Operations

BE Group AB (publ), Corp. Reg. No. 556578-4724, which is listed on the Nasdaq Stockholm exchange, is an independent steel distributor that stores and processes steel, stainless steel, and aluminium for customers primarily in the construction and manufacturing industries. Through the company’s production services, customers can order customized steel components to optimize their production processes. In 2024, the Group reported sales of SEK 4.7 billion. BE Group has approximately 640 employees, with Sweden and Finland as its largest markets. The headquarters is located in Malmö, Sweden. Read more about BE Group at www.begroup.com.

Alternative performance measures

BE Group present certain alternative performance measures that are not defined in accordance with IFRS accounting standards. These alternative performance measures should be seen as a complement and not a substitute for financial information presented in accordance with the standards. Group management believes that these alternative performance measures provide useful information to analysts, other stakeholders and readers of the reports about the Group’s operational and financial development. The alternative performance measures that BE Group considers to be significant are underlying operating result, working capital, net debt and capital employed. Under Alternative performance measures, you can read more about how these are calculated.

Market and business environment

In Europe (EU27), 129.5 million tonnes of crude steel were produced in 2024, according to the World Steel Association, the global trade association for steel producers. This is an increase of just under 3 percent compared to 2023. Globally, 1,840 million tonnes were produced, a decrease of around 1 percent. During the year, we have seen continued price declines due to reduced demand while European mills maintained their capacity.

Long products (beams, rebar, etc.), which are largely consumed in the construction sector, have had weak demand in 2024. However, spot prices for long products in Europe have been more stable in 2024 compared to the previous year, probably as a result of producers managing to balance their production capacity to the lower demand. For flat products (hot and cold rolled sheet), spot prices in Europe rose at the beginning of the year and then declined until the beginning of December, thus resulting in a full-year decrease of 16-19 percent. Producers of flat products have maintained their capacity during the year despite the declining demand, which has had an effect on prices.

Group structure and organization

The Group consists of two business areas, Sweden & Poland and Finland & Baltics, with a focus on the Group’s main markets. Parent Company & consolidated items include the Parent Company and Group adjustments.

Net sales and business performance

During the year, the Group’s net sales decreased by 12 percent compared to last year and amounted to SEK 4,667 M (5,328). The decline is explained by negative price and mix effects of -8 percent, closure of the Baltic unit of -3 percent and negative tonnage growth of -1 percent. Tonnage to the construction industry decreased organically by -6 percent, which mainly affects the Swedish business, while the manufacturing industry increased by 2 percent. Tonnage in business area Sweden & Poland decreased by -2 percent, but excluding rebar it increased by 5 percent. In Finland & Baltics organic tonnage increased by 1 percent through increased sale of long products.

Gross profit amounted to SEK 517 M (544) while gross margin increased to 11.1 percent (10.2). The operating result amounted to SEK -49 M (-52), corresponding to an operating margin of -1.0 percent (-1.0). Adjusted for inventory losses of SEK -53 M (-76) and items affecting comparability of SEK -47 M (-6), the underlying operating result increased to SEK 51 M (30). The underlying operating margin increased to 1.1 percent (0.6).

Business area Sweden & Poland

Business area Sweden & Poland accounted for 52 percent (49) of the Group’s net sales during the year. The business area includes the Group’s operations in Sweden consisting of BE Group Sverige AB, BE Group Produktion Arvika AB and the joint venture ArcelorMittal BE Group SSC AB as well as the Polish operations BE Group Sp.z o.o., which is under closure. Net sales decreased by 8 percent compared to last year, amounting to SEK 2,423 M (2,641). The decline is explained by negative price and mix effects of -6 percent and negative organic tonnage growth of -2 percent. The operating result amounted to SEK -32 M (-24). Adjusted for inventory losses of SEK -48 M (-59) and items affecting comparability of SEK -28 M (-4), the underlying operating result increased to SEK 44 M (39). In the result, intra-group expenses invoiced from the Parent Company have been eliminated except for expenses for IT and business systems.

Business area Finland & Baltics

Business area Finland & Baltics accounted for 48 percent (51) of the Group’s net sales during the year. The business area consists of the Group’s operations in Finland. The Baltic unit was closed during the year and the shares were divested. Net sales decreased by 16 percent compared to last year, amounting to SEK 2,290 M (2,729). The decline is explained by negative price and mix effects of -10 percent and closure of the Baltic unit of -7 percent. Tonnage increased organically by 1 percent. The operating result amounted to SEK -11 M (-22) and adjusted for inventory losses of SEK -4 M (-17) and items affecting comparability of SEK -19 M (-2), the underlying operating result increased to SEK 12 M (-5). In the result, intra-group expenses invoiced from the Parent Company have been eliminated except for expenses for IT and business systems.

The Group & Parent Company

Net financial items and tax

Consolidated net financial items amounted to SEK -22 M (-23) and net interest accounted for SEK -26 M (-25), of which SEK -10 M (-10) is related to leasing according to IFRS 16. Tax amounted to SEK 29 M (15). Result after tax amounted to SEK -42 M (-60).

Cash flow

Cash flow from operating activities amounted to SEK 105 M (491). The cash flow from investing activities amounted to SEK -84 M (-145) for the full-year of which SEK 64 M is related to a new business system. Cash flow after investments thereby amounted to SEK 21 M (346).

Capital, investments and return

At the end of the period, consolidated working capital amounted to SEK 628 M (683) and average working capital tied-up was 14.5 percent (16.2). Of the year’s investments, totalling SEK 128 M (146), investments in intangible assets accounted for SEK 92 M (44) and investments in tangible assets for SEK 36 M (102). The return on capital employed excl. IFRS 16 was negative and amounted to -2.9 percent (-3.1).

Financial position and liquidity

At the end of the period, consolidated cash and cash equivalents, including overdraft facilities, were SEK 159 M (224) and consolidated interest-bearing net debt excl. IFRS 16 amounted to SEK 340 M (259). At the end of the period, equity amounted to SEK 1,390 M (1,424).

Employees

The number of employees amounted to 626 compared to 657 last year. The decrease is mainly attributable to the closure of the Baltic unit. The average number of employees during the year amounted to 640 (678).

Parent Company & consolidated items

Parent Company & consolidated items include the Parent Company and Group adjustments.

The effects regarding IFRS 16 were reported under Parent Company & consolidated items and have not been allocated to the two business areas.

Sales for the Parent Company, BE Group AB (publ), amounted to SEK 111 M (128) during the period and derived from intra-Group services. These intra-Group services mainly include licensing fees regarding the subsidiaries’ use of the BE Group brand and central expenses for IT and Finance, etc. The expenses are distributed and invoiced to all subsidiaries in the Group. In the result follow-up of the business areas, intra-group expenses were eliminated except for expenses for IT and business systems. Out of the total costs for the Parent Company, of SEK -65 M (-64), SEK 49 M (54) was distributed to the subsidiaries.

The operating result amounted to SEK 46 M (64). Net financial items amounted to SEK -2 M (97). The result before tax amounted to SEK -11 M (63) and the result after tax was SEK -10 M (70). At the end of the year, Parent Company equity amounted to SEK 1,067 M (1,077). Investments in the Parent Company amounted to SEK 92 M (44) mainly attributable to a new business system. At the end of the period, cash and cash equivalents in the Parent Company amounted to SEK 5 M (64).

Sustainability report

BE Group has established a sustainability report pursuant to the Annual Accounts Act. The Group’s sustainability report includes pages 18-27, the section on risks and risk management in the Board of director’s Report on pages 15-17 and the business model and value chain on pages 6-7.

Environmental policy and environmental work

BE Group is working with environmental issues as an integrated part of its operations. The company is working to continuously 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 among others 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 the 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 one site each in Sweden and Finland for which environmental permits are required. Group companies have obtained special permits to engage in operations in the countries where such permits are required. All operations within the Group are certified under the ISO 14001 environmental management system.