Bufab Group: Interim report January - September 2018

Continued strong growth and improved earnings. 
Acquisition of Rudhäll Industri AB in Sweden and China in October.

Third quarter of 2018

  • Net sales rose by 22 percent to SEK 895 million (735), of which 9 percent was organic
  • Order intake increased 19 percent and was in line with net sales
  • Operating profit (EBITA) rose to SEK 81 million (70) and the operating margin declined to 9.1 percent (9.5)
  • Earnings per share rose to SEK 1.37 (1.16)
  • After the end of the quarter, Rudhäll Industri AB, with annual sales of approximately SEK 210 million, was acquired. Acquisition costs of SEK 5 million were charged to the third quarter

January - September 2018

  • Net sales rose by 19 percent to SEK 2,820 million (2,373), of which 10 percent was organic.
  • Order intake was in line with net sales
  • Operating profit (EBITA) rose to SEK 285 million (240) and the operating margin was 10.1 percent (10.1)
  • Earnings per share rose to SEK 5.14 (4.24)  

The Group in brief 

  Quarter 3    D Jan-Sep D 12-months
Full year
SEK million   2018   2017   % 2018 2017 % 2017/18 2017
Order intake   893   749   19 2,816 2,393 18 3,679 3,256
Net sales   895   735   22 2,820 2,373 19 3,648 3,201
Gross profit   259   209   24 817 679 20 1,055 917
%   28.9   28.4     29.0 28.5   28.9 28.6
Operating expenses   -178   -139   28 -532 -439 21 -699 -606
%   19.9   18.9     18.9 18.5   19.2 18.9
Operating profit (EBITA)   81   70   16 285 240 19 356 311
%   9.1   9.5     10.1 10.1   9.8 9.7
Operating profit   79   68   16 279 235 19 348 304
%   8.8   9.3     9.9 9.9   9.7 9.5
Profit after tax   51   44   16 193 161 20 245 213
Earnings per share, SEK   1.37   1.16   16 5.14 4.24 20 6.46 5.61


CEO's overview

In the third quarter, Bufab experienced the same favourable level of demand as earlier in the year. Sales rose by a full 22%.

Segment International noted an improvement in earnings performance during the quarter, even compared with the very strong second quarter. Increased market shares and successful acquisitions contributed to growth of 28 percent, of which 10 percent was organic. The gross margin strengthened further due to price increases and favourable currency effects despite cost increases driven by raw material prices. We also succeeded in achieving growth without a corresponding increase in operating expenses. Overall, operating profit increased by more than 60 percent, primarily as a result of a very healthy organic growth.

However, Segment Sweden had a poorer earnings trend during the quarter, as it did in the second quarter. Growth was good, but the gross margin was far too low. Despite significant price increases, we did not succeed in fully offsetting the weak Swedish krona combined with high raw materials prices. Accordingly, a weakening of the Swedish krona adversely impacted segment Sweden but benefitted segment International during the period.

The segment's earnings were not good enough. We continue the work on price increases and have intensified our focus on cost savings for sourcing. Earnings were also burdened by high operating expenses. Operating profit fell overall compared with 2017, an unsatisfactory trend that we intend to reverse.

It is gratifying, however, that we completed a good complementary acquisition in segment Sweden at the beginning of October in the form of Rudhäll Industrier AB. Rudhäll is a well-managed group of companies with a combination of trading and in-house production, which will strengthen Bufab's offering of special products.

Both invoicing and order intake remained at the same high level as during the second quarter. Thus, we have not yet seen any clear impact of the uncertainty regarding the economic development. We continue to carefully monitor the signals, but are mainly focused on continuing to increase our market shares in both operating segments at the same pace as previously.

We are also making significant investments in our organisation and in processes and systems within the framework of our "Leadership 2020" programme. These activities impacted our operating expenses during the quarter. It is our long-term aim that operating expenses should not increase as a share of net sales. This requires comprehensive efficiency measures in the business in general.

Profit for the period rose by 16 percent despite acquisition costs of SEK 5 million. Without these costs, profit would have risen by 27 percent. Looking at Bufab overall, we are satisfied with the quarter and optimistic about the rest of the year.


A conference call will be held on 25 October 2018 at 10:00 a.m. CET. Jörgen Rosengren, President and CEO, and Marcus Andersson, CFO, will present the results. The conference call will be held in English. To participate in the conference, use any of the following dial-in numbers: +44 (0) 2071 928000, UK 08445718892, Sweden 08 50692180 or the US 16315107495. Conference code: 3399788 Please dial in 5-10 minutes ahead in order to complete the short registration process.



Jörgen Rosengren
+46 370 69 69 00


Marcus Andersson
+46 370 69 69 66



This information is such that Bufab AB (publ) is obliged to disclose in accordance with the EU's Market Abuse Regulation. The information was submitted for publication by the aforementioned contact on 25 October 2018 at 7:30 a.m. CET.



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