Risks and risk management

BE Group’s profits and financial position are affected by a large number of factors. Several of these are beyond the company’s own control. Effective risk management supports BE Group’s strategic targets and ensures business continuity even under shifting circumstances.

The Group operates in several countries and is therefore exposed to various risks as a consequence of differences in legislation, regulations and guidelines. Group management reports ongoing risk issues to the Board, which has ultimate responsibility for the company’s risk management. This may apply, for example, to financial status and changes in the surrounding world. Responsibility for risk management within the Group is governed by established policies and routines, which are continuously revised. Group management receives support in strategic decisions by identifying, mapping and managing the Group’s risks.

The most important risks and factors of uncertainty for BE Group can be divided between Market risks, Operational risks, Financial risks and Sustainability related risks.

Market risks

	Description	Management
Economic trends	The company has a large number of customers in different industries and is therefore affected by the general economic climate. A weak economic trend increases the risk of lower demand for the Group’s products, resulting in lower sales revenues. In addition, a weaker economy can lead to low inventory turnover, falling prices and inventory losses on existing inventories.	BE Group’s strategy regarding inventory levels is primarily to warehouse products based on estimated customer demand. The various companies in BE Group strive to maintain a level of inventory turnover suited to the market and local conditions of each company. The operational control of inventory levels is exerted by means of targets for the number of inventory days.
Legal risks	Since BE Group maintains operations in several countries, the Group is exposed to different laws, regulations, agreements and guidelines, as well as to changes in the stipulations within these. Among other things, regulations include trade restrictions, such as sanctions, customs duties and tariffs, requirements for import and export licenses, restrictions on movements of capital and tax regulations. In all commercial operations, disputes may arise as a consequence of differences of opinion on issues of responsibility and interpretations of contract terms.	BE Group follows the laws and regulations that apply in each country the company operates. The company follows developments, complies to new rules and regulations and implements policies and/or activity plans where required.
Tariffs	The company has several business partners with global operations. At current levels, the tariffs may have an impact on the company’s result, but it is difficult to fully quantify due to the uncertainty of the situation. However, an indirect impact of a weaker global economy is a risk that could have material impact.	The company conducts external monitoring and follows as well as responds to developments within the relevant areas.
War and conflicts	The European producers are dependent on inputs from different countries. War can have a negative impact and mean, for example, high energy prices, shortages of materials and interruptions in supply chains with sharp price increases as a consequence. In the event of a major conflict in Europe, there is a high risk that the company’s units would be directly and negatively affected.	As an independent supplier, BE Group is not committed to one supplier but is working with different alternatives. The company conducts environmental monitoring and monitors critical material flows. BE Group manages risks in the surrounding region through contingency planning.
Steel price trend	Steel price trends are volatile and has a direct impact on the company’s profitability. Steel prices affect the company such that lower market prices provide a smaller contribution towards covering the Group’s costs given a constant gross margin. The steel price trend also affects final sales prices for products held in inventory, which for BE Group leads to a financial impact in the form of inventory gains and losses.	To limit these inventory effects, BE Group is working actively to reduce the number of inventory days while maintaining its level of service towards customers. BE Group has longer price agreements with several customers, which reduces the risk. Consequently, falling steel prices have a negative impact on BE Group’s operations and earnings, while increased prices have a positive impact.

Sensitivity analysis

The table below shows the estimated effect on underlying operating result of changes in steel prices and sold tonnage. The sensitivity analysis is based on the outcome for 2025 and assumes a constant material margin for changes in both steel prices and sold tonnage, as well as a constant underlying gross margin for changes in sold tonnage.

	Change	Operating result effect
Steel price	+/-5 %	+/-39 MSEK
Tonnage	+/-5 %	+/-13 MSEK

Operational risks

	Description	Management
Information security	Dependence on IT systems increases vulnerability to cyber-attacks and downtime, which can seriously affect the business in various ways and lead to extensive financial consequences. Cyber risks through ransomware, phishing, information leakage and other types of online fraud are a growing threat that requires great vigilance.	In order to minimize external threats and their impact, the Group continuously invests in appropriate technology and internal IT security training takes place on an ongoing basis. BE Group carefully follows developments in the area in order to best protect critical information and ensure stable IT operations.
Global disturbances in the supply chain	The company is exposed to the risk that deliveries from suppliers may be significantly delayed or absent in the event of production interruptions, capacity shortages or transport problems beyond its control. This can mean loss of revenue and/or costly measures to meet commitments to customers.	It is BE Group’s assessment that the group is not dependent on any single supplier and all major suppliers are deemed to be replaceable, which is why a supplier interruption does not necessarily lead to long-term consequences for the business. Some product groups are more vulnerable, but the Group strives to develop relationships with the best steel producers in order to maintain a long-term and sustainable collaboration.
Customer dependence	The company’s customers are mainly concentrated within the construction and manufacturing industries and the company is exposed to risks at declining demand and production.	BE Group’s operations are conducted in several different markets and to numerous customer categories. The ten largest customers accounted for 20 percent (18) of total sales in 2025. BE Group has a large number of customers in different industries and consequently, a good risk diversification.
Insufficient delivery capacity	The lead time to the customers is highly dependent on the purchase process and production activities proceeding as planned. Production disruptions and deficiencies in incoming deliveries may affect delivery capability to customers.	BE Group’s ten largest suppliers together account for about 60 percent of the purchases, however, the company is cooperating with around 370 different suppliers which ensures the availability of materials. The company measures and follow up lead times and delivery accuracy as a part of an ongoing improvement work.

Financial risks

	Description	Management
Currency risk	The company is exposed to transaction exposure arising when the Group conducts purchasing in one currency and sales in another. This means that the transaction exposure is attributable to accounts receivable and accounts payable. The Group’s purchases are denominated mainly in SEK and EUR, while sales are denominated in local currency.	BE Group’s objective is to minimize the short-term and long-term impact of movements in foreign exchange rates on the company’s profit and equity. This is mainly achieved by matching revenues and expenses in business transactions with currencies other than SEK. When matching cannot be achieved, the Group utilizes forward contracts for currency hedging.
Refinancing risk	The company is a net borrower and a refinancing risk arises in connection with the extension of existing loans and the raising of new loans. Access to external financing, which is affected by factors such as the general trend in the capital and credit markets, as well as the borrower’s creditworthiness and credit capacity, may be limited and there may be unforeseen events and costs associated with this.	According to BE Group’s finance policy the borrowing strategy focuses on securing the Group’s borrowing needs, both with regard to long-term financing needs and day-to-day payment commitments. BE Group works to maintain satisfactory payment capacity by means of unutilized credit facilities and through active control of its working capital, which is the main item affecting the Group’s liquidity.
Credit risk	The company makes a commercial assessment when entering into new business relations and extending existing ones. The risk that payment will not be received on accounts receivable represents a customer credit risk.	BE Group applies credit policies to manage this risk by limiting the outstanding credit extended and terms for various customers as well as a Group wide credit insurance. Short credit terms and the absence of risk concentrations towards individual customers and specific sectors contribute to reducing credit risk in Sweden and Finland. The risk of a counterparty not fulfilling its obligation is limited by selecting creditworthy counterparties and limiting the commitment per counterparty.

Sustainability related risks

	Description	Management
Health and safety	Deficiencies in safety and work environment leads to a greater risk of illness and incidents for the company’s employees.	The work environment, health and safety are central issues for BE Group and the company has a systematic work to secure and improve the work environment called Safety First. BE Group continuously monitors a number of parameters in the area of health and safety. Possibilities of improvements are discussed by the Group Management Team and locally at the units. Each accident and incident are reported, rectified, evaluated and followed up.
Human resources	The company depends on competent employees for its future development and success. The ability to recruit, retain and develop qualified employees and to be an attractive employer is important. The effect on the operations could be negative if key personnel leave and suitable successor can not be recruited.	In order to achieve an organization with committed employees, the company conducts during the year, among other things, employee talks and employee surveys, systematic work with the work environment, competence development and internal training. Training takes place both through broad programs for many employees and as individual-based competence development.
Gender equality, diversity and discrimination	Shortcomings in implementation and compliance with the company’s values can lead to deficient gender equality and diversity.	BE Group annually conducts an employee survey with active follow-up of the results, where action plans are prepared for the identified improvement areas. The work is done with full transparency in relation to guidelines, employee manuals and reporting of violations regarding gender equality, diversity and discrimination.
Corruption	Corruption can exist to varying degrees in some countries and different sectors of society. Like many other companies, the company runs a risk of becoming involved in unethical transactions in the areas comprising sales and purchasing processes.	Within BE Group, there is zero tolerance to unethical business practices. The company has an Anti Corruption Policy and a Code of Conduct for the company’s employees, suppliers and cooperative partners. BE Group applies central and local authorization manuals to avoid conflicts of interest and uses procurement processes that ensure good business ethics.
Sanctions	EU has tightened restrictions on imports of iron, steel and other goods by requiring importers to prove that the material does not come from sanctioned countries, companies or individuals.	BE Group has developed a sanction policy that covers the entire organization. It states that the company does not interact, directly or indirectly, with any person or entity listed as unauthorized on sanction lists and that the company does not conduct business, directly or indirectly, with countries or regions subject to sanctions. All companies within BE Group are required to collect basic identification information about all business partners and to conduct sanction controls.
Human rights	With a geographically widespread supplier base insight regarding human rights may be limited and there is a risk that the company may involuntarily contribute to human rights violations.	These issues are addressed in BE Group’s Code of Conduct and it applies to all employees within BE Group including the Group Management Team. Board members, business partners, customers and suppliers are also encouraged to follow this Code of Conduct. For suppliers, there is a separate Code of Conduct. Reporting of potential problems, inaccuracies, illegal behavior or improprieties can be made to the immediate manager or anonymously through the whistle-blower system.
Environmental legislation and responsibility for the environment	Operations are subject to legislation pertaining to the environment, as well as regulations on emissions to the atmosphere and water, waste management and the workplace environment. The company could become liable for environmental damage caused by operations conducted, or that have previously been conducted by the company. It cannot be ruled out that operations such as those that are conducted, or have been conducted, by the company could lead to liability for environmental impacts that do not appear until much later.	BE Group works to comply with laws and regulations and to reduce the company’s environmental impact within the ISO14001 framework. BE Group also works to reduce the environmental impact in the value chain, through the production and distribution process from suppliers to end users.
Emissions from transports	The company primarily sells its products in two markets, which means that transports of materials are unavoidable and use of transport services most often entails use of fossil fuels.	BE Group works to optimize the logistics flows. Detailed data for the current fuel consumption are being gathered in cooperation with the transport companies and the Group is working actively on finding transport companies with an explicit and deliberate sustainability and environmental focus.