Release Date: April 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Order intake increased by 5% overall, with Westermo contributing 2% and Beijer Electronics 8%.
- The acquisition of Welotec is expected to strengthen Ependion AB's position in the energy segment and provide access to new edge computing technology.
- Westermo maintained a stable and relatively high profitability level at 15.7%, despite acquisition-related costs.
- Beijer Electronics saw an 18% increase in order intake for its key product range, HMIs.
- The new X3 product family from Beijer Electronics received the Red Dot Award for design in 2025.
Negative Points
- Sales were lower than the previous year, driven by both business entities.
- The group's profitability level was unsatisfactory at 9%, impacted by negative currency effects and nonrecurring cost items.
- Beijer Electronics reported a weak profitability level of 6.7% due to negative FX impacts, an unfavorable product mix, and restructuring costs.
- The company faces high uncertainty due to trade barriers and tariffs, impacting future outlooks.
- Free cash flow was negative at SEK12 million for the quarter, indicating cash flow challenges.
Q & A Highlights
Q: On the impressive 54% gross margin, is this improvement primarily due to Westermo, given Beijer Electronics had an unfavorable sales mix?
A: Yes, the SEK54 million is driven by Westermo. Beijer Electronics is moving sideways compared to the last quarter.
Q: Regarding the US tariffs, are you adding the 10% tariff to your quotes for new contracts in the US?
A: Some products are exempt from these tariffs, and we are exploring ways to mitigate the impact. Price adjustments could be a method to compensate, but we need full clarity on the exposure first.
Q: Are the cost cuts in Beijer Electronics related solely to the phase-out products, or is there more to it?
A: It's a combination. We are not satisfied with the profitability, so adjustments are being made to improve profitability going forward. The program has been completed within the quarter.
Q: Regarding the Welotec acquisition, is the earn-out related to improved earnings compared to 2024?
A: Yes, improvements are necessary to achieve an earn-out. To reach the maximum amount, a very strong development is needed, which would be beneficial for all parties involved.
Q: Can you comment on the FX effects, particularly the impact of the Swedish krona against the euro and dollar?
A: The majority of the FX effect is due to the Swedish krona versus the euro, with some impact from the krona's strength against the dollar. We also have exposure to the Turkish lira and Taiwanese dollars.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
