BUSINESS AREA
FINLAND & BALTICS

Lasse Levola

Business Area Manager Finland & Baltics

Key data 1) 2018 2017 %
Nyckeltal 1) 2018 2017 %
Shipped tonnage, thousands of tonnes Levererat tonnage, tusentals ton 190 191 -1%
Net sales, SEK M Nettoomsättning, MSEK 2,299 2,114 9%
Operating result (EBIT), SEK M Rörelseresultat (EBIT), MSEK 81 105 -23%
Operating margin, % Rörelsemarginal, % 3.5 5.0 -1.5%
Underlying operating result (uEBIT), SEK M 2) Underliggande rörelseresultat (uEBIT), MSEK 2) 68 89 -24%
Underlying operating margin, % Underliggande rörelsemarginal, % 2.9 4.2 -1.3%
Investments, SEK M Investeringar, MSEK 18 12 56%
Average number of employees Medelantal anställda 304 316 -4%
1) In the result, the intra-group expenses invoiced from the Parent Company have been eliminated.
2) Included as a part of BE Group’s alternative performance measures, see also Alternative performance measures.

In 2018, the business area accounted for a total of 48 percent (49) 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 Baltic States comprise warehousing and sales units in Tallinn, Riga and Kaunas.

In the Finnish market, the company has around 2,800 customers and the ten largest customers account for 13 percent of the business area’s sales. Focus is on delivering value-creating services to both the construction and manufacturing industries. BE Group Finland operates a steel service center for thin sheets processing in-house, which results in 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 position in the market.

Sales and business performance

Net sales for the year increased by 9 percent compared with last year, amounting to SEK 2,299 M (2,114). The operating result amounted to SEK 81 M (105) and, adjusted for inventory gains of SEK 13 M (16), the underlying operating result decreased to SEK 68 M (89). Shipped tonnage during the period decreased by 1 percent compared with last year mainly as a result of the tough competition in thin sheets. Sales measured in SEK were impacted positively by currency effects and the average price of steel is higher compared with last year. The positive price trend partially compensated for the anticipated bad debt and adjustment of inventory in the Baltics of SEK -12 M that impacted the second quarter. New management in the Baltics was appointed during the year.

Continued development

Demand during the year was generally very good both in the construction and the manufacturing industries. Industrial production remains at a high level, which contributes positively to the demand for steel. Steel prices also continued to increase in 2018. Extensive focus is now on improving profitability in the Finnish production operations and the Baltic operations. As before, the goal is to offer the best customer experience in our industry by providing value-creating solutions to every customer and segment that we focus on.

Sales
SEK M
Operating result (EBIT)
SEK M
Underlying Operating result 1)
SEK M

1) 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 Alternative performance measures.