SEK 34.2M, the result amounted to SEK 377.7M (415.2). The operating profit for the fourth quarter was SEK 98.9M (84.0), an increase of 18 per cent compared with the same period in the previous year. The improved result for the quarter is explained by a stabilisation of the market and by positive effects from the structural measures initiated during the second quarter.

During 2012, a number of structural measures and cost savings were initiated aimed at mitigating the effects of the reduced demand in the market. Additional measures implemented in 2013 affect the result with one-off costs of SEK 34.2M for severance pay and restructuring. The implemented measures are estimated to generate annual cost savings of approximately SEK 50M, of which the majority have been realised and affect the result for 2013.

The Group’s financial income/expense amounted to SEK -31.1M (-10.3) for the full year and to SEK -7.4M (-8.0) for the fourth quarter. Financial income/expense for 2012 included capital gains of SEK 22.0M from the divestment of a participation in an associated company.

Profit before tax amounted to SEK 346.6M (404.9) for the full year and to SEK 91.5M (76.0) for the fourth quarter. Profit after tax amounted to SEK 244.2M (305.8) for the full year and to SEK 61.1M (49.6) for the fourth quarter. Adjusted for one-time items, profit for the year amounted to SEK 269.2M (293.0).

Profit per share amounted to SEK 5.51 (6.96). Adjusted for one-time items, profit per share was 6.10 (6.66).

The Board of Directors proposes that the Annual Meeting of shareholders resolves that a dividend of SEK 4.75 (4.75) per share shall be paid for the 2013 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 65.3M (88.3) for the full year. Liquid funds, including unutilised bank overdraft facilities, were SEK 563.2M (538.0). Shareholders’ equity amounted to SEK 2,417.0M (2,399.7) at the year end. The net debt was SEK 1,211.5M (1,228.5). The equity ratio amounted to 47.3 per cent (47.9). The average number of employees during the period was 2,137(2,141).

Significant events 2013
In April, G & L Beijer acquired the Danish refrigeration wholesaler, FK Teknik, which reported sales of approximately SEK 32M in 2012 and showed good profitability. The company, founded in 1956, enjoys a very good reputation in the market. FK Teknik has five employees. The acquisition was a step forward in a consolidation of the Danish market. G & L Beijer already has a strong position through its existing operation in Denmark. The acquisition is deemed to have a marginal positive effect on G & L Beijer’s profit per share. FK Teknik is included in G & L Beijer’s accounts from 1 April 2013.

In June, the Board of Directors appointed Per Bertland as the new President and CEO of G & L Beijer. Per Bertland took up his duties on 1 July 2013. He has worked in different functions within the G & L Beijer Group since 1990. He has been Head of the Beijer Ref business area and a Member of the Executive Management.

Events after the end of the reporting period
In January 2014, G & L Beijer acquired all the shares in Eurocool (Pty) Ltd, a leading refrigeration wholesaler in South Africa. Eurocool was founded in 1999 and holds a strong market position within G & L Beijer’s priority segments. The company reports sales of approximately SEK 65M and has 36 employees. The acquisition is expected to provide cost synergies, increased efficiency and increased purchasing volumes through co-ordination with the company’s existing operation in southern Africa. The acquisition is deemed to have a marginal positive effect on G & L Beijer’s profit per share in 2014. Eurocool is included in G & L Beijer’s accounts from January 2014.

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. For further information, see pages 40 and 58 in the Annual Report for 2012.

Financial information
- The Annual Report for 2013 will be published in April 2014.
- The Three-Month Report for 2014 will be published on 23 April 2014.

The Annual Meeting of shareholders will be held on 24 April 2014.

Malmö, 6 February 2014
G & L Beijer AB (publ)
Board of Directors

For further information, please contact:
Per Bertland, CEO
switchboard +46 40 35 89 00, mobile +46 705 98 13 73
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.