G & L Beijer AB Nine-Month Report January - September 2011

G & L Beijer AB Nine-Month Report January - September 2011

- Net sales increased by nine per cent to SEK 4,216.3M (3,866.2).

- Operating profit rose by 18 per cent to SEK 312.3M (263.8).

- Net profit for the period increased to SEK 269.6M (197.6) including
the capital gain of SEK 51.7M from the divestment of shares in Beijer
Alma.

- Profit per share amounted to SEK 12.40 (15.92). Excluding the capital
gain, profit per share amounted to SEK 10.60 (9.32).

- The acquisition of Toshiba's distribution operation in eleven European
countries was completed after the end of the quarter.

- The acquisition of United Refrigeration's operation in France and the
United Kingdom was completed after the end of the quarter.

 
G & L Beijer is a technology-oriented trading Group which, through a
combination of added-value agency products and products of the company's
own development, offers competitive solutions for its customers.

In the previous year, operations were consolidated into comprising only
products within refrigeration and air conditioning.

Sales
The Group continued to enjoy stable growth. Sales for the first nine
months of the year increased by nine per cent to SEK 4,216.3M (3866.2).
Organically, sales increased by approximately seven per cent. The
previous acquisitions of SCM Frigo and the operation in Thailand
contributed positively to sales whilst the stronger Swedish currency had
a negative effect. At the end of the first quarter of 2010, the Beijer
Tech business area was divested, which means that Beijer Tech's sales
and results are not included in the comparative figures for 2010.

Sales for the third quarter increased by five per cent to SEK 1,474.8M
(1,410.6). The third quarter was affected by weak demand at the
beginning of the period, mainly as a result of the cold weather. For the
remainder of the period, sales reverted to the corresponding levels of
increase as earlier in the year. In spite of lower demand at the
beginning of the quarter, organic growth amounted to 0.5 per cent for
the third quarter.

Organic growth for the first nine months of the year was extensive and
comprised all markets in which G & L Beijer operates. Southern Europe
including France, Italy and Spain continued to develop strongly as did
South Africa. Demand in the Scandinavian countries, especially in
Sweden, im­proved gradually. The acquisitions, the wholesale
refrigeration operation in Thailand and the Italian company, SCM Frigo,
enjoyed a very positive development.

During the third quarter, G & L Beijer was intensively involved with two
significant acquisitions. The acquisition of Toshiba's distribution
operation within refrigeration, heating and air conditioning in eleven
European countries and the acquisition of United Refrigeration's
operation in France and the United Kingdom were completed after the end
of the quarter. The acquisitions report total annual sales of SEK 1.8
billion.

The acquisitions of Toshiba's and United Refrigeration's operations,
which are included in G & L Beijer from the fourth quarter, involve
significant contributions to consolidated sales. Based on a rolling
twelve-month period until September 2011, G & L Beijer's annual sales
pro forma would have amounted to approximately SEK 7.2 billion.

Results
Consolidated operating profit for the first nine months increased by 18
per cent to SEK 312.3M (263.8). The result improvement is explained by
rising volumes, acquisitions and continued strict control of expenses.

During the third quarter, operating profit fell slightly to SEK 114.5M
(122.3). The fall is explained by the aforementioned weak demand at the
beginning of the quarter.

The Group's financial income/expense amounted to SEK 55.5M (1.6) for the
first three quarters and to SEK 5.2M (2.4) for the third quarter.
Financial income/expense includes the capital gain from the divestment
of shares in Beijer Alma, with SEK 51.7M (0) and a share in profits of
associated companies of SEK 11.2M (6.0) for the nine-month period. The
third quarter included a share in profits of associated companies of SEK
8.2M (2.0).

Profit before taxes increased to SEK 367.8M (265.4) for the first nine
months, of which SEK 119.6M (124.7) was for the third quarter. Profit
after tax amounted to SEK 269.6M (197.6) for the nine-month period and
to SEK 92.1M (91.4) for the third quarter. Profit per share amounted to
SEK 12.40 (15.92) for the nine-month period. Excluding the capital gain,
profit per share amounted to SEK 10.60 (9.32).

Other financial information
Consolidated capital expenditure including acquisitions amounted to SEK
111.7M (28.8) for the nine-month period. Liquid funds, including
unutilised bank overdraft facilities, were SEK 576.1M (539.9) on 30
September 2011. Share­holders' equity amounted to SEK 2,385.5M
(2,243.9). Net debt amounted to SEK 325.6M (461.6). The equity ratio was
57.5 per cent (53.8). The average number of employees during the period
was 1,834 (1,682).

Significant events
During the first quarter, G & L Beijer completed its acquisition of the
Italian SCM Frigo group. SCM Frigo designs, develops and builds
chillers. The company reports annual sales of approximately SEK 220M and
has around 70 employees. Initially, G & L Beijer acquired 51 per cent of
the shares in SCM Frigo with an option to acquire the remaining 49 per
cent. SCM Frigo is included in G & L Beijer's accounts from 1 January
2011.

During the first quarter, G & L Beijer divested its entire holding of
2.7 million shares in Beijer Alma, equivalent to 9.0 per cent of capital
and 4.5 per cent of votes. The divestment generated sales proceeds of
approximately SEK 365M and G & L Beijer made a capital gain of SEK 51.7M
before tax and SEK 38.1M after tax. The shares in Beijer Alma were
received as part payment on the sale of Beijer Tech during the spring of
2010. The divestment of the shares was another step forward in creating
increased scope to take action for the continued expansion within the
strongly growing refrigeration wholesale operation.

After the end of the reporting period, G & L Beijer completed its
acqui­sition of Toshiba's distribution operation within refrigeration,
heating and air conditioning in eleven European countries from Carrier
Corporation. The transaction means that Carrier will transfer staff and
assets to G & L Beijer for a consideration of approximately EUR 86M (SEK
790M) on a debt-free basis. Sales for Toshiba's distribution operation
in the countries involved amounted to EUR 130M (approxi­mately SEK
1,200M) and the operating profit was EUR 9.6M (SEK 88M) for the latest
twelve-month period until the end of the first quarter of 2011. The
operation has 160 employees. The acquisition, which is made on a
debt-free basis, is financed through own funds and increased borrowing.
The acquired operation is included in G & L Beijer's accounts from 1
October 2011. The acquisition is estimated to affect G & L Beijer's
profit per share positively by approximately SEK 2 on an annual basis.

After the end of the reporting period, G & L Beijer completed its
acquisition of United Refrigeration's refrige­ration wholesale
operations in France and the United Kingdom. The acquisition included
two companies. The French company - Cofriset - reports sales equivalent
to SEK 520M and has 125 employees. The British company - United
Refrigeration (UK) Ltd - reports sales equivalent to SEK 90M and has 44
employees. In total, the two companies report sales equivalent to SEK
610M and have 169 employees. The total consideration for both companies
amounts to approximately SEK 240M on a debt-free basis. The
consideration is financed through own funds and increased borrowing.

With the acquisitions, G & L Beijer strengthens its position still
further in the French and British markets. The acquired companies sell
products which correspond to G & L Beijer's product range. The
acquisition is expected to have a marginally positive effect on G & L
Beijer's profit per share. The acquired companies are included in the
consolidated accounts from October 2011.

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 G & L Beijer'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 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 Year-End Report for 2011 will be published on 9 February 2012.
- The Annual Report for 2011 will be published in April 2012.
- The Three-Month Report for 2012 will be published on 25 April 2012.

Malmö, 21 October 2011
G & L Beijer AB (publ)
Joen Magnusson, CEO
 

For further information, please contact:
Joen Magnusson, CEO
switchboard +46 40-35 89 00, mobile +46 709-26 50 91

Jonas Lindqvist, CFO
switchboard 040-35 89 00, mobile +46 705-90 89 04

Accounting principles
This interim report has been prepared in accordance with IAS 34, the
Annual Accounts Act and RFR 2.

G & L Beijer AB continues to apply the same reporting principles and
valuation methods as those described in the latest Annual Report.

Review report
We have carried out a review of this Interim Report for the G & L Beijer
Group for the period 1 January-30 September 2011 and pertaining reports
on results, changes in equity and change in cash flow during the
nine-month period which ended on this date as well as a summary of
important reporting principles and other supplementary disclosures. The
Board and the MD are responsible for preparing and presenting this
financial interim information in accordance with IAS 34 and the Annual
Accounts Act. Our responsibility is to express a conclusion about this
financial interim information based on our review.

We have carried out our review in accordance with the Standard for
review engagement, SÖG 2410, Review of financial interim information
carried out by the company's elected Auditors. A review includes making
enquiries, primarily to individuals responsible for financial matters
and accounting matters, carrying out an analytical examination and
implementing other audit checks.

A review has a different emphasis and is significantly less extensive
compared with the emphasis and extent of an audit in accordance with ISA
and generally accepted auditing standards. The auditing checks
implemented in a review do not enable us to acquire such assurance that
we become aware of all important circumstances which would have been
identified if an audit had been carried out. The expressed conclusion is
based on a review and, therefore, does not have the assurance of an
expressed conclusion based on an audit.

Based on our review, no circumstances have emerged which give us reason
to consider that this Interim Report does not, in substance, give a true
and fair view of the company's financial position on 30 September 2011
and of its financial results and cash flow for the nine-month period
which ended on this date in accordance with IAS 34.

Malmö, 21 October 2011

PricewaterhouseCoopers
Mikael Eriksson                                 Cecilia Dorselius
Authorised Public Accountant           Authorised Public Accountant