“We deliver another year of growth, improved result and a stronger balance sheet.”
ANOTHER SIGNIFICANT STEP TOWARDS A STRONGER GROUP
As we sum up 2018, we again note that the work of developing BE Group into a long-term profitable and successful company is continuing in the right direction. As a result of this, we can deliver another year of growth, improved result and a stronger balance sheet.
We have continued the work of strengthening the company during the year. We have closed the last part of our operations in the Czech Republic and resolved the dispute regarding the warehouse in Malmö. We also strengthened management functions and adjusted the organization after the major changes made in 2016. Among our units we still see, with varying degrees, success in improving profitability. Work was intensified with the units that are the furthest from our financial targets and will continue in the coming year.
After the successful efforts in recent years, this year we were able to focus even more on developing our core businesses in Distribution and Production in our main markets. Demand continued to be strong in the construction and manufacturing industries and there was generally a positive price development. The downward trend in housing construction only had a marginal impact on the company while currency effects were positive during the year.
BE Group’s sales increased by 10 percent and the tonnage in our main markets, Sweden and Finland, increased by a combined 4 percent. The underlying operating result increased by more than 40 percent, which shows that our improved profitability efforts have continued to give results. Cash flow developed in line with last year and net debt thereby continued to decrease.
As a result of the improved financial position, the Board of Directors proposes a dividend of SEK 1.75 per share (-) for the financial year, which means that dividend payments are being resumed after being on hold since 2011.
Improved profitability for business area Sweden & Poland
Sales for business area Sweden & Poland increased by 18 percent during the year and the underlying operating result improved to SEK 104 M compared with SEK 72 M in the previous year.
The distribution business improved their results at the same time that the production unit in Norrköping developed strongly through continuous improvements and higher capacity utilization.
Challenging year for business area Finland & Baltics
Sales for business area Finland & Baltics increased by 9 percent in 2018, but the underlying operating result decreased to SEK 68 M compared with SEK 89 M in last year. The lower profitability is largely attributable to the provision for an anticipated bad debt and adjustment of inventory in the Baltics of SEK -12 M that affected the second quarter. New management in the Baltics was appointed during the year.
Closure of unprofitable operations
During the year, a decision was made to exit the remaining operations in Prerov, Czech Republic. The unit had been unprofitable for an extended period in spite of extensive improvement measures. Affected staff executed the closure commendably and contributed strongly to a successful process.
Focus going forward
I would like to express my gratitude to our customers who entrust us with their business every day. I would also like to take this opportunity to compliment our employees for all of their extraordinary work in the past year.
Looking forward, we see that our focus on cost control and our determined improvement work will continue to strenghten the Group. With the customer in focus, we continue towards our vision to be the most professional, respected and successful steel service company in our markets.
President and CEO