BE Group AB (publ) Year-end report 2011 Malmö, February 7 ...€¦ · BE Group AB Corp. Reg. No....

BE Group, listed on the NASDAQ OMX Stockholm exchange, is a trading and service company in steel and other metals. BE Group provides various forms of service for steel, stainless steel and aluminium applications to customers primarily in the construction and engineering sectors. In 2011, the Group reported sales of SEK 5.9 Bn. BE Group has slightly more than 900 employees in ten countries, 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.

BE Group AB / Corp. Reg. No. 556578-4724 / Year-end report 2011 1

FOURTH QUARTER 2011• Netsalesroseby2percentcomparedwiththeyear-earlierperiod,amountingtoSEK1,405M(1,383).Shippedtonnageroseby5percent.

• TheoperatingresultweakenedtoalossofSEK19M(8)asaconsequenceofinventorylossesofSEK26M(15)andnon-recurringitemsamountingtoanetnegativeSEK11M.Theunderlyingoperatingresult1)improvedtoSEK18M(7).

• Cashflowwassubstantiallyimprovedthroughthereductionofworkingcapital.

• ThelossaftertaxwasSEK37M(18).

• Earningspershare2)amountedtoalossofSEK0.74(0.37).

• Duringthequarter,adecisionwasmadetoimplementmeasuresthatwillentailannualcostsavingsintheregionofSEK50M.

FULL-YEAR 2011• NetsalesamountedtoSEK5,941M(5,129),whichrepresentsanincreaseof16percent.Shippedtonnageroseby12percent.

• TheoperatingresultamountedtoSEK96M(98)andtheunderlyingoperatingresult1)improvedtoSEK131M(75).

• ProfitaftertaxwasSEK20M(29).

• Earningspershare2)amountedtoSEK0.41(0.58).

• TheBoardofDirectorsproposesthatadividendofSEK0.25pershare(-)bepaidtoshareholders.

1)Operatingresult(EBIT)beforenon-recurringitems,adjustedforinventorygainsandlosses.2)Earningspersharearebothbeforeandafterdilution.

BE Group AB (publ)

Year-end report 2011

Malmö, February 7, 2012


Net sales 2010 1,383


Operating result (EBIT) 2010 -8

Inventorylosses 15Underlying EBIT 2010 7

Tonnage-,price-,mix-andgrossmargineffects -1Changesinoverheads,etc. 12Underlying EBIT 2011 18

Non-recurringitems -11Inventorylosses -26Operating result (EBIT) 2011 -19

NET SALES AND EARNINGS TREND IN THE FOURTH QUARTER

(SEK M)

Market and business environmentDuring the fourth quarter the market situation wascharacterizedbyseveralsteelproducerscuttingbackproductiontomeetcurrentdemand. Comparedwith the situation a few years ago,thegeneralmarketclimateispervadedbyincreasedshort-sightednessinthepricingofsteelatall levelsinthevaluechain. Overall,BEGroup’sdemandmeasuredintonnesdevelopedpositivelyinrelationtotheprecedingyearand was at largely the same level as in the thirdquarter.ShippedtonnagewasaffectedfavorablybyinventoryclearancesintheCzechRepublic.Areas of strategic focusBE Group works to increase the proportion ofproduction services in our customer offering in thelong-term.AparticularpriorityistoincreasesalestocustomerswithoperationsinseveraloftheGroup’smarkets.AnewproductionservicecenterinTrebaczew,Polandenteredoperation in thebeginningof2012.In Finland, an additional extension of the LapuafacilityisinprogressandthenewproductionfacilityforLecorStålteknikinKungälv,Sweden,wasbroughtintoserviceduringthefourthquarter. In addition, several activities are in progressthroughoutBEGrouptoimprovebusinessprocessesandraisetheGroup’sefficiencyandthusimproveitsmarginsandearnings.

Outlook Basedonsignalsfromcustomers,weexpectstabledemand in the first half of 2012, primarily withinBusiness Areas Sweden and CEE. Raised pricesamongproducersareexpectedtoleadtograduallyincreasingsalespricesforBEGroup’sproducts.

Developments in the fourth quarter of 2011GroupNet sales rose by 2 percent compared with theprecedingyear,amountingtoSEK1,405M(1,383).Theincreaseisattributabletoanincreaseintonnageof5percentagepointsandanacquisitioneffectof1percentagepoint.Priceandmixeffectsimpactednetsalesnegativelyby3percentagepoints,whilecurrencyeffectshadanegativeimpactof1percentagepoint. The average sales price was 3 percent lowerthanintheyear-earlierperiodand1percentlowerthaninthethirdquarterof2011.Thegeneralpricetrendoverthequarterpointeddownwards. ConsolidatedgrossprofitamountedtoSEK156M(169),correspondingtoagrossmarginof11.1percent(12.2).Adjusted for inventory losses, theunderlyinggrossmarginamounted to12.9percent (13.2)–an

improvementontheimmediatelyprecedingquarter. Duringthequarter,decisionsweremadetoimple-mentanumberofprofitabilityimprovementmeasures.TheprograminvolvespersonnelcutbacksinSweden,Finland, Poland and the Czech Republic, inventoryconsolidationandstreamliningof theproduct rangein the Czech Republic and the centralization ofproductionservicesinPoland.InFinland,negotiationshave taken place that enable temporary lay-offs inthe event of further weakened demand. The totalreductioninpersonnelamountstoapproximately100employees.Thecostforthesemeasuresisexpectedto total SEK 26 M and has been charged againstfourth quarter earnings. Thesemeasures will entailannualcostsavingsintheregionofSEK50M.Attheend of the quarter, the savings began to have animpactonthelevelofoverheads,althoughmostoftheeffectswillbegeneratedinthefirstquarterof2012. TheoperatingresultweakenedtoalossofSEK19M(8)asaconsequence,amongother things,ofinventorylossesofSEK26M(15)andnon-recurringitems amounting to a negative SEK 11M (-). Non-recurringitemsconsistofthereversalofaprovisionofSEK15M for a guarantee to a property owner andcostsfortheongoingprofitabilityimprovementprogram.Adjustedforinventorygains,theunderlyingoperatingresultamountedtoSEK18M(7).Theoperatingmarginwasanegative1.4percent(0.6)andtheunderlyingoperatingmarginwasapositive1.3percent(0.5).

Sales by sales channel BE Group’s sales are conducted through threechannels: inventorysales,servicesalesanddirectsales.Oftotalnetsalesforthefourthquarter,ship-


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Net sales, SEK BnQuarter and rolling 12 months

Quarter

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2009 2010

R12

2011

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Operating result (EBIT), SEK MQuarter and rolling 12 months

EBITuEBIT

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2009 2010

EBIT R12uEBIT R12

2011

mentsfromGroupfacilitiesaccountedfor80percent(80),whichisbrokendownasfollows:inventorysales51 percentage points (51) and service sales 29percentagepoints(29).

Sales trend in commercial steelNetsalesofcommercialsteelrose4percenttoSEK1,029M(991).Intermsoftonnagetheincreasewas6percent.Overall,commercialsteelaccountedfor73percent(72)ofBEGroup’snetsales. Thesalespricefellby3percentcomparedwiththethirdquarter.Comparedwiththecorrespondingquarterin2010,thedecreasewas2percent.

Sales trend in stainless steelComparedwiththeyear-earlierperiod,BEGroup’ssales of stainless steel rose 10 percent andamountedtoSEK234M(213).Shippedtonnageroseby17percent.Theproportionofnetsalesrepresentedbystainlesssteelincreasedto17percent(15). Asaconsequenceoflowerpricesfornickelandother alloy metals, the sales price was 6 percentlowerthanintheyear-earlierperiodand7percentlowerthaninthethirdquarter.

Sales by customer segmentInthefourthquarter,OEMcustomersandtheirpart-ners accounted for the largest share of sales, 49percent(54);projectcustomersfor24percent(22);pre-processingcompaniesfor18percent(15);andretailersfor9percent(9).

Business areasBusiness area SwedenForBusinessAreaSweden,demandremainedlargelyatthelevelestablishedintheimmediatelypreceding

quarters.Acertainseasonalweakeningwasnotedtowards the end of the quarter, primarily amongcustomersintheconstructionsector,whiledemandfromengineeringcustomerswasstable.Netsalesrose by 5 percent compared with the year-earlierperiod, amounting to SEK 701 M (668). Shippedtonnageroseby2percentandthesalespriceroseby2percent.Comparedwith thethirdquarter, thesalespricedecreasedby3percent. SalesfromacquiredunitsamountedtoSEK14M. TheoperatingresultrosetoSEK16M(11)asa consequence of increased sales combinedwithlower overheads.Adjusted for inventory losses ofSEK8M(5)andpositivenetnon-recurringitemsofSEK1Massociatedwithpersonnel cutbacksandthereversalofprovisions,theunderlyingoperatingresultrosetoSEK23M(16). ThenewproductionfacilityforLecorStålteknikwas brought into operation during the quarter,representingatotalinvestmentofSEK39M. In January 2012,CEORoger Johansson alsotookontheroleofBusinessAreaManager.

Business Area FinlandInBusinessAreaFinland,demandremained largelyat the level established in the third quarter. In theproduct portfolio, demand for production servicesfrom customers in the engineering sector remainedstable. Sales and earnings were at the same timeaffectednegativelybypricepressure. Netsalesdecreasedby5percenttoSEK454M(479).Shippedtonnagedecreasedby6percent.TheaveragesalespriceinEURroseby2percentcomparedto theyear-earlierperiodanddeclinedby3percentcomparedwiththethirdquarter. TheoperatingresultfelltoSEK2M(7)asitwas


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3 3 44 1 224 1

2009 2010

Quarter R12

2011

TheoperatinglossamountedtoSEK27M(16)withinventory losses of SEK 6 M (2) and non-recurringcosts of SEK 8 M associated with the program ofmeasures contributing to the loss.Adjusted for theinventorylossesandnon-recurringcosts,theunder-lyingoperatinglosswasSEK13M(14). The centralization of production services inPolandentailstheestablishmentofanewproductioncenterinTrebaczew.Theincreasedcapacitywillmainlybeusedtomeetexistingdemandfrominternationalcustomers.Theoverallinvestmentinproductionequip-mentamountstoSEK15M.During2011,SEK11Mwasinvestedandthefacilitywasbroughtintoopera-tioninearly2012.

Net financial items and taxConsolidatednetfinancialitemsforthefourthquarteramountedtoanexpenseofSEK17M(13),ofwhichthenetinterestexpenseaccountedforSEK10M(8).Onanannualbasis,thiscorrespondsto4.9percent(3.6)ofinterest-bearingnetdebt.ExchangeratelossesaffectednetfinancialitemsnegativelybySEK4M(1). The tax expense for the quarter amounted toSEK1M(income3),equivalenttonegative2percent(positive13)ofearningsbeforetax.Thetaxpercent-ageforthequarterwasmainlyduetotheadjustmentof deferred tax receivables related to loss makingoperations.

Cash flowCashflowbeforechangesinnetdebt,improvedandamountedtoSEK133M(30).Cashflowfromoper-atingactivitieswasSEK162M(58).Theimprovementisprimarilyattributabletoadecreaseinworkingcapital. Cashflowfrominvestingactivitieswasanega-tiveSEK29M(28).Cashflowfromfinancingactivi-tieswasnegativeintheamountofSEK6M(2).

impactedbyinventorylossesofSEK12M(8).Adjustedfor the inventory lossesandnon-recurring costs forpersonnelcutbacks,theunderlyingoperatingresultwasatthesamelevelasintheprecedingyear,amountingtoSEK15M(15). The proportion of total sales accounted for byproduction services rose in comparison with thepreceding year and amounted to 47 percent (45).TheupgradedproductionequipmentinLahtienteredoperationduringthethirdquarter.Additionalexpansionof the facility inLapua isalso inprogress.Here theinvestmenttotalsSEK20Mandismainlyexpectedto burden cash flow in the first quarter of 2012.Operationsareplannedtocommenceinthespringof2012. The investment is beingmade to strengthenBEGroup’soffering inadvancedproductionserviceforengineeringcustomers

Business Area CEEWithintheframeworkoftheongoingprogramofmeas-ures,anumberofactionswereinitiatedintheCzechandPolishoperations.Thesemeasuresinvolveinven-tory consolidation and streamlining of the productrangeintheCzechRepublicandthecentralizationofproductionservicesinPoland. Demand in themarkets of Central and EasternEuropehasremainedatthelevelsestablishedafterthesummer.Netsalesroseby9percenttoSEK280M(258)asaconsequenceofanincreaseinshippedtonnageof28percent.Theaveragesalespricewas15percentlowercomparedtotheyear-earlierperiodand6percentlowerthaninthethirdquarterof2011.Amongother effects, inventory consolidation in theCzechRepublicentailedsellingoffportionsofexistingproductinventories.Overall,thisconsolidationaffectedtheperiod’sresultbySEK5M,includingnon-recurringcosts.


Capital and investmentsConsolidatedworkingcapitalamountedtoSEK430M(519)attheendoftheperiod.Workingcapitaltied-upimprovedto9percent(10)basedonloweraverageworkingcapitalduringthequarter. Of the investmentsofSEK28M(83,ofwhichacquisitionsaccountedfor68)madeduringtheperiod,investmentsinintangibleassetsrepresentedSEK12M(5).TheserelatetothedevelopmentoftheGroup’sITplatform.Investmentsintangibleassetsamountedto SEK 16 M (10) and mainly involve productionequipmentinSweden,FinlandandPoland.Development over the 2011 full yearGroupOver2011,theGroup’snetsalesroseby16percenttoSEK5,941M(5,129).Theimprovementisduetoanincreaseintonnageof12percentagepoints,positivepriceandmixeffectsamountingto5percentagepointsand an acquisition effect of 2 percentage points.Currencyeffects impactednetsalesnegativelyby3percentage points. Price trends were volatile overthe year, but compared to the 2010 full year, theaveragesalespriceroseby4percent. TheoperatingresultamountedtoSEK96M(98).AdjustedforinventorylossesofSEK20M(gains23)andnegativenetnon-recurringitemsofSEK15M(-)theunderlyingoperatingresultimprovedtoSEK131M (75). The improvement in profit is primarily aconsequence of increased sales. The operatingmarginamountedto1.6percent(1.9)andtheunder-lyingoperatingmarginimprovedto2.2percent(1.5).

(SEK M)



Operating result (EBIT) 2010 98

Inventorygains -23

Underlying EBIT 2010 75

Tonnage-,price-,mix-andgrossmargineffects 76

Changesinoverheads,etc. -20

Underlying EBIT 2011 131

Non-recurringitems -15

Inventorylosses -20

Operating result (EBIT) 2011 96

NET SALES AND EARNINGS TREND OVER THE 2011 FULL YEAR

Business areasBusiness area SwedenBusinessAreaSwedenreportedsalesofSEK2,843M (2,425) – an increase of 17 percent. Shippedtonnageroseby7percent.Acquiredunitsaccountedfor5percentagepointsoftheincreaseinsales.TheoperatingresultamountedtoSEK83M(73)andtheunderlying operating result to SEK 91M (56).Theimprovement in the underlying operating result isattributabletothehighersales. Netnon-recurringitemsofanegativeSEK3M(-)consistingofcostsforpersonnelcutbacksandtheclosureoftheDanishoperationswerechargedagainsttheresult.Thesecosts,totalingSEK18M,areoffsetby the reversal of a provision of SEK 15 M for aguaranteetoapropertyowner. The Swedish metal processing group BEProduktion(formerlyRTSProduktion),withoperationsinEskilstuna,SwedenandRapla,Estonia,aswellasasmalleroperationinRomaniawasacquiredinthefirstquarter.TheacquisitionstrengthensBEGroup’sproduction service offering to major engineeringcustomers. The operations were consolidated intoBEGroupasof thedate inFebruaryonwhichBEGroupassumedcontrol. ThejointventureArcelorMittalBEGroupSSCisreportedinaccordancewiththeequitymethod,withBE Group’s participation in earnings for the yearamountingtoSEK6M(10).

Business Area FinlandBusinessAreaFinland’ssalesroseby11percenttoSEK 2,055M (1,846). Shipped tonnage rose by 8percent.TheoperatingresultimprovedtoSEK87M(81) and, adjusted for inventory losses, the under-lyingoperatingresultimprovedtoSEK93M(78). Servicesalesasproportionof total sales roseto47percent(45).

Business Area CEESalesforBusinessAreaCEEroseby19percentovertheyeartoSEK1,167M(981).Shippedtonnageroseby22percent. TheoperatinglossamountedtoSEK35M(22)andtheunderlyingoperatingloss,adjustedforinven-torylossesofSEK10M(gains3)andnon-recurringcostsforprofitabilityimprovementmeasuresofSEK8M(-),wasreducedtoSEK17M(25).

Net financial items and taxConsolidatednetfinancialitemsfortheyearamountedtoanexpenseofSEK48M(56),ofwhichnetinterestamounted to an expense of SEK 38 M (34). Netinterestcorrespondsto4.6percent(4.1)ofnetinterest-


higher Group contributions received and dividendsfromsubsidiariesandwastoacertainextentoffsetbycurrencyeffects.ThelossbeforetaxamountedtoSEK25M(58)andthelossaftertaxwasSEK25M(60). TheParentCompany investedSEK21M(24)inintangibleassetsduringtheyear.Attheendoftheyear, the Parent Company’s cash and equivalentswereSEK73M(25).

Significant events after the end of the periodNosignificanteventshavetakenplaceaftertheendoftheperiod.

Related-party transactions and significant changes in ownershipNo transactions tookplacebetweenBEGroupandrelated parties that had a material impact on thecompany’sfinancialpositionandresults.

Nominating CommitteeThemembersoftheNominatingCommitteearePetterStillström (Traction), Jan Andersson (SwedbankRoburFonder),TomasRamsälv(OdinFonder),andAnders Ullberg as the Chairman of BEGroupAB.Following the appointment of the NominatingCommittee, Nordea Fonder has sold its holding inBEGroupanditsrepresentative,ThomasEhlin,hastherefore vacated his position on the NominatingCommittee. BEGroup’sNominatingCommitteewillproposeto theAnnual GeneralMeeting (AGM) thatAndersUllbergbere-electedastheChairmanoftheBoardofBEGroupAB(publ)andthatPetterStillströmbeelectedasanewBoardmember.PetterStillströmisthePresidentofABTraction. The proposal also includes the re-election ofBoardmembers Roger Bergqvist, Cecilia Edström,MaritaJaatinenandLarsOlofNilsson.LarsSpongberghasdeclinedre-election.TheNominatingCommittee’sotherproposalswillbepresentedintheAGMnotifi-cationandonthecompany’swebsite.

2012 Annual General MeetingTheAnnual General Meeting of BE Group will beheldonWednesday,April25,2012,at4:00p.m. inMalmö, Sweden. Further information will be avail-ableonthecompany’swebsite.

Dividend proposalTheGroup’sdividendpolicyentails that,over time,BEGroupshalldistributeatleast50percentofprofitaftertax. The Board of Directors proposes that a cash

bearingliabilities,whichaveragedSEK835M(828).Net financial items were negatively impacted byexchange-ratedifferencesintheamountofSEK3M(5).NetfinancialitemswerealsoimpactednegativelybyotherfinancialexpensesofSEK7M(16). ThetaxexpensefortheyearamountedtoSEK28M(13),equivalentto58percent(31)ofearningsbeforetax.Thehightaxpercentagewasmainlyduetotheadjustmentofdeferredtaxreceivablesrelatedtolossmakingoperations.

Cash flowDuringtheyear,cashflowbeforechangesinnetdebtimprovedtoSEK76M(negative110).Cashflowfromoperating activities was SEK 184M (negative 57).Theimprovementwasmainlyduetoworkingcapitalfreedupduringtheyear.ThecashfloweffectofthedecreaseinworkingcapitalamountedtoSEK100M(negative126). CashflowfrominvestingactivitieswasanegativeSEK 108M (53), of which investments in tangibleassetsaccountedforSEK78M(15). CashflowfromfinancingactivitieswasnegativeintheamountofSEK7M(positive4).

Financial position and liquidity ConsolidatedcashandequivalentswereSEK146M(80)atyear-end.Atyear-end,theGrouphadunutilizedcreditfacilitiestotalingSEK371M. Consolidatedinterest-bearingnetdebtamountedtoSEK773M (842) at year-end.BEGroup’s totalcreditfacilitiesamountedtoSEK1,273M.Thematu-rity date for 94 percent of the credit facility isMay2013.Atyear-end,consolidatedequity totaledSEK805M(787),whilethenetdebt/equityratioamountedto96percent(107).

Organization, structure and employeesThenumberofemployeesroseto924comparedwith910atthebeginningoftheyear.Theaveragenumberofemployeesduringtheyearamountedto943(909).Theincreaseisattributabletoacquiredunits.

Contingent liabilitiesConsolidatedcontingentliabilitiesamountedtoSEK112M(146).

Parent CompanySalesbytheParentCompany,BEGroupAB(publ),amountedtoSEK55M(45)fortheyearandderivedfromintra-Groupservices.TheoperatinglossamountedtoSEK38M(39). NetfinancialitemsamountedtoSEK13million(negative19).Theimprovementwasmainlycausedby


dividendofSEK0.25pershare (-)bepaid toshare-holders,correspondingto61percentofprofitaftertax.

Significant risks and uncertaintiesBEGroup’sprofitsandfinancialpositionareaffectedbyalargenumberoffactors.Theprincipalrisksandfactorsofuncertaintycanbedividedintosectorandmarket risks, strategic and operational risks, andfinancial risks.Fluctuations ineconomic trendsandsteelprices,togetherwithchangesamongsuppliers,customersandpersonnelrepresentriskfactorsthataffect the Group’s financial performance and cashflow.Thefinancialrisksconsistofcurrency,interest-rate, refinancing and credit risks.The financial riskexposure is explained in the 2010 Annual ReportpublishedinMarch2011.Nonewsignificantrisksoruncertaintieshavesubsequentlyarisenbeyondthosedescribedinthisreport.

Accounting principlesTheinterimreportispreparedinaccordancewithIAS34 Interim Financial Reporting and the SwedishAnnualAccountsAct.TheParentCompany’s finan-cialstatementsareprepared incompliancewith theSwedish Annual Accounts Act and the SwedishFinancialReportingBoard’srecommendationRFR2AccountingforLegalEntities.

Refer to the 2010Annual Report for details of theGroup’s accounting principles and definitions ofcertain terms. The principles applied here remainunchangedinrelationtothoseintheAnnualReportwiththeexceptionofGroupcontributionstotheParentCompany,which,effectivefromthe2011financialyearare reported as a financial item rather than directlyagainst equity. In other regards, the new standardsandinterpretationsthathaveenteredintoforceeffec-tive fromthe2011financialyearhavehadnoeffectonthefinancialreporting.

Future reporting datesDuring2012,BEGroupAB(publ)intendstopublishfinancialinformationonthefollowingdates:• TheAnnualReportforthe2011financialyearwillbeavailableattheendofMarch2012

• TheInterimReportforJanuary-March2012willbepublishedonApril25

• TheInterimReportforJanuary-June2012willbepublishedonJuly18

• The InterimReport for January-September 2012willbepublishedonOctober23

FinancialinformationisavailableinSwedishandEnglishfromBEGroup’swebsiteandcanbeorderedbycalling+46(0)40384200ore-mailing:[email protected]

Malmö, February 7, 2012,BE Group AB (publ)

Roger JohanssonPresident and CEO

This report has not been reviewed by the company’s auditors.

Questions concerning this report may be directed to: PresidentandCEORogerJohansson,tel:+46(0)733188758,e-mail:[email protected]örnClementz,tel:+46(0)708690788,e-mail:[email protected]

BEGroupAB(publ),Box225,SE-20122Malmö,Sweden.Streetaddress:Spadegatan1Corp.Reg.No.:556578-4724,Tel:+46(0)40384200,Fax:+46(0)40384111,[email protected],www.begroup.com

Thisyear-endreportpresentsinformationthatBEGroupAB(publ)isrequiredtodisclosepursuanttotheSwedishSecuritiesExchangeandClearingOperationsActand/ortheSwedishFinancialInstrumentsTradingAct.ThisinformationwassubmittedforpublicationonFebruary7,2012at7.45a.m.CET.


Condensed consolidated income statement2011 2010 2011 2010

(SEK M) Note Oct-Dec Oct-Dec Full-year Full-year

Netsales 1,405 1,383 5,941 5,129

Costofgoodssold -1,249 -1,214 -5,173 -4,396

Gross profit 156 169 768 733

Sellingexpenses -130 -138 -504 -495

Administrativeexpenses -36 -40 -160 -155

Otheroperatingincomeandexpenses 1 -9 1 -14 5

Participationinjointventure 0 0 6 10

Operating profit/loss -19 -8 96 98

Financialitems -17 -13 -48 -56

Profit/loss before tax -36 -21 48 42

Tax -1 3 -28 -13

Profit/loss for the period -37 -18 20 29

Amortizationofintangibleassets 5 4 20 12

Depreciationoftangibleassets 11 12 44 47

Earningspershare -0.74 -0.37 0.41 0.58

Earningspershareafterdilution -0.74 -0.37 0.41 0.58

Consolidated statement of comprehensive income2011 2010 2011 2010

(SEK M) Oct-Dec Oct-Dec Full-year Full-year

Profit/loss for the period -37 -18 20 29

Other comprehensive income

Translationdifferences -25 -17 -4 -80

Hedgingofnetinvestmentsinforeignsubsidiaries 19 12 3 61

Taxattributabletoitemsinothercomprehensiveincome -5 -3 -1 -14

Total other comprehensive income -11 -8 -2 -33

Comprehensive income for the period -48 -26 18 -4

Note 1 Non-recurring items2011 2010 2011 2010


Reversalofprovisionforguaranteetopropertyowner 15 - 15 -

Costsforprofitabilityenhancementmeasures -26 - -26 -

ClosureoftheDanishoperations - - -4 -

Total non-recurring items -11 - -15 -


Condensed consolidated balance sheet2011 2010

(SEK M) 31 Dec 31 Dec

Goodwill 693 692

Otherintangibleassets 87 81

Tangibleassets 300 267

Investmentinjointventure 124 129

Financialassets 2 2

Deferredtaxassets 19 34

Total non-current assets 1,225 1,205

Inventories 605 683

Accountsreceivables 529 575

Otherreceivables 100 87

Cashandequivalents 146 80

Assetsheldforsale 2 2

Total current assets 1,382 1,427

Total assets 2,607 2,632

Equity 805 787

Non-currentinterest-bearingliabilities 852 854

Provisions 1 16

Deferredtaxliability 58 62

Total non-current liabilities 911 932

Currentinterest-bearingliabilities 69 71

Accountspayables 637 598

Othercurrentliabilities 167 227

Othercurrentprovisions 18 17

Total current liabilities 891 913

Total equity and liabilities 2,607 2,632


Condensed consolidated cash-flow statement2011 2010 2011 2010


Profit/lossbeforetax -36 -21 48 42

Adjustmentfornon-cashitems 9 26 57 53

Incometaxpaid -8 -4 -21 -26

Changeinworkingcapital 197 57 100 -126

Cash flow from operating activities 162 58 184 -57

Investmentsinintangibleassets -12 -5 -25 -24

Investmentsintangibleassets -19 -8 -78 -15

Acquisitionsofsubsidiaries - -16 -7 -16

Othercashflowfrominvestingactivities 2 1 2 2

Cash flow before change in net debt 133 30 76 -110

Cashflowfromfinancingactivities -6 -2 -7 4

Cash flow for the period 127 28 69 -106

Exchange-ratedifferenceincashandequivalents -4 -3 -3 -11

Change in cash and equivalents 123 25 66 -117

Condensed statement of changes in equity2011 2010 2011 2010


Equity at beginning of period 858 812 787 798

Effectofchangedaccountingprinciples - - - -

Adjusted equity at beginning of period 858 812 787 798

Comprehensiveincomefortheperiod -48 -26 18 -4

Acquisition/salesoftreasuryshares -5 - -3 -10

ShareSavingsScheme 0 1 3 3

Equity at end of period 805 787 805 787


Operating profit/loss (EBIT) per segment2011 2010 2011 2010


Sweden 16 11 83 73

Finland 2 7 87 81

CEE -27 -16 -35 -22

ParentCompanyandconsolidateditems -10 -10 -39 -34

Group -19 -8 96 98

Operating margin per segment2011 2010 2011 2010

Oct-Dec Oct-Dec Full-year Full-year

Sweden 2.3% 1.6% 2.9% 3.0%

Finland 0.4% 1.4% 4.2% 4.4%

CEE -9.6% -6.0% -3.0% -2.3%

Group -1.4% -0.6% 1.6% 1.9%

Segment reportingNet sales per segment

2011 2010 2011 2010(SEK M) Oct-Dec Oct-Dec Full-year Full-year

Sweden 701 668 2,843 2,425

- External 690 660 2,806 2,378

- Internal 11 8 37 47

Finland 454 479 2,055 1,846

- External 445 471 2,007 1,796

- Internal 9 8 48 50

CEE 280 258 1,167 981

- External 267 252 1,125 955

- Internal 13 6 42 26

Parent Company and consolidated items -30 -22 -124 -123

Group 1,405 1,383 5,941 5,129

Shipped tonnage per segment (thousands of tonnes)2011 2010 2011 2010


Sweden 56 55 224 209

Finland 40 42 178 165

CEE 41 32 158 130


Group 132 126 546 489


Segment reportingUnderlying operating profit/loss (uEBIT) per segment 1)

2011 2010 2011 2010(SEK M) Oct-Dec Oct-Dec Full-year Full-year

Sweden 23 16 91 56

Finland 15 15 93 78

CEE -13 -14 -17 -25


Group 18 7 131 751)Operatingprofit/loss(EBIT)adjustedforinventorygainsandlossesandnon-recurringitems.Inventorygainsandlossesarethedifferencesbetweenthecostofgoodssoldathistoricalcostandthecostofgoodssoldvaluedatreplacementcost.Thecompany’sinternalmodelisusedtocalculateinventorygainsandlossesandhasnotbeensubjectforreviewbythecompany´sauditor.

Underlying operating margin per segment2011 2010 2011 2010


Sweden 3.3% 2.4% 3.2% 2.3%

Finland 3.2% 3.1% 4.5% 4.2%

CEE -4.5% -5.2% -1.5% -2.5%

Group 1.3% 0.5% 2.2% 1.5%

Depreciation per segment2011 2010 2011 2010


Sweden 5 5 18 18

Finland 5 5 21 22

CEE 3 3 11 12

ParentCompanyandconsolidateditems 3 4 14 7

Group 16 16 64 59

Investments in tangible and intangible assets per segment2011 2010 2011 2010


Sweden 9 74 52 76

Finland 4 3 24 7

CEE 6 0 15 1

ParentCompanyandconsolidateditems 9 6 21 24

Group 28 83 112 108


Key data2011 2010 2011 2010

(SEK M unless otherwise stated) Oct-Dec Oct-Dec Full-year Full-year

Earnings measurements

Operatingprofit/loss(EBIT) -19 -8 96 98

Margin measurements

Grossmargin 11.1% 12.2% 12.9% 14.3%

Operatingmargin -1.4% -0.6% 1.6% 1.9%

Capital structure

Netdebt 773 842 773 842

Netdebt/equityratio 95.9% 107.0% 95.9% 107.0%

Equity/assetsratio 30.9% 29.9% 30.9% 29.9%

Workingcapital(average) 529 575 525 528

Operatingcapital(average) 1,679 1,658 1,659 1,619

Operatingcapital(excludingintangibleassets)(average) 897 916 879 893

Workingcapitaltied-up 9.4% 10.4% 8.8% 10.3%

Return

Returnonoperatingcapital(%) -4.6% -2.0% 5.8% 6.0%

Returnonoperatingcapital(excludingintangibleassets)(%) -6.4% -1.7% 13.2% 12.4%

Returnonequity(%) -17.7% -9.1% 2.5% 3.7%

Per share data

Earningspershare(SEK) -0.74 -0.37 0.41 0.58

Earningspershareafterdilution(SEK) -0.74 -0.37 0.41 0.58

Equitypershare(SEK) 16.31 15.90 16.31 15.90

Cashflowfromoperatingactivitiespershare(SEK) 3.27 1.18 3.72 -1.15

Sharesoutstandingatperiodend(thousands) 49,376 49,505 49,376 49,505

Averagenumberofshares(thousands) 49,462 49,505 49,546 49,656

Dilutedaveragenumberofshares(thousands) 49,476 49,549 49,564 49,704

Other

Averagenumberofemployees 949 889 943 909


Supplementary disclosures2011 2010 2011 2010

(SEK M unless otherwise stated) Oct-Dec Oct-Dec Full-year Full-year

Sales by main products

Longsteel 386 394 1,685 1,478

Flatsteel 487 497 2,123 1,829

Reinforcementsteel 156 100 559 408

Total commercial steel 1,029 991 4,367 3,715

Stainlesssteel 234 213 1009 887

Aluminium 79 103 329 352

Other 63 76 236 175

Total sales 1,405 1,383 5,941 5,129

Growth

Salesgrowth 2% 37% 16% 19%

–organictonnagegrowth 5% 21% 12% 17%

–priceandmixchanges -3% 17% 5% 6%

–currencyeffects -1% -5% -3% -5%

–acquisitions 1% 4% 2% 1%

Adjusted earnings measurements

Underlyingoperatingprofit/loss(uEBIT) 18 7 131 75

UnderlyingEBITA 23 11 151 87

Adjusted margin measurements

Underlyinggrossmargin 12.9% 13.2% 13.3% 13.9%

Underlyingoperatingmargin 1.3% 0.5% 2.2% 1.5%

UnderlyingEBITAmargin 1.6% 0.8% 2.5% 1.7%

Adjusted return

Underlyingreturnonoperatingcapital(excludingintangibleassets) 10.5% 5.0% 17.1% 9.8%

Adjusted per share data

Underlyingearningspershare(SEK) -0.12 -0.13 1.02 0.24

Underlyingearningspershareafterdilution(SEK) -0.12 -0.13 1.02 0.24

Adjusted capital structure

Netdebt/underlyingEBITDA(multiple) - - 4.0 6.3

Other

Inventorygainsandlosses -26 -15 -20 23

Shippedtonnage(thousandsoftonnes) 132 126 546 489

Averagesalesprices(SEK/kg) 10.66 10.98 10.89 10.48


Condensed parent company income statement2011 2010 2011 2010


Netsales 14 10 55 45

Administrativeexpenses -21 -21 -92 -84

Otheroperatingincomeandexpenses -1 0 -1 0

Operating profit/loss -8 -11 -38 -39

Financialitems* 19 -17 13 -19

Profit/loss before tax 11 -28 -25 -58

Tax -16 -6 0 -2

Profit/loss for the period -5 -34 -25 -60*Effectiveasof2011,GroupcontributionsreceivedarereportedasdividendsandGroupcontributionspaidasafinancialexpenseinprofit/lossfortheperiod.Thecomparisonfiguresfor2010havebeenadjustedinaccordancewiththenewprinciples.Previously,GroupcontributionswerereporteddirectlyinequityinaccordancewithstatementUFR2oftheSwedishFinancialReportingBoard;Groupandshareholdercontributions.

Statement of comprehensive income – parent company2011 2010 2011 2010


Profit/lossfortheperiod -5 -34 -25 -60

Othercomprehensiveincome - - - -

Comprehensive income for the period -5 -34 -25 -60

Condensed parent company balance sheet2011 2010

(SEK M) 31 Dec 31 Dec

Intangibleassets 71 64

Tangibleassets 0 0

Financialassets 1,354 1,381

Interest-bearingreceivables,Groupcompanies 53 54

Deferredtaxassets - 0

Total non-current assets 1,478 1,499Currentinterest-bearingreceivables,Groupcompanies 225 251

Receivables,Groupcompanies 98 55

Otheroperatingreceivables 21 20

Cashandequivalents 73 25

Total current assets 417 351

Total assets 1,895 1,850

Equity 826 850

Non-currentinterest-bearingliabilities 835 837

Provisions 1 1

Total non-current liabilities 836 838

Currentinterest-bearingliabilities,Groupcompanies 193 69

Accountspayables 6 9

LiabilitiestoGroupcompanies 19 19

Othercurrentliabilities 15 65

Total current liabilities 233 162Total equity and liabilities 1,895 1,850

Pledged assets 1,309 1,310

Contingent liabilities 80 95


Key data – multi-quarter summary2011 2011 2011 2011 2010 2010 2010 2010 2009

(SEK M unless otherwise stated) Oct-Dec Jul-Sep Apr-Jun Jan-Mar Oct-Dec Jul-Sep Apr-Jun Jan-Mar Oct-Dec

Netsales 1,405 1,420 1,597 1,519 1,383 1,273 1,399 1,074 1,011

Earnings measurements

Operatingprofit/loss(EBIT) -19 4 66 45 -8 48 86 -28 -33

Underlyingoperatingprofit/loss(uEBIT) 18 23 43 47 7 32 46 -10 7

UnderlyingEBITA 23 28 49 51 11 37 47 -8 9

Margin measurements

Operatingmargin -1.4% 0.3% 4.2% 2.9% -0.6% 3.8% 6.2% -2.6% -3.3%

Underlyingoperatingmargin 1.3% 1.6% 2.7% 3.1% 0.5% 2.5% 3.3% -0.9% 0.7%

UnderlyingEBITAmargin 1.6% 1.9% 3.1% 3.3% 0.8% 2.9% 3.4% -0.8% 0.8%

Capital structure

Netdebt 773 924 851 783 842 876 832 814 777

Netdebt/equityratio 95.9% 107.7% 98.2% 96.5% 107.0% 107.9% 104.4% 107.1% 97.4%

Equity/assetsratio 30.9% 29.2% 29.1% 26.8% 29.9% 29.7% 29.2% 29.2% 31.8%

Operatingcapital(excludingintangibleassets)(average) 897 964 873 836 916 947 888 857 906

Workingcapitaltied-up 9.4% 10.5% 8.2% 8.2% 10.4% 11.7% 9.2% 10.9% 12.8%

Return

Returnonoperatingcapital(excludingintangibleassets) -6.4% 3.7% 33.1% 23.5% -1.7% 22.4% 39.3% -7.0% -13.9%

Underlyingreturnonoperatingcapital(excludingintangibleassets) 10.5% 11.5% 22.7% 24.2% 5.0% 15.8% 21.3% -3.8% 3.8%

Returnonequity -17.7% -4.7% 21.0% 11.5% -9.1% 12.9% 23.4% -12.8% -17.3%

Per share data

Earningspershare(SEK) -0.74 -0.20 0.89 0.46 -0.37 0.52 0.92 -0.50 -0.71

Underlyingearningspershare(SEK) -0.12 0.09 0.55 0.50 -0.13 0.29 0.31 -0.23 -0.09

Equitypershare(SEK) 16.31 17.30 17.47 16.36 15.90 16.39 16.02 15.28 16.05

Cashflowfromoperatingactivitiespershare(SEK) 3.27 -1.04 -0.31 1.80 1.18 -0.89 -0.39 -1.05 1.41

Other

Averagenumberofemployees 949 962 955 935 889 882 887 882 882

Inventorygainsandlosses -26 -19 23 2 -15 16 40 -18 -32

Shippedtonnage(thousandsoftonnes) 132 131 143 140 126 116 133 114 104

Averagesalesprices(SEK/kg) 10.66 10.81 11.20 10.86 10.98 11.00 10.49 9.44 9.70


Definitions of key data SUPPLEMENTARY DISCLOSURES

Growth

Salesgrowth Changefromtheprecedingperiodasapercentageofnetsales.

Adjusted earnings measurements

Underlyingoperatingprofit/loss(uEBIT) Operatingprofit/loss(EBIT)beforenon-recurringitemsadjustedforinventorygainsandlosses(deductionsforgainsandadditionsforlosses).

UnderlyingEBITA EBITAbeforenon-recurringitemsadjustedforinventorygainsandlosses(deductionsforgainsandadditionsforlosses).

Adjusted margin measurements

Underlyinggrossmargin Underlyinggrossprofitasapercentageofnetsales.Theunderlyinggrossprofitisthereportedgrossprofitadjustedforinventorygainsandlosses(deductionsforgainsandadditionsforlosses)exclusiveinventorygainsandlossesrelatedtojointventure.

Underlyingoperatingmargin Underlyingoperatingprofit/loss(uEBIT)asapercentageofnetsales.

UnderlyingEBITAmargin UnderlyingEBITAasapercentageofnetsales.

Adjusted return

Underlyingreturnonoperatingcapital(excludingintangibleassets)

AnnualizedunderlyingEBITAasapercentageofaverageoperatingcapitalexcludinggoodwillandotherintangibleassets.UnderlyingEBITAisEBITAbeforenon-recurringitemsandadjustedforinventorygainsandlosses(deductionsforgainsandadditionsforlosses).EBITAisoperatingprofitbeforeamortizationofintangibleassets.

Adjusted per share data

Underlyingearningspershare(SEK) Profitfortheperiodbeforenon-recurringitemsadjustedforinventorygainsandlosses(deductionsforgainsandadditionsforlosses)andincludingthetaxeffectoftheadjustmentsdividedbytheaveragenumberofsharesduringtheperiod.

Underlyingearningspershareafterdilution(SEK)

Profitfortheperiodbeforenon-recurringitemsadjustedforinventorygainsandlosses(deductionsforgainsandadditionsforlosses)andincludingthetaxeffectoftheadjustmentsdividedbytheaveragenumberofsharesafterdilutionduringtheperiod.

Adjusted capital structure

Netdebt/underlyingEBITDA AnnualizednetdebtdividedbyunderlyingEBITDA.UnderlyingEBITDAisEBITDAbeforenon-recurringitemsandadjustedforinventorygainsandlosses(deductionsforgainsandadditionsforlosses).EBITDAisoperatingprofitbeforedepreciationandamortization.

Other

Inventorygainsandlosses Thedifferencebetweenthecostofgoodssoldatacquisitionvalueandthecostofgoodssoldatreplacementcost.

Please refer to the 2010 annual report for other definitions of key data.

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