Development over the year


BE Group is a trading and service company in steel, stainless steel and aluminum. Customers mainly operate in the engineering and construction sectors in Sweden, Finland and Baltics, where BE Group is one of the leading actors in the market. The Group has approximately 700 employees, with operations in eight countries and head office located in Malmö, Sweden. BE Group’s stock is listed on the Nasdaq Stockholm Exchange. Read more about BE Group at

Alternative performance measures

BE Group uses a number of alternative performance measures. The alternative performance measures that BE Group considers significant are underlying operating result, net debt, working capital and capital employed. Under the tab alternative performance measures you can read more about how these are calculated.

Market and business environment

According to The European Steel Association (EUROFER), demand for steel in Europe is estimated to have increased 2.5 percent in 2016 compared with the previous year. Just like last year improvement in demand is clearest in the automotive industry. The market situation on the supply side has during the year also been impacted by the import duties imposed by EU on a number of material types. This has reduced the import volumes and in some cases, completely eliminated the overcapacity that has long existed among European steel mills. The facts that BE Group has regarding the current developments in the Swedish and Finnish distribution market indicate a market growth of 6 percent. Steel prices have had an upward trend during the year.

New Group structure and organization implemented

During the year, the Group’s structure has changed and now consists of two Business Areas: Sweden & Poland and Finland & Baltics, with a business focus on the Group’s main markets. Within each business area, an organization has been built up with separate business units which focus on Distribution and Production, respectively. The purpose of this split is to obtain greater focus and increased transparency to more easily identify and implement improvements. Other units which are under restructuring, consist of BE Group Czech Republic, BE Group Slovakia and RTS Estonia, and is reported together with the Parent company and group eliminations in Parent Company & consolidated items.

Net sales and result

During 2016, consolidated net sales decreased by 7 percent compared to the previous year and amounted to SEK 3,870 M (4,155). Tonnage fell 8 percent as a result of the restructuring of operations in the Czech Republic and Slovakia. In Business Areas Sweden & Poland and Finland & Baltics, tonnage was in-line with, or higher than, the previous year. The average sales price has gradually increased during the year and, for the full-year, is in line with the previous year. The positive price trend during the year has resulted in inventory gains of SEK 28 M (-12). Consolidated net sales were positively impacted by currency effects of 1 percent as a result of a stronger euro. Gross profit, which was positively impacted by inventory gains, increased despite lower sales and amounted to SEK 561 M (524), corresponding to a gross margin of 14.5 percent (12.6). The underlying gross margin improved to 13.9 percent (12.9), corresponding to an unchanged underlying gross profit of SEK 536 M. The operating result, which was affected by non-recurring items of SEK -45 M (-124), improved to SEK16 M (-114). Adjusted for non-recurring items and inventory gains and losses, the underlying operating result increased to SEK 33 M (22). The improved underlying gross margin compensated for the lower sales. This, together with lower expenses, improved the underlying results. The operating margin amounted to 0.4 percent (-2.8) and the underlying operating margin was 0.9 percent (-0.5).

Net financial items and tax

Consolidated net financial items amounted to SEK -27 M (-48), of which net interest expense accounted for SEK -19 M (-26). On an annual basis, consolidated net interest corresponded to 3.4 percent (3.9) of average interest-bearing net debt. Tax amounted to SEK -9 M (-7). Result after tax increased to SEK -20 M (-169).

Cash flow

Cash flow from operating activities increased to SEK 78 M (-93) for the full year. The positive cash flow was largely generated from the operating activities’ results. The lower working capital, primarily an effect of a reduction in structural working capital from restructuring in the Czech Republic and Slovakia, contributed positively to the cash flow of SEK 34 M (-110). Cash flow from investing activities was SEK -10 M (-16) for the full year. Cash flow after investments thereby amounted  to SEK 68 M (-109).

Capital, investments and return

At the end of the period, consolidated working capital amounted to SEK 506 M (525) and average working capital tied-up was 12.6 percent (12.2). Of the year’s investments, totaling SEK 10 M (16), investments in intangible assets accounted for SEK 2 M (0) and investments in tangible assets for SEK 8 M (16). The return on capital employed increased in comparison with the previous year and amounted to 1.2 percent (-7.5).

Financial position and liquidity

At the end of the period, consolidated cash and equivalents, including overdraft facilities, were SEK 127 M (133) and consolidated interest-bearing net debt amounted to SEK 562 M (609). At the end of the period, equity totaled SEK 771 M (785), while the net debt/equity ratio increased to 73 percent (78).

BE Group’s fundamental values act as a guide in the day-to-day work of everyone within BE Group. They address how we act towards one another, as well as towards customers, suppliers and others with whom we come into contact.


BE Group considers the employees to be the Group’s most important resource. On many occasions, it is one or a few individual employees who are the outward face towards a specific customer or supplier and it is therefore important that everyone who works at BE Group should contribute to us being perceived as an economically, socially and ethically responsible company. It is the people at BE Group who make things happen and make it possible for the Company to keep its promises. The corporate culture is based, among other things, on what BE Group has defined as its fundamental values. These values act as a guide in the day-to-day work of everyone within BE Group. They address how we behave towards one another, as well as towards customers, suppliers and others with whom we come into contact. These are: Understanding customers, Profit, Action, Responsibility and Openness.

The number of employees decreased to 711 compared with 774 at the beginning of the year. The decline is due to the restructuring in Czech Republic and Slovakia. The average number of employees during the year amounted to 739 (768).

Environmental policy and environmental work

For a long time, BE Group has been working with environmental issues as an integrated part of its operations. With its position between steel producers and customers, it is in the area of transport in particular that BE Group is able to help lessen the environmental impact. In addition, BE Group works continuously to improve its own facilities’ energy consumption, emissions and waste management.

Overarching environmental policy

A comprehensive environmental policy forms the basis of BE Group’s environmental work. The policy states that BE Group shall

  • As a minimum comply with current environmental legislation and requirements from local authorities.
  • Be economical in the use of energy and natural resources.
  • Work to decrease the amount of waste and emissions from our facilities.
  • Identify opportunities to make adjustments benefiting the environment when making investments and changes in processes and facilities.
  • Maintain a high level of awareness on environmental issues through ongoing training.
  • Document and communicate environmental work to employees and provide open and objective information to external stakeholders.

BE Group is engaged in operations at two sites in Sweden for which environmental permits are required. In Finland, operations in one site require environmental permits. Group companies have obtained special permits to engage in operations in the countries where such permits are required. All operations within the Group, with the exception of Lecor Stålteknik, are certified under the ISO 14001 environmental management system.

Risks and risk management in BE Group

BE Group’s profits and financial position are affected by a large number of factors. Several of these are beyond the Company’s own control. The Group operates in several countries and is therefore exposed to various risks as a consequence of differences in legislation, regulations and guidelines. Risk management within the Group is guided by established policies and procedures that are revised by the Board of Directors and/or Group Management on an ongoing basis. The most important risks and factors of uncertainty for BE Group can be divided between:

  • Market risks (economic and steel price trend)
  • Operational risks (suppliers, customers, contractual relationships, personnel, product liability, legal and environmental liability)
  • Financial risks (currency risk, interest risk, refinancing risk and credit risk)

Market risks

Economic trend

BE Group has a large number of customers in different industries and is therefore affected by the general economic climate. A weak economic trend increases the risk of lower demand for the Group’s products, resulting in lower sales revenues. In addition, a weaker economy can lead to low inventory turnover, falling prices and inventory losses on existing inventories. BE Group’s strategy regarding inventory levels is to warehouse products based on estimated customer demand. The various companies in BE Group strive to maintain a level of inventory turnover suited to the market and local conditions of each company. The operational control of inventory levels is exerted by means of targets for the number of inventory days.

Steel price trend

The steel industry is influenced by economic developments. As a consequence, steel price trends are volatile and are affected by the balance between the production offering and demand for steel at the different points along the value chain.

Steel prices affect BE Group such that higher market prices provide a greater contribution towards covering the Group’s costs given a constant gross margin. The steel price trend also affects final sales prices for products held in inventory, which for BE Group entails a financial impact in the form of inventory gains and losses. To limit these inventory effects, BE Group is working actively to reduce the number of inventory days while maintaining its level of service towards customers. Consequently, falling steel prices have a negative impact on BE Group’s operations and earnings, while increased prices have a positive impact.

The table below shows the estimated effect on underlying operating result of changes in steel prices and sold tonnage. The sensitivity analysis is based on the outcome for 2016 and assumes a constant underlying gross margin.

Change Operating result effect
Steelprice +/-5 % +/-22 MSEK
Tonnage +/-5 % +/-22 MSEK

Operational risks

Insufficient deliveries

BE Group’s product range consists of materials from several different suppliers. The Group strives to establish relations with the best steel producers and to maintain sustainable, long-term cooperation. To safeguard access to materials on each individual occasion, the Group seeks to always maintain relations with several suppliers in each product group. Over the year, BE Group has cooperated with more than 500 suppliers. Before establishing new business relationships and entering into agreements, suppliers’ capacity to meet BE Group’s demands in terms of finance, quality, logistics, the environment and other aspects is ascertained.

In BE Group’s assessment, it is not dependent on any single supplier and all major suppliers are considered fully interchangeable, so disruption to deliveries by any one of them does therefore not entail long-term consequences for operations. In 2016, the largest single supplier accounted for 14 percent (12) of the Group’s purchases. Combined, the ten largest suppliers accounted for 52 percent (49) of the Group’s total purchasing. BE Group is exposed to the risk that deliveries from suppliers could be substantially delayed in the event of interrupted production, capacity shortage or transport issues, outside the control of BE Group. This can mean loss of income and/or more expensive actions to meet our commitments to customers.


BE Group’s operations are conducted in several different markets and to numerous customer categories. The ten largest customers accounted for 13 percent (12) of total sales in 2016. BE Group has a large number of customers in different industries and consequently, a good risk diversification. The Company actively works to manage credit risks (see Note 31 for further information) by setting credit limits and focusing on collecting overdue debts. As in the previous year, the credit losses for the year amounted to 0.1% of net sales.

Increased direct deliveries from steel producers

Users of steel have mainly two sources of purchases: directly from steel producers or from trading and service companies. Traditionally, many large-scale users have bought directly from producers, while small and medium-sized users have often made use of trading and service companies. There is, however, a risk that producers will try to extend their direct sales, reducing the use of trading and service companies as agents.

Contractual relations

In accordance with current market practices, the majority of BE Group’s customers and its suppliers are not tied to the Group through long-term binding contracts. Instead, it is the Group’s custom to rely primarily on its good and often long-term relations with customers and suppliers, and on the normal practices that have been established between the parties. There are specific agreements with some of BE Group’s larger customers.

Human Resources

BE Group depends on competent employees for its future development and success. The ability to recruit, retain and develop qualified employees and to be an attractive employer is important. The effect on the operations would be negative if key individuals were to quit and without it being possible to recruit suitable replacements. BE Group has compiled a number of values that reflect the spirit of the Group and pervade its management. BE Group’s commercial competence is continuously developed through training and recruitment. Training efforts include broad programs aimed at many employees, as well as specialized solutions for individuals.

Product liability

In the event of defect products, some of the products that BE Group sells could cause personal injury or other harm, thereby incurring a risk of claims for damages in accordance with the product liability laws of the country concerned. BE Group has taken out the conventional liability insurance policies on its operations.


Since BE Group maintains operations in several countries, the Group is exposed to different laws, regulations, agreements and guidelines, as well as to changes in the stipulations within these. Among other things, regulations include trade restrictions, such as customs duties and tariffs, requirements for import and export licenses, restrictions on movements of capital and tax regulations. In all commercial operations, disputes may arise as a consequence of differences of opinion on issues of responsibility and interpretations of contract terms. From a risk perspective, BE Group is not dependent on any individual commercial agreement that could significantly limit the Group’s operations.

Environmental legislation and responsibility for the environment

BE Group’s operations are subject to legislation pertaining to the environment, as well as regulations on emissions to the atmosphere and water, waste management and the workplace environment. BE Group could become liable for environmental damage caused by operations conducted, or that have previously been conducted by the Company. According to Swedish law, certain environmental liability is not subject to limitations of time. It cannot be ruled out that operations such as those that are conducted, or have been conducted, by BE Group could lead to liability for environmental impacts that do not appear until much later.

Financial risks

For an account of financial risks, see Note 31.

Share-related information

Ownership structure

The BE Group share has been listed on the Nasdaq Stockholm Exchange since the end of 2006. At the end of the financial year, BE Group had 6,303 shareholders, compared with 7,143 at the end of the previous year. AB Traction and Swedbank Robur were the two largest owners with 19.9 percent and 7.2 percent of the shares, respectively. Information on other major owners is available on the website relations. At the end of the year, the proportion of institutional ownership (legal entities) totaled 70.4 percent and foreign ownership was 9.6 percent.

At the end of the year, the four members of Group Management together held 95,153 shares in BE Group. At the same time, the Company’s directors together held 2,598,728 shares. The disclosures regarding shareholdings in BE Group for the Board of Directors and Group Management refers to own and physically related owned shares including legally owned shares which directly or indirectly is controlled by the person or its relatives.

BE Group held 26,920 treasury shares at the close of 2016.

Share capital, shares outstanding and rights

The registred share capital amounted to 13,010,124 (260,202,495) common shares. The decrease of the number of shares is due to a reverse share split of the company’s shares (whereby 20 existing shares was consolidated into one new share) made during the second quarter of 2016. Each share has a quotient value of SEK 20.00 (1.00). According to the Articles of Association, minimum share capital in the Company is SEK 150,000,000 and maximum share capital SEK 600,000,000, with a minimum of 10,000,000 and a maximum of 40,000,000 shares. Share capital is determined in Swedish kronor.

All shares convey equal rights to a percentage of the Company’s net assets, profits and any surplus upon liquidation. Each share carries one vote and there is only one class of shares. There is no limit to the number of votes a shareholder may cast at the Annual General Meeting or with respect to transfer of shares. The Company is aware of no agreements between shareholders which may limit the right to transfer shares.

Further information about the BE Group share is provided on

Authorization to the Board of Directors

The Annual General Meeting resolved to authorize the Board of Directors, on one or several occasions and not later than the 2017 Annual General Meeting, to make decisions regarding the transfer of treasury shares for the purpose of financing smaller corporate acquisitions. Transfers of at most 26,920 shares, corresponding to the company’s existing holding of treasury shares, may deviate from shareholders’ preferential rights. Transfers may be applied as payment of all or part of the purchase consideration in the acquisition of companies or operations or parts of companies or operations, in which case the payment shall correspond to the assessed market value of the shares. Alongside share transfers, payment may be effectuated through capital contributed in kind or by setting off claims against BE Group. Transfers may also be made on cash payment through sales on the Nasdaq Stockholm Exchange at a price within the price interval registered at any given time – that being the interval between the highest bid price and lowest asking price at the time of sale. The Board of Directors shall have the right to decide on other conditions for the transfer. However, the conditions shall be market-based.

During the year, no treasury shares were transferred and BE Group held 26,920 treasury shares, corresponding to 0.2 percent of the share capital, which was acquired for a total amount of SEK 21 M.

Dividend and dividend policy

According to BE Group’s dividend policy, the Group will distribute at least 50 percent of profit after tax, over time. BE Groups financial positions and future outlook shall be taken into account in determining the payment of dividends.

Corporate governance

The Corporate Governance Report, which, among other things includes an account of the Group’s governance and the work of the Board of Directors over the year, is presented on the website

Remuneration principles for senior executives

The 2016 Annual General Meeting adopted guidelines for executive remuneration. The policies apply to remuneration and other terms of employment for the individuals who, while the policies are in effect, are members of Group management for BE Group.

In connection with the reorganization implemented during the second quarter of 2016 the Group management also changed. Group managment now consist of four persons: the President and CEO, the CFO, Business Area Manager for Finland & Baltics and the Group Sourcing director.

The policies apply for agreements entered in accordance with Annual General Meeting resolutions and to amendments to existing agreements made after this date. The guidelines are reviewed annually.

The guidelines mainly state that remuneration for senior executives shall consist of fixed base pay, variable remuneration, pension benefits and other benefits. Total remuneration shall be market-based. Fixed pay shall be individual and differentiated based on the individual’s responsibilities and performance and set annually. Variable remuneration shall be related to the degree of meeting the annual predetermined, well-defined goals and shall amount to a maximum of 50 percent of fixed salary.

Pension is to be defined-contribution-based and correspond to a maximum of 30 percent of fixed annual salary.

Where notice of termination is issued by BE Group, fixed salary and severance pay shall not exceed an amount equivalent to 12 months’ fixed pay.

The actual remunerations agreed during the year are detailed in Note 3.

The Board of Directors’ preparation and resolutions in business related to salaries and other terms of employment for senior executives

The Remuneration Committee appointed by the Board of Directors shall prepare matters related to salaries and other terms of employment for executives. Decisions on remuneration to the President and CEO shall be taken by the Board of Directors in its entirety. In respect to other senior executives, decisions on salaries shall be taken by the Remuneration Committee based on proposals by the President and CEO.

Provisions of the Articles of Association on appointment and discharge of directors and amendment of the Articles of Association

There are no provisions in the Articles of Association on appointment and discharge of directors and amendment of the Articles of Association. In accordance with the provisions in the Companies Act, directors are elected by the Annual General Meeting for the period extending until the close of the first Annual General Meeting after that at which they were elected, and amendments to the Articles of Association are determined by the Annual General Meeting in accordance with the regulations set out in the Companies Act.

Contingent liabilities

Consolidated contingent liabilities amounted to SEK 17 M (21).

Significant events after the end of the financial year

After the end of the financial year BE Group’s CFO Andreas Karlsson left the company. Daniel Fäldt commenced, as previously informed, the position as CFO at the beginning of March 2017. No other significant events have taken place after the end of the period.

Parent Company

Sales for the Parent Company, BE Group AB (publ), amounted to SEK 25 M (34) during the period and derived from intra-Group services. The operating result amounted to SEK -26 M (-23), of which SEK 1 M (0) were non-recurring items related to personnel reductions. Net financial items, which were negatively impacted in both years by impairment of shares in subsidiaries and last year also by intra-Group receivables, amounted to SEK -50 M (-219). The result before tax was SEK -67 M (-230) and the result after tax was SEK -57 M (-224). At the end of the period, Parent Company equity amounted to SEK 558 M (615). During the year, the Parent Company invested SEK 1 M (0) in intangible assets. At the end of the year, cash and equivalents in the Parent Company amounted to SEK 9 M (13).

Accounting principles

As of January 2005, the consolidated accounts are prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Commission for application within the European Union. A more detailed explanation of accounting principles is available under “Accounting principles”.

Outlook for 2017

Efforts to improve the Group’s performance continue in many areas. In our main markets we believe in a somewhat growing market in 2017. The price increase for steel products that we have seen during the year has provided a more sustainable situation. Current trade barriers, as well as anticipated future ones, make the market more regional, which should lead to a more stable price development. We are continuing to work according to plan and market conditions are, after several years of negative growth, now brighter.

Appropriation of earnings

The Board of Directors’ proposal for the appropriation of earnings is detailed under Appropriation of Earnings and in note 24.