BE Group Q3 2011 – decision regarding profitability improvements
- In the third quarter, net sales rose by 12 percent compared with the year-earlier period, amounting to SEK 1,420 M (1,273). Shipped tonnage rose by 13 percent.
- The operating result decreased to SEK 4 M (48), primarily as a consequence of inventory losses, currency effects and higher production costs. The underlying operating result amounted to SEK 23 M (32).
- Strategic efforts to strengthen the production service offering long term is continuing and demonstrating positive effects. The establishment and build-out of service units in Finland and Poland progressed according to plan.
- After the end of the reporting period, BE Group reached a decision to initiate a program of profitability improvement measures. The program is expected to generate cost savings of SEK 50 M calculated on an annual basis. Costs of SEK 25 M will be charged against the results for the fourth quarter of 2011.
BE Group’s President and CEO Roger Johansson comments on the report for the third quarter of 2011:
“The third quarter results were not satisfactory. This was caused by a number of circumstances – falling steel prices, an excessive cost base and, to a certain extent, weakening demand, primarily in Finland.
On the positive side, we can nonetheless affirm that both sales and shipped tonnage have continued to develop in a satisfactory manner, mainly within the Sweden and CEE business areas. This indicates a generally favorable level of underlying demand for the quarter.
We do not expect the market to improve in the near-term perspective. In the CEE business area, we also need to strengthen profitability regardless of market trends and we have therefore decided on a program of measures. The main features of this include consolidating inventories and streamlining the product range in the Czech Republic, consolidating production in Poland and implementing personnel cutbacks in all business areas. The personnel cutbacks will affect some 100 employees.
Along with the other ventures currently in progress within the Group, this will improve our position moving forward.”
For further information, please contact:
| Roger Johansson, President and CEO tel: +46 (0)733 188 758 |
e-mail: roger.johansson@begroup.com |
| Torbjörn Clementz, CFO and Executive Vice President tel: +46 (0)708 690 788 |
e-mail: torbjorn.clementz@begroup.com |
Today, at 9:00 a.m. CET, Roger Johansson and Torbjörn Clementz will comment on development at a conference with market analysts and the press. The conference may be followed via webcast or by phone (see information below).
If you wish to participate via webcast and/or ask questions at the press conference, please copy and paste the following link into your web browser to register online. Make sure to include the full link.
http://storm.zoomvisionmamato.com/player/begroup/objects/k18j37gw/
| The following telephone numbers can be used to participate in the presentation: Sweden: UK: US: |
+46 (0)8 505 598 53 +44 (0) 203 043 24 36 +1 866 458 40 87 |
| The information in this report is such that BE Group AB (publ) is required to disclose pursuant to the Swedish Securities Exchange and Clearing Operations Act and/or the Swedish Financial Instruments Trading Act. This information was submitted for publication on October 27, 2011 at 7.45 a.m. CE |
BE Group, listed on the Nasdaq OMX Stockholm exchange, is one of Europe’s leading trading and service companies for steel and other metals. The Group has about 10,000 customers, primarily in the construction and engineering industries. BE Group provides various forms of service for steel, stainless steel and aluminum applications. In 2010, the Group reported sales of SEK 5.1 Bn. BE Group has about 1,000 employees in ten countries, with Sweden and Finland being its largest markets. The head office is located in Malmö, Sweden. Read more about BE Group at www.begroup.com
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