BE GROUP QUARTER 3 REPORT 2007

Transcription

1 BE GROUP QUARTER 3 REPORT 2007 Håkan Jeppsson, CEO Torbjörn Clementz, CFO Page 1

2 Highlights Q Net sales increased 8 % Substantial decrease in operational profit - Revaluation stainless steel inventories - Stock losses Underlying profit on same very high level Lower growth rate than beginning of the year Heavy volatility in nickel prices resulted in substantial decrease in base prices for stainless steel Service volumes remains on highest ever, 34 % of total Centralisation Product Supply Page 2

3 Financial Summary Q (MSEK) Net Sales 1,709 1,581 +8% Operating profit (EBIT) % Profit after tax % Earnings/share % Page 3

4 Highlights Q1-Q Best first nine months ever Strong growth in all business areas Very high alloy surcharges for stainless Improved underlying margins Stronger competition for acquisitions Page 4

5 Financial Summary Q1-Q (MSEK) Net Sales 5,848 4, % Operating profit (EBIT) % Profit after tax % Earnings/share % Paid dividend 3.50 Page 5

6 Financial targets September 2007 TARGET ACTUAL 12m Underlying growth >5% 7.2% Underlying EBITA-margin >6% 7.6% Underlying ROOC >40% 70.2% Net debt/equity <150% 108.9% Net DEBT/underlying EBITDA <3 times 1.3 times Page 6

7 BE Group - quarterly development ,621 1,581 1,938 2,065 2,073 1,709 Q Q Q Q Q Q Net Sales (msek) EBITA msek Underlying EBITA msek Page 7

8 BE Group - quarterly development 8.0% 8.7% 10.4% 8.4% 8.2% 6.6% 7.9% 7.6% 8.1% 7.6% 7.1% 5.0% 1,621 1,581 1,938 2,065 2,073 1,709 Q Q Q Q Q Q Net Sales (msek) EBITA % Underlying EBITA % Page 8

9 Underlying ROOC on a high level 72.5% 68.5% 54.5% 48.9% 27.3% Q YTD Sep 2007 Page 9

10 Working capital affected by stainless turbulence Average Net Working Capital (MSEK) 720 Average Net Working Capital / Sales 13.3% % 9.9% 9.2% 8.2% R12 Q3/ R12 Q3/07 Page 10

11 Page 11 EFFECTS FROM STAINLESS STEEL

12 Substantial decrease of prices for stainless steel Avg Q1: 88 Avg Q2: 97 Avg Q3: Avg Q4: ~ % 54% 57% 61% 65% 70% 73% 73% 69% 65% Estimates 46% 46% 43% 39% 35% 30% 27% 27% 31% 35% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Base price Alloy Surcharge Page 12

13 Alloy surcharge a substantial part of stainless steel sales Q % Q Q % 6.7% ,412 1,474 1,397 Q % Q Q % 10.3% ,760 1,707 1,439 Alloy Surcharge without Contribution Alloy Surcharge with Contribution Net Sales excluding Surcharge Page 13

14 Page 14 DEVELOPMENT FOR BUSINESS AREAS

15 Business area Sweden - highlights Strong sales growth in a strong market Lower growth rate than in Q1-Q2 Underlying profits on highest level ever Successful restructuring concluded leading to lower cost Margin pressure due to alloy surcharges Key: Production, sales and warehouse facilities Pure sales facilities Page 15

16 Business area Sweden quarterly development 8.5% 9.1% 9.1% 8.4% 7.7% 6.7% 7.3% 8.3% 8.2% 8.3% 7.9% 6.1% ,075 1,124 1, Q Q Q Q Q Q Net Sales (msek) EBITA % Underlying EBITA % Page 16

17 Business area Finland - highlights Strong growth in a very strong market Strong demand for production services Lower profit margins than in 2006 Improved production efficiency Investment in Lapua service workshop ongoing Key: Production, sales and warehouse facilities Pure sales facilities Page 17

18 Business area Finland quarterly development 11.3% 8.7% 8.2% 12.4% 10.4% 9.9% 9.4% 9.1% 8.8% 8.4% 8.3% 5.8% Q Q Q Q Q Q Net Sales (msek) EBITA % Underlying EBITA % Page 18

19 Business area New Markets - highlights Market demand and growth still strong Contribution margins not satisfying Critical mass needed for improved profitability Czech Republic and Russia need to reach stable profits Increase in service sales from low level Denmark Czech Rep. Poland Slovakia Estonia Latvia Lithuania Russia Consolidation expected to speed up Key: Production services, sales and warehouse facilities Pure sales facilities Page 19

20 Business area New Markets quarterly development 8.3% 14.3% % 1.7% 1.0% 1.2% -1.0% 2.2% -1.3% 1.3% 1.1% -0.2% Q Q Q Q Q Q Net Sales (msek) EBITA % Underlying EBITA % Page 20

21 Market outlook Continued strong global steel markets with high production costs Healthy general demand in Sweden and Finland Strong markets in Eastern and Central Europe Lower overall growth rate to be expected for BE Group compared to latest 12 months More or less stable high carbon steel prices in Q4 Lower stainless prices and alloy surcharges Page 21

22 BE Group average sales prices (SEK/kg) Quarter R Page 22

23 Going forward in 2007 Looking for growth - Acquisitions -Organic Service development highly focused Coordinating BE Group further into ONE Group Continued focus on underlying performance Page 23

24 Page 24 APPENDIX FINANCIAL INFORMATION

25 EBITA-development Q3 compared to last year OPERATING PROFIT Q Reversal of amortization of intangible assets EBITA Q Exceptional items Adjustment for stock profits Q Underlying EBITA Q Changes in volume, price, mix and gross margin Changes in overhead cost etc Underlying EBITA Q Exceptional items stainless stock revaluation Adjustment for other stock losses Q EBITA Q Less amortization of intangible assets OPERATING PROFIT Q (MSEK) Page 25

26 Sensitivity analysis Change in underlying EBITA YTD Sep 2007 (m SEK) +/- 5% in Volume +/- 5% in Average steel price +/- 5% in Selling and Administration Cost +/- 5% in SEK/EUR exchange rate +/- 10% in Alloy surcharge +/-54 +/-45 -/+13 -/+26 +/-4 Page 26

27 Financial summary Amounts in MSEK Q1 Q2 Q3 Q4 Q1 Q2 Q3 YTD YTD Volume (kton) Net Sales 1,542 1,621 1,581 1,938 2,065 2,073 1,709 4,743 5,848 EBITA % of Sales 5.8% 8.0% 10.4% 8.7% 8.4% 8.2% 5.0% 8.1% 7.3% Underlying EBITA % of Sales 6.2% 6.6% 7.9% 7.6% 8.1% 7.6% 7.1% 6.9% 7.6% Profit Earnings/share Cash flow Operating Capital Underlying ROOC 65.1% 64.2% 70.3% 82.5% 89.9% 73.6% 48.9% 67.2% 68.5% 1 Earnings per share after dilution Page 27

28 Sales per product area Q3 06/07 YTD Sep 06/07 7.1% 3.2% 6.7% 3.4% 3.8% 27.3% 7.0% 25.7% 3.8% 25.7% 7.0% 25.7% 24.2% 23.4% 26.0% 23.4% 6.5% 6.5% 33.5% 31.8% 6.2% 6.5% 33.5% 32.0% Long Steel Flat Steel Reinforcement steel Stainless steel Aluminium Other Page 28

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