BE Group Interim Report January – March 2024

First quarter

• Net sales decreased by 16% to SEK 1,305 M (1,558)
• The underlying operating result increased to SEK 42 M (10)
• The quarter was affected by items affecting comparability of SEK -27 M (-) related to closure of the operations in the Baltics
• The operating result increased to SEK 4 M (1), including inventory losses of SEK -11 M (-9)
• Result after tax amounted to SEK -4 M (-3)
• Cash flow from operating activities amounted to SEK 44 M (226)
• Earnings per share amounted to SEK -0.35 (-0.22)

Statement from the CEO
Net sales fell by 16 percent to SEK 1,305 M (1,558). The decline is largely equally divided between lower prices and decreased tonnage. However, the strengthened gross margin and good cost control mean that the underlying operating result increased to SEK 42 M (10), corresponding to an operating margin of 3.2 percent (0.6). The operating result, including inventory losses but cleared of non-recurring costs, amounted to SEK 31 M (1). Cash flow remained positive at SEK 44 M (226).

The decline in tonnage is primarily related to the construction segment but was also affected negatively by a three-day political strike that affected all our Finnish units and many of the customers in February. In mid-March a four week long strike targeted at the process industry and transportation on rails and in harbours followed which continued to affect the Finnish market.

The closure of the Baltic operations announced at the end of March is proceeding according to plan and is affecting the operating result by SEK -27 M in the quarter, which is somewhat lower than previously announced. The closure is estimated to generate a positive cash flow of approximately SEK 30 M and will have a positive impact on the company’s future results.

Outlook
The industry sector is expected to continue at a good level in the near future. In general, the Finnish market is currently under more pressure than the Swedish right now because of the political strikes. When the situation calms down demand will reasonably increase at least in the short term. The construction sector remains under pressure and is expected to continue at low levels. In total, the construction sector constitutes approximately 15% of the turnover.

The price of sheet metal, which is mainly delivered to the industry, is expected to be relatively stable in the second quarter. Beams and rebar normally increase somewhat in the spring, but the price is now expected to remain relatively unchanged as a result of the challenges in the construction sector. The smaller price variations can reasonably be attributed to the return to a better balance between supply and demand.

Our focus
Our most important focus continues to be to increase and deepen our cooperation with our customers to win as much new business as possible, streamline the supply chain and continue to work with the cost side in order to achieve a healthy margin throughout the business. The ambition for the company is to be profitable regardless of economic trends and external factors. During the first quarter, we show a positive result despite both recession and strike hustle.

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 11:00 a.m. CEST on April 18, 2024.

BE Group AB (publ), which is listed on the Nasdaq Stockholm exchange, is a trading and service company in steel, stainless steel and aluminium. BE Group offers efficient distribution and value-adding production services to customers primarily in the construction and manufacturing industries. In 2023, the Group reported sales of SEK 5.3 billion. BE Group has approximately 680 employees, with Sweden and Finland as its largest markets. The head office is located in Malmö, Sweden. Read more about BE Group at www.begroup.com.

Tags: