Financial targets and outcome
Clear direction
The Board of Directors of BE Group has set three financial targets that are to be achieved in order for earnings to be considered adequate. The fulfilment of these targets can vary over time, depending among other things on what phase of development the Company is in and the current state of the economy.
Sales growth that exceeds market growth
To measure growth in BE Group’s markets, the market statistics that the company receives for the distribution markets in Sweden and Finland are used. By comparing tonnage growth year on year in this data, the growth in the market is estimated. BE Group’s growth is measured in delivered tonnes in the Swedish and Finnish markets. For Sweden, deliveries for the joint venture ArcelorMittal BE Group SSC AB are included. The target is to grow more than the market. Complete market statistics is no longer available to compare the company’s growth with the market development, hence an estimation has been made.
A profit margin of at least 5 percent
Profit margin is defined as the underlying operating margin (uEBIT%) in the past 12 months. The target level is set to at least 5 percent measured over a longer period of time. The underlying operating result, i.e. the operating result excluding the impact of inventory gains or losses and items affecting comparability, is used to put focus on how the operating activities perform and develop.
At least 15 percent return on capital employed
As a measure of return, return on capital employed excl. IFRS 16 is used, defined as operating result excl. IFRS 16 in the past 12 months divided by the average capital employed excl. IFRS 16 (equity and interest-bearing liabilities). The target level is set to at least 15 percent. The measure is calculated based on recognized operating profit, i.e. including inventory gains and losses and items affecting comparability, to put focus on the actual returns to the owners.
-2.6% (-9.0)
The market is estimated to have decreased -3,9 percent (-9) compared to last year. During the full-year 2024, BE Group has had an organic tonnage growth which is slighly better then the market. The improvement mainly comes from operations in Finland which is estimated to have grown more than the domestic market during the year.
1.1% (0.6)
The target at current sales corresponds to approximately SEK 233 M in underlying operating result (uEBIT). The underlying operating margin amounted to 1.1 percent (0.6) for 2024 and thus the target was not fulfilled.
-2.9% (-3.1)
The return on capital employed amounted to -2.9 percent (-3.1) during the year and thus the target was not fulfilled. The cause is the negative operating result as a result of declining steel prices and sales volumes, inventory losses and non-recurring costs regarding the Baltics and Poland.