Statement from the CEO

Structural changes are progressing according to plan

Net sales in the fourth quarter decreased by 12 percent to SEK 1,033 M (1,177) in a descending order attributable to the closure of the Baltic unit, lower material prices and lower demand from OEM customers linked to the automotive industry and a continued weak construction sector. The underlying operating result was in line with the previous year and amounted to SEK -15 M (-17), corresponding to an underlying operating margin of -1.5% (-1.4). For the full year, net sales decreased by 12 percent to SEK 4,667 M (5,328) and the underlying operating result improved to SEK 51 M (30), corresponding to an underlying operating margin of 1.1 percent (0.6). Inventory losses amounted to SEK -26 M (20) for the quarter and SEK -53 M (76) for the full year. Cash flow from operating activities was positive for the quarter, SEK 53 M (150), as well as for the full year, SEK 105 M (491).

The relocation of the Polish operations to Sweden and Finland announced at the end of November is proceeding according to plan and impacts the operating result negatively by SEK 28 M, which is somewhat lower than previously communicated. The closure of the Polish unit is estimated to have an ongoing positive effect with a payback period of less than one year. The closure of the Baltic unit has been proceeding according to plan and the shares in the company were divested at the end of the quarter.

The joint venture ArcelorMittal BE Group SSC AB provided a better quarterly result than the previous year, although it was somewhat lower for the full year but, as a whole, the company exceeded its underlying operating result target.

Outlook

A year ago, I wrote, “after close to 20 months of continuous drops in material prices, the price level must be stabilized for margins to return to reasonable levels.” In 2024, BE Group’s average sales price decreased by another 8 percent. Right now, the situation is a little “wait and see”. In December, analyst firms predicted relatively large spot price increases until May, but the fact that there has been no inventory build-up among large European warehousers has conceivably updended this. Instead, a smaller price increase or stable prices until Q2 are more likely.

A number of days into January, the sales rate in tons per trading day is in line with the previous year, but gross margins are still pressured. We are pleased to see an improvement within the construction sector while the industry, which decreased quite clearly at the end of the previous year, is expected to remain under pressure.

Our focus

Our most important focus is to maintain momentum in our strategic efforts to continue improving earnings. Given the structural changes initiated and implemented in 2024, with all else being equal, 2025 is expected to be better.

Peter Andersson
President and CEO

“Given the structural changes initiated and implemented in 2024, with all else being equal, 2025 is expected to be better”

 

Bridge 2023-2024 operating result SEK M
Q1 Q2 Q3 Q4 Full-year
Brygga resultatutveckling 2023–2024. MSEK Q1 Q2 Q3 Q4 helår
Operating result 2023 Rörelseresultat 2023 1 26 -42 -37 -52
Reversal of inventory gains (-)/losses (+)
Återläggning lagervinster (-)/förluster (+)
9 7 40 20 76
Items affecting comparability Jämförelsestörande poster 6 6
Underlying operating result 2023
Underliggande rörelseresultat 2023
10 33 4 -17 30
Change in sales Försäljningsförändring -26 -17 -15 -16 -74
Change in underlying gross margin
Underliggande bruttomarginalförändring
39 -6 4 -11 26
Change in overhead costs Omkostnadsförändring 19 8 13 29 69
Underlying operating result 2024
Underliggande rörelseresultat 2024
42 18 6 -15 51
Reversal of inventory gains (+)/losses (-)
Återläggning lagervinster (+)/förluster (-)
-11 -7 -9 -26 -53
Items affecting comparability Jämförelsestörande poster -27 8 -28 -47
Operating result 2024 Rörelseresultat 2024 4 11 5 -69 -49