BE Group Q1 2016 – strong cash flow


· Net sales fell by 11 percent, amounting to SEK 978 M (1,104).
  · The underlying operating result amounted to SEK 9 M (12).
  · Operating result, affected by non-recurring costs of SEK -45 M (0), amounted
to SEK -45 M (10).
  · The result after tax was SEK -53 M (0).
  · Cash flow from operating activities was SEK 51 M (-54).
  · Earnings per average number of shares amounted to SEK -0.20 (0.00).
  · Decision to close the unprofitable parts of the operations in the Czech
Republic and Slovakia.

 CEOs Message
Comments on the period
Development in the first quarter was largely characterized by the sharp decline
in steel prices that occurred at the end of 2015. The current price level is
significantly lower than just a year ago. Generally lower prices, combined with
sales in the Czech and Slovakian markets having declined by about 40 percent,
mean that the Group’s overall sales have fallen by 11 percent compared with the
same quarter last year.

The decline in sales and continued losses, combined with the weak market
outlook, has resulted in a decision to restructure the Group’s operations in the
Czech Republic and Slovakia. This entails that the operations in Slovakia will
be closed, as will flat carbon steel and aluminium in the Czech Republic. The
profitable part of our operations in the Czech Republic, which successfully
supplies the market with cut round bars, is not affected by the change.

Shipped tonnage in the main markets Sweden and Finland are largely on the same
level as last year, despite the fact that the quarter is seasonally affected by
the Easter holiday, which unlike last year, occured during the first quarter.
With improved underlaying margins and lower overheads we show a result in line
with last year in these markets, despite lower prices.

In total, the quarter’s underlying result decreased to SEK 9 M, compared with
SEK 12 M last year. The decline is mainly due to a lower result in the Czech
Republic and Slovakia. The sharp fall in prices in late 2015 led to inventory
losses, totaling SEK -9 M in the first quarter of this year. Combined with non
-recurring costs of SEK -45 M, mainly related to restructuring in the Czech
Republic and Slovakia, this means that we also reported a lower operating
result. The Group shows a strong cash flow from operating activities during the
first quarter, which means that the cash flow for the last twelve months is
positive.

Structure and organizational change
To improve conditions for a stronger and more profitable BE Group, we have, in
addition to the cutbacks in the Czech Republic and Slovakia, also performed an
organizational change in order to decentralizing responsibility for results on
the basis of two new business units, Distribution and Production, on our main
markets Sweden and Finland respectively. In concrete terms, this means that the
business areas will be divided into business units focused on distribution and
production respectively. The full measures were announced in April and are
presented in the section Significant events after the end of the period, in this
report.

With the changes in the Czech Republic and Slovakia and an organization that
clearly reflects and supports our business models, we will improve the
conditions for a stronger market position.

Outlook
Looking ahead, the price situation appears to have stabilized following the
sharp decline at the end of last year. Our assessment is that prices have
reached bottom and that the trend going forward will be positive. At the same
time, the view is that market demand will remain at the current level.

Anders Martinsson, President and CEO

 For further information, please contact:
Anders Martinsson, President and CEO
tel.: +46 (0)706-21 02 22, e-mail: anders.martinsson@begroup.com

Andreas Karlsson, CFO
tel.: +46 (0)709-48 22 33 e-mail: andreas.karlsson@begroup.com

 Today, at 9:00 a.m., Anders Martinsson and Andreas Karlsson will comment on
developments in a press and analyst conference. 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. Please be certain to copy the full link.

http://edge.media-server.com/m/p/zv23w649

The following telephone numbers can be used to participate in the presentation:
Sweden: +46 8 519 993 64
UK: +44 20 336 453 73
US: +1 855 753 22 37

BE Group, 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 engineering sectors. In 2015, the Group reported sales of SEK
4.2 billion. BE Group has about 770 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.

Attachments

04211463.pdf BE Group PR 160422_ENG.pdf