The business continues to deliver growth and improved profitability

Statement from the CEO

The business continued to deliver growth and improved profitability in the fourth quarter. Net sales increased by 5 percent and the result improved significantly, mainly driven by tonnage growth and improved profitability in the production businesses in Sweden and Poland and despite temporarily increased production and material cost in the Finnish business. The distribution businesses in our main markets are doing better and we see that our focus on improvement activities is having an effect.

The steel prices stabilized in line with the previous quarter which resulted in lower inventory gains compared to last year. Altogether, the operating result increased and it was positive that the cash flow from operating activities recovered as expected after the relatively weak development in the first three quarters. As a result, the balance sheet is increasingly stronger and the net debt/equity ratio has decreased to 49 percent (60).

Tonnage and sales growth

Demand in our main markets remains satisfying. During the

quarter, we had a good tonnage growth in business area Sweden & Poland while Finland & Baltics was in line with last year.

For the full-year, we have seen a similar trend where growth primarily comes from business area Sweden & Poland while Finland & Baltics remains at the same level as in 2017. For the full year, the Group shows a total sales growth of 10 percent.

Outlook

Demand in the next quarter is expected to remain strong in the company’s main markets while steel prices stay on the same level as those seen in the fourth quarter. Continued cost control and improvement measures are expected to continue to strengthen the Group’s profitability.

Anders Martinsson
President and CEO

 

Bridge 2017-2018 operating result SEK M
Q1 Q2 Q3 Q4 Jan-Dec
Brygga resultatutveckling 2017–2018. MSEK Q1 Q2 Q3 Q4 jan-dec
Operating result 2017 Rörelseresultat 2017 46 -13 19 5 57
Reversal of inventory gains (-)/losses (+)
Återläggning lagervinster (-)/förluster (+)
-16 -8 3 -6 -27
Items affecting comparability Jämförelsestörande poster 42 10 52
Underlying operating result 2017
Underliggande rörelseresultat 2017
30 21 22 9 82
Change in sales Försäljningsförändring 13 22 20 8 63
Change in underlying gross margin
Underliggande bruttomarginalförändring
4 -7 -11 -2 -16
Change in overhead costs Omkostnadsförändring 1 -10 -5 2 -12
Underlying operating result 2018
Underliggande rörelseresultat 2018
48 26 26 17 117
Reversal of inventory gains (+)/losses (-)
Återläggning lagervinster (+)/förluster (-)
7 12 7 1 27
Items affecting comparability Jämförelsestörande poster -16 4 -12
Operating result 2018 Rörelseresultat 2018 55 22 33 22 132
The “change in underlying gross margin” and “change in overhead costs” have 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.