Press releases

2018-07-19

Bufab Group: Interim report January - June 2018

Continued strong growth and improved margin


Second quarter 2018

  • Net sales rose by 19 percent to SEK 980 million (823). Organic growth was 9 percent
  • Order intake increased 18 percent and was in line with net sales
  • Operating profit (EBITA) rose to SEK 98 million (78) and the operating margin to 10.0 percent (9.5)
  • Earnings per share were SEK 1.78 (1.41)

January - June 2018

  • Net sales rose by 18 percent to SEK 1,925 million (1,638). Organic growth was 10 percent
  • Order intake was in line with net sales
  • Operating profit (EBITA) rose to SEK 204 million (170) and the operating margin was 10.6 percent (10.4)
  • Earnings per share rose to SEK 3.77 (3.05)

The Group in brief 

  Quarter 2    D Jan-June   D   12-months
rolling
  Full year
SEK million 2018   2017   %   2018   2017   %   2017/18   2017
Order intake 979   833   18   1,923   1,644   17   3,535   3,256
Net sales 980   823   19   1,925   1,638   18   3,488   3,201
Gross profit 282   232   22   559   471   19   1,005   917
% 28.8   28.2       29.0   28.7       28.8   28.6
Operating expenses -184   -154   19   -355   -301   18   -660   -606
% 18.8   18.7       18.4   18.4       18.9   18.9
Operating profit (EBITA) 98   78   26   204   170   20   344   310
% 10.0   9.5       10.6   10.4       9.9   9.7
                               
Operating profit 96   77   25   200   167   20   337   304
% 9.8   9.4       10.4   10.2       9.7   9.5
Profit after tax 67   54   24   142   116   22   239   213
Earnings per share, SEK 1.78   1.41   26   3.77   3.05   24   6.33   5.61

      

     

CEO's overview


The favourable performance that marked the beginning of the year continued during the second quarter. Solid growth at 19 percent was driven by acquisitions, increased market shares and favourable underlying growth, but also by positive calendar effects.

Segment International accelerated the excellent earnings trend that we have witnessed in recent years. Through strengthened market shares in most markets and through successful acquisitions, we achieved growth of 25%. The gross margin improved significantly due to currency effects and price increases that exceeded the material-driven cost increases. It was also satisfying that the growth did not cause a corresponding rise in operating expenses. In total, operating profit grew by more than 50 percent. These successes give us confidence and scope for continued investment in the segment.

On the other hand, Segment Sweden experienced a poorer earnings trend during the quarter. Growth was good, but the gross margin was lower than earlier in the year and in 2017. This means that we have not fully succeeded in offsetting the continued negative trend for the SEK and raw materials prices through price increases to customers. However, work continues aiming at a strong and stable gross margin over time, regardless of external factors. In addition, the segment's cost level for the quarter was too high, partly due to adjustment of a and currency effects. Overall, operating profit declined, a development with which we cannot be satisfied.

The uncertainty regarding the economic development increased during the quarter, among other factors due to the fear of a trade war. This is reflected, for example, in a somewhat weaker purchasing managers' index, but has not yet made an impact on Bufab's order intake. At the same time as we are watchful for signs of a downturn, our ambition is to increase our market share at the same rate as previously, or faster.

We need to strengthen our gross margin through further price increases. In addition, we need to work to ensure that operating expenses do not increase further as a share of sales, despite the significant investments we are making in our "Leadership" programme. This requires comprehensive efficiency measures in the business in general.

For Bufab in its entirety, we are satisfied with the quarter and with the first half of 2018. Healthy growth, an improved margin and Bufab's best six-month profit to date are indications that our strategy for organic and acquisition-driven growth is working. Reinforced by this, we will continue to increase the investments in our strategy. The aim is to be the leading company in our industry by 2020.

Jörgen Rosengren
President and CEO

 

CONTACT


Jörgen Rosengren

CEO
+46,370 69 69 00
jorgen.rosengren@bufab.com

Marcus Andersson
CFO
+46,370 69 69 66
marcus.andersson@bufab.com

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 contacts on 19 July 2018 at 7:30 a.m. CET.

Bufab Holding AB (publ) Box 2266 SE-331 02 Värnamo, Corp. Reg. No. 556685-6240
Tel: +46 370 69 69 00 Fax +46 370 69 69 10
www.bufab.com

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