First quarter of 2025
• Net sales increased by 1.6 percent to SEK 2,184 million (2,149). Organic growth was -0.1 percent and order intake was somewhat lower than net sales
• Adjusted operating profit (EBITA) was SEK 278 million (259), corresponding to an operating margin of 12.7 percent (12.1)
• Operating profit (EBITA) was SEK 286 million (259) and the operating margin was 13.1 percent (12.1)
• Earnings per share amounted to SEK 4.81 (3.82)
• Cash flow from operating activities amounted to SEK 164 million (259), corresponding to a cash conversion ratio of 56 percent (95)
• Net debt/EBITDA, adjusted, was 2.5 (2.7)
 
CEO’s overview

The year started in a good way with a strengthened gross margin and improved operating margin, and the organic growth continued its positive trend.

We reported positive total growth of 1.6 percent after several quarters of negative growth. The organic growth was -0.1 percent, showing an improvement to the fourth quarter, when it was -1.5 percent. Region Asia-Pacific continued to demonstrate strong organic growth of 17.2 percent, led by China. The general market has shown some signs of stabilisation, but as a whole remains cautious.

Demand was strongest in defence, energy and medical, while agriculture, automotive, furniture and interior had a weaker development. The market conditions in the important general industry, construction, and mobile home and trailer segments were stable.

The gross margin increased by 1.2 percentage points to 30.3 percent (29.1), mainly driven by our trading business. Over the past seven quarters, we have gradually strengthened our gross margin, which I am pleased about, and this is a driving factor in achieving our profitability target.

The underlying cost level was lower than last year when adjusted for one-offs and restructuring costs, and currency effects of approximately SEK 3 million. We continue to place a strong focus on cost control across the organisation and several measures have been implemented to reduce our cost base. As a result, restructuring costs of SEK 2.4 million were charged to the quarter. The effects of these measures are expected in 2025/2026 and while some additional restructuring costs will be incurred in the coming quarters, they will not be material.

The adjusted operating margin improved compared to last year and amounted to 12.7 percent (12.1). This result is a step in the right direction towards achieving our margin target of 14 percent. The regions Europe North & East and Europe West demonstrated particularly good results, while UK/Ireland reported a weaker performance due to lower market prices in our niche companies.

The integration of our latest acquisition, VITAL, is going according to plan, and contributed positively to the margin improvement in the quarter.

Cash flow from operating activities amounted to SEK 164 million (259), mainly due to the fact that the reduction in inventory was less than in the comparative period. Net debt/EBITDA was 2.5 (2.7).

We continue, according to plan, to implement our strategy, where one of the focus areas is to add more value-creating services to broaden our customer offering. We are also working actively to implement value-based pricing within the organisation.

Trade tariffs between the US and other countries are moving back and forth rapidly and we are monitoring the developments closely. We can see how higher tariffs could affect Bufab’s operations in the US in the short term, but as a large and stable supplier that manages these disruptions better than smaller competitors, we may benefit over time. We are already working actively with both suppliers and customers to ensure that we maintain our strong position and good profitability in the region. 

Despite the uncertain market climate, we remain optimistic about the future. Going forward, our focus will be on gaining market share, gradually improving our margins and delivering strong cash flow. This will put us in a strong position when the market rebounds and provide a solid platform for a continued long-term, sustainable and profitable growth journey.

Finally, I would like to thank our customers, partners and employees for the good cooperation in the first quarter.

Erik Lundén
President and CEO

Conference call
A conference call will be held on 24 April 2025 at 09:00 a.m. CEST. Erik Lundén, President and CEO, and Pär Ihrskog, CFO, will present the results. Analysts and investors who wish to ask questions are asked to connect to the presentation via the following Teams link: Click here to join the meeting and use the “Raise Your Hand” function during the Q&A session.

Bufab AB (publ)
Box 2266
SE-331 02, Värnamo, Sweden
Corp. Reg. No. 556685-6240
Phone: +46 370 69 69 00
www.bufabgroup.com