Comments on the report
Consolidated net sales for the period decreased by 24 percent compared to last year, amounting to SEK 744 M (977). The decrease is explained by the negative volume development in all units, mainly as an effect of Covid-19 and lower steel prices.
Gross profit amounted to SEK 105 M (137), with a gross margin of 14.1 percent (14.0). The operating result amounted to SEK 4 M (14), corresponding to an operating margin of 0.5 percent (1.5). Adjusted for inventory gains and losses of SEK -10 M (1), the underlying operating result thus amounted to SEK 14 M (13). The underlying operating margin during the period was 1.8 percent (1.4).
First nine months
During the first nine months, consolidated net sales decreased by 17 percent compared to last year amounting to SEK 2,797 M (3,375). Tonnage in business area Sweden & Poland decreased by 18 percent compared to last year, while Finland & Baltics delivered 7 percent less. Price and mix effects negatively impacted net sales by 5 percent and in addition inventory losses of SEK -23 M (-5) affected the period.
Gross profit amounted to SEK 413 M (467) with a gross margin of 14.8 percent (13.8). Adjusted for inventory gains and losses gross margin increased to 15.5 percent (13.9).
The operating result amounted to SEK 21 M (80), corresponding to an operating margin of 0.7 percent (2.4). Sales and administration expenses are SEK 27 M or 7 percent lower than last year, of which SEK 7 M relates to cost-reduction of Government grants. Adjusted for inventory gains and losses of SEK -23 M (-5) and items affecting comparability of SEK -40 M (-), the underlying operating result amounted to SEK 84 M (85). The underlying operating margin for the period was 3.0 percent (2.5).
The scope and duration of the on-going pandemic are not yet known, which means, as previously reported, that it is not possible to fully quantify its future impact on BE Group. The uncertain market situation has led BE Group to take several measures necessary to fend off the effects of Covid-19. This primarily concerned the operations in Sweden and the company made use of Government grants, such as the introduction of short-term lay-offs, for example. Government grants linked to Covid-19 contributed around SEK 2 M during the third quarter and around SEK 7 M during the first nine months. This grant is recognized as a cost-reduction of the items the grant pertains to. As a precautionary measure, the company has also applied for and been granted a deferral of tax payments of approximately SEK 30 M. All of the companies in the Group focus extensively on cost control, savings and efficiency enhancements and report developments to Group Management weekly.
Net sales were primarily negatively impacted by Covid-19 during the second and third quarter. Mainly the Swedish, but in the third quarter also the Finnish operations, were negatively impacted by a lower demand from both the manufacturing and contruction industries.
BE Group is monitoring the development closely and is prepared to take further steps where necessary to reduce the negative impact on the business. The company acts in accordance with decisions and recommendations from governments and authorities in the respective markets and with the health and well-being of its employees as a top priority.
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The comparative figures for 2018 are prepared according to previous accounting principles regarding leasing (IAS 17).
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