“Strong cash flow during the period and continued focus on efficiency improvements and investments”

Statement from the CEO

The weaker demand that characterized the second and third quarters continued during the last quarter of the year and net sales declined by 15 percent compared to last year. As a result of this, the underlying operating result decreased to SEK 9 M (16).

Relatively stable steel prices during the quarter generated a minor inventory loss of SEK 1 M, compared to an inventory gain of SEK 1 M the same period last year, and the operating result amounted to SEK 8 M (22).

On-going capacity adjustments to the lower demand together with effects of previously implemented structural measures mean that the number of employees continued to decrease during the quarter. Implemented efficiency improvements and other improvement measures have contributed to strengthening of the gross margin by 0.8 percentage points during the quarter compared to last year.

Tonnage and sales growth

During the quarter, business area Sweden & Poland had a negative tonnage growth as a result of continued declining demand from both the construction and manufacturing industries and sales decreased by 19 percent.

In business area Finland & Baltics, tough competition combined with weaker demand from major OEM customers led to a tonnage decrease of 9 percent, which resulted in a sales decrease of 9 percent compared to the same period last year.

However, the weaker operating result was compensated by a decrease in working capital, which generated a strong cash flow during the period.

Efficiency improvements and investments

The economic downturn that began earlier this year continued and strengthened. This means that focus on efficiency improvements and taking market shares continues to be prioritized. The previously communicated investments in Norrköping, totalling approximately SEK 60 M, are proceeding according to plan and will clearly strengthen the Group’s competitiveness.

Peter Andersson
President and CEO

 

Bridge 2018-2019 operating result SEK M
Q1 Q2 Q3 Q4 Jan-Dec
Brygga resultatutveckling 2018–2019. MSEK Q1 Q2 Q3 Q4 jan-dec
Operating result 2018 Rörelseresultat 2018 55 22 33 22 132
Reversal of inventory gains (-)/losses (+)
Återläggning lagervinster (-)/förluster (+)
-7 -12 -7 -1 -27
Items affecting comparability Jämförelsestörande poster 16 -4 12
Underlying operating result 2018
Underliggande rörelseresultat 2018
48 26 26 17 117
Change in sales Försäljningsförändring -3 -15 -17 -22 -57
Change in underlying gross margin
Underliggande bruttomarginalförändring
-5 11 8 9 23
Change in overhead costs Omkostnadsförändring 0 10 -4 5 11
Underlying operating result 2019
Underliggande rörelseresultat 2019
40 32 13 9 94
Reversal of inventory gains (+)/losses (-)
Återläggning lagervinster (+)/förluster (-)
-6 0 1 -1 -6
Items affecting comparability Jämförelsestörande poster
Operating result 2019 Rörelseresultat 2019 34 32 14 8 88
The operating result has 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.