Kalle Björklund

Business Area Manager Sweden

Key data 2013 2014 2015
Shipped tonnage, thousands of tonnes 169 160 167
Net sales, SEK M 1,889 1,776 1,837
Change, % -18 -6 3
Operating result (EBIT), SEK M1) 19 31 -12
Operating margin, % 1.0 1.7 -0.6
Underlying operating result (uEBIT), SEK M 37 31 41
Underlying operating margin, % 2.0 1.7 2.2
Investments, SEK M 6 1 4
Average number of employees 287 265 256

1) The operating resultat for 2015 has been impacted negatively by write-down of assets of -50 SEK M.

Business Area Sweden accounted for 43 percent (41) of BE Group’s net sales in 2015. The roughly 2,000 customers in the engineering and construction industry receive deliveries from warehouse and production facilities in Malmö and Norrköping and are served from local sales offices in a total of nine cities. The size and needs of the customers vary widely; the ten largest customers account for about 21 percent of the business area’s sales. Local presence, a high level of service and good understanding of customers are prerequisites for serving the market.

BE Group owns 50 percent of the company ArcelorMittal BE Group SSC AB, a steel service center where metal coils is cut and slit. The competitors in the market include SSAB-owned Tibnor and Stena Stål, which is a part of the Stena Group.

Sales and business performance

The business area reported sales of SEK 1,837 M (1,776), an increase of 3 percent compared with the previous year, depending on an increase of 4 percent in shipped tonnage. The information the Company has regarding the size of the distribution market indicates that demand, measured in tonnage, has been more or less unchanged compared with the previous year. The prices have had a downward trend, but the effect was smaller in Business Area Sweden than in the Group’s other markets due to a weaker SEK and less exposure to flat products, where the price drop was the sharpest.

Operating result, which amounted to SEK -12 M (31), was impacted by write-down of participations in the joint venture ArcelorMittal BE Group SSC, owned by the business area, in an amount of SEK -50 M. The joint venture is recognized according to the equity method and the participation in earnings for the year amounted to SEK 2 M (1).

The underlying operating result, adjusted for inventory losses and non-recurring items, improved to SEK 41 M (31) as a consequence of higher sales and lower overhead costs.

Continued development

In 2015, considerable focus was placed on more active sales work. The growth generated during the year is seen as a result of this work, which is set to continue in 2016. In the second half of the year in 2015, the Company invested in two processing machines at the plant in Norrköping. The Company will thereby have the opportunity to supplement and broaden its customer offering to the customers that buy processed products.

The price drop on steel of recent years has entailed a weakening in the Company’s earnings. In the coming year, further focus will be placed on increasing the margins to ensure that the Company’s transactions are sustainable and generate value for both the customer and the Company.

Sales by business solution
(previous year)
Sales
SEK M
Operating result (EBIT)
SEK M

*The operating result for Q3 2015 is cleared from write-down of assets of SEK -50 M. The operating result including write-down of assets amounts to SEK -42 M.