The Van Leeuwen Pipe and Tube Group’s consolidated net sales were € 1,178 million (2019: € 787 million). When considering the full year sales in 2019 of the acquired Benteler Distribution International entities, net sales would have decreased 18% from € 1,444 million to € 1,178 million in 2020 and total tonnage sold decreased with 17%. Out of the total sales, the Industry segment contributed 69% and the Energy segment 31%.
The operating result was € 15 million, in line with the previous year but due to the loss in sales turnover significantly lower than anticipated. The total operating expenses were € 216.4 million, which includes € 12.5 million of releases of the negative goodwill resulting from the Benteler Distribution acquisition, to offset the one-off costs incurred for the integration of the acquired Benteler Distribution entities.
The tax charge of € 3.4 million, resulting in an effective tax rate of 28.7%, increased compared to 2019 due to the change in country mix (addition of the new Van Leeuwen companies), adjustments in prior years and write-off of recognized carry forward losses of € 5.0 million.
The result from participating interests amounts to € 1.0 million and relates to our 50% participation in Polarputki, a leading pipe and tube distributor located in Finland.
The net result for 2020 was € 9.4 million, in line with the net result in 2019.
In 2020, much attention was given to working capital management with targets for all companies. Operating working capital decreased from € 382 million to € 262 million, mainly the result of the decrease of inventories and trade accounts receivable, which was partly offset by a decrease of trade accounts payable. Total inventories decreased from € 336 million to € 237 million at the end of 2020.
The net debt position of the Group improved considerably from a net debt position of € 85 million to a net cash position of € 22 million. The Group’s equity increased by € 1 million to € 253 million and the solvency rate improved to almost 37% (2019: 31%). The Van Leeuwen Pipe and Tube Group’s cash position and bank facilities are adequate to meet the financing requirements.
Following the integration of the acquired Benteler Distribution entities, one-off costs were incurred in 2020. These costs were offset by the release of negative goodwill. This negative goodwill results from the fact that the purchase price paid by Van Leeuwen for the acquisition was lower than the net asset value of the acquired entities.
At the end of 2020, the total negative goodwill was € 67 million. In the net result of 2020, a release of the negative goodwill with a net effect of € 15.1 million was recorded. Of this amount, € 12.5 million related to one-off integration costs incurred and € 2.6 million related to the amortization of negative goodwill.