Industry News

Bufab Group net sales rose 11% to SEK 1.089 billion in Q2 2019. Net sale for the first half of the year were up 13% to SEK 2.18 billion. Organic sales growth for the first half 2019 was 4%.

Operating profit (EBITA) for the quarter was SEK 103 Million (2018 Q2: SEK 98 million). Operating margin was 9.5% (2018 Q2: SEK 10 million). Half year EBITA increased to SEK 222 million (2018 H1: SEK 204 million) with the operating margin at 10.2% (2018 H1: 10.6%). Order intake for the first half rose by 13% to SEK 2.164 billion, “somewhat lower than net sales”.

After the end of the quarter Bufab completed the acquisition of HT BENDIX A/S, which has annual sales of around SEK 500 million. Acquisition costs of SEK 3 million were charged to Q2 2019. Bufab described the acquisition as “a strong and significant complement to our existing operations in the Nordic region”.

President and CEO Jörgen Rosengren commented: “Bufab continued to perform well during the second quarter of 2019… Earnings and cash flow increased compared with the very strong second quarter in 2018. We continued to invest in our ‘Leadership 2020’ strategy, and in July we completed a significant acquisition.”

“All of this was achieved against a background characterised by increased uncertainty in the market. The underlying demand decreased during the quarter, particularly in certain industries (such as automotive) and geographies (such as China). Despite this, Bufab posted organic growth of 3%, due to increased market shares in many markets.”

Both Bufab operating segments increased their operating profit. International saw “a good but somewhat weaker growth than previously”, with increased market shares and continued investment in strategic areas. In Sweden Bufab experienced weaker market conditions and negative organic growth. Despite a continued weak Swedish krona, the gross margin strengthened significantly compared to the last two quarters, attributed to “comprehensive price increases, which, combined with effective cost control and the contribution from the acquisition of Rudhäll Industri, enabled a higher operating profit…”

Bufab continues to focus on its ‘Leadership 2020’ strategy and Rosengren said the Group was beginning to see results take form. Increased market shares have financed strengthening of processes and Bufab’s teams in the key areas of purchasing, logistics and quality. He also pointed to closer integration with customers and suppliers using new digital tools, to streamline the entire value chain.

In conclusion Rosengren cautioned: “Recently, the market outlook has become more uncertain than before, which is reflected in Bufab’s somewhat lower organic growth and order intake for the quarter. We will continue our strategic initiatives but are now entering a phase in which the focus will be mainly on generating results, for example, in the form of purchasing savings. We will also focus increasingly on internal efficiency.”