|Shipped tonnage, thousands of tonnes||191||185|
|Net sales, SEK M||2,114||1,794|
|Change compared to previous year, %||18||3|
|Operating result (EBIT), SEK M 1)||105||80|
|Operating margin, %||5.0||4.4|
|Underlying operating result (uEBIT), SEK M 2)||89||66|
|Underlying operating margin, %||4.2||3.7|
|Investments, SEK M||12||3|
|Average number of employees||316||325|
1) The operating result 2016 has been impacted by restructuring costs of SEK -2 M related to the organizational change implemented during second quarter.
2) Included as a part of BE Group’s alternative performance measures, see also tab Alternative performance measures.
In 2017, the business area accounted for a total of 49 percent (46) of the Group’s net sales. This business area consists of the Group’s operations in Finland and the three Baltic States. The operations in Finland consist of production and warehousing facilities in Lapua, Lahti and Turku and sales offices in nine locations. The operations in the Baltics consists of warehousing and sales units in Tallinn, Riga and Kaunas.
In the Finnish market, the Company has 2,800 customers and the ten largest customers account for 16 percent of the business area’s sales. Focus is on delivering value-generating production services to both manufacturing and construction industries. BE Group Finland is running its own steel service center for cutting and slitting of thin sheets and coils, which means a higher share of sales of these products compared with business area Sweden & Poland. The primary competitors are Tibnor, Kontino and Flinkenberg.
In the Baltics, the market is more fragmented and conditions vary substantially between Estonia, Latvia and Lithuania, but BE Group generally has a strong and growing position in the area.
Sales and business performance
Net sales for the year increased by 18 percent compared with the previous year, amounting to SEK 2,114 M (1,794). The operating result improved to SEK 105 M (80) and, adjusted for inventory gains of SEK 16 M (16), the underlying operating result improved to SEK 89 M (66). Delivered tonnage during the period increased by 4 percent compared with the previous year. Sales measured in SEK were impacted positively by currency effects and the average selling price, which is higher compared with the previous year. The positive price trend and beneficial price and mix effects contributed to the markedly improved operating result.
Demand during the year was generally very good both in the construction industry and the manufacturing industry. Industrial production increased during the latter part of previous year and then began to contribute positively to the demand for steel. In the latter half of 2016, the prices increased as a result of higher raw material prices and the import duties the EU introduced. The steel prices subsequently continued to increase consistently throughout 2017 except for a period in Q3 when development was neutral. The improved market climate together with targeted sales work led to good growth compared with the previous year.
At the top of our agenda in 2018 will, as before, be to offer the best customer experience in our industry by providing value-generating solutions to every customer and segment that we focus on. Altogether, we positively view being able to achieve growth in 2018 that exceeds the general market growth.
* Underlying operating result (uEBIT) is the reported operating result before items affecting comparability and adjusted for inventory gains and losses (deductions for gains and additions for losses). See also tab Alternative performance measures.