STENA METALL AB - Stena Metall Group

Financial review
Directors’ report
▲
The Board of Directors and the President
of Stena Metall Aktiebolag, with
its registered office in Göteborg, herewith
present their report for the fiscal
year September 1, 2004 to August 31,
2005.
About Stena Metall
The Stena Metall Group is the Nordic
leader in recycling and environmental
services. The Group has nine business
areas: Ferrous and Non-Ferrous Metals,
Aluminium, Recovered Paper, Environmental
Services, Electronics Recycling,
Oil, Steel, Trading and Finance.
Extensive recycling operations are conducted
in the Scandinavian countries
and Poland.
Market
The U.S. dollar started and finished the
fiscal year at about the same exchange
rate with the Swedish krona, but fluctuated
greatly in between. A volatile trend
with major price swings in the ferrous
and non-ferrous scrap market continued
during the fiscal year. Volume trends
were positive in the business areas.
Recycling operations in Sweden
The Swedish recycling operations
continue to shift their emphasis toward
total waste management solutions, industry-specific
solutions and hazardous
waste services. Through acquisitions,
the business areas have expanded to
new locations and strengthened their
branch networks. Volume rose in all
business areas despite tighter competition.
Recycling operations in Denmark
Operations have grown substantially
thanks to new services, expanded locations
and acquisitions. This makes it
possible to offer services in more re-
Phuc Duyen Nguyen, a production employee
at Stena Miljø in Ausenfjellet, Norway.
gions of the country. The volume trend
is positive in all business areas. In a recovered
paper market stifled by price
pressures, Averhoff & Co A/S has
gained market share by increasing its
collections of existing volumes in the
market. Scanfors A/S and Nicha
Miljøteknik A/S were merged to form
Stena Miljø A/S. New smelting furnace
technology was placed in operation by
Stena Aluminium A/S at its facility in
Kolding.
Recycling operations in Finland
During the fiscal year Stena Metalliyhtymä
Oy signed an ELV agreement
with the Finnish association of automakers
to collect and process end-oflife
vehicles. A cooperation has been
established with a network of auto dismantlers
whereby Stena will receive
their scrapped vehicles. A cooperation
was also established with the publicly
listed company Lassila & Tikanoja Oy,
one of Finland’s leading environmental
service providers. In August 2005 the
WEEE directive was introduced, regulating
the collection and processing of
electrical and electronic equipment. The
volume of WEEE waste is expected to
rise in years ahead.
Recycling operations in Norway
Recycling operations in Norway continued
to develop total waste management
solutions and hazardous waste
services during the year. Demand for
total waste management solutions is
rising. Stena is well prepared for Norway’s
harmonization with the EU’s
new directives on electronic scrap and
end-of-life vehicles. In Mongstad, north
of Bergen, a new hazardous waste treatment
plant was opened – the first of its
kind in the world. Ferrous and non-ferrous
metal operations are developing
positively, as are recovered paper services.
Recycling operations in Poland
Stena consolidated its position as a
leader in the Polish recycling and waste
management market. It continued to
improve its range of services, collection
systems and local presence. In the Recovered
Paper business area, Stena has
become the market leader after expanding
to three new locations during the
fiscal year. In the Ferrous and Non-
Ferrous Metals business area, Stena has
retained its position despite market
pressures.
Trading
Development for Stena Oil AB was
favorable during the fiscal year, as it
expanded to Denmark’s Great Belt
area. The bunker fleet is being updated,
and two new bunker vessels offer a
number of benefits in terms of safety
and the environment, making it possible
to further enhance service.
Stena Stål AB reported satisfactory
income and enhanced its services for
customers in several ways. The shuttle
delivery system and customization
services were improved, and the product
range was broadened.
Trading operations were distinguished
by good demand for raw materials
from the steel industry; this applies
to both scrap and pig iron. Stena Metal
Inc. raised its volumes across the board
and boosted income compared to the
previous year. The cooperation with
other companies in the Ferrous and
Non-Ferrous Metals business area
developed positively.
Finance
During the fiscal year funding was
secured for acquisitions primarily in
Denmark. Equity trading increased in
scope compared to the previous year.
Some oil trading was conducted as well.
The Group continuously monitors
the key financial indicators it agreed
upon with its banks to ensure access to
liquid funds.
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