Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Beijer Ref AB (FRA:BRZ0, Financial) reported a total growth of 12% for the quarter, with organic sales increasing by 3%, despite a negative currency impact of 3%.
- The company achieved a solid margin performance with an 11.4% margin, slightly up from 11.3% last year.
- EPS growth was strong at 17%, indicating robust profitability improvements.
- The acquisition of the J A Group, a market leader in Spain, is expected to bolster the company's market position.
- The company is experiencing double-digit growth in the OEM segment, particularly with natural refrigerants and CO2-based pumps, which are environmentally friendly solutions.
Negative Points
- The company faced a negative currency impact of 3%, which affected overall growth figures.
- Southern Europe, a significant market for Beijer Ref AB (FRA:BRZ0), has been weak this year, impacting regional performance.
- The company had to close several branches in the US due to hurricanes, which negatively affected sales in that region.
- There is continued weakness in larger projects in Asia, particularly driven by a sluggish market in China.
- The company is facing headwinds from currency effects, with a negative impact of 26 million on EBIT compared to last year.
Q & A Highlights
Q: How did the regional closures in the US due to Hurricane Lane impact sales, and what is the outlook for Q4 given recent extreme weather conditions?
A: The closures resulted in a loss of about one day's sales, particularly in Tennessee and Alabama. However, this did not significantly impact overall sales in the US, which remained positive. There have been no negative weather impacts observed for Q4, and October has started well with solid volume growth. - Christopher Norbye, CEO
Q: What is the expected organic growth for the HVAC segment in the US, considering regulatory tailwinds and past high peaks?
A: The US market remains stable, driven by a strong aftermarket service and replacement model. The transition to A2L refrigerants is expected to impact pricing more in the second half of the year. Interest rate reductions could further boost home sales and renovations, positively affecting HVAC demand. - Christopher Norbye, CEO
Q: Can you provide insights into the APAC market, especially with the high season approaching?
A: The APAC market is performing well, particularly in HVAC as it enters the high season. Growth is expected to continue above market rates. Larger projects in Asia, especially China, remain sluggish but do not significantly impact overall performance. - Christopher Norbye, CEO
Q: How is the European refrigeration market adapting to F-gas regulations, and what are the trends in food retail?
A: There is still a significant gap in transitioning to new refrigerants. Quoting levels in food retail are increasing, indicating pent-up demand. Approximately 30-35% of the market has converted, with supply issues expected to drive further conversion. - Christopher Norbye, CEO
Q: What is the potential for Beijer Ref's data center business, and how does it fit into the company's model?
A: The data center business is not a primary driver, as the company's model focuses on parts, maintenance, and service. However, there are opportunities in Eastern Europe and through the F-gas solution. The company is involved in discussions about using excess heat from data centers for district heating. - Christopher Norbye, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
