Significant events during the first quarter
BE Group has, during the second quarter, signed a contract to acquire all shares of Goodtech Solutions Manufacturing AB in Arvika. The main focus of the business is subcontracting in machining and the turnover in 2021 amounted to approximately SEK 20 M. The company employs approximately 15 persons. The acquisition is strengthening BE Group’s offering within “ready to weld” in Sweden and adds additional skills within CNC machining and increased production capacity. The take-over takes place on September 1 at the latest and the business will be a part of business area Sweden & Poland. The acquisition is estimated to have a marginally positive impact on the underlying result for 2022.
By the end of the second quarter, BE Group sold Lecor Stålteknik to EAB. Lecor Stålteknik is specialized in pre-fabricated steel structures for construction and industrial projects and has been a separate part of BE Group since 2010. The turnover in 2021 amounted to SEK 82 M. The company employs approximately 35 people. The take-over took place on July 1. Final purchase price was approximately SEK 17 M. The sale is estimated to have a marginal impact on the result in 2022.
More information about the above will be released in connection with the report for the third quarter.
Significant events after the end of the period
No significant events have taken place after the end of the period.
Transactions with related parties
No transactions took place between BE Group and related parties that had a material impact on the company’s financial position and results.
Significant risks and uncertainties
Through its operations, BE Group is exposed to global macroeconomic factors, the competitive situation, structural changes in the market and the economy, as well as financial risks such as currency risks, interest risks, credit and counterparty risks. Within the companies of the Group, continuous processes are ongoing to identify existing risks and assess how these should be handled. The risk exposure is explained in the 2021 Annual Report, which was published in March 2022. Risks related to the war in Ukraine is described below.
The war in Ukraine
As Russia and Ukraine are major producers of iron ore and other inputs and European manufacturers are importing parts of their coal needs from Russia, the war will continue to have a major impact on the European steel market with shortages and sharp price increases as a possible consequence. About 10% of BE Group’s total steel purchases in 2021 came from Russian-controlled steel producers. The imposed sanctions resulted in BE Group immediately stopping orders and payments to companies subject to it. BE Group is monitoring the development closely and are working proactively with finding alternatives to secure the deliveries of steel. The effect of sanctions and potentially other consequences connected to the war may affect the company’s financial position.
The interim report was prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The Parent Company’s interim report is prepared in compliance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board’s recommendation RFR 2 Accounting for Legal Entities.
Refer to the 2021 Annual Report for details of the Group’s other accounting principles and definitions of certain terms. The principles applied are unchanged in relation to the Annual Report. In other regards, the new standards and interpretations that have come into effect from the financial year 2022 have had no significant effect on the financial reporting.