Great uncertainty in the market

Net sales in the first quarter decreased by 15 percent to SEK 1,105 M (1,305) attributable to a shift in demand, where the construction segment increased and the industrial segment declined, combined with lower material prices and the closure of the Baltic operations that began at the end of the first quarter of the previous year. In the Finnish part of the company, sales were also negatively impacted by somewhat lower efficiency in connection with the transition to a new business system and the number of trading days was affected negatively by a three day strike in February. The decrease in sales combined with pressured margins generated an underlying operating margin of -0.2% (3.2%). Inventory losses amounted to SEK -10 M (-11).

The transfer of the Polish operations to Sweden and Finland, which was announced in the previous quarter, has progressed according to plan and is expected to be completed in the second quarter.

Outlook

Demand gradually increased during the quarter and, in the short term, the market situation is expected to be relatively favorable. Spot prices for steel have risen into the second quarter and many steel producers have high capacity utilisation into the third quarter. Given the surrounding world in general and what is or is not happening, particularly in the US, there is great uncertainty and how this may affect future quarters and the full year of 2025 is impossible to quantify.

Our focus

In a storm, it’s important to have a good footing and keep your wits about you. A lot of steel is needed even in bad times and as usual it is important to secure as many deals as possible at healthy margins. At the same time, we are working to adapt our organization, costs and working capital.

A rationalization program is being developed, which is expected to lower costs by about SEK 20 M in 2025 and with a full-year effect of about SEK 50 M in 2026.

The transition to a new business system in Finland has initially led to slightly lower efficiency, although in the long term it is expected to contribute to greater efficiency primarily through increased digitalization.

Peter Andersson
President and CEO