“Mixed signals from the market and our internal improvement measures continue”

Statement from the CEO

In the second quarter, we saw a downturn in our main markets, primarily in the construction sector, but at the end of the quarter, also from subcontractors to the manufacturing industry. Some OEM customers have decreased orders to their subcontractors. However, we expect some recovery from this effect. The business subsequently provided lower sales compared to the same quarter last year.

In the quarter, we noted a somewhat stronger margin growth in the distribution businesses in Sweden and Finland while on-going measures in the Baltics and at Lecor Stålteknik have not yet had a full effect. It is pleasing that the production operations in Finland have now recovered after several weak quarters and delivers in line with last year. Steel prices generally remained stable and in line with the first quarter. However, what we projected to be a temporary decline in the price of aluminium and stainless steel in the previous quarter has now recovered and there were no inventory gains or losses in the quarter.

Cash flow remained strong as a result of the positive earnings and good control of working capital. During the quarter, operating activities generated a positive cash flow of SEK 67 M and of SEK 129 M in the first six months.

Outlook

Demand in the third quarter is expected to be in line with the second quarter, adjusted for the vacation period. The steel prices are in general expected to remain on the same level as the second quarter.

Anders Martinsson
President and CEO

 

Bridge 2018-2019 operating result SEK M
Q1 Q2 Q3 Q4 Jan-Jun
Brygga resultatutveckling 2018–2019. MSEK Q1 Q2 Q3 Q4 jan-jun
Operating result 2018 Rörelseresultat 2018 55 22 33 22 77
Reversal of inventory gains (-)/losses (+)
Återläggning lagervinster (-)/förluster (+)
-7 -12 -7 -1 -19
Items affecting comparability Jämförelsestörande poster 16 -4 16
Underlying operating result 2018
Underliggande rörelseresultat 2018
48 26 26 17 74
Change in sales Försäljningsförändring -3 -15 -18
Change in underlying gross margin
Underliggande bruttomarginalförändring
-5 11 6
Change in overhead costs Omkostnadsförändring 0 10 10
Underlying operating result 2019
Underliggande rörelseresultat 2019
40 32 72
Reversal of inventory gains (+)/losses (-)
Återläggning lagervinster (+)/förluster (-)
-6 0 -6
Items affecting comparability Jämförelsestörande poster
Operating result 2019 Rörelseresultat 2019 34 32 66
The operating result has been impacted by a total of SEK -12 M due to a provision for an anticipated bad debt and adjustment of inventory in the Baltics during Q2 2018.
Items affecting comparability in Q2 2018 is related to the exit of the operations in Prerov, Czech Republic, SEK -9 M is affecting the Group’s consolidated statement of comprehensive income while SEK -7 M refers to translation differences from previous fiscal years.