BE Group Q3 2021
Third quarter
- Net sales increased by 85% to SEK 1,375 M (744)
- The underlying operating result increased to SEK 193 M (14)
- Inventory gains and losses amounted to SEK 26 M (-10)
- The operating result increased to SEK 219 M (4)
- Result after tax increased to SEK 175 M (-4)
- Cash flow from operating activities increased to SEK 6 M (1)
- Earnings per share increased to SEK 13.49 (-0.32)
Statement from the CEO
Normally, the third quarter is a weak quarter for BE Group, but continued higher demand combined with rising steel prices and higher gross margins means that BE Group once again provide a strong quarter. The operating margin amounted to 15.9%, which is by far the best since the stock exchange listing in 2006.
In relation to the corresponding quarter last year, sales increased by 85% and the underlying operating result ended up at SEK 193 M (14). Steel prices continued to rise and led to inventory gains of SEK 26 M, compared with inventory losses of SEK -10 M in the same period last year, and the operating result increased to SEK 219 M (4). Despite the sharp price increase, we continue to have good control of working capital and this led to a positive cash flow in the period.
Continued recovery
The market is continuing to recover and material prices that rose rapidly and by a lot at the end of last year have continued to rise throughout the year with a sharp increase in some product types in the third quarter. The recovery is evident in both the construction and manufacturing industries.
Counted in tonnage, the quarter’s increase is 21% compared to last year, but in relation to 2018, which was a good year in terms of tonnage, it is still a decrease by around 10% so there is absolutely room for continued recovery. We are now seeing this recovery primarily among our larger customers.
Steel price trend
In total, steel prices will continue to increase in the fourth quarter, but in no way close to the price increases in the third quarter. Demand for steel is expected to be high in the coming year and the assessment is also that the transition to green steel production will require more sustainable prices for the steel producers. As prices stabilize, it is possible that a certain marginal contraction occurs when more expensive newly purchased material is sold.
Future outlook
Although we are humbly enjoying the good results for a short while, we are also continuing our hard work on constant and recurring improvements. The ambition is to continue to build a good company that is profitable in the long term with a stable foundation for the future by focusing on customer experience and sales culture. Commercial steel comprises standardized products and whoever offers the best customer experience within sustainability, competence, delivery performance and availability is on the forefront. The working name is in short customer experience. Another means of competition is service level, business integrity and proactivity. This is what we call sales culture.
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. CET on October 21, 2021.
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 2020, the Group reported sales of SEK 3.7 billion. BE Group has approximately 630 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.
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