Continued healthy growth and increased profit
First quarter of 2019
- Net sales rose by 15 percent to SEK 1,091 million (945). Organic growth was 6 percent
- Order intake was in line with net sales
- Operating profit (EBITA) rose to SEK 119 million (106) and the operating margin was 10.9 percent (11.2)
- Earnings per share rose to SEK 2.23 (1.98)
THE GROUP IN BRIEF
| Quarter 1 | Δ | 12-months rolling | Full year | |||||||||||||
| SEK million | 2019 | 2018 | % | 2019/18 | 2018 | |||||||||||
| Order intake | 1,084 | 944 | 15 | 3,938 | 3,798 | |||||||||||
| Net sales | 1,091 | 945 | 15 | 3,932 | 3,786 | |||||||||||
| Gross profit | 304 | 277 | 10 | 1,114 | 1,088 | |||||||||||
| % | 27.9 | 29.3 | 28.3 | 28.6 | ||||||||||||
| Operating expenses | -184 | -171 | 6 | -734 | -721 | |||||||||||
| % | 16.9 | 18.1 | 18.7 | 19.0 | ||||||||||||
| Operating profit (EBITA) | 119 | 106 | 13 | 380 | 367 | |||||||||||
| % | 10.9 | 11.2 | 9.7 | 9.7 | ||||||||||||
| Operating profit | 117 | 104 | 12 | 371 | 358 | |||||||||||
| % | 10.7 | 11.0 | 9.7 | 9.7 | ||||||||||||
| Profit after tax | 84 | 75 | 12 | 262 | 255 | |||||||||||
| Earnings per share, SEK | 2.23 | 1.98 | 12 | 6.96 | 6.71 | |||||||||||
CEO’s OVERVIEW
Bufab started off in 2019 with a strong result. Growth was 15 percent, driven by acquisitions, increased market share and stable demand.
Our largest operating segment, International, enjoyed a particularly strong performance. We continued to take market share, just as previously by capturing many new contracts with many customers. For several consecutive years, we have continuously increased our market share in most countries where we operate. Even so, we see many business opportunities going forward. Increased market share and a somewhat higher demand created organic growth of 8 percent. Growth was particularly strong in Central Europe, strong in the UK, Northern Europe and Southern Europe, but somewhat weaker in Eastern Europe. Price increases secured a stable gross margin. Through an effective cost control and increased efficiency, it was possible to translate this into an operating margin that was the segment’s best ever. Accordingly, operating profit rose by a full 20 percent.
Unfortunately, the result in Sweden was poorer than last year. This was fully attributable to a significant weakening of the segment’s gross margin. The main reason is that the price increases we implemented during 2018 and the beginning of 2019 were insufficient in light of the continued weakening of the Swedish krona. In addition, we had limited organic growth for the second consecutive quarter. Despite effective cost control, both operating profit and operating margin were therefore considerably lower than in 2018. This development is entirely unsatisfactory. Accordingly, we will undertake further price increases for end customers which, in combination with purchasing savings, aim to restore the segment’s gross margin during the year.
Overall, we are nonetheless satisfied with the Group’s earnings for the quarter. We are creating healthy growth and strengthening our customer relations. At the same time, we are continuing our long-term investment programme within the scope of our “Leadership 2020” strategy. For example, we have strengthened our sourcing function, invested in the digitalisation of key processes, and further strengthened our organisation and competence in key areas.
Our newly acquired companies are contributing to increased sales and profits, while also significantly strengthening our customer offering, something we see concrete evidence of in our daily sales. It is part of our strategy to make additional value-adding acquisitions also in the future.
Despite these costly activities, we improved our operating profit and achieved Bufab’s best quarterly result to date. We are satisfied with the start to the year. The macroeconomic uncertainty has not diminished, but we are optimistic about the remainder of 2019.
Jörgen Rosengren
President and CEO
CONFERENCE CALL
A conference call will be held on 25 April 2019 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 0850692180 or the US 16315107495. Conference code: 3992056.
Please dial in 5–10 minutes ahead in order to complete the short registration process.
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 25 April 2019 at 7:30 a.m. CET.
Bufab 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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