Interim report January - June 2017
Continued growth despite calendar effects, but weaker margins. Acquisition of Thunderbolts.
Second quarter 2017
- Net sales rose by 8 percent to SEK 823 million (762). Organic growth was 3 percent
- Order intake increased 13 percent and was higher than net sales
- Operating profit declined to SEK 77 million (82) and the operating margin to 9.4 percent (10.8)
- Earnings per share were SEK 1.41 (1.55)
- Thunderbolts Group Limited was acquired
January - June 2017
- Net sales rose by 11 percent to SEK 1,638 million (1,480). Organic growth was 6 percent
- Order intake was slightly higher than net sales
- Operating profit rose to SEK 167 million (153) and the operating margin was 10.2 percent (10.3)
- Earnings per share rose to SEK 3.05 (2.84)
The Group in brief
| Quarter 2 | D | Jan-Jun | D | 12-months rolling | Full year | |||||||||||
| SEK millions | 2017 | 2016 | % | 2017 | 2016 | % | 2016/17 | 2016 | ||||||||
| Order intake | 833 | 739 | 13 | 1,644 | 1,478 | 11 | 3,053 | 2,887 | ||||||||
| Net sales | 823 | 762 | 8 | 1,638 | 1,480 | 11 | 3,004 | 2,847 | ||||||||
| Gross profit | 232 | 223 | 4 | 471 | 429 | 10 | 870 | 828 | ||||||||
| Gross margin, % | 28.2 | 29.3 | 28.7 | 29.0 | 29.0 | 29.1 | ||||||||||
| Operating expenses | -155 | -141 | 10 | -304 | -276 | 10 | -584 | -556 | ||||||||
| Operating profit/loss | 77 | 82 | -6 | 167 | 153 | 9 | 286 | 272 | ||||||||
| Operating margin, % | 9.4 | 10.8 | 10.2 | 10.3 | 9.5 | 9.6 | ||||||||||
| Profit/loss after tax | 54 | 59 | -9 | 116 | 108 | 7 | 171 | 163 | ||||||||
| Adjusted profit/loss after tax | 54 | 59 | -9 | 116 | 108 | 7 | 195 | 187 | ||||||||
| Earnings per share, SEK | 1.41 | 1.55 | -9 | 3.05 | 2.84 | 7 | 4.49 | 4.29 | ||||||||
| Adjusted earnings per share, SEK | 1.41 | 1.55 | -9 | 3.05 | 2.84 | 7 | 5.12 | 4.92 | ||||||||
CEO'S overview
In the second quarter of 2017, net sales rose by 8 percent, of which 3 percent was organic growth. Organic growth was thus lower than in the first quarter, which was entirely attributable to calendar effects. However, we noted continued healthy underlying demand and a higher market share.
In the segment International, we increased our market share in most markets, which continues the good trend since many quarters. Growth was favourable in the UK and continental Europe, but softer in Norway, Finland and Asia. The segment's gross margin was weaker than in previous year.
We also continued to increase our market share in Sweden. Unfortunately, we noted a deterioration in the gross margin during the quarter compared to the same period last year and the first quarter. The decline was the result of rising purchasing prices in recent quarters, driven in turn by higher prices for raw materials, which now impacted our income statement. However, we saw signs that the trend towards rising purchasing prices slowed in the latter part of the quarter. We continue to focus on raising prices for customers, although to date these have not been enough to offset the cost increases.
The acquisitions we have completed in recent years continue to develop well. During the quarter, we completed the acquisition of Thunderbolts, complementing our other operations in the UK. We continue looking for suitable acquisition targets.
Due to acquisition costs and to a better than expected development in acquired companies, the result was charged with SEK 3 million in the quarter.
Overall, the result in the second quarter was influenced by calendar effects and raw material prices. Looking at the first six months as a whole, sales increased by 11 percent and operating profit by 8 percent. We also noted a deterioration in the gross margin during the quarter driven primarily by rising purchasing prices. Offsetting these is our main challenge in the short term. At the same time, we will continue to work on growing our market share and to seek more value-generating acquisitions. Because of the unusually strong order intake in the quarter, we remain optimistic ahead of 2017 as a whole.
Jörgen Rosengren
President and CEO
Conference call
A conference call will be held on 19 July 2017 at 10:00 a.m. CET. Jörgen Rosengren, President and CEO, and Thomas Ekström, 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 1452 555566, UK: 08444933800, Sweden: 0850336434, or the US: 16315107498. Conference code: 34014806.
Please dial in 5-10 minutes ahead in order to complete the short registration process.
CONTACT
Jörgen Rosengren CEO +46 370 69 69 01 jorgen.rosengren@bufab.com
Thomas Ekström CFO and IR Director +46 370 69 94 01 thomas.ekstrom@bufab.com
About Bufab Bufab AB (publ), Corporate Registration Number 556685-6240, is a trading company that offers its customers a full-service solution as Supply Chain Partner for sourcing, quality control and logistics for C-Parts (screws, nuts, etc.). Bufab's Global Parts Productivity TM customer offering aims to improve productivity in the customers' value chain for C-Parts.
Bufab was founded in 1977 in Småland and is an international company with operations in 24 countries. The head office is located in Värnamo, Sweden, and Bufab has about 1,000 employees. Bufab's net sales for the past 12 months amounted to SEK 3.0 billion and the operating margin was 9.5 percent. The Bufab share is listed on Nasdaq Stockholm, under the ticker "BUFAB". Please visit www.bufab.com for more information.
This information is such that Bufab AB (publ) is obliged to disclose in accordance with the EU's Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication by the aforementioned contacts on 19 July 2017 at 7:30 a.m. CET.
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