BE Group interim report January – September 2024
Third quarter
- Net sales decreased by 11% to SEK 1,057 M (1,187)
- The underlying operating result increased to SEK 6 M (4)
- The operating result increased to SEK 5 M (-42), including inventory losses of SEK -9 M (-40) and items affecting comparability of SEK 8 M (-6)
- Result after tax increased to SEK 18 M (-42)
- Cash flow from operating activities amounted to SEK -13 M (-17)
- Earnings per share increased to SEK 1.36 (-3.27)
Statement from the CEO
A year ago, I wrote that “a lot of steel is needed even in worse times and now it is important to secure as many deals as possible at healthy margins”. I now note a decent increase in tonnage in the main markets Sweden and Finland in the third quarter despite a rather difficult market situation, particularly in the construction sector. The increase amounted to 4 percent and, excluding the rebar business, which is exclusively construction-related, the increase amounted to 9 percent. The gross margin has also improved, although the level is not yet satisfactory.
Overall, net sales fell by 11 percent to SEK 1,057 M (1,187), with lower market prices and the closure of the Baltic unit accounting for the lion’s share of the explanation. The underlying operating result amounted to SEK 6 M (4), corresponding to an operating margin of 0.6 percent (0.3).
The closure of the Baltic unit, which was communicated at the end of March, was essentially concluded in the third quarter and went better than planned, resulting in a positive impact on the result for the quarter of approximately SEK 8 M. The Group’s future results will be affected positively by the closure.
Outlook
Demand in the fourth quarter is expected to be in line with the third quarter. Producers of flat products and analyst firms believe in a stronger market in 2025. For the first half of the year, I believe that is more a hope. The automotive sector is cutting back and the construction sector has not recovered yet. In addition, it takes a long time before it is time for roof and facade sheet metal even if construction begins now.
For long products, it is reasonable to believe in better times. Mostly because the market is really weak now and when interest rates fall, a number of construction projects that have been “pending” will be activated again. For our part, it should first be noticed in the area of rebar. I wouldn’t be surprised if there was a shortage of construction workers, materials and equipment in the second half of 2025.
Our focus
Our most important focus is to maintain momentum in our strategic efforts to continue improving the result. Simply put, this means increasing and deepening our cooperation with our customers to win as much new deals as possible, streamline the supply chain and lower the costs in order to create conditions for a healthy margin throughout the business.
Lastly, I would also like to mention our work on occupational health and safety. The Swedish part of the company has now worked for a year without an accident that requires absence from work. In Finland, one of our facilities has more than 1,000 days without accidents. A fantastic improvement over a few years ago and I strongly believe that a safe and sound workplace is the foundation for good business. If we can’t take care of our employees and offer a safe workplace, we can’t reasonably take care of our business and customers either.
Peter Andersson, President and CEO
For further information, please contact:
Peter Andersson, President and CEO
Tel: +46 706 53 76 55, email: peter.andersson@begroup.com
Christoffer Franzén, CFO
Tel: +46 705 46 90 05, email: christoffer.franzen@begroup.com
This information is information that BE Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2:00 p.m. CEST on October 17, 2024.
BE Group AB (publ), which is listed on the Nasdaq Stockholm exchange, is a leading independent steel distributor that stores and processes steel, stainless steel, and aluminium for customers primarily in the construction and manufacturing industries. Through the company’s production services, customers can order customized steel components to optimize their production processes. In 2023, the Group reported sales of SEK 5.3 billion. BE Group has approximately 640 employees, with Sweden and Finland as its largest markets. The headquarters is located in Malmö, Sweden. Read more about BE Group at www.begroup.com.