Comments on the report

Third quarter

The Group’s consolidated net sales for the period increased by 10 percent compared to last year, amounting to SEK 1,514 M (1,375). The increase is explained by positive price and mix effects of 19 percent, acquisitions of 4 percent and positive currency effects of 3 percent counteracted by negative organic tonnage growth of -15 percent and divestment of -1 percent. The prevailing business environment, high inventories among customers, and a changed price trend contributed to demand remaining moderate in the third quarter. The positive price effect is due to relatively higher steel prices.

Declined volume and high costs for incoming material contributed to a decreased gross profit of SEK 173 M (316) which leads to a gross margin of 11.5 percent (23.0). The operating result amounted to SEK 40 M (219), corresponding to an operating margin of 2.6 percent (15.9). Adjusted for inventory gains and losses of SEK -27 M (26), the underlying operating result amounted to SEK 67 M (193). The underlying operating margin during the period amounted to 4.4 percent (14.0).

First nine months

During the first nine months, the Group’s net sales increased by 39 percent compared to last year and amounted to SEK 5,403 M (3,878). Tonnage in business area Sweden & Poland decreased by -2 percent including acquisitions and Finland & Baltics delivered -18 percent less. Rising steel prices and mix effects have affected net sales positive by 42 percent. Gross profit increased to SEK 958 M (819) with a gross margin of 17.7 percent (21.1).

The operating result increased to SEK 537 M (463), corresponding to an operating margin of 9.9 percent (11.9). Adjusted for inventory gains and losses of SEK -1 M (69), the underlying operating result increased to SEK 538 M (394). The underlying operating margin amounted to 10.0 percent (10.1) during the period.

The sanctions directed at Russia, a shortage of input materials and rising energy costs caused considerable price increases among producers at the end of the first quarter and the second quarter. The current economic downturn and high inventory levels have led to shorter delivery times and a dampening of price pressure from suppliers. Steel producers are adapting to lower market needs by reducing capacity and costs.

BE Group is also affected directly and indirectly by higher fuel costs and energy prices, as well as the risk of shortages of electricity and gas. BE Group is continuing to closely monitor developments and is prepared to take actions where necessary to reduce the negative impact on the business.