Release Date: July 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Beijer Alma AB (LTS:0YG7, Financial) reported organic growth in both order bookings and net revenues, with a 2% organic increase in each.
- The Nordic region emerged as the strongest region for growth, particularly in the industrial springs segment.
- Beijer Tech's newly formed business area in niche technologies and fluid technology showed significant growth, with fluid technology growing by 32%.
- The company announced two new acquisitions: Clemco Norge and Clifford Springs, which are expected to strengthen operations in Norway and the UK respectively.
- Adjusted operating profit for the group was SEK249 million, maintaining a stable margin of 13.2%.
Negative Points
- Lesjofors experienced a mixed demand picture, with a 1% decrease in order bookings and a 4% decrease in net revenue overall.
- Central Europe and Asia showed disappointing performance with lower demand from customers.
- The US market had lower deliveries to medical projects compared to the previous year.
- Chassis Springs saw a slowdown towards the end of the quarter, resulting in a 6% decrease in revenue compared to last year.
- Economic uncertainty and high interest rates pose challenges, requiring a balance between investing for growth and cost-saving measures.
Q & A Highlights
Q: Just a question on margins or profitability in Lesjofors. I was curious to hear your view on the year-on-year progression. If you adjust for the one-off last year, Lesjofors earnings were slightly down. How do you explain that? Is it just chassis mix?
A: Yes, your thinking is relevant. It is perhaps in the mix section. Compared to the quarter one year ago, it's a couple of percent down. We also have a little bit of mix in terms of the customer segments, for example, with medical. So, it's a small difference in margin.
Q: Would you argue that medical is a bigger impact compared to chassis?
A: I would say they both have some impact.
Q: Can you provide more details on the recent acquisitions and their expected impact?
A: We announced two new acquisitions. Beijer Tech acquired Clemco Norge, a niche player in Norway, and Lesjofors acquired Clifford Springs in the UK. These acquisitions strengthen our operations in Norway and our focus on energizer springs, respectively.
Q: How did the different regions perform in terms of demand?
A: The Nordic region came back as our strongest region this quarter. The UK followed, while the US industrial segments were good but deliveries to medical projects were lower. Central Europe and Asia were more disappointing with lower demand.
Q: What was the performance of Beijer Tech in the Nordics?
A: Demand was generally stable. The newly formed business area in niche technologies grew together with fluid technology. The Norwegian market stood out as the strongest, whereas Finland was a bit weaker.
Q: Can you elaborate on the financial performance of the group?
A: Order bookings grew by 5%, with 2% organic growth. Net revenues grew by 4%, also with 2% organic growth. The adjusted operating profit was SEK249 million, with a margin of 13.2%.
Q: How did Lesjofors perform in terms of order bookings and revenue?
A: Order bookings for Lesjofors decreased by 1% but grew 2% organically. Net revenue decreased by 4%, and organically it was flat versus last year. The industrial segments in the US grew, whereas deliveries within medical were lower.
Q: What was the impact of acquisitions and divestments on the financials?
A: Acquisitions together with divestments contributed SEK38 million, equal to an increase of 2%. The divestment was the German company Stumpp, sold in December 2023. Organic growth was SEK28 million, also corresponding to 2%.
Q: How did Beijer Tech's different business areas perform?
A: Order bookings increased by 19%, with 4% organic growth. Net revenues grew by 23%, with 6% organic growth. Fluid technology grew by 32%, partly due to the new acquisition of AVS. Niche technologies grew significantly by 6% to 9%.
Q: What are the key financial ratios and their implications?
A: Adjusted EBITDA is up SEK33 million compared to last year. Cash flows of the capital expenditure were SEK167 million lower than last year. Net debt is lower, mostly related to operating cash flow. The financial net improved due to more efficient use of cash.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
