“Efficiency improvements and investments”
Statement from the CEO
In the third quarter, the slowdown in demand, which also characterized the second quarter, continued in our business areas and net sales dropped by 12 percent compared to last year. The underlying operating result was halved mainly due to negative organic volume growth combined with some negative price and mix changes. The improved gross margin in the quarter could only partly compensate for this.
Steel prices that continued to be stable during the quarter meant inventory gains of SEK 1 M, compared with inventory gains of SEK 7 M in the same period last year. Altogether, the operating result decreased to SEK 14 M (33).
As an effect of the restructuring carried out last year, the average number of employees decreased by 3 percent. Other activities related to efficiency improvements have led to the strengthening of the gross margin by 0.4 percentage points during the quarter compared to last year.
Tonnage and sales growth
During the quarter, we had a 12 percent negative tonnage growth in business area Sweden & Poland and a sales decline by 14 percent as a result of declining demand from both the construction and manufacturing industry.
In business area Finland & Baltics the tough competition continues combined with negative signals from the large OEM customers in Finland. Meanwhile, we see lower activity in the Baltic markets. This led to a negative tonnage growth by 10 percent and a sales decrease by 9 percent compared with the same quarter in the previous year. The lower operating result could not be fully compensated by lower working capital, which resulted in a negative cash flow during the period.
Efficiency improvements and investments
We see an economic downturn and focus ahead is on efficiency improvements and taking market shares. The investments in Norrköping give us an opportunity to gain strength and to be even more competitive.
Peter Andersson
President and CEO
| Bridge 2018-2019 operating result SEK M | Q1 | Q2 | Q3 | Q4 | Jan-Sep | |
| Brygga resultatutveckling 2018–2019. MSEK | Q1 | Q2 | Q3 | Q4 | jan-sep | |
| Operating result 2018 | Rörelseresultat 2018 | 55 | 22 | 33 | 22 | 110 |
| Reversal of inventory gains (-)/losses (+) | Återläggning lagervinster (-)/förluster (+) | -7 | -12 | -7 | -1 | -26 |
| Items affecting comparability | Jämförelsestörande poster | – | 16 | – | -4 | 16 |
| Underlying operating result 2018 | Underliggande rörelseresultat 2018 | 48 | 26 | 26 | 17 | 100 |
| Change in sales | Försäljningsförändring | -3 | -15 | -17 | – | -35 |
| Change in underlying gross margin | Underliggande bruttomarginalförändring | -5 | 11 | 8 | – | 14 |
| Change in overhead costs | Omkostnadsförändring | 0 | 10 | -4 | – | 6 |
| Underlying operating result 2019 | Underliggande rörelseresultat 2019 | 40 | 32 | 13 | – | 85 |
| Reversal of inventory gains (+)/losses (-) | Återläggning lagervinster (+)/förluster (-) | -6 | 0 | 1 | – | -5 |
| Items affecting comparability | Jämförelsestörande poster | – | – | – | – | – |
| Operating result 2019 | Rörelseresultat 2019 | 34 | 32 | 14 | – | 80 |
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.