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Six-Month Report January – June 2010

- Net sales increased by seven per cent to SEK 2,455.6M (2,292.7).
- Operating profit increased to SEK 281.5M (118.1), including a capital gain of SEK 140M.
 - Profit after tax increased to SEK 246.2M (79.9) including a capital gain of SEK 140M.
- Profit per share amounted to SEK 11.62 (4.05). Excluding the capital gain, profit per share amounted to SEK 5.01.
- Continued good organic growth. 

The above refers to remaining operations and a capital gain from the divestment of Beijer Tech. 

The G & L Beijer Group reported a continued strong development for the second quarter. Organic growth, when adjusted for acquisitions and currency effects, was approximately seven per cent whilst profit improved. The positive trend strengthened at the end of the period. The start of the third quarter has been good as Beijer Ref benefits from the hot weather in Europe. At the end of the first quarter, the Beijer Tech business area was divested. It means that Beijer Tech’s sales and results are not included in the figures reported below. Consolidated sales for the first six months of the year increased by seven per cent to SEK 2,455.6M (2,292.7). Sales for the second quarter amounted to SEK 1,325.7M (1,325.4). In local currencies, sales increased by approximately seven per cent. 

Consolidated operating profit for the first six months rose to SEK 281.5M (118.1). The result includes a capital gain of SEK 140M from the divestment of Beijer Tech. Excluding this gain, operating profit amounted to SEK 141.5M, equivalent to an increase of 20 per cent. For the second quarter, consolidated operating profit increased by 20 per cent to SEK 101.0M (84.0). 

Beijer Ref
Beijer Ref’s sales for the fist half of the year increased by seven per cent to SEK 2,455.6M (2,292.7). Organic growth amounted to approximately five per cent. Acquisitions affected sales positively, as Carrier ARW was not included in the figures for January 2009, whilst generally weaker foreign currencies affected sales negatively when translated into SEK. Sales for the second quarter amounted to SEK 1,325.7M (1,325.4). Organic growth amounted to approximately seven per cent. Virtually all markets reported a good development. United Kingdom, Italy and Spain all showed an especially positive sale growth. Eastern Europe reported a strong recovery from low levels.     

Beijer Ref’s operating profit increased by 21 per cent to SEK 153.9M (127.4) for the first half of the year. Operating profit for the second quarter rose by 19 per cent to SEK 107.6M (90.2). The increase means improved operating margins. The improved result is essentially explained by increased sales volumes and strict control of expenses. Savings and structural measures have been implemented in Carrier ARW. These have generated, and will continue to generate, positive effects on the result. 

Consolidated profit before and after tax
The Group’s financial income/expense for the six months amounted to SEK -0.8M (-9.4) and to SEK -0.8M (-4.8) for the second quarter. Financial income/expense includes a share in profits of SEK 4.0M (2.7) accumulated and SEK 2.0 M (0.9) for the period, relating to Malmö Hamn. Profit before taxes amounted to SEK 280.7M (108.7) for the first half of the year and to SEK 100.2M (79.2) for the second quarter. Profit after tax amounted to SEK 246.2M (79.9) and to SEK 77.5M (57.7) for the respective period. Profit per share amounted to SEK 11.62 (4.05) for the six-month period. Excluding the capital gain of SEK 140M, profit per share amounted to SEK 5.01 (4.05) for the remaining operations. 

Other financial information
Consolidated capital expenditure amounted to SEK 13.4M (25.0). Liquid funds, including unutilised bank overdraft facilities, were SEK 436.2M (322.4) at the end of the half year. Shareholders’ equity amounted to SEK 2,190.1M (2,077.6). Net debt amounted to SEK 542.6M (687.1). The equity ratio was 51.9 per cent (47.5). The average number of employees during the period was 1,674 (1,566). 

Significant events
During the first quarter, G & L Beijer divested its Beijer Tech business area to Beijer Alma. G & L Beijer received a consideration of 2.7 million newly-issued B shares in Beijer Alma and SEK 38.7M in cash. In total, the transaction is valued at approximately SEK 345M and G & L Beijer’s capital gain amounted to SEK 140M. The divestment of Beijer Tech was a move forward in the consolidation of G & L Beijer towards the strongly growing refrigeration wholesale operation. As a result of the transaction, G & L Beijer became a significant shareholder in Beijer Alma.  

Beijer Tech’s sales amounted to SEK 141.8M (140.1) for the first quarter of 2010 and the average number of employees was 175. Operating profit amounted to SEK 6.3M (6.5). 

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 Beijer Ref’s products and services. Acquisitions are normally linked with risks, 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 AB 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 Nine-Month Report for 2010 will be published on 21 October 2010.
- The Year-End Report for 2010 will be published in February 2011.

For further information:
Joen Magnusson
, Managing Director
Mobile +46 709 26 50 91 

This Interim Report has not been the subject of special 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 2.3. 
G & L Beijer AB continues to apply the same reporting principles and valuation methods as those described in the latest Annual Report.