Comments on the report

Second quarter

The Group’s consolidated net sales increased by 14 percent compared to last year and amounted to SEK 1,312 M (1,147). The increase is mainly explained by an organic tonnage growth of 8 percent, positive price and mix effects of 3 percent and currency effects of 3 percent. The positive price effect is due to higher steel prices compared to last year.

Adjusted for inventory gains of SEK 12 M (8), the underlying operating result amounted to SEK 26 M (21). The underlying operating margin thereby increased somewhat to 2.0 percent (1.9).

The underlying operating result and the operating result were affected by one-off costs of SEK -12 M, caused by a provision for anticipated bad debt and adjustment of inventory in the Baltics.

Gross profit amounted to SEK 179 M (159), with a gross margin of 13.6 percent (13.8). Operating result amounted to SEK 22 M (-13), corresponding to an operating margin of 1.6 percent (-1.1).

In addition to the previously mentioned costs relating to the Baltics, a decision has also been taken to close the remaining operation in Prerov, Czech Republic. In spite of considerable measures taken, we cannot see any future for this operation. These structural measures mean that profit for the quarter has been impacted by items affecting comparability amounting to SEK -16 M, which will not have any negative effect on cash flow. SEK -7 M of this refers to translation differences, i.e. accumulated exchange rate differences recognized in equity. This means that SEK -7 M has already been included in the Group’s comprehensive income in previous periods and reflected in equity.

To summarise, the total effect on the quarter’s operating result has been SEK -28 M in one-off costs, of which SEK -16 M has been classified as items affecting comparability and brought back in the calculation of underlying profit.

First six months

During the first six months, the Group’s net sales increased by 11 percent compared to last year and amounted to SEK 2,538 M (2,285). Tonnage in business area Sweden & Poland exceeded last year by 9 percent, while Finland & Baltics delivered 1 percent less than last year. Higher average steel prices and mix effects had a positive effect of 4 percent on net sales. The price trend also led to inventory gains of SEK 19 M (24). Gross profit amounted to SEK 366 M (333), with a gross margin of 14.4 percent (14.6).

During the second quarter, the operating result was impacted by items affecting comparability of SEK -16 M relating to the exit of the remaining unprofitable operation in Prerov, Czech Republic. In spite of this, operating result amounted to SEK 77 M (33) for the first six months. The improvement in result is due to preserved gross margin while growing organically from a tonnage perspective by 4 percent and increasing net sales by 11 percent. Sales and administration costs have been kept at the same level as last year. Adjusted for items affecting comparability and inventory gains and losses, the underlying operating result increased to SEK 74 M (51). Operating margin amounted to 3.0 percent (1.4) and the underlying operating margin amounted to 2.9 percent (2.3).

The Group´s sales growth and underlying operating result per quarter
The Group´s gross margin and gross profit per quarter