Interim report January—March 2016: Lower sales but earnings somewhat above plan, new financial targets

· Order intake of 265.0 MSEK (343.5*).
  · Net sales were 280.5 MSEK (351.8*).
  · Operating profit/loss -55.5 MSEK (26.7). Profit was charged with non
-recurring expenses of 50 MSEK (0).
  · Profit/loss after-tax was -41.9 MSEK (15.1).
  · Earnings per share were -2.19 SEK (0.80).
  · An Extraordinary General Meeting (EGM) on January 28, 2016, resolved to
divest operations in the Baltics.
  · The Board of Directors decided on a restructuring program in the IAS
business area, which will reduce costs by 50 MSEK annually. The cost of this
package amounts to 50 MSEK, and was charged to profit in the first quarter 2016.
  · The Board of Directors has adopted new financial targets.


*Includes distributor volumes that have been discontinued.

COMMENTS FROM PRESIDENT AND CEO PER SAMUELSSON

“Intensive efforts to create what to some extent is a new platform for the group
continued in the first-quarter. As reported, sales decreased, mainly due to the
conclusion of our partnership with Mitsubishi Electric at year-end. As expected,
the group also reported a loss in the quarter, mainly due to non-recurring
expenses of 50 MSEK which were charged to profit. Otherwise, the quarter
included results that were better and worse than plan.

The IDC business area’s order intake and sales decreased in the quarter after a
long period of healthy growth. But we view this downturn as temporary. Due to
its focus on the train segment in Westermo, IDC’s business has got a far greater
content of projects. Usually, individual orders are substantial, which often
mean long lead-times, and sometimes, delays. This has a big impact on order
intake, sales and profits in individual quarters. We can conclude that we
underestimated the time from making a sale to completing the deal and
delivering.

Since Westermo initiated its far-reaching investment program in fall 2014, it
has accumulated some 30 potential new business accounts in the train segment
worldwide. The sales process is multi-stage, involving customer enquiries,
testing and specification phases. Of 23 different projects at present, 18 have
been specced, and 5 are in the testing phase. If the outcome is positive, these
projects would generate additional sales of over 100 MSEK annually.

The lead-time from the specification phase to order varies widely, from a few
months to several years. This lead-time is hard to state exactly, and it is
impossible to be certain about outcomes until complete. But we’re really hopeful
of completing the projects now in processing, and securing several more.
Meanwhile, this greater project content means that taking a longer perspective
becomes more important. We are retaining our long-term positive growth outlook
and overall investment plan for Westermo and the IDC business area, while we
view departures from plan as temporary.

As previously reported, the IAS business area’s sales were down significantly,
while it also reported a deficit for the quarter, due to the loss of Mitsubishi
Electric products and profits being charged with 50 MSEK of restructuring
expenses.

Meanwhile, IAS was able to discern some positive signs. Sales stabilized,
especially in the US, even if there was some continued downturn in the oil and
gas sector. One positive was IAS achieving successes in segments outside the US
oil and gas sector, and good order intake in Europe at the end of the quarter.
Adjusted for sales of Mitsubishi Electric products in 2015, sales were almost
unchanged in the quarter, and were up by 7% on the fourth quarter of 2015.

The savings programs from the previous year had the planned effect. IAS’s
overheads reduced by 16%, or 12 MSEK, in the quarter. These actions will
continue to generate effects for the rest of the year. Our work in 2016 is
focused on creating a more robust platform for long-term positive and profitable
growth for the group, simultaneous with the various business areas balancing
each other out. Our sights are set on 2017 and the years beyond.

Accordingly, the Board of Directors has adopted new financial targets for the
whole of Beijer Electronics. The objectives are for the group to achieve minimum
yearly organic growth of 7%, and in the first stage, a minimum EBIT margin of
10% measured as an average over a business cycle. Work on strategies to achieve
these targets has already begun, will continue and be determined in 2016. As
previously communicated, Beijer Electronics expects to report lower sales in the
first half-year. Overall, Beijer Electronics expects to post somewhat lower
sales and somewhat higher operating profit including non-recurring expenses for
the full year 2016 compared to the results for 2015.”


INVITATION TO CONFERENCE CALL

Today, a conference call will be held for press and analysts, where President
and CEO Per Samuelsson and CFO Joakim Laurén present the company and comment on
the report.

Time:  Tuesday April 26, at 2.30 p.m. CET

To participate in the conference please dial:
From Sweden: +46 856642669
From UK: +44 2030089802


To access the presentation please use this link:
http://www.anywhereconference.com?UserAudioMode=DATA&Name=&Conference=131670692&
P 
IN=41600634

The report and the presentation will be available at Beijer Electronics’ website
www.beijerelectronics.com/ir. A recording of the conference call will also be
available here after the event.

Welcome!

For more information please contact:

President and CEO, Per Samuelsson, tel +46 (0)40 35 86 10, mobile +46 (0)708 58
54 40
CFO Joakim Laurén, tel +46 (0)40 35 84 96, mobile +46 (0)703 35 84 96.



Beijer Electronics is a fast growing technology company with extensive
experience of industrial automation and data communication. The company develops
and markets competitive products and solutions that focus on the user. Since its
start-up in 1981, Beijer Electronics has evolved into a multinational group with
sales of 1,375 MSEK in 2015. The company is listed on NASDAQ OMX Nordic
Stockholm Small Cap list under the ticker BELE.
www.beijerelectronics.com (http://www.beijerelectronics.se/)