1
second QUARTeR 2012
• Netsalesfellby15percentcomparedwiththeyear-earlierperiod,amountingtoSEK1,357M(1,597).Shippedtonnagedecreasedby11percent.
• TheoperatingresultdeclinedtoSEK13M(66)andtheunderlyingoperatingresult1)amountedtoSEK7M(43).
• ProfitaftertaxwasSEK0M(44).
• Earningspershare2)amountedtoSEK0.01(0.89).
• Followingtheendofthequarter,BEGroupsignedanewthree-yearcreditagreementwithapossibilityforatotalextensionoftwoyears.ThetotalcreditfacilityamountstoSEK1,400M,includingguaranteefacilities.
• Followingtheendofthequarter,adecisionhasbeenmadetoinitiateaprocesstoselltheoperationsintheCzechRepublic.
• RogerJohanssonannouncedhisresignationasPresidentofBEGroup,althoughhewillcontinueinthatcapacityuntilJanuary1,2013.Theprocessofrecruitingasuccessorhasbeeninitiated.
THe FIRsT sIX MonTHs oF 2012
• NetsalesamountedtoSEK2,793M(3,116),whichis10percentlowerthanintheprecedingyearandshippedtonnagedecreasedby6percent.
• TheoperatingresultweakenedtoSEK48M(111)andtheunderlyingoperatingresult1)amountedtoSEK50M(90).
• ProfitaftertaxwasSEK19M(67).
• Earningspershare2)amountedtoSEK0.39(1.35).
1)Operatingresult(EBIT)beforenon-recurringitems,adjustedforinventorygainsandlosses.2)Earningspersharearebothbeforeandafterdilution.
Interim report BE Group AB (publ)January – June 2012Malmö, July 18, 2012
Be Group,listedontheNasdaqOMXStockholmexchange,isatradingandservicecompanyinsteelandothermetals.BEGroupprovidesvariousformsofserviceforsteel,stainlesssteelandaluminiumapplicationstocustomersprimarilyintheconstructionandengineeringsectors.In2011,theGroupreportedsalesofSEK5.9Bn.BEGrouphasabout900employeesintencountries,withSwedenandFinlandasitslargestmarkets.TheheadofficeislocatedinMalmö,Sweden.ReadmoreaboutBEGroupatwww.begroup.com.
BEGroupAB/Corp.Reg.No.556578-4724/InterimreportJanuary–June2012
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 2
developments in the second quarter of 2012 Group Net sales fell by 15 percent compared with theprecedingyear,amountingtoSEK1,357M(1,597).Thedecline isexplainedbyan11percentagepointdecreaseintonnage,negativepriceandmixchangesaccounting for 3 percentage points and a negativecurrency effect accounting for 1 percentage point.However,incomparisonwiththefirstquarterof2012averagesalespricesroseby3percent. ConsolidatedgrossprofitamountedtoSEK179M(233), with a gross margin of 13.2 percent (14.6).Operatingprofit fell toSEK13M (66).Adjusted forinventory gains of SEK 6 M (23), the underlyingoperating profit amounted to SEK 7 M (43). Theweakeningof results isattributable to thedecline intonnage,combinedwithlowersalesprices.ThisistoacertainextentoffsetbygrossmarginimprovementsintheSwedishandFinnishoperations.Theprofitab-ilityimprovementmeasuresadoptedtowardstheendof 2011 have been implemented according to plan.Results were affected positively by savings ofapproximatelySEK13M,meaningthatthefulleffectof the measures was reached early in the secondquarter. The savings were to some extent counter-actedbytheinvestmentsmadetoextendcapacityinFinlandandtheestablishmentofaproductioncenterinPoland.TheannualcostfromtheseinvestmentsisestimatedtoSEK12M. Theoperatingmarginamounted to1.0percent(4.2) and the underlying operating margin was 0.5percent(2.7).
sales by sales channel BE Group’s sales are conducted through threechannels: inventorysales,servicesalesanddirectsales. Of total net sales for the second quarter,shipments from Group facilities accounted for 82percent (82), which is broken down as follows:inventory sales 52 percentage points (53) andservicesales30percentagepoints(29).
sales trend by product area Netsalesofcommercialsteelfell16percenttoSEK989M(1,181).Shipped tonnagedecreasedby12percent.Overall,commercialsteelaccountedfor73percent (74) of BE Group’s net sales. The sales
net sales 2011 1,597
net sales 2012 1,357
Operating profit 2011 66
Inventorygains -23
Underlying operating profit 2011 43
Tonnage-,price-,mix-andgrossmargineffects -37
Changesinoverheads,etc. 1
Underlying operating profit 2012 7
Inventorygains 6
Operating profit 2012 13
neT sAles And eARnInGs TRend In THe second QUARTeR
(seK M)
-25
25
50
75
100
-50
0 0
50
100
150
200
Operating result (EBIT), SEK MQuarter and rolling 12 months
EBIT uEBIT
4 4 1 21 2 332
2010EBIT R12 uEBIT R12
2011 2012
0.0
0.5
1.0
1.5
2.0
0.0
2.0
4.0
6.0
8.0
Net sales, SEK BnQuarter and rolling 12 months
Quarter
44 1 21 2 32 3
2010R12
2011 2012
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 3
price for commercial steel declined by 5 percentcompared with the year-earlier period. However,comparedwiththefirstquarterof2012,theaveragesalespricerose3percent. BEGroup’ssalesofstainlesssteeldeclinedby15percentandamountedtoSEK230M(271).Thedecline is explained by sales prices that were 9percent lower and tonnage that decreased by 7percentcomparedwiththeprecedingyear.Comparedwiththefirstquarterof2012,salespricesroseby2percent.Theproportionofnetsalesrepresentedbystainlesssteelamountedto17percent(17).
sales by customer segment IIn the second quarter, OEM customers and theirpartners accounted for the largest share of sales,48 percent (52); project customers for 24 percent(23);pre-processingcompaniesfor18percent(16);andretailersfor10percent(9).
Business areas Business Area Sweden Improvedsaleswasnoted,comparedwiththefirstquarter, measured in terms of tonnage shippeddaily. Within the different customer segments,developmentamongcustomersintheconstructionsector has been somewhatmore stable than thatamongindustrialcustomers. Comparedwith thepreceding year, net salesdecreased11percenttoSEK666M(748).Shippedtonnagedeclinedby7percentandthesalespricefellby5percent.Comparedwiththefirstquarterof2012,thesalespricerose1percent. Theoperating resultweakened toSEK17M(32),withanoperatingmarginof2.5percent(4.3).
Thedeclineinprofitisprimarilyattributabletolowersales.Negative results fromBEGroupProduktion(formerRTS)andLecorStålteknikintheamountofSEK 4M (positive 1) affected the operating profitnegatively. Other parts of the business area’soperations continued to showapositiveoperatingmargintrendinrelationtothemostrecentquarters.Adjustedforinventorygains,theunderlyingoperatingprofitwasSEK12M(24).
Business Area Finland Initially, demand was at the same level as in thepreceding quarter but then weakened during thelatter part of the quarter. Compared with thepreceding year, net sales fell 18 percent andamountedtoSEK473M(574).Shippedtonnagefell12 percent and sales prices in EUR declined by 6percent.Incomparisonwiththefirstquarterof2012,salespricesroseby3percent. The operating profit decreased to SEK 18 M(44),with an operatingmargin of 3.7 percent (7.7).TheunderlyingoperatingprofitamountedtoSEK18M(29).Thedeclineintheresult isprimarilyattribut-abletothelowertonnage. TheextendedfacilityinLapuawasbroughtintooperationat thestartof thequarter.Thedegree towhich the added production service capacity isutilized will gradually increase over the year. ThetotalinvestmenthasamountedtoSEK16M. In accordance with his employment contract,BusinessAreaManagerMatti Tiira has decided toretire and is succeeded from the start of July byLasse Levola, former head of marketing for thebusinessarea.
0
2
4
6
8
10
12
0
2
4
6
8
10
12
4 4 1 21 23 322010
Quarter R12
Average sales prices, SEK/kgQuarter and rolling 12 months
2011 2012
0
25
50
75
100
125
150
0
100
200
300
400
500
600
Tonnage, thousands of tonnesQuarter and rolling 12 months
4 4 1 21 2 332
2010Quarter R12
2011 2012
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 4
Business Area CEE The operations in the Baltic States and Slovakiacontinuedtoshowstablegrowthduringthequarter.InPolandandtheCzechRepublic,saleswerelowerthan in the preceding year. Net sales for the busi-nessareaasawholedeclinedby22percenttoSEK239 M (307) as a consequence of a decline inshippedtonnageby17percentandlowersalesprices.Themarketsituationwascharacterizedbycontinuedsubstantialpricepressure,which impactedmarginsnegatively,whilesalespriceswere6percent lowerthan in the year-earlier period. Compared with thefirstquarterof2012,theaveragepricelevelroseby5percent,primarilythroughashiftintheproductmix. The operating loss amounted to SEK 12 M(profit 1) due to decreased sales and weakenedmarginsinthePolishandCzechoperations.Adjustedforinventorygains,theunderlyingoperatinglosswasSEK13M(profit1). The negative operating result for the quartercorrespondsentirelytotheresultsofthePolishandCzech operations. The restructuring of the Polishbusinessasastreamlinedproductionoperationwascompletedduringthequarter.Capacityutilizationatthenewproduction facility inTrebaczewwillgradu-allyincreaseovertheyear.ThetotalinvestmenthasamountedtoSEK14M. Following the end of the quarter, as a conse-quenceoftheweakperformanceinCzechRepublicforaprolongedtime,theBoardofDirectorsdecidedtoinitiateadivestmentprocessoftheCzechoperations.
Net financial items and tax ConsolidatednetfinancialitemsforthesecondquarteramountedtoanexpenseofSEK13M(9),ofwhichthenetinterestexpenseaccountedforSEK9M(9).Onanannualbasis,thenetinterestexpensecorre-sponds to 4.2 percent (4.4) of interest-bearing netdebt,whichaveragedSEK825M (817) during thequarter. The tax expense for the period amounted toSEK0M(13).
Cash flow CashflowafterinvestmentswasanegativeSEK34M(52).Theimprovementismainlyexplainedbyalowerlevelofinvestment.Cashflowfromoperatingactivitieswas negative in the amount of SEK 16 M (15).Comparedwiththeprecedingyear,thelowerearningsleveliscompensatedbyalowerbuild-upofworkingcapital from the start of the year. Cash flow frominvestingactivitiesamountedtoanegativeSEK18M
(37),whilecashflowfromfinancingactivitiesamountedto a negativeSEK14M (3), ofwhichdividends toshareholdersamountedtoSEK12M(-).
capital, investments and returnAttheendoftheperiod,consolidatedworkingcapitalamounted toSEK493M(569)andworkingcapitaltied-upwas9percent(8). Of the investments of SEK 18 M (37) madeduring thequarter, investments in intangibleassetsaccountedforSEK3M(7)andrelatetothedevelop-ment of the Group’s IT platform. Investments intangible assets amounted to SEK 15 M (30) andmainlyinvolvedproductionequipmentinFinland. Thereturnoncapitalemployedwas3percent(15).
Financial position and liquidity Followingtheendofthequarter,BEGroupsignedanewthree-yearcreditagreementwithSkandinaviskaEnskildaBankenandSvenskaHandelsbanken.ThetotalcreditfacilityamountstoSEK1,400M,includingguaranteefacilities,andmaturesinJuly2015,withapossibilityforatotalextensionoftwoyears. Attheendoftheperiod,consolidatedcashandequivalentswereSEK55M(92).At theendof thefirstsixmonthsoftheyear,theGrouphadunutilizedcreditfacilitiestotalingSEK368M. Consolidatedinterest-bearingnetdebtamountedtoSEK844M(851)attheendoftheperiod. At the end of the period, consolidated equitytotaledSEK808M (866),while thenetdebt/equityratiowas104percent(98).
Development in the first six months of 2012GroupComparedwiththeprecedingyear,consolidatednetsalesfell10percentinthefirstsixmonthsoftheyearandamountedtoSEK2,793M(3,116).Thedeclineisattributabletoadecreaseinshippedtonnageby6percentage points, negative price and mix effectsamounting to 3 percentage points and a negativecurrencyeffectof1percentagepoint. OperatingprofitdecreasedtoSEK48M(111).AdjustedforinventorylossesofSEK2M(gains25;also adjusted for non-recurring expenses), theunderlyingoperatingprofitwasSEK50M(90).Thedeclineinresultsisattributabletothelowersales. Theoperatingmarginweakenedto1.7percent(3.6) and the underlying operatingmargin was 1.8percent(2.9).
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 5
which the net interest expense accounted for SEK18 M (18). On an annual basis, the net interestexpensecorrespondsto4.5percent(4.3)ofinterest-bearingnetdebt,whichaveragedSEK808M(825)duringthefirstsixmonths. The tax expense for the first six monthsamountedtoSEK7M(26),equivalentto25percent(28)ofearningsbeforetax.
Cash flowDuring thefirsthalfof2012,cashflowafter invest-ments was negative in the amount of SEK 65 M(positive11).Cashflowfromoperatingactivitieswasnegative in theamount ofSEK31M (positive74).Theweakeningincashflowisattributabletothelowerresultandacertainincreaseinworkingcapital. CashflowfrominvestingactivitieswasanegativeSEK34M (63).Cashflow fromfinancingactivitieswas a negative SEK 25M (0), of which dividendspaidtoshareholdersaccountedforSEK12M(-).
organization, structure and employees Thenumberofemployeesamountedto896comparedwith924atthestartoftheyearand950atthecorres-ponding time last year. The average number ofemployeesduringtheperiodamountedto912(940). Duringthequarter,RogerJohanssonannouncedthathewouldberesigningasPresidentandCEOofBEGroup.However,hewillcontinueinthatcapacityuntil January 1, 2013. The process of recruiting asuccessorisinprogress.
contingent liabilities TheGroup’s contingent liabilities amounted to SEK112M,unchangedsinceDecember2011.
outlook Incomparisonwiththesecondquarter,thedemandisexpectedtobeonthesamelevelfortheremainderoftheyear,apartfromaseasonaldownturnduringthesummer.TheaveragesalespricesontheGroup’sproductsareassumed tobe lowerduring the thirdquarterincomparisonwiththesecondquarter.
Parent company SalesfortheParentCompany,BEGroupAB(publ),amounted toSEK29M (27)during theperiodandderivedfromintra-Groupservices.TheoperatinglossamountedtoSEK18M(21). Netfinancial itemsamountedtoSEK23M(7)duetoincreaseddividendsfromsubsidiariesofSEK35M (27).Profitbefore taxamounted toSEK5M
(seK M)
Net sales 2011 3,116
net sales 2012 2,793
Operating profit 2011 111
Inventorygains -25
Non-recurringitems 4
Underlying operating result 2011 90
Tonnage-,price-,mix-andgrossmargineffects -45
Changesinoverheads,etc. 5
Underlying operating result 2012 50
Inventorylosses -2
Operating profit 2012 48
neT sAles And eARnInGs TRend In THe FIRsT sIX MonTHs oF THe yeAR
Business areasBusiness Area SwedenBusinessAreaSwedenreportedsalesofSEK1,364M(1,488), a decrease of 8 percent that was mainlyattributabletoa5percentdeclineinshippedtonnage.OperatingprofitamountedtoSEK37M(49)andtheunderlying operating result to SEK 34M (45).Theweakenedresultisprimarilyattributabletothelowersales.
Business Area FinlandBusinessAreaFinland’ssalesdecreasedby13percenttoSEK972M(1,120)asaconsequenceofadeclinein tonnageof9percent.OperatingprofitweakenedtoSEK43M(77)andtheunderlyingoperatingprofitwasSEK51M(62).TheweakenedresultisprimarilyattributabletothelowersalescombinedwithinventorylossesofSEK8M(gains15).
Business Area CEESales for the CEE business area declined by 11percent to SEK 510 M (571). Shipped tonnagedecreasedby4percent.OperatinglossamountedtoSEK 16 M (profit 4) and the underlying operatinglosstoSEK19M(profit2).Theweakenedresultisattributable to the lowersalescombinedwith lowermargins.
Net financial items and taxTheGroup’snetfinancialitemsforthefirsthalfoftheyearamountedtoanexpenseofSEK22M(18),of
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 6
(loss14)andtheprofitaftertaxamountedtoSEK13M(loss3).TheParentCompanyinvestedSEK9M(9)inintangibleassetsduringtheperiod.Attheendoftheperiod,theParentCompany’scashandequi-valentswereSEK20M(35). Attheendofthequarter,theParentCompanyheld590,727treasuryshares.
Significant events after the end of the period Following the end of the reporting period, a newthree-yearcreditagreementwassigned.Inadditiona decision has beenmade to initiate a divestmentprocessoftheCzechoperations.
Related-party transactions No transactions tookplacebetweenBEGroupandrelated parties that had a material impact on thecompany’sfinancialpositionandresults.
2012 Annual General Meeting AtBEGroupAB’sAnnualGeneralMeeting(AGM)ofApril25,2012,AndersUllbergwasre-electedChair-man andRoger Bergqvist, Cecilia Edström,MaritaJaatinen and LarsOlof Nilssonwere re-elected asboard members. In addition, Petter Stillström waselected as a new board member. Board memberLarsSpongberghaddeclinedre-election. ThedividendofSEK0.25proposedbytheBoardwasapprovedbytheAGM. With the purpose of securing cover for socialsecurity contributions attributable toShareSavingsScheme2010andShareSavingsScheme2011,theAGMalsoresolved, inaccordancewiththeBoard’sproposal,toauthorizetheBoardtodecideononeormoreoccasionspriortothe2013AGMonthetransferof at most 80,000 treasury shares via the stockexchange. In accordance with the Board’s proposal, theAGMalsoresolvedtoauthorizetheBoardtodecideononeormoreoccasionspriortothe2013AGMonthe transfer of treasury shareswith the purpose ofenabling thefinancingofsmallercorporateacquisi-tions.Suchtransfermaydivergefromshareholders’preferentialrightstotheextentthisdoesnotexceedthenumberoftreasurysharesheldbyBEGroupatthe time of the Board’s decision and that are notneeded as matching or performance shares or tocover social security contributions in accordancewithcurrentsharesavingsschemes.Transfersmaybeappliedaspaymentofallorpartofthepurchase
consideration in the acquisition of companies oroperations or parts of companies or operations, inwhich case the payment shall correspond to theassessedmarketvalueoftheshares.Alongsidesharetransfers,paymentmaybeeffectuatedthroughcapitalcontributedinkindorbysettingoffclaimsagainstBEGroup. Finally, the Meeting resolved, in accordancewiththeBoard’sproposal,toauthorizetheBoardtodecide,ononeormoreoccasionsprior to thenextAGM,ontheissueofnewsharesintheCompanyforsettlement in cash, offset, or in kind, and with orwithout preferential rights for shareholders. Theauthorizationislimitedtoatmostfivemillionshares,corresponding to10percentof thesharecapital intheCompany. Additional informationon theBoardmembers,theAGMisavailablefromthecompany’swebsite.
Significant risks and uncertainties BE Group’s profits and position are affected by alarge number of factors. The principal risks andfactorsofuncertaintycanbedividedintosectorandmarket risks, strategic and operational risks, andfinancial risks.Fluctuations ineconomic trendsandsteelprices,togetherwithchangesamongsuppliers,customersandpersonnelrepresentriskfactorsthataffect the Group’s financial performance and cashflow.Thefinancialrisksconsistofcurrency,interest-rate,refinancingandcreditrisks. Thefinancial riskexposure isexplained in the2011AnnualReport.Sincethen,therefinancingriskhasdecreasedsubstantiallyfollowingthesigningofthenewcreditagreement.Furthermore,nonewsignificantrisksoruncertaintieshavearisensincethatdate.
Accounting principles TheinterimreportispreparedinaccordancewithIAS34InterimFinancialReportingandtheSwedishAnnualAccountsAct.TheParentCompany’s interim reportis prepared in compliancewith theSwedishAnnualAccountsAct and the Swedish Financial ReportingBoard’srecommendationRFR2AccountingforLegalEntities. Refertothe2011AnnualReportfordetailsoftheGroup’saccountingprinciplesanddefinitionsofcertainterms.Theprinciplesappliedareunchangedinrela-tion to thoseapplied in theAnnualReport. In otherregards, the new standards and interpretations thathaveentered forceeffective fromthe2012financialyearhavehadnoeffectonthefinancialreporting.
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 7
Malmö, July 18, 2012BE Group AB (publ)
Anders Ullberg Roger Bergqvist cecilia edström Marita JaatinenChairman of the Board Director Director Director
lars olof nilsson Petter stillström Thomas Berg Kerry JohanssonDirector Director Employee Representative Employee Representative
Roger JohanssonPresident and CEO
This report has 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
ThisinterimreportpresentsinformationthatBEGroupAB(publ)isrequiredtodisclosepursuanttotheSwedishSecuritiesExchangeandClearingOperationsActand/ortheSwedishFinancialInstrumentsTradingAct.TheinformationwasreleasedforpublicationonJuly18,2012at7:45a.m.CET.
Future reporting datesDuring2012,BEGroupAB(publ)intendstopublishfinancialinformationonthefollowingdates:
• The InterimReport for January-September 2012willbepublishedonOctober24,2012.
• TheYear-endReportfor2012willbepublishedonFebruary7,2013.
FinancialinformationisavailableinSwedishandEnglishfromBEGroup’swebsiteandcanbeorderedbycalling+46(0)40384200ore-mailing:[email protected]
The Board of Directors and the President provide their assurance that this interim report provides an accurate overview of the operations, position and earnings of the Parent Company and the Group, and that it also describes the principal risks and sources of uncertainty faced by the Parent Company and its subsidiaries.
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 8
Auditor's Report on Review of Interim Financial Information
TotheBoardofDirectorsofBEGroupAB(publ)Corp.Reg.No.556578-4724
IntroductionWehavereviewedtheinterimfinancialinformation(InterimReport)ofBEGroupAB(publ)asatJune30,2012,and thesix-monthperiodendingon thatdate.TheBoardofDirectorsand theCEOare responsible for thepreparationandpresentationofthisInterimReportinaccordancewithIAS34andtheAnnualAccountsAct.OurresponsibilityistoexpressaconclusiononthisInterimReportbasedonourreview.
Focus and scope of the reviewWeconductedourreviewinaccordancewith theStandardonReviewEngagements(SÖG)2410ReviewofInterimFinancialInformationPerformedbytheIndependentAuditoroftheEntity.Areviewconsistsofmakinginquiries,primarilyofpersonsresponsibleforfinancialandaccountingmatters,andapplyinganalyticalandotherreviewprocedures.Areviewhasanother focusand issubstantially less inscopethananauditconducted inaccordancewithISAandothergenerallyacceptedauditingpractices.Theproceduresperformedinareviewdonotenableustoobtainalevelofassurancethatwouldmakeusawareofallsignificantmattersthatmightbeidentifiedinanaudit.Therefore,theconclusionexpressedbasedonareviewdoesnotgivethesamelevelofassuranceasaconclusionexpressedbasedonanaudit.
conclusionBasedonourreview,nothinghascometoourattentionthatcausesustobelievethattheaccompanyingInterimReportisnotprepared,inallmaterialrespects,fortheGroupinaccordancewithIAS34andtheAnnualAccountsActandfortheParentCompanyinaccordancewiththeAnnualAccountsAct.
other mattersTheInterimReportofBEGroupABasofJune30,2011andthesix-monthperiodthenendedhasnotbeenreviewed and the corresponding figures in the report as of June 30, 2012 and the six-month period thenendedhavethereforenotbeenreviewed.
Malmö,July18,2012
KPMGABEvaMelzigHenrikssonAuthorizedPublicAccountant
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 9
condensed consolidated income statement2012 2011 2012 2011 2011 Rolling
(seK M) note Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
Netsales 1,357 1,597 2,793 3,116 5,941 5,618
Costofgoodssold -1,178 -1,364 -2,417 -2,668 -5,173 -4,922
Gross profit 179 233 376 448 768 696
Sellingexpenses -126 -130 -249 -256 -504 -497
Administrativeexpenses -39 -43 -81 -85 -160 -156
Otheroperatingincomeandexpenses 1 -2 1 0 -2 -14 -12
Participationinjointventure 1 5 2 6 6 2
Operating profit/loss 13 66 48 111 96 33
Financialitems -13 -9 -22 -18 -48 -52
Profit/loss before tax 0 57 26 93 48 -19
Tax 0 -13 -7 -26 -28 -9
Profit/loss for the period 0 44 19 67 20 -28
Amortizationofintangibleassets 5 6 10 10 20 20
Depreciationoftangibleassets 11 11 22 22 44 44
Earningspershare 0.01 0.89 0.39 1.35 0.41 -0,55
Earningspershareafterdilution 0.01 0.89 0.39 1.35 0.41 -0.55
consolidated statement of comprehensive income2012 2011 2012 2011 2011 Rolling
(seK M) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
Profit/loss for the period 0 44 19 67 20 -28
other comprehensive income
Translationdifferences -9 19 -11 17 -4 -32
Hedgingofnetinvestmentsinforeignsubsidiaries 7 -12 8 -12 3 23
Taxattributabletoitemsinothercomprehensiveincome -2 3 -2 3 -1 -6
Total other comprehensive income -4 10 -5 8 -2 -15
comprehensive income for the period -4 54 14 75 18 -43
note 1 non-recurring items
2012 2011 2012 2011 2011 Rolling
(seK M) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
Reversalofprovisionforguaranteetopropertyowner - - - - 15 15
Costsforprofitabilityimprovementmeasures - - - - -26 -26
ClosureoftheDanishoperations - - - -4 -4 -
Total non-recurring items - - - -4 -15 -11
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 10
condensed consolidated balance sheet2012 2011 2011
(seK M) 30 Jun 30 Jun 31 dec
Goodwill 690 702 693
Otherintangibleassets 86 83 87
Tangibleassets 300 300 300
Investmentinjointventure 127 124 124
Financialassets 2 2 2
Deferredtaxassets 22 33 19
Total non-current assets 1,227 1,244 1,225
Inventories 675 831 605
Accountsreceivables 602 716 529
Otherreceivables 83 91 100
Cashandequivalents 55 92 146
Assetsheldforsale 2 2 2
Total current assets 1,417 1,732 1,382
Total assets 2,644 2,976 2,607
equity 808 866 805
Non-currentinterest-bearingliabilities 844 867 852
Provisions 0 16 1
Deferredtaxliability 58 69 58
Total non-current liabilities 902 952 911
Currentinterest-bearingliabilities 58 78 69
Accountspayables 662 830 637
Othercurrentliabilities 205 239 167
Othercurrentprovisions 9 11 18
Total current liabilities 934 1,158 891
Total equity and liabilities 2,644 2,976 2,607
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 11
Condensed consolidated cash-flow statement2012 2011 2012 2011 2011 Rolling
(seK M) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
Profit/lossbeforetax 0 57 26 93 48 -19
Adjustmentfornon-cashitems 11 15 24 31 57 50
Incometaxpaid 12 6 5 -1 -21 -15
Changeinworkingcapital -39 -93 -86 -49 100 63
Cash flow from operating activities -16 -15 -31 74 184 79
Investmentsinintangibleassets -3 -7 -9 -10 -25 -24
Investmentsintangibleassets -15 -30 -25 -46 -78 -57
Acquisitionsofsubsidiaries - 0 - -7 -7 0
Othercashflowfrominvestingactivities 0 0 0 0 2 2
Cash flow after investments -34 -52 -65 11 76 0
Cashflowfromfinancingactivities -14 -3 -25 0 -7 -32
Cash flow for the period -48 -55 -90 11 69 -32
Exchange-ratedifferenceincashandequivalents -1 1 -1 1 -3 -5
change in cash and equivalents -49 -54 -91 12 66 -37
condensed statement of changes in equity2012 2011 2012 2011 2011 Rolling
(seK M) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
equity at beginning of period 824 811 805 787 787 866
Effectofchangedaccountingprinciples - - - - - -
Adjusted equity at beginning of period 824 811 805 787 787 866
Comprehensiveincomefortheperiod -4 54 14 75 18 -43
Dividend -12 - -12 - - -12
Acquisition/salesoftreasuryshares - - 0 2 -3 -5
ShareSavingsScheme 0 1 1 2 3 2
equity at end of period 808 866 808 866 805 808
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 12
Operating profit/loss (EBIT) per segment
2012 2011 2012 2011 2011 Rolling
(seK M) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
Sweden 17 32 37 49 83 71
Finland 18 44 43 77 87 53
CEE -12 1 -16 4 -35 -55
ParentCompanyandconsolidateditems -10 -11 -16 -19 -39 -36
Group 13 66 48 111 96 33
operating margin per segment
2012 2011 2012 2011 2011 Rolling
Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
Sweden 2.5% 4.3% 2.7% 3.3% 2.9% 2.6%
Finland 3.7% 7.7% 4.4% 6.9% 4.2% 2.8%
CEE -5.0% 0.4% -3.1% 0.7% -3.0% -5.0%
Group 1.0% 4.2% 1.7% 3.6% 1.6% 0.6%
segment reportingnet sales per segment
2012 2011 2012 2011 2011 Rolling
(seK M) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
Sweden 666 748 1,364 1,488 2,843 2,719
- External 658 740 1,349 1,469 2,806 2,686
- Internal 8 8 15 19 37 33
Finland 473 574 972 1,120 2,055 1,907
- External 466 559 955 1,095 2,007 1,867
- Internal 7 15 17 25 48 40
cee 239 307 510 571 1,167 1,106
- External 229 298 481 552 1,125 1,054
- Internal 10 9 29 19 42 52
Parent company and consolidated items -21 -32 -53 -63 -124 -114
Group 1,357 1,597 2,793 3,116 5,941 5,618
shipped tonnage per segment (thousands of tonnes)
2012 2011 2012 2011 2011 Rolling
Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
Sweden 54 58 111 117 224 218
Finland 43 48 89 97 178 170
CEE 33 40 72 75 158 155
ParentCompanyandconsolidateditems -4 -3 -8 -6 -14 -16
Group 126 143 264 283 546 527
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 13
segment reportingUnderlying operating profit/loss (uEBIT) per segment1)
2012 2011 2012 2011 2011 Rolling
(seK M) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
Sweden 12 24 34 45 91 80
Finland 18 29 51 62 93 82
CEE -13 1 -19 2 -17 -38
ParentCompanyandconsolidateditems -10 -11 -16 -19 -36 -33
Group 7 43 50 90 131 91
1)Operatingprofit/loss(EBIT)adjustedforinventorygainsandlossesandnon-recurringitems.Inventorygainsandlossesarethedifferencesbetweenthecostofgoodssoldatacquisitionvalueandthecostofgoodssoldatreplacementcost.Thecompany’sinternalmodelisusedtocalculateinventorygainsandlossesandhasnotbeensubjectforreviewbythecompany´sauditor.
Underlying operating margin per segment
2012 2011 2012 2011 2011 Rolling
Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
Sweden 1.8% 3.2% 2.5% 3.0% 3.2% 2.9%
Finland 3.8% 5.0% 5.3% 5.5% 4.5% 4.3%
CEE -5.6% 0.4% -3.8% 0.3% -1.5% -3.5%
Group 0.5% 2.7% 1.8% 2.9% 2.2% 1.6%
depreciation per segment
2012 2011 2012 2011 2011 Rolling
(seK M) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
Sweden 6 5 11 9 18 20
Finland 5 5 9 10 21 20
CEE 2 3 5 6 11 10
ParentCompanyandconsolidateditems 3 4 7 7 14 14
Group 16 17 32 32 64 64
Investments in tangible and intangible assets per segment
2012 2011 2012 2011 2011 Rolling
(seK M) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
Sweden 4 21 6 37 52 21
Finland 8 6 14 14 24 24
CEE 2 3 6 4 15 17
ParentCompanyandconsolidateditems 4 7 9 10 21 20
Group 18 37 35 65 112 82
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 14
Key data2012 2011 2012 2011 2011 Rolling
(SEK M unless otherwise stated) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
earnings measurements
Operatingprofit/loss(EBIT) 13 66 48 111 96 33
Margin measurements
Grossmargin 13.2% 14.6% 13.5% 14.4% 12.9% 12.4%
Operatingmargin 1.0% 4.2% 1.7% 3.6% 1.6% 0.6%
capital structure
Netdebt 844 851 844 851 773 844
Netdebt/equityratio 104.5% 98.2% 104.5% 98.2% 95.9% 104.5%
Equity/assetsratio 30.6% 29.1% 30.6% 29.1% 30.9% 30.6%
Workingcapital(average) 483 524 466 522 525 519
Capitalemployed(average) 1,723 1,777 1,724 1,755 1,759 1,758
Operatingcapital(excludingintangibleassets)(average) 860 873 839 867 879 889
Workingcapitaltied-up 8.9% 8.2% 8.3% 8.4% 8.8% 9.2%
Return
Returnoncapitalemployed(%) 3.2% 15.3% 5.8% 12.9% 5.7% 2.1%
Returnonoperatingcapital(excludingintangibleassets)(%) 8.3% 33.1% 13.8% 27.9% 13.2% 6.0%
Returnonequity(%) 0.2% 21.0% 4.8% 16.3% 2.5% -3.3%
Per share data
Earningspershare(SEK) 0.01 0.89 0.39 1.35 0.41 -0.55
Earningspershareafterdilution(SEK) 0.01 0.89 0.39 1.35 0.41 -0.55
Equitypershare(SEK) 16.36 17.47 16.36 17.47 16.31 16.36
Cashflowfromoperatingactivitiespershare(SEK) -0.33 -0.31 -0.63 1.49 3.72 1.60
Sharesoutstandingatperiodend(thousands) 49,409 49,590 49,409 49,590 49,376 49,409
Averagenumberofshares(thousands) 49,409 49,590 49,399 49,567 49,546 49,516
Dilutedaveragenumberofshares(thousands) 49,414 49,633 49,421 49,618 49,564 49,541
other
Averagenumberofemployees 907 955 912 940 943 932
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 15
supplementary disclosures2012 2011 2012 2011 2011 Rolling
(SEK M unless otherwise stated) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
sales by main products
Longsteel 361 460 739 898 1,685 1,526
Flatsteel 476 581 1,008 1,133 2,123 1,998
Reinforcementsteel 152 140 296 257 559 598
Total commercial steel 989 1,181 2,043 2,288 4,367 4,122
Stainlesssteel 230 271 476 538 1009 947
Aluminium 70 87 141 172 329 298
Other 68 58 133 118 236 251
Total sales 1,357 1,597 2,793 3,116 5,941 5,618
Growth
Salesgrowth -15% 14% -10% 26% 16% -3%
–organictonnagegrowth -11% 7% -6% 13% 12% 1%
–priceandmixchanges -3% 8% -3% 14% 5% -3%
–currencyeffects -1% -3% -1% -4% -3% -1%
–acquisitions - 2% - 3% 2% -
Adjusted earnings measurements
Underlyingoperatingprofit/loss(uEBIT) 7 43 50 90 131 91
UnderlyingEBITA 12 49 60 100 151 111
Adjusted margin measurements
Underlyinggrossmargin 12.8% 13.4% 13.5% 13.6% 13.3% 13.2%
Underlyingoperatingmargin 0.5% 2.7% 1.8% 2.9% 2.2% 1.6%
UnderlyingEBITAmargin 0.9% 3.1% 2.1% 3.2% 2.5% 2.0%
Adjusted return
Underlyingreturnonoperatingcapital(excludingintangibleassets) 5.2% 22.7% 14.1% 22.9% 17.1% 12.4%
Adjusted per share data
Underlyingearningspershare(SEK) -0.08 0.55 0.42 1.05 1.02 0.38
Underlyingearningspershareafterdilution(SEK) -0.08 0.55 0.42 1.05 1.02 0.38
Adjusted capital structure
Netdebt/underlyingEBITDA(multiple) - - - - 4.0 5.5
other
Inventorygainsandlosses 6 23 -2 25 -20 -47
Shippedtonnage(thousandsoftonnes) 126 143 264 283 546 527
Averagesalesprices(SEK/kg) 10.75 11.20 10.57 11.03 10.89 10.65
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 16
condensed parent company income statement2012 2011 2012 2011 2011 Rolling
(seK M) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
Netsales 14 13 29 27 55 57
Administrativeexpenses -23 -24 -47 -48 -92 -91
Otheroperatingincomeandexpenses 0 0 0 0 -1 -1
Operating profit/loss -9 -11 -18 -21 -38 -35
Financialitems -7 -13 23 7 13 29
Profit/loss before tax -16 -24 5 -14 -25 -6
Tax 4 6 8 11 0 -3
Profit/loss for the period -12 -18 13 -3 -25 -9
statement of comprehensive income – parent company2012 2011 2012 2011 2011 Rolling
(seK M) Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year 12 months
Profit/lossfortheperiod -12 -18 13 -3 -25 -9
Othercomprehensiveincome - - - - - -
comprehensive income for the period -12 -18 13 -3 -25 -9
condensed parent company balance sheet2012 2011 2011
(seK M) 30 Jun 30 Jun 31 dec
Intangibleassets 72 66 71
Tangibleassets 0 0 0
Financialassets 1,354 1,394 1,354
Interest-bearingreceivables,Groupcompanies 53 54 53
Deferredtaxassets - 1 -
Total non-current assets 1,479 1,515 1,478
Currentinterest-bearingreceivables,Groupcompanies 268 291 225
Receivables,Groupcompanies 79 36 98
Otheroperatingreceivables 22 32 21
Cashandequivalents 20 35 73
Total current assets 389 394 417
Total assets 1,868 1,909 1,895
equity 827 851 826
Non-currentinterest-bearingliabilities 829 851 835
Provisions 1 1 1
Total non-current liabilities 830 852 836
Currentinterest-bearingliabilities,Groupcompanies 174 102 193
Accountspayables 5 7 6
LiabilitiestoGroupcompanies 7 56 19
Othercurrentliabilities 25 41 15
Total current liabilities 211 206 233
Total equity and liabilities 1,868 1,909 1,895
Pledged assets 1,305 1,313 1,309
contingent liabilities 36 71 80
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 17
Key data – multi-quarter summary
2012 2012 2011 2011 2011 2011 2010 2010 2010
(SEK M unless otherwise stated) Apr-Jun Jan-Mar oct-dec Jul-sep Apr-Jun Jan-Mar oct-dec Jul-sep Apr-Jun
Netsales 1,357 1,436 1,405 1,420 1,597 1,519 1,383 1,273 1,399
earnings measurements
Operatingprofit/loss(EBIT) 13 35 -19 4 66 45 -8 48 86
Underlyingoperatingprofit/loss(uEBIT) 7 43 18 23 43 47 7 32 46
UnderlyingEBITA 12 48 23 28 49 51 11 37 47
Margin measurements
Operatingmargin 1.0% 2.5% -1.4% 0.3% 4.2% 2.9% -0.6% 3.8% 6.2%
Underlyingoperatingmargin 0.5% 3.0% 1.3% 1.6% 2.7% 3.1% 0.5% 2.5% 3.3%
UnderlyingEBITAmargin 0.9% 3.3% 1.6% 1.9% 3.1% 3.3% 0.8% 2.9% 3.4%
capital structure
Netdebt 844 806 773 924 851 783 842 876 832
Netdebt/equityratio 104.5% 97.8% 95.9% 107.7% 98.2% 96.5% 107.0% 107.9% 104.4%
Equity/assetsratio 30.6% 29.4% 30.9% 29.2% 29.1% 26.8% 29.9% 29.7% 29.2%
Capitalemployed(average) 1,723 1,731 1,766 1,809 1,777 1,727 1,728 1,741 1,724
Operatingcapital(excludingintangibleassets)(average) 860 821 897 964 873 836 916 947 888
Workingcapitaltied-up 8.9% 7.9% 9.4% 10.5% 8.2% 8.2% 10.4% 11.7% 9.2%
Return
Returnoncapitalemployed 3.2% 8.3% -4.1% 1.1% 15.3% 10.5% -1.7% 11.2% 20.1%
Returnonoperatingcapital(excludingintangibleassets) 8.3% 19.5% -6.4% 3.7% 33.1% 23.5% -1.7% 22.4% 39.3%
Underlyingreturnonoperatingcapital(excludingintangibleassets) 5.2% 23.3% 10.5% 11.5% 22.7% 24.2% 5.0% 15.8% 21.3%
Returnonequity 0.2% 9.2% -17.7% -4.7% 21.0% 11.5% -9.1% 12.9% 23.4%
Per share data
Earningspershare(SEK) 0.01 0.38 -0.74 -0.20 0.89 0.46 -0.37 0.52 0.92
Underlyingearningspershare(SEK) -0.08 0.50 -0.12 0.09 0.55 0.50 -0.13 0.29 0.31
Equitypershare(SEK) 16.36 16.68 16.31 17.30 17.47 16.36 15.90 16.39 16.02
Cashflowfromoperatingactivitiespershare(SEK) -0.33 -0.30 3.27 -1.04 -0.31 1.80 1.18 -0.89 -0.39
other
Averagenumberofemployees 907 921 949 962 955 935 889 882 887
Inventorygainsandlosses 6 -8 -26 -19 23 2 -15 16 40
Shippedtonnage(thousandsoftonnes) 126 138 132 131 143 140 126 116 133
Averagesalesprices(SEK/kg) 10.75 10.41 10.66 10.81 11.20 10.86 10.98 11.00 10.49
BE Group AB / Corp. Reg. No. 556578-4724 / Interim report January–June 2012 18
Definitions of key data sUPPleMenTARy dIsclosURes
Growth
Salesgrowth Changeinnetsalesfromtheprecedingperiodinpercent.
Adjusted earnings measurements
Underlyingoperatingprofit/loss(uEBIT) Operatingprofit/loss(EBIT)beforenon-recurringitemsadjustedforinventorygainsandlosses(deductionsforgainsandadditionsforlosses).
UnderlyingEBITA EBITAbeforenon-recurringitemsadjustedforinventorygainsandlosses(deductionsforgainsandadditionsforlosses).
Adjusted margin measurements
Underlyinggrossmargin Underlyinggrossprofitasapercentageofnetsales.Theunderlyinggrossprofitisthereportedgrossprofitadjustedforinventorygainsandlosses(deductionsforgainsandadditionsforlosses).
Underlyingoperatingmargin Underlyingoperatingprofit/loss(uEBIT)asapercentageofnetsales.
UnderlyingEBITAmargin UnderlyingEBITAasapercentageofnetsales.
Adjusted return
Underlyingreturnonoperatingcapital(excludingintangibleassets)
AnnualizedunderlyingEBITAasapercentageofaverageoperatingcapitalexcludinggoodwillandotherintangibleassets.
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 2011 annual report for other definitions of key data.