Note 1 – Operating segments 2015 Sweden Finland Other Units Parent Company/ Elimination Group External sales 1,786 1,741 628 0 4,155 Internal sales 51 4 20 -75 – Net sales 1,837 1,745 648 -75 4,155 Participation in earnings of joint venture 2 – – – 2 Underlying operating result 41 30 -26 -23 22 Inventory gains/losses -3 -9 0 0 -12 Non-recurring items1) -50 0 -74 0 -124 Operating result -12 21 -100 -23 -114 Net financial items -48 Profit/loss before tax -162 Taxes -7 Profit/loss for the year -169 Underlying operating margin 2.2 % 1.7 % -3.9 % – 0.5 % Operating margin -0.6 % 1.2 % -15.4 % – -2.8 % Shipped tonnage (thousands of tonnes) 167 178 69 -8 406 Operating capital 653 478 210 50 1,391 Investments 4 9 3 0 16 Depreciation/amortization of tangible/intangible assets 13 20 15 14 62 Other non-cash flow items 48 1 68 7 124 Total non-cash flow items 61 21 83 21 186 1) During the year, write-down of assets totaling SEK 124 million have been made. 2014 Sweden Finland Other Units Parent Company/ Elimination Group External sales 1,734 1,713 755 0 4,202 Internal sales 42 2 21 -65 – Net sales 1,776 1,715 776 -65 4,202 Participation in earnings of joint venture 1 – – – 1 Underlying operating result 31 40 -28 -25 18 Inventory gains/losses 0 -6 0 0 -6 Non-recurring items 0 -2 -21 -6 -29 Operating result 31 32 -49 -31 -17 Net financial items -55 Profit/loss before tax -72 Taxes -1 Profit/loss for the year -73 Underlying operating margin 1.7 % 2.3 % -3.6 % – 0.4 % Operating margin 1.7 % 1.9 % -6.4 % – -0.4 % Shipped tonnage (thousands of tonnes) 160 172 86 -7 411 Operating capital 641 455 306 66 1,467 Investments 1 4 2 0 7 Depreciation/amortization of tangible/intangible assets 13 19 11 22 65 Other non-cash flow items -5 1 22 1 19 Total non-cash flow items 8 20 33 23 84 BE Group is a trading and service company in steel, stainless steel and aluminium. Customers are primarily in the construction and engineering sectors. Since customers’ needs vary widely, BE Group offers different sales solutions: inventory sales, production service sales, and direct sales. The cooperation between BE Group and a particular customer can comprise one or more of these sales solutions. BE Group’s basic products are of a similar nature, regardless of the customers or markets to which they are distributed. Part of BE Group’s strategy is also to further process materials at its own production facilities through various types of production services, which in some cases result in completed components being delivered straight into customers’ production lines. BE Group’s risks and opportunities differ between the different geographical markets to which its products are distributed. For that reason, BE Group has chosen geographical areas as its primary segments. Operations that support the Swedish and Finnish operations or that are geographically situated outside these core areas are gathered in a separate segment. The operating structure and internal reporting to Group management and the Board of Directors are therefore based primarily on reporting of geographical business areas. Each segment´s result, assets and liabilities include operating items attributable to the on-going activities of the segment. The allocation of operating capital per segment is based on the location of the business and includes items directly attributable and items that can be allocated by segment in a reasonably reliable manner. Operating capital allocated by segment comprises tangible assets, goodwill and other intangible assets, participations in joint ventures, deferred tax assets and working capital less deferred tax liability and provisions. Financial assets and liabilities have not been divided by segment but are reported as other assets/liabilities. Capital expenditures for the segment include investments in intangible and tangible assets, including assets included in acquisitions. The financial information per segment is based on the same accounting principles as those that apply for BE Group, with the exception of the underlying earnings and return measures. Underlying earnings correspond to reported earnings after adjustment for non-recurring items and inventory gains and losses. These represent the difference between the cost of goods sold at acquisition cost and the cost of goods sold at replacement value. BE Group applies an internal calculation model. The model has not been reviewed by the Company’s auditors. Internal prices between BE Group’s segments are based on the principle of “arm’s-length transactions,” that is, transactions between parties that are mutually independent, thoroughly informed and have an interest in the transactions. Prices of goods are based on current purchase prices plus an internal markup margin. Data on products, services and geographical regions BE Group consists of two business areas – Sweden and Finland. BE Group’s other operations are gathered within Other Units. Sweden BE Group’s operations in Sweden are conducted under the name BE Group Sverige AB. The Company offers sales and distribution of BE Group’s products, such as commercial steel, stainless steel and aluminium. In addition to distribution of materials, production service is also provided, whereby the Company processes materials in various ways to meet specific customer requirements. Examples include cutting to length, shot blasting, painting, drilling and cutting in various forms. The Company provides additional services including advanced logistics solutions and material advisory services. In addition, BE Group Sverige AB owns 50 percent of the thin plate processing company ArcelorMittal BE Group SSC AB. Finland Business Area Finland includes BE Group’s operations in Finland, which are conducted under the name BE Group Oy Ab, and the ope-rations in the Baltic States under the names BE Group AS, Estonia, BE Group SIA, Latvia and UAB BE Group, Lithuania. Sales and distribution of BE Group’s products, such as commercial steel, stainless steel and aluminium, are offered in all operations. In Finland, production services are also provided on a large scale. Examples include cutting to length, shot blasting, painting, drilling and cutting in various forms. In addition, the company in Finland offers its customers logistics solutions, advisory services and financing of working capital. Other Units BE Group’s operations in Poland, the Czech Republic and Slovakia, as well as the Swedish companies Lecor Stålteknik and BE Group Produktion Eskilstuna are gathered within Other Units. Other Units is a collective concept encompassing the units outside Business Areas Sweden and Finland. In Poland, operations are conducted under the name BE Group Sp.z o.o., and are providing production services to Polish and Nordic customers. BE Group offers parts of its product range in commercial steel, stainless steel and aluminium in Slovakia, under the name BE Group Slovakia s.r.o. and in the Czech Republic, under the name BE Group CZ s.r.o. In the Czech Republic, production services such as cutting to length and drilling are also offered. Lecor Stålteknik AB provides steel construction solutions to customers in the Swedish construction sector and BE Group Produktion Eskilstuna AB is a service company in the area of plate processing and welding. Group Sales per product group 2015 2014 Long steel Products 1,284 1,334 Flat steel Products 1,645 1,622 Stainless steel 780 765 Aluminium 194 188 Other 252 293 Total 4,155 4,202 Sales by country based on customer’s domicile 2015 2014 Sweden 1,994 1,946 Finland 1,466 1,454 Other countries 695 802 Total 4,155 4,202 Tangible, intangible and financial assets by country 2015 2014 Sweden 511 639 Finland 300 317 Other countries 54 86 Total 865 1,042 Parent company Sales of internal services by country based on domicile of subsidiary 2015 2014 Sweden 14 17 Finland 13 16 Other countries 7 10 Total 34 43