BUSINESS AREA
SWEDEN & POLAND

Anders Martinsson

Business Area Manager Sweden & Poland

Key data 1) 2018 2017 %
Nyckeltal 1) 2018 2017 %
Shipped tonnage, thousands of tonnes Levererat tonnage, tusentals ton 187 172 9%
Net sales, SEK M Nettoomsättning, MSEK 2,476 2,094 18%
Operating result (EBIT), SEK M 2) Rörelseresultat (EBIT), MSEK 2) 123 78 57%
Operating margin, % Rörelsemarginal, % 5.0 3.7 1.3%
Underlying operating result (uEBIT), SEK M 3) Underliggande rörelseresultat (uEBIT), MSEK 3) 104 72 45%
Underlying operating margin, % Underliggande rörelsemarginal, % 4.2 3.4 0.8%
Investments, SEK M Investeringar, MSEK 16 10 52%
Average number of employees Medelantal anställda 338 312 8%
1) In the result, the intra-group expenses invoiced from the Parent Company have been eliminated.
2) The operating result was impacted by items affecting comparability of SEK 4 M (-7), attributable to the release of the provision related to maintenance of the warehouse in Malmö.
3) Included as a part of BE Group’s alternative performance measures, see also Alternative performance measures.

Business Area Sweden & Poland accounted for 52 percent (48) of the Group’s net sales in 2018. This business area includes the Group’s operations in Sweden consisting of the companies BE Group Sverige and Lecor Stålteknik, as well as the Polish operations BE Group Poland. The roughly 2,000 customers in the construction and manufacturing industries receive deliveries from warehouse and production facilities in Malmö, Kungälv and Norrköping in Sweden and Trebaczew in Southern Poland. In addition to these facilities, BE Group Sweden has local sales offices in a total of seven locations. The size and needs of the customers vary widely; the ten largest customers account for about 22 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. The competitors in the market include SSAB-owned Tibnor and Stena Stål, which is a part of the Stena Group.

BE Group owns 50 percent of the company ArcelorMittal BE Group SSC AB in Karlstad, a steel service center where thin sheets are cut and split. The company is a modern Steel Service Center for processing of thin sheets with sales of SEK 838 M (783) in 2018.

Lecor Stålteknik offers finished prefabricated steel deliveries to construction projects, as well as bridges and industrial frames. The operations had sales of SEK 116 M (86) in 2018.

Sales and business performance

Net sales for the year increased by 18 percent compared with last year, amounting to SEK 2,476 M (2,094). Operating result amounted to SEK 123 M (78). Adjusted for inventory gains of SEK 15 M (13) and items affecting comparability of SEK 4 M (-7), the underlying operating result amounted to SEK 104 M (72).

Tonnage in the Distribution business in Sweden increased by 4 percent compared with last year and contributed to significantly improved result. The higher underlying result for the business area is, however, mainly attributable to the continued steel price increases combined with strongly improved profitability in the production unit in Norrköping.

The joint venture ArcelorMittal BE Group SSC AB is reported in accordance with the equity method, with the participation in earnings for the year amounting to SEK 4 M (11).

Continued development

In 2018, focus was on continuing to serve our customers in a professional manner, which provided positive effects in the form of higher sales and earnings. The continued recovery we saw in prices during the year also resulted in inventory gains. In the production business, we have seen the effect of the structure and efficiency improvement work and the unit in Norrköping developed strongly. Many things have fallen into place internally, but the work of strengthening our margins will also continue in 2019. This will be achieved through active work to increase and clarify the values we create and price them correctly, but also by streamlining the purchase processes.

Sales 1)
SEK M
Operating result (EBIT) 1)
SEK M
Underlying operating result 2)
SEK M

1) Comparative numbers have been restated with regards to BE Group Produktion Eskilstuna.
2) Underlying operating result (uEBIT) is the reported operating result (EBIT) before items affecting comparability and adjusted for inventory gains and losses (deductions for gains and additions for losses). See also Alternative performance measures.