Beijer Ref AB reported record second-quarter sales for 2026, driven by a significant acceleration in its original equipment manufacturer (OEM) division. The Swedish heating and cooling products distributor announced the results on July 17, 2026. Group sales reached SEK 12.8 billion for the quarter, a 19% increase compared to the same period last year. The OEM segment was the standout performer, with sales surging 31% year-on-year, indicating a successful strategic pivot toward higher-margin proprietary products. This growth significantly outpaces the more modest 8% expansion in the company's traditional distribution business.
Context — why Beijer Ref's OEM pivot matters now
Beijer Ref's transformation from a pure-play distributor to an integrated OEM has been a multi-year strategic initiative. The company's last major acquisition in the OEM space was the purchase of German HVAC component maker KKT GmbH in late 2024 for approximately SEK 3.5 billion. That acquisition expanded Beijer Ref's in-house production capabilities for refrigeration valves and system controls. The current macroeconomic environment, characterized by stable but elevated interest rates in Europe, has pressured the construction-linked distribution business. This makes the higher-margin, less cyclical OEM segment a critical driver for growth and profitability.
The recent surge is likely a direct result of commercial synergies from the KKT integration reaching full effect. Beijer Ref can now bundle its own manufactured components with third-party products, offering customers complete system solutions. Regulatory tailwinds also play a role, as the European Union's revised F-Gas regulation continues to phase down the use of high-global-warming-potential refrigerants. This drives demand for new, compliant technologies, an area where Beijer Ref's OEM unit has invested heavily. The Q2 performance demonstrates that this strategy is gaining meaningful commercial traction ahead of schedule.
Data — what the numbers show
The Q2 2026 financial slides present a clear picture of accelerating growth, particularly in the strategically vital OEM arm. Group sales of SEK 12.8 billion compare to SEK 10.8 billion in Q2 2025. The OEM business contributed SEK 4.1 billion to the total, up from SEK 3.1 billion a year prior. This 31% growth rate is nearly four times faster than the distribution segment's 8% increase. The following table illustrates the shift in business mix over the past year.
| Segment | Q2 2025 Sales (SEK bn) | Q2 2026 Sales (SEK bn) | Growth |
|---|
| OEM | 3.1 | 4.1 | 31% |
| Distribution | 7.7 | 8.7 | 8% |
The OEM segment now represents 32% of total group sales, up from 29% in Q2 2025. This performance stands in contrast to broader industrial distribution peers. The STOXX Europe 600 Industrial Goods & Services index has delivered average sales growth of approximately 5% over the same period. Beijer Ref's market capitalization has responded positively, increasing by over SEK 15 billion since the start of the year to approximately SEK 105 billion.
Analysis — what it means for markets / sectors / tickers
The strong OEM performance signals a successful de-risking of Beijer Ref's business model. A more balanced revenue stream between distribution and proprietary products should lead to improved gross margins in subsequent quarters. Primary beneficiaries within the supply chain include specialized component suppliers like NIBE Industrier, which could see increased orders for sub-components. Conversely, pure-play HVAC distributors that compete with Beijer Ref's legacy business, such as British-based Edmondson Group, may face heightened competitive pressure from its integrated offering.
A key risk to the bullish narrative is integration strain. Absorbing KKT's operations while achieving such rapid growth could lead to operational inefficiencies or margin compression if not managed meticulously. Investor positioning data from recent weeks shows a notable increase in long positions from institutional funds focused on European industrials. Flow has rotated away from pure distributors toward companies with stronger intellectual property and manufacturing moats. The results validate this shift and may accelerate it across the sector.
Outlook — what to watch next
The immediate catalyst is the full Q2 2026 earnings report and investor call scheduled for July 24, 2026. Analysts will scrutinize the OEM segment's EBITDA margin for confirmation that growth is profitable. The next significant data point will be the Q3 interim report, expected on October 23, 2026, which will indicate if the OEM momentum is sustainable.
Key levels to monitor include the OEM segment's share of total sales. Sustained movement above 33% would confirm the strategic shift is durable. Investors should also watch for any guidance revision on the full-year 2026 margin outlook. If the European Central Bank announces further rate cuts in its September meeting, it could provide an additional tailwind for the distribution business, creating a dual-engine growth scenario for the second half of the year.
Frequently Asked Questions
What is Beijer Ref's OEM business?
Beijer Ref's OEM division designs and manufactures proprietary components for heating, ventilation, air conditioning, and refrigeration systems. This includes valves, heat exchangers, and control systems sold under its own brands, often integrated into larger units by other manufacturers. This segment typically carries higher profit margins than the company's core business of distributing third-party HVAC-R products. The strategic focus on OEM aims to reduce cyclicality and create a more defensible market position.
How does Beijer Ref compare to US peers like Watsco?
Beijer Ref and Watsco are both leading HVAC-R distributors, but their strategies differ. Watsco remains heavily focused on the North American distribution market with a vast branch network. Beijer Ref, while a major distributor in Europe and Asia-Pacific, is aggressively pursuing vertical integration through its OEM segment. Beijer Ref's 31% OEM growth significantly outpaces the organic sales growth reported by Watsco in recent quarters, highlighting a divergent strategic path and revenue mix.
What are the risks of Beijer Ref's OEM strategy?
The primary risk is execution risk in integrating acquired OEM companies and managing rapid growth without eroding quality or profitability. The business also requires continuous high research and development investment to keep its proprietary technology competitive against specialized component makers. the OEM segment is exposed to global industrial production cycles, which could downturn, potentially making the business more cyclical than intended, even as it diversifies away from construction-driven distribution.
Bottom Line
Beijer Ref's OEM surge validates its strategic pivot, transforming its growth profile and margin potential.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
