Industry News

Bufab Group reported net sales for the first quarter 2018 at SEK 945 million (€89.7 million), 16% higher than the same period last year – driven by acquisitions, increased market shares and favourable demand. Organic growth was a “healthy 9%”.

Operating profit (EBITA) rose to SEK 106 million, compared to SEK 91 million in the same quarter 2017. Operating margin was 11.2%, very slightly down on the 11.1% reported for the first quarter last year. Gross margin improved to 29.2% from 28.8% for the full year 2017.

President and CEO Jörgen Rosengren noted particularly strong performance from Bufab’s international operating segment, especially in eastern and central Europe and Asia. Bufab continued to increase market share but Rosengren said the Group still sees many business opportunities to explore moving forward. The international segment’s sales and profit were significantly strengthened by contributions from two recent acquisitions in the United Kingdom and Singapore.

Bufab also increased market share in Sweden during the quarter, where it also noted good underlying demand. Growth was spread over many customers and industries.

The healthy demand in both operating segments and Bufab’s inflow of new business created challenges in its supply chain. Jörgen Rosengren said: “It is therefore gratifying to note that Bufab succeeded in upholding a good delivery precision during the quarter, thus securing our customers’ production.”

Group gross margin was strengthened slightly year-on-year and significantly outperformed the final quarter of 2017.

Price increases implemented in 2017 offset raw material price increases in the first half of the year. However, Jörgen Rosengren pointed out: “Because raw material prices continued to rise in the second half of the year, increasing the prices will again be an important area and a major challenge during 2018.” This was particularly significant in Sweden due to a weak exchange rate, whereas the situation in international segment was mitigated by a strong EUR exchange rate in the quarter.

Jörgen Rosengren concluded: “We are quite satisfied with our performance during the early part of the year. Our strategy is working and is generating healthy returns in the form of growth and profit. We also have strengthened our customer and supplier relationships. We have a more competitive customer offering, better internal processes and systems, and an even stronger team than a year ago.”

“During 2018 we will need to continue to work on price increases and, as always, ensure that our customers are satisfied and that our delivery and quality are spot on. We intend to continue to capture market shares and we hope to complete additional value-generating acquisitions in the future. But primarily we will focus on further increasing our short and long-term customer value. Our target is to be the leading player in our industry by 2020.”