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Bufab Group: Year-end report 2020
Strong increase in sales and profitability in a challenging world
Fourth quarter of 2020
Net sales rose by 10 percent to SEK 1,238 million (1,124), of which +10 percent was organic
Order intake increased by 13 percent and was higher than net sales
Operating profit (EBITA) rose to SEK 121 million (73) corresponding to an operating margin of 9.8 percent (6.5)
Earnings per share amounted to SEK 2.03 (1.03)
Full-year 2020
Net sales rose by 9 percent to SEK 4,756 million (4,348), of which -5 percent was organic
Order intake increased by 11 percent and was higher than net sales
Operating profit (EBITA) rose to SEK 482 million (384) corresponding to an operating margin of
10.1 percent (8.8)Earnings per share amounted to SEK 8.04 (6.75)
Operating cash flow increased to SEK 540 million (351)
In 2020, Bufab achieved its highest annual sales, operating profit and earnings per share ever
The Board of Directors proposes a dividend of SEK 2,75 per share (0.00)
The Group in Brief
Quarter 4 | Δ | Jan-Dec | Δ | |||
SEK million | 2020 | 2019 | % | 2020 | 2019 | % |
Order intake | 1,299 | 1,148 | 13 | 4,827 | 4,354 | 11 |
Net sales | 1,238 | 1,124 | 10 | 4,756 | 4,348 | 9 |
Gross profit | 323 | 297 | 9 | 1,252 | 1,183 | 6 |
% | 26.1 | 26.4 | 26.3 | 27.2 | ||
Operating expenses* | -202 | -224 | -10 | -771 | -799 | -4 |
% | -16.3 | -20.0 | -16.2 | -18.4 | ||
Operating profit (EBITA)* | 121 | 73 | 66 | 482 | 384 | 26 |
% | 9.8 | 6.5 | 10.1 | 8.8 | ||
Operating profit | 114 | 67 | 70 | 452 | 368 | 23 |
% | 9.2 | 6.0 | 9.5 | 8.5 | ||
Profit after tax | 76 | 39 | 96 | 299 | 253 | 18 |
Earnings per share, SEK | 2.03 | 1.03 | 97 | 8.04 | 6.75 | 19 |
Dividend per share, SEK | - | - | 2,75** | - | ||
Operating cash flow | 166 | 94 | 77 | 540 | 351 | 54 |
CEO's Overview
Stronger Bufab after a challenging 2020
2020 has been a very challenging year for everyone, including Bufab. Despite good news about vaccines at the end of the year, the negative effects of the coronavirus pandemic on people’s lives and on economies throughout the world increased. However, we are very pleased that Bufab is a stronger company today than at the beginning of the year.
During the spring, our most important goal was to protect our employees and their health. Largely thanks to our subsidiaries in Asia, we succeeded in rapidly getting the right measures in place throughout the Group. We were then able to safely focus on protecting our customers from the disruptions in global supply chains. Meeting the customers’ fluctuating needs required speed and flexibility. We also adapted staffing and cost level to an entirely new demand scenario and intensified our efficiency programme to SEK 100 million. The programme progressed well and achieved full effect from the end of the year. During the autumn, we also worked on restoring profitable growth, for example through training of the sales team and further development of our customer offering.
The fourth quarter also brought challenges. A new wave of the pandemic gave rise to new problems but we succeeded nonetheless in achieving 10 percent organic growth, partly due to increased market share, which was a very strong recovery compared with earlier in the year. Combined with effective cost control, this led to a strong improvement in operating profit, a higher margin and doubled net profit. Cash flow was also very strong, which creates scope for further investments and acquisitions.
Business volatility and uncertainty caused fluctuations in growth and profitability across our operating segments, quarter by quarter. During the fourth quarter, we noted a particularly favourable trend in segment UK/North America and segment West.
We also continued to implement our long-term strategy for industry leadership, not least by developing the relationships with our key customers. Many of them suffered major difficulties with the supply of components in 2020 and therefore have an interest in simplifying and securing their supply chains. This strengthens Bufab’s position.
As a result of investments in processes and digital tools in recent years, we have improved Bufab’s productivity. This is apparent, for example, in the considerable strengthening of the operating margin during the second half of the year. Improving productivity will remain a focus area for us going forward.
A key component of Bufab’s long-term strategy is acquisition. During 2020, we worked to integrate and realise growth synergies from the two major acquisitions completed in the second half of 2019. This is a long-term effort. But these companies also developed well organically and contributed well to our growth and profitability. As usual, we are involved in dialogue with several potential acquisition candidates.
In the autumn, we updated our long-term strategy and made plans within it for each segment. We will provide more information in this regard during a capital markets day on 18 March 2021.
Our intensive work to address the challenges created by the pandemic, combined with our long-term efforts relating to industry leadership also led to a healthy earnings trend in 2020. Growth of 9 percent, an improved operating margin and an increase in net profit of 19 percent are some key indicators. Both sales and operating profit were the highest ever for Bufab, for the sixth consecutive year, and cash flow was very strong.
At the beginning of 2021, Bufab and our customers are struggling with severely strained global supply chains. At the same time, the formerly low raw material prices have turned upwards, which will create margin pressure for both Bufab and our customers. But we also note that the favourable growth at the end of 2020 has continued into the new year.
2021 is also looking to be a tough year and there is a great deal of uncertainty. Nonetheless, we are confident in Bufab’s opportunities for continued favourable development.
I want to end by thanking all of Bufab’s 1,300 employees – our “Solutionists” – for their outstanding efforts during 2020
Jörgen Rosengren
President and CEO
Conference call
A conference call will be held on 11 February 2021 at 10:00 a.m. CET. Jörgen Rosengren, President and CEO, and Marcus Söderberg, 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: Standard Intl. +44 (0) 2071 928 000, UK 08 445 718 892, Sweden 08 506 92 180 or the US 163 151 074 95. Conference code: 7745908.
Please dial in 5–10 minutes ahead in order to complete the short registration process.
Contact
Jörgen Rosengren
President and CEO
+46 370 69 69 00
jorgen.rosengren@bufab.com
Marcus Söderberg
CFO
+46 370 69 69 66
marcus.soderberg@bufab.com
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 11 February 2021 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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