q2 - cision · second quarter of 2017. the increase in sales is due to strong growth in demand on...

Q22017–Publishedon14July2017

Q22017

Thestrongestquartertodate• Netsalesinthesecondquarterof2017increasedby10percentcomparedwiththe

sameperiodlastyear,amountingtoSEK2,657million(2,417).Theincreaseisdueto

stronggrowthindemandonseveralofourkeymarketsandpositivecurrencyeffects.

• TheOEMandComfortCoolingproductsegmentscontinuedtheyearstrong,while

CommercialCoolingremainsstable.

• Theoperatingprofitforthesecondquarterof2017wasSEK223million(186).Thisis

anincreaseof20percentonthesameperiodlastyear.

• TheprofitfortheperiodwasSEK154million(121),anincreaseof27percentonthe

sameperiodlastyear.

• EarningspershareamountedtoSEK3.56(2.82).

BeijerRefAB 1:12

Key figures Q2-17 Q2-16 ∆% H1-17 H1-16 ∆% Full year 16

Net sales, sek m 2 657 2 417 9.9 4 874 4 384 11.2 9 045

EBITDA, sek m 244 206 18.7 372 312 19.0 671

Operating profit, sek m 223 186 19.6 330 275 19.7 593

Profit margin, % 8.4 7.7 — 6.8 6.3 — 6.6

Net profit, sek m 154 121 26.8 226 182 23.8 399

Profit per share, sek 3.56 2.82 26.6 5.20 4.17 24.7 9.17

Return on operating capital, % — — — 13.6 13.3 — 13.4

Return on equity, % — — — 15.8 14.8 — 14.2

Average number of employees — — — 2 696 2 593 4.0 2 667

Q22017–Publishedon14July2017BeijerRefAB 2:12

CommentsbytheCEO

Our strongest quarter to dateDespite a slightly weak start to April, the second quarter of 2017 ended up being the strongest quarter in Beijer Ref’s history. We had double-digit growth in both sales and profit and saw growth in both geographical segments and our product segments.

The warm spring on the major markets in Southern Europe and increased focus on air condi-tioning are two of the reasons for the good growth. Another important factor is that HFCs, the refrigerants which have a negative climate impact, have dramatically increased in price as a result of import restrictions. The recently initiated phasing-out of HFC refrigerants means a faster switchover to greener alternatives, both natural and synthetic. A step in the right direction. Eu-rope is leading developments and, as many non-European countries are following suit, we expect a corresponding increase in demand on these markets as well.

We therefore continue to develop our own solutions and have presented CUBO2 Smart during the year. This is an environmentally friendly cooling unit for installation in small stores, petrol stations and other small premises. Our own-developed heat pump TripleAqua also attracted attention during the quarter, winning several innovation prizes. It uses the natural refrigerant propane.

We enjoyed strong, double-digit growth for our two product segments OEM and HVAC. The growth in the Commercial Cooling product segment was also positive but at a slower rate.

Positive on many marketsIn France, which is our biggest market, we enjoyed strong growth during the quarter. One factor was the warm weather, which boosted sales of air conditioning units.

There has also been excellent growth in the Netherlands and the UK/Ireland. In the UK/ Ireland we have seen major commercial effects of our integration work after the acquisition of HRP. Our concentration on factors such as back office and logistics has produced good results in terms of costs, while we are also seeing sales growth.

Asia Pacific is another region with stable growth and an organic increase in profit. Our work to restructure operations in Australia has begun to have an impact on costs.

In Africa, we had weak growth for the second quarter in a row. We estimate that this is a tem-porary decline and retain our confidence in the African market. We are planning to expand and supplied our first transcritical CO2 solution to South Africa in the quarter. We estimate that there are good opportunities to expand sales of environmentally friendly CO2 solutions on the African market as well in the long term.

The good growth on most of our key markets, combined with increasing demand for green solu-tions, means that we begin the third quarter with confidence.

Per Bertland

+10%Sales

» The warm spring in Southern

Europe and increased focus on air

conditioning are two of the reasons

for the good growth. «

+27%Profit


Secondquarter2017

BeijerRefAB 3:12

SalesBeijer Ref increased net sales by 9.9 percent to SEK 2,657 million (2,417) during the second quarter of 2017. The increase in sales is due to strong growth in demand on our European key markets and positive currency effects. Adjusted for exchange rate fluc-tuations and acquisitions, there was a 2.5 percent organic change in sales. During the first half of the year, net sales increased by 11.2 percent to SEK 4,874 million (4,384). Adjusted for exchange rate fluctuations and acquisitions, there was a 2.9 percent organic change in sales.

ProfitGroup operating profit amounted to SEK 223 million (186) during the second quarter, an increase of 19.6 percent. The growth in profit is due to the warm spring having contributed to increased demand for air conditioning, primarily in Southern Europe and there have been price rises for refrigerants with a severe negative impact on global warming. Cost savings as a result of increased coordination in administration and logistics also contributed to the higher profit. Adjusted for exchange rate fluctuations and acquisitions, there was a 13.7 percent organic increase in operating profit. During the first half of the year, the operating profit increased by 19.7 percent to SEK 330 million (275). Adjusted for exchange rate fluctuations and acquisitions, there was a 12.6 percent organic increase in operating profit. During the first half of the year, Group net financial items amounted to SEK -14 million (-15). Pre-tax profit was SEK 316 million (260). The profit for the period was SEK 226 million (182). Earnings per share amoun-ted to SEK 5.20 (4.17).

9000

6000

3000

0

2700

1800

900

0

Sales, sek m

Q2Q3Q4Q1Q2Q3Q4 Q1Q2 2015 2016 2017n Quartern R12

9

6

3

0

3

2

1

0

Profit per share, sek

600

400

200

0

240

160

80

0

Operating profit, sek m

Sales, sek m Q2 % H1 %

Net sales 2016 2 417 4 384

Organic change 63 2.5 135 2.9

Change through acquisitions 1 64 2.6 153 3.5

Exchange rate fluctuation 113 4.8 202 4.8

Change, total 240 9.9 490 11.2

Net sales 2017 2 657 4 874

1) Refers to HRP which is included in the consolidated financial statements from June 2016




Cash flowCash flow from operating activities before change in working capital was SEK 308 mil-lion during the first half of 2017, compared with SEK 230 million during the correspon-ding period of the previous year. During the first half of the year, the working capital increased by SEK 247 million against an increase of SEK 340 million during the same period of the previous year. This results in cash flow from operating activities of SEK 60 million, compared with SEK -110 million in the previous year. Working capital at the beginning of 2017 was higher than at the beginning of 2016, which meant higher cash flow than during the corresponding period of the previous year.

InvestmentsGroup investments in non-current assets amounted to SEK 50 million (50) in the first six months.

Significant events during the yearAs part of Beijer Ref’s objective to be at the cutting edge of the transition to environ-mentally friendly cooling technology, the first environmentally friendly, carbon dioxide-based cooling system was delivered to Chile at the beginning of the year. This was the Group’s first installation in South America and is in line with Beijer Ref’s focus on carbon dioxide and other environmentally friendly cooling 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. Her most recent position was as CEO of Ikano Vårdbo-ende and she was previously CFO of Ikano Fastigheter, Dole and Switchcore.Maria Rydén will take up her position no later than 1 December 2017.

Cash flow, sek m H1 2017 H1 2016

Cash flow from current operations

before changes in working capital 308 230

Change in working capital -247 -340

Cash flow from current operations 60 -110

The regions’ shareof total sales, %

Share of sales,product segments, %

14

27

38

47

10

5936

5

n Commercial&IndustrialRefn OEMn HVAC

n Nordic countriesn Central Europen Southern Europen Eastern Europen African AsiaPacific


Risk descriptionThe 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.

Accounting policiesThis 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:Per Bertland, CEO – switchboard +46 (0)40-35 89 00

This interim report has not been reviewed 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 14 July 2017.

Malmö, Sweden, 14 July 2017

Bernt Ingman Peter Jessen Jürgensen Frida Norrbom Sams William Striebe Chairman Board Member Board Member Board Member

Ross B Shuster Monica Gimre Joen Magnusson Per Bertland Board Member Board Member Board Member President

The Board of Directors and the President assure that the six-month report is prepared in accordance with generally accepted accounting principles for listed companies. The information provided corresponds with the actual conditions in the operation and nothing of significant importance has been left out which could affect the picture

of the Group and the parent company that has been created by the six-month report.


Financialinformation

BeijerRefAB 6:12

Summarised profit and loss account, sek m Q2-17 Q2-16 H1-17 H1-16 R12 Full year 16

Net sales 2 657 2 417 4 874 4 384 9 535 9 045

Other operating income 5 3 15 8 47 39

Operating expenses -2 418 -2 215 -4 518 -4 080 -8 852 -8 413

Depreciation -21 -19 -42 -37 -83 -78

Operating profit 223 186 330 275 647 593

Net financial income/expense -7 -11 -14 -15 -32 -33

Profit before tax 216 175 316 260 615 560

Tax -61 -54 -90 -78 -173 -161

Net profit 154 121 226 182 442 399

Net profit attributable to:

The parent company’s shareholders 151 120 220 177 432 389

Non-controlling interests 3 1 5 5 9 10

Net profit per share before and after dilution, sek 3,56 2,82 5,20 4,17 10,20 9,17

The Group’s report on other comprehensive

income, sek m Q2-17 Q2-16 H1-17 H1-16 R12 Full year 16

Net profit 154 121 226 182 442 399

OTHER COMPREHENSIVE INCOME

Items which will not be reversed

in the profit and loss account:

Revaluation of the net pension commitment — — — — -12 -12

Items which can later be reversed

in the profit and loss account:

Exchange rate differences -6 46 6 63 107 164

Cash flow hedging — — — 1 — 1

Hedging of net investment -8 -4 -6 -5 4 5

Other comprehensive income for the period -14 42 — 59 99 158

Total comprehensive income for the period 140 163 226 241 541 556

Attributable to:

The parent company’s shareholders 140 161 222 235 222 544

Non-controlling interests 1 2 4 6 4 12


Summarised balance sheet, sek m 30 June 2017 30 June 2016 31 Dec 2016

ASSETS

Fixed assets:

Intangible fixed assets 1 653 1 600 1 644

Tangible fixed assets 317 311 306

Other fixed assets 228 226 230

Total fixed assets 2 198 2 137 2 181

Current assets:

Inventories 2 599 2 458 2 485

Trade debtors 2 156 1 933 1 559

Other receivables 210 262 288

Liquid funds 289 328 342

Total current assets 5 254 4 981 4 674

Total assets 7 452 7 118 6 855

EQUITY AND LIABILITIES

Shareholders’ equity 2 959 2 652 2 967

Total equity 2 959 2 652 2 967

Long term liabilities 1 933 1 816 1 811

Total long term liabilities 1 933 1 816 1 811

Current liabilities:

Trade creditors 1 373 1 402 985

Other liabilities 1 186 1 248 1 092

Total current liabilities 2 560 2 650 2 077

Total equity and liabilities 7 452 7 118 6 855

Of which interest-bearing liabilities 2 333 2 214 2 157

Net debt 2 044 1 886 1 815


Key figures 30 June 2017 30 June 2016 31 Dec 2016

Equity ratio, % 39.7 37.3 43.3

Equity per share, sek 70 63 70

Return on equity after full tax, % 15.8 14.8 14.2

Return on capital employed, % 12.7 12.4 12.3

Return on capital employed in operations, % 13.6 13.3 13.4

Dept ratio 0.7 0.7 0.6

Interest coverage ratio 18.5 13.9 16.6

Number of outstanding shares 42 391 030 42 391 030 42 391 030

Average number of outstanding shares 42 391 030 42 391 030 42 391 030

Holding of own shares 87 200 87 200 87 200

Summarised consolidated cash flow analysis, sek m H1 2017 H1 2016 Full year 2016

Cash flow from current operations before changes in working capital 308 230 478

Changes in working capital -247 -340 -413

Cash flow from investment operations -50 -50 -80

Change in financing operation 170 357 212

Dividend paid -233 -223 -223

Change in cash and bank -52 -26 -26

Exchange rate difference in liquid funds — 6 20

Cash and bank on 1 January 342 348 348

Cash and bank at the period end 289 328 342

Shareholders’ equity, sek m 30 June 2017 30 June 2016 31 Dec 2016

Opening balance 2 967 2 634 2 634

Total comprehensive income for the period 226 241 556

Dividend -233 -223 -223

Dividend to shareholders with no controlling influence -1 — -1

Closing balance 2 959 2 652 2 967


Q2 Nordic Central Southern Eastern Africa Asia Groupsek m countries Europe Europe Europe Pacific 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016

Netsalesbyoperation 354 350 745 625 1104 1021 106 101 163 142 240 223 2711 2461Internalsalesbetweenoperations -55 -44Netsales 2657 2417

Operatingprofitbyoperation 42 42 57 39 109 88 11 10 3 8 19 13 239 200Group-wideexpenses -16 -14Operating profit 223 186

Netfinancial -7 -11Tax -61 -54Net profit 154 121 Workingcapital,averagefortheperiod 428 417 800 612 1202 1013 159 137 361 241 336 323 3284 2743

H1 Nordic Central Southern Eastern Africa Asia Groupsek m countries Europe Europe Europe Pacific 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016

Netsalesbyoperation 668 652 1338 1096 1935 1781 180 166 359 317 490 456 4969 4468Internalsalesbetweenoperations -94 -84Netsales 4874 4384

Operatingprofitbyoperation 65 59 71 46 152 124 15 12 19 24 41 34 361 294Group-wideexpenses -32 -18Operating profit 330 275

Netfinancial -14 -15Tax -90 -78Net profit 226 182 Workingcapital,averagefortheperiod 413 409 759 586 1103 939 153 136 377 235 352 325 3155 2630

Reporting for segmentsOperating segments The Group’s operation is split into operating segments based on how the company’s highest executive decision maker, i.e. the CEO, monitors the operation. The Group has the following segments; the Nordic countries, Central Europe, Southern Europe, Eastern Europe, Africa and Asia Pacific.

The segments reporting for the regions contains the profit and loss account up to and including operating profit. Internal sales within each segment are eliminated in net sales by operation, internal sales between segments are eliminated on total level. Previous were all internal sales eliminated within the segment independence on counterpart. Comparative figures for the previous period have been recalculated. The working capital includes inventories, trade debtors and trade creditors and is an average based on monthly values for the period.


Parent company profit and loss account in summary, sek m H1 2017 H1 2016 Full year 2016

Operating income 1 0 43

Operating expenses -25 -22 -44

Depreciation -1 0 -1

Operating profit -26 -22 -2

Net financial income/expense -2 -8 5

Result of participations in Group companies 32 74 225

Write-down of financial fixed assets 0 0 -7

Profit before appropriations 5 44 221

Appropriations 0 0 32

Profit before tax 5 44 253

Tax 0 0 -8

Net profit 5 44 245

Parent company balance sheet in summary, sek m 30 June 2017 30 June 2016 Full year 2016

ASSETS

Intangible fixed assets 5 3 3

Tangible fixed assets 5 5 6

Financial fixed assets 2 705 2 640 2 700

Current assets 1 028 1 026 1 099

Total assets 3 744 3 674 3 808

EQUITY AND LIABILITIES

Shareholders’ equity 1 446 1 473 1 674

Long-term liabilities 1 775 2 134 1 649

Current liabilities 523 67 485

Total equity and liabilities 3 744 3 674 3 808


Trade terms

ARW

HFC gases

HFO

HVAC

OEM

Air Condition & Refrigeration Wholesale.

HydroFluoroCarbons, Fluorised greenhouse gases which contribute to global warming.

HydroFluoroOlefins, synthetic environmentally friendly refrigerants.

Heating, Ventilation, Air Conditioning.

Original Equipment Manufacturer.

Glossary

Financial definitions

Geographic areas

Africa

Asia Pacific

Central Europe

Eastern Europe

Nordic countries

Southern Europe

Botswana, Ghana, Mozambique, Namibia, South Africa, Tanzania, Zambia

Australia, India, Malaysia, New Zealand, Thailand

Belgium, Ireland, The Netherlands, Switzerland, Germany, UK

Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia

Denmark, Finland, Norway, Sweden

France, Italy, Spain

Change in percentage.

Balance sheet total with a deduction for non-interest-bearing liabilities and deferred tax liability.

Net debt in relation to equity. The ob-jective is to show borrowing in relation to book value of equity.

Earnings before interest, taxes, depreciation and amortisation of tangible and intangible fixed assets. The objective of reporting EBITDA is that the Group regards it as a relevant measure for an investor who wants to understand the generation of earnings before investments in fixed assets.

Equity at the end of the period in relation to balance sheet total.

Interest-bearing liabilities include interest-bearing provisions.

Earnings before tax plus financial ex-penses in relation to financial expenses.The objective of this measure is to show the proportion of earnings al-located to paying interest expenses and other financial expenses.

Interest-bearing liabilities less liquid funds including current investments.We are of the opinion that the net debt is useful for the users of the financial report as a complement for assessing the possibility for a dividend, for car-rying out strategic investments and for assessing the Group’s possibilities for living up to financial commitments.

Capital employed minus liquid funds, financial assets and other interest-bea-ring assets. Operating profit in relation to net sales.

Comparative figures year over year adjusted for translation effects on con-solidation and changes in the structure.

Net profit in relation to average num-ber of shares.

Rolling twelve is the latest 12 months.

Profit before tax plus financial expen-ses (rolling 12 months) in relation to average capital employed.

Earnings after tax (rolling 12 months) as a percentage of average equity. The objective of return on equity and other return measures is to put the earnings in relation to important balance sheet items.

Operating profit (rolling 12 months) as a percentage of average capital em-ployed in operations.

∆%

Capital employed

Debt/equity ratio

EBITDA

Equity ratio

Interest-bearing liabilities

Interest coverage ratio

Net debt

Operating capital

Operating margin

Organic change

Profit per share

R12

Return on capital employed

Return on equity

Return on operating capital


Beijer Ref in shortThe 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 con-ditioning 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 effectsBeijer 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• The Interim Report for the third quarter 2017 will be published on 20 October 2017. • The Year-End Report for 2017 will be published on 31 January 2018.• The Annual Report for 2017 will be published in March 2018.

Stortorget 8, SE-211 34 Malmö, SwedenTelephone +46 40-35 89 00Corporate ID number 556040-8113

www.beijerref.com

The total amount in tables and statements might not always summarize as there are rounding differences. The aim is to have each line item corresponding to the source and it might therefore be rounding differences in the total.

ThisdocumentisatranslationoftheSwedishlanguageversion.

IntheeventofanydiscrepanciesbetweenthistranslationandtheoriginalSwedishdocument,thelattershallbedeemedcorrect.

q2 - cision · second quarter of 2017. the increase in sales is due to strong growth in demand on...

Documents