Bufab Group reported accelerating sales growth in the final quarter of 2017, up 18% year-on-year, of which 14% was organic – plus an order book increase by 16% and higher than net sales.
Group net sales for the full year were SEK 3,201 million (approximately €323 million), an increase of 12% over 2016. Operating profit (EBITA) rose to SEK 311 million from SEK 277 million for the previous year, with an unchanged operating margin of 9.7%.
President and CEO, Jörgen Rosengren, commented: “Sales in the fourth quarter rose 18%, driven primarily by organic growth. The gross margin remained under pressure from higher raw material prices and was lower than in 2016. However, the margin recovered somewhat from the third quarter, mainly as a result of the price increases we implemented. Our ambition is to continue with these in 2018. Despite a lower gross margin, the strong growth generated a sharp increase in operating profit and an improved operating margin.”
Bufab’s international segment reported a 20% sales increase in Q4, with increased gross margin and lower costs as a percentage of sales. Both operating profit and the margin thus increased sharply. Bufab says improvement was across a broad front – in addition to contributions from acquisitions, there was favourable growth and improved earnings in most markets.
Sweden also displayed robust growth with the gross margin “somewhat stronger than in Q3 but significantly lower than in 2016”. Jörgen Rosengren added: “While we see the results of the price increases we have implemented, we also see a clear need to implement further such measures.”
Reflecting on 2017 performance as a whole, Jörgen Rosengren said: “A key factor was the favourable development of industrial demand during the year. In parallel, we could clearly see our strategy was delivering results. We captured market shares in nearly all markets – a result of a systematic focus on the sales organisation over many years.”
He concluded: “There is no shortage of challenges. For instance, we have to compensate for higher raw material prices using price increases and further streamlined purchasing processes. But we see even more opportunities. The strong development of industrial demand in 2017 was kept up during the latter part of the year, which was also evident in a favourable order intake in the last quarter. This is a positive signal as we head into 2018.”
Having held senior management roles in leading automotive and fastener businesses, Phil joined Fastener + Fixing Magazine as editor in 2002. Convinced there is no substitute for ‘being there’, over 17 years of visits and interviews around the world means he has accumulated an extraordinary knowledge and perspective of the global fastener industry, reflected in his incisive and thought provoking reporting.
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