SWEDEN: Beijer Ref CEO Per Bertland has pledged that the refrigeration and air conditioning wholesaler will exit the Covid-19 crisis stronger, despite its early impact on first quarter financial figures.
While net sales increased by 1.3% in the first quarter to SEK3,478m (€319m), thanks to acquisitions and positive currency effects, organic growth was down by 3.2%.
The effects of Covid-19 and a lower share of refrigerant sales is blamed for a 19% decrease in operating profit to SEK197m (€18m). The operating margin amounted to 5.7% compared to 7.1% in the same quarter last year.
Per Bertland lamented that the business had seen a strong start to the year before the Covid-19 pandemic made an impact on the global economy.
“Sales in the first two months of the quarter followed our expectations until the effects of Covid-19 became felt in the second half of March. Overall, net sales including acquisitions are slightly higher than in the same period last year,” he said.
Refrigerant prices fall
Beijer Ref has seen refrigerant prices continue to fall and are now at a lower level than this time last year.
“However, we are beginning to sense some stabilisation of this trend and in historical terms prices are still at a high level. The effect of Covid-19 has obviously also had an impact, with most of the largest markets, which together make up about 70% of sales, being almost completely shut down during part of March,” Bertland revealed.
Despite this, sales of air conditioning were described as “relatively strong” during the quarter, especially in Central Europe, Eastern Europe and Asia Pacific.
“Our HVAC product area has thus experienced growth during the quarter, including the effects of the acquisition of ACD Trade in Australia at the beginning of the year. In the OEM business we see a slight increase in sales during the quarter, despite the fact that our factories in China and Italy had to close for a short period in February and March respectively. Since Beijer Ref’s business is considered to be essential to society – our products are necessary for the proper functioning of the food industry – most of our 450 branches are open in order to provide service and maintenance, in some cases in very restrictive forms.”
It is accepted that the effects of Covid-19 will have an even greater impact on the business in the second quarter, but efforts have been made to reduce the group’s cost base and Bertland is confident it will be able to gear up quickly again when the market sees an upturn.
“We hope and believe that the third quarter will be more stable and that the market will return to a more normalised state by the end of the year,” said Bertland.
“Historically, Beijer Ref has come out stronger after a crisis. We are part of an industry that is important to society, which means that the business does not come to a stop despite the fact that we are in an extreme situation.”