15 June 2020: Sold 100% of holding in Beijer Ref (SEK 280-ish). ATH was 306 SEK just before market crash. Good company with megatrends supporting the long term runway for the company, but too pricey at current prices
Beijer Ref is one of the largest refrigeration wholesalers in the world and has also operations in air conditioning and heat pumps.
Beijer Ref is active in a fragmented market where the majority of the competition consists of local players. An important part of the group’s strategy is to grow through acquisitions and Beijer Ref is actively working to consolidate the market. In total, Beijer Ref has so far completed the acquisition of approximately 50 businesses. By adding strategic companies to the portfolio, Beijer Ref can grow faster than the market, both geographically and through an expanded product range. Synergies are achieved primarily in purchasing and logistics as well as a widened product range (source: Annual report 2019)
Within the EU, a new F-gas regulation was published in April 2014 which increases the demand for the phasing out of HFC(3) refrigerants with a high greenhouse impact. The F-gas regulation also regulates the authority for intervening in the refrigerant cycle in order to avoid leakage, all in order to reduce the discharges. The new F-gas regulation will also regulate the imported volume of refrigerants into the EU with a falling import volume until 2030. This is to give owners of installations time to adapt their selection of refrigerant (source: Beijer Ref). Outside the EU there is also continuous discussion about how F-gases should be regulated, which will support the structural growth of the industry and for the company.
Risks: Dependency of Carrier, Toshiba and Mitsubishi Heavy Industries (all are important partners of the company). Changed legal requirements and regulations. Competition
Investment basis: The EU-regulation will keep demand for Beijer Ref’s products high in the coming decade since few retailers has replaced their old refrigerators. Furthermore, the heat pump segment is also experiencing high growth since warmer summers drives demand for heat pumps (can also be used for cooling).