Morning, everybody, welcome to our webcast where we present our Q2 2021. I am Henrik Perbeck, with me, I have Erika Ståhl, our CFO. In addition to the overall performance of the Beijer Alma Group, we will also discuss our reporting segments, our three subsidiaries. These are Lesjöfors, a full range supplier of standard and customized industrial springs, as well as wire and flat strip components, acting globally with majority of sales in Europe. With Habia Cable, one of Europe's largest manufacturers of custom designed cables for customers in telecom, nuclear power, defense, offshore, and other industries. Beijer Tech, which specializes in industrial trading and manufacturing within fluid technology, as well as consumables, components, and machinery to Nordic industrial companies. Beijer Tech is also a platform for acquisitions into new industrial niches. Next page, please, straight to page four.
I'm happy to report another strong quarter with significant profitable growth. We saw continued strong demand in most customer segments and geographies. Order booking and sales increased, both compared with previous quarter and last year. Operating result increased significantly versus last year, albeit not quite on the first quarter's level, mainly due to the impact of the data intrusion in Habia. Still, the second highest result in the group's history. The high level of activity in the industry has put the strain on supply chains, both in terms of raw materials and components. Thanks to our efforts to adjust prices and actively manage inventory and procurement, the impact is limited, both financially and in our customer deliveries. Looking at our subsidiaries. For Lesjöfors, order bookings and sales remain at high levels, in particular in the Chassis Springs business area, thanks to strong demand in the automotive aftermarket.
For Habia, demand was good with healthy order bookings. However, operations were affected by the data intrusion with impact on sales and operating profits. Here I would also like to take the opportunity to underline the extraordinary efforts from Habia's management and employees to promptly get the systems back online and always with a focus to minimize the impact for our customers. Also, Beijer Tech noted strong demand with high organic growth, both in order booking and sales, in addition to profitable growth from acquisitions. Finally, on acquisitions. It continues to be a priority for the group. This resulted in two acquisitions in the quarter and two announced shortly after. In April, Beijer Tech acquired Noxon within fluid technology and Novosystems within building automation.
In July, an agreement was signed to acquire Källström Engineering Systems, a well-managed and profitable company in the field of filling solutions for the fast-growing battery industry. Later the same month, we were happy to announce that Lesjöfors carried out its largest acquisition to date, the Alcomex Group, a leading and growing European manufacturer of door and industrial springs and an attractive platform for continued profitable growth. Next, page five, please. Continuing with an overview of the group's financial performance. As you are probably aware, significant COVID-19 impact in the last year, Q2 2020. Comparables are indeed weaker. However, on the graph on the right, you can also see the development versus the quarter in 2019 for a reference to a more normal year. Looking at the performance, we can see that order bookings grew strongly by 60% organically, and net sales by 37% organically.
The operating result is up significantly to SEK 197 million with a margin of 14.7%. Moving on to the performance of the reporting segments, our subsidiaries. Next, page six, please. Lesjöfors, our spring manufacturer, is organized into two business areas. Industrial, mainly a customized product to a very diversified customer base globally. Chassis Springs, standardized replacement springs sold to car part wholesalers, mainly in Europe. Order bookings for Lesjöfors as a group increased organically by 78%, which is a very strong development across the two business areas. Net revenues grew organically by 61%. For Industrial Springs, the largest business area, the growth was 38%, and it was broad across geographies and customer segments. For Chassis Springs, demand in the aftermarket was strong. Here I want to note that this is also the one business area within Lesjöfors and also Beijer Alma with a clear seasonality.
The second quarter is typically the strongest. When you look into the dynamics in the lower middle graph, you will see that we had a very strong COVID-19 effect second quarter last year, due to that many workshops in Europe were closed. Instead, last year, there was an unusual peak in the third quarter. You can also see a more normal seasonal pattern in the 2019 figures. The operating result for Lesjöfors increased to SEK 179 million, with margin improvements broadly across business areas and geographies, thanks to high production utilization. Next, page seven, please. Now to Habia, our specialty cable manufacturer. Habia is not organized into business areas. Sales to nuclear power defense and offshore customers are usually strongly project related, and this can create volatility, and that's why we show the dynamics of these customer segments down on the left.
As mentioned, demand was good in the quarter, with order bookings amounting to SEK 242 million, up organically by 33%. Net revenues declined by 11% organically, and the operating result reported was 0 in the quarter. Revenues and operating results were negatively affected by the data intrusion, which resulted in a loss of production and also a negative product mix, since, in particular, the most sophisticated products need full system support during the whole manufacturing process. This event is covered through the group's cyber insurance. In the result, the extra direct costs have been offset by expected insurance compensation, less a deductible of one and a half million SEK. Once systems were back, production output has been fully ramped up to catch up and also meet demand. This continues into the autumn after the quarter. Next, page eight, please.
Beijer Tech operates in two business areas, fluid technology and industrial products, mainly within trading, but also manufacturing. Further, it is a platform for acquisitions into new product and business areas. Thanks to continued strong demand, organic growth in order bookings amounted to 43%, and net revenues grew by 52%, of which 28% was organic. Operating result increased to SEK 24 million. In the quarter, two companies were acquired. Noxon, within wastewater treatment, is reported into fluid technology and has an annual turnover of approximately SEK 70 million. Novosystems, within building automation, is reporting into industrial products and has an annual turnover of approximately SEK 50 million. The impact on operating results from these recent acquisitions is offset in this quarter by transaction costs. Regarding acquisitions, I will come back shortly with some positive events after the quarter. Next, page nine, please.
I will now hand over to Erika to further comment on the financials.
Thank you, Henrik. Please go to page 10, which is a very busy page, but it includes a summary of the quarter and the year to date, first half of 2021. I would like to highlight a few things that I have in addition to what Henrik has already mentioned. We had an operating margin on 14.7% in the second quarter and 15.7% in the first half. This is a very strong start for the year 2021. Cash flow in the quarter was good, but of course, we had an impact from the higher operating capital as we have higher accounts receivable due to the higher sales. As you can see from the key ratios, we have a strong balance sheet.
After the recent acquisitions that we have made and announced, this impact is not visible in the numbers, our balance sheet remains stable, we continue to have room for acquisitions. Additional information is also then that we have increased our revolving credit facility from 300 to 800 million SEK. Please move to page 11. Here we have the bridges that show the development of order bookings and net revenues in the quarter. Both items then have a headwind of 4%, the acquisition impact is from the Beijer Tech acquisitions. As you can see, the level of organic growth is high. We have, as Henrik has already mentioned, the comparables from last year is then heavily affected by the COVID-19 pandemic. Order bookings were strong in all of our companies.
The net revenues for Habia was lower than last year. Lesjöfors and Beijer Tech had a strong net revenue development. Please move to page 12. Looking at two bridges showing the contribution from the different segments on net revenue and operating result. As mentioned, and as you can see on the charts as well, Lesjöfors and Beijer Tech had very strong net revenue development, which then also resulted in good operating result development for the quarter. As we talked about before, we then have a zero result in Habia, which then resulted in SEK 13 million lower than last year. All of these things then led up to the SEK 197 million operating profit for the second quarter 2021. Please move to page 13, which then are similar bridges as the one we looked at on the previous page.
These ones depict the development in the first half 2021 compared to 2020 first half. Here we see also a strong contribution from Lesjöfors and Beijer Tech, both in terms of net revenues and operating results, whilst Habia is lower than last year. Even though we did have a zero result for Q2, for the first half, it is only SEK 3 million that Habia is behind in the first half-year perspective. I think that is a good thing to keep in mind when talking about the performance of the different segments. Now with that, I hand over back to you, Henrik.
Thank you, Erika. We are now want to have page 15. After the quarter closed, we have several events that are interesting to highlight for you. On July 9th, Beijer Tech signed an agreement to acquire Källström Engineering Systems. Källström designs and produces equipment for filling, mixing, and handling of corrosive liquids, and primarily for the growing international battery industry. Källström sales amounts approximately SEK 35 million with good profitability. The transaction is expected to close during the third quarter. Later in July on the 28th, Lesjöfors acquired Alcomex, which I will come back to in more detail shortly. Moving on the 29th of July, we signed an agreement to divest S&P Federnwerk in Germany, and the transaction has been closed since. S&P was a part of Lesjöfors since 2013 and had a turnover of approximately SEK 110 million, mainly to automotive OEM customers and agricultural vehicles.
The decision followed an evaluation of strategic alternatives and an unsatisfactory profitability. For Beijer Alma and Lesjöfors, this will occur a negative result effect of approximately SEK 60 million, not affecting cash flow, and this will be seen in the third quarter. As Erika mentioned, during the quarter, we increased our credit facilities from SEK 300 million to SEK 800 million to cater for the above-mentioned transactions. Coming back to the main event. Next, page 16, please. The acquisition of Alcomex. We were proud to disclose this acquisition by Lesjöfors in the end of July, and I would like to take this opportunity to present Alcomex Group. Alcomex is a leading and growing door and industrial springs manufacturer. It has its base in the Netherlands. Like Lesjöfors, the focus is on smaller batches and customized products with value creation through technical expertise.
It has a diversified customer base and becomes a new platform for continued profitable growth for Lesjöfors. Alcomex has a complementary geographical footprint for us, both in its sales but also through production footprint in countries like India, Poland, and Czech Republic. In a snapshot, a revenue of approximately EUR 45 million with good profitability, approximately 350 employees, and serving 2 main product segments, Door Springs and Industrial Springs. We're also positive to continue to develop Alcomex together with their strong management who remains as minority owners. We see a clear industrial logic in this acquisition and many opportunities for collaboration and synergies going forward. It is the largest acquisition to date by Lesjöfors and will bring significant impact to the profitable growth for Beijer Alma as a group. Next page, 17, please. Finally, in the last webcast, I presented our strategic focus.
I would like to reconnect to this in the light of what we have discussed today. In the quarter, we report significant profitable growth, both organic and through acquisitions. Our diversified customer base is a strength as demand has increased, both during the pandemic and recent challenges in the supply chain. We have shown resilience and managed our customer deliveries. Our increased acquisition focus continues. The consolidation on the industrial springs market through Lesjöfors continues with the acquisition of Alcomex. Three acquisitions by Beijer Tech discussed today, establishes further its role of a compounder within industrial niches. As Erika mentioned, our financial position remains strong to support acquisitions also beyond these recent events. We are a long-term owner, with the divestment of S&P, also shows that if we cannot achieve profitable growth long term, we will take action and also adjust our portfolio of companies accordingly.
Finally, a decentralized governance is key to us to empower local management and encourage entrepreneurship, both for our existing and recently acquired companies. With that, we move on to page 18, please, and open up for questions. Operator, please.
Thank you. If you wish to ask a question, please dial zero one on your telephone keypads now to enter the queue. Once your name has been announced, you can ask your question. If you find your question has been answered before it's your turn to speak, you can dial zero two to cancel. We have two questions in the queue so far. The first is from the line of Carl Ragnerstam of Nordea. Please go ahead. Your line is open.
Hi, it's Carl from Nordea. A couple of questions my side. Just first a clarification on how Habia Cable, could you just once again please explain how the insurance policy is working? Just one more time also explain the impact on Habia's result in the quarter. Yeah, let's start there.
Hello, Carl. Okay, to clarify how the cyber insurance works, it has the component of covering direct costs associated with coming back up online with the systems. It also has a component of the business interruption, covering loss of business during the period. During the quarter, as I explained, we have taken significant extra costs to manage the situation. We have less the deductible, added back this as our expected insurance compensation. Referring to the business impact, as I mentioned, we are in the quarter already have ramped up our production to catch up with customers that did not receive their deliveries during that time. We are continuing to work on that into the autumn.
Okay, perfect. The sales loss in the quarter, as you reported a negative 11%, I think, negative organic growth. What was the sales loss during the quarter owing to the IT attack? I guess you managed to offset it fully, at least.
If you talk about the sales loss in the numbers related to last year, I just want to reiterate on that Habia actually were not that heavily impacted by COVID-19 in Q2 last year. We're comparing to fairly normal numbers there. We have not quantified specifically the sales impact, but the sales impact comes from loss of production, as I mentioned during a couple of weeks. It's different for the different factories. Some factories managed to run quite high utilization through manual processes, whereas, as I mentioned, the most sophisticated production, which require full system support throughout the manufacturing, had a larger impact.
Okay. On that note, I guess it's fair to assume a more positive margin mix going forward. I guess it implies that.
Once again, the mix effect in the quarter, as I mentioned, there is a mix effect due to what I just explained on the more advanced product and also, of course, a top-line effect in general.
Okay, perfect. On the Chassis Springs, of course, strong growth, but you had favorable comparisons as well. I'm a bit curious to know what sort of the growth looks like at the end of the quarter when you don't have as favorable COVID comparisons. For instance, when looking at LKQ's European division, they reported close to 10% growth in June, for instance. Is that a fair proxy for you as well at the end of the quarter?
The demand was very strong throughout the quarter, as actually I mentioned also in my CEO comment in the report through the summer. Of course, you remember that in April last year, it was more or less shut down, the growth continues to be strong throughout the quarter.
Okay, perfect. Also a bit on Beijer Tech. I mean, a good strong growth there as well, but margin looked a bit muted, at least in the quarter. Especially when considering the strong organic recovery, which seemingly gave a little drop through. What is behind that?
I think the margins are on a similar level. We have some impact, as we mentioned, from acquisition transaction costs. It is a portfolio of companies, so the development stayed similar to the previous quarter.
Okay, perfect. The final one from my side is related to M&A, and you have obviously closed quite a solid amount of M&A year to date, to say the least. Would you say that it is a catch-up effect from the pandemic, if you will? Would you say that it's partly due to the strength in M&A team and that you're able to follow up on leads more effectively and maybe even be more proactive in your M&A approach?
I think it's a combination of both. Of course, the M&A market has been quite strong. We have been working proactively throughout most of the pandemic, by the way, and a project like Alcomex is, of course, a lot of work during a longer time. It's a combination. Strong market, but also definitely proactive work with the team that we have, both in our subsidiaries and supported by us at the Alma central.
Perfect. Thank you.
Okay.
Thank you. We have one further question that's from the line of Hjalmar Jernström of Erik Penser Bank. Please go ahead. Your line is open.
Hi, Henrik and Erika. Thanks for addressing my question. The first question is relating to Lesjöfors. You have an improved operating margin here, both compared to 2020 and 2019. Could you elaborate a bit on the effect here and whether this mainly stems from a good gross margin, or is it the management of capital operating expenditures?
Hello, Hjalmar . Yes, I think the two main components of that is that with a good demand and very high deliveries, we of course get the general good leverage on our production units. We are also looking back, have a very competitive cost base. Of course, several actions that were taken during last year is still there and having an impact. Leverage and a very competitive cost base.
All right. Thank you. My next question is relating to Habia Cable and his strong order intake. Could you elaborate a bit on whether this order intake increase comes from telecom, or is it from the nuclear offshore defense segment?
We've seen, in particular, a strong demand in industrial clients over the quarter, which resembles both of the other subsidiaries we have. The main uptick is related to the industrial business.
All right. One question regarding the Alcomex acquisition. You mentioned briefly some synergies. Could you elaborate a bit whether you believe that the effects will come mainly from cross-selling or perhaps from manufacturing? What do you believe will be the dominating synergy effects?
As I mentioned, we have a fundamentally decentralized governance structure, and the company and the Alcomex Group will continue to operate as such. Both the two areas you mentioned are, of course, very interesting. We always encourage cross-sales between our companies, and in particular within Lesjöfors, of course. We will obviously also look for procurement synergies and also the interesting factory footprint that Alcomex brings to the group with new geographies is definitely on the agenda to see how we can work best together with them. Far it's only been three and a half weeks, but we have already launched several initiatives, and it's a great team to work together with. We're very excited about this new development and this new company in our group.
All right. Thank you. Also looking at the intense acquisitions that you've made recently, looking forward, how do you believe that this will affect your CapEx requirements?
As we have mentioned, of course, we will have a slightly different balance sheet after these acquisitions, but it still supports our ambitious growth strategies also through acquisitions. We're quite confident that we will not be limited in that part of our strategy by our balance sheet.
All right. Thank you so much.
Thank you. As there are no further questions. Oh, we've just had one further question come through. It's a follow-up from Carl Ragnerstam of Nordea. Please go ahead. Your line is open.
A couple of more from my side, Ona. First of all, in terms of the Chassis Springs, I guess in Q3 last year, you started to work through sort of the pent-up demand right after the pandemic, right? Of course, this year you might have even higher car utilization, which might drive a replacement, of course, compared to last year. Could you help us a bit on the comparisons or the dynamic when entering Q3? Thank you.
As I mentioned during the presentation, and you're aware of, that normally the Q2 is seasonally the strongest, and it continues also into Q3. Whereas Q4 is normally a lower season for the chassis spring sales. Generally, what we have seen in these last, what should we say, 18 months is a less normal world. Looking into the different demand factors for chassis springs, of course, there are some effects from how cold was the winter, and we had a fairly cold winter in Europe, which has driven demand. There is also some remaining effects of the close down and a lot of the replacement takes part following your yearly inspection, et cetera. Finally, there is also the growing market of second-hand cars is underlying and slowly growing. To foresee what will be the exact impact in the Q3, we don't go into that.
As I mentioned, we did see a strong demand throughout the summer. Despite the, as you said, the comparables are a little different from last year, but the market remains strong and the demand remains strong.
Perfect. In terms of cost inflation, that is, of course, a hot topic, especially the raw material side. You seemingly have at least, when looking at your gross margin, handled that quite well during Q2. Should we expect a more material impact going forward for some reason, or?
This has, of course, been a focus for our companies throughout this last quarter and this half year. We have managed actively both in terms of pricing and inventory. Some parts of our business, some customer agreements, we have indexing in the pricing. In other cases, it's a matter of negotiations. I think as many companies experience now that such swings in the raw material prices also, it's very natural that this can be compensated also in these negotiations. I think we managed this well throughout the quarter, and it has been a high priority for us.
Perfect. The final one is, of course, related to the component issue, which you mentioned has been limited during the quarter. Have you seen a worsening impact at the end of the quarter? Should we expect any headwinds which you foresee already in the coming period?
In general, for Beijer Alma Group, I think that's what I referred to, both through the pandemic and this last quarter, we do not procure so much components. It's mainly raw materials, of course. We can see some, not impact, but some delayed delivery time, longer delivery time, especially in the trading areas. Once again, we are fairly well placed for this with good inventories in the most important products. Yes, there is a strain in the supply chain, and it's really constant work, daily work to find. So far, no significant impact, and we have managed it well.
Perfect. Thank you.
Thank you. As there are no further questions on the phone lines at this time, I'll hand back to our speakers for the closing comments.
Thank you everybody for attending our webcast, and have a nice day.
Thank you very much.