Comments on the report

Fourth quarter

The Group’s consolidated net sales for the period decreased by 3 percent compared to last year, amounting to SEK 1,472 M (1,510). The decrease is explained by organic tonnage growth of -14 percent partly compensated by positive price and mix effects of 5 percent, currency effects of 5 percent and acquisition and divestment of 1 percent. The weaker economy combined with high inventories throughout the chain contributed to continued decline in demand and lower steel prices in the fourth quarter. Inventory sales to both the construction and manufacturing industries decreased while production sales to OEM customers remained stable.

Gross profit decreased to SEK 51 M (283) whith a low gross margin of 3.4 percent (18.7). The operating result amounted to SEK -119 M (158), corresponding to an operating margin of -8.1 percent (10.4), of which inventory gains and losses of SEK -69 M (23). Lower demand and continued falling steel prices contributed to inventory losses and thus the deteriorated result. Adjusted for inventory gains and losses, the underlying operating result amounted to SEK -50 M (135) and the underlying operating margin to -3.4 percent (9.0).

Full-year 2022

During the year, the Group’s net sales increased by 28 percent compared to last year and amounted to SEK 6,875 M (5,388). The sales growth is explained by positive price and mix effects of 32 percent, acquisitions of 3 percent and currency effects of 2 percent counteracted by organic tonnage growth of -9 percent.

Gross profit amounted to SEK 1,009 M (1,102) with a gross margin of 14.7 percent (20.4).

The operating result amounted to SEK 418 M (621), corresponding to an operating margin of 6.1 percent (11.5). Adjusted for inventory gains and losses of SEK -70 M (92), the underlying operating result amounted to SEK 488 M (529). The underlying operating margin amounted to 7.1 percent (9.8).

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

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 closely monitoring developments and working continously to reduce the negative impact on the business.