Third quarter of 2024

• Net sales declined by -9.2 percent to SEK 1,880 million (2,071). Organic growth was -2.6 percent and order intake was lower than net sales
• Adjusted operating profit (EBITA) was SEK 239 million (260), corresponding to an operating margin of 12.7 percent (12.6)
• Operating profit (EBITA) was SEK 258 million (220) and the operating margin was 13.7 percent (10.6)
• Earnings per share increased by 50.3 percent to SEK 3.85 (2.56).
• Cash flow from operating activities amounted to SEK 322 million (371), corresponding to a cash conversion ratio of 121 percent (159)
• Net debt/EBITDA, adjusted, was 2.4 (2.7).

January – September 2024

• Net sales declined by -8.4 percent to SEK 6,171 million (6,737). Organic growth was -6.6 percent and order intake was lower than net sales
• Adjusted operating profit (EBITA) was SEK 759 million (892), corresponding to an operating margin of 12.3 percent (13.2)
• Operating profit (EBITA) decreased by 9.4 percent to SEK 781 million (862) and the operating margin was 12.7 percent (12.8).
• Earnings per share decreased by 12.7 percent to SEK 11.61 (13.30)
• Cash flow from operating activities amounted to SEK 974 million (1,125), corresponding to a cash conversion ratio of 119 percent (124)

CEO’s overview

Bufab reported a strong gross margin and stable operating margin in the third quarter, in a continued cautious market.

Demand in the quarter remained cautious, with continued large variations between different industries and regions. Similar to previous quarters, the strongest developments were noted in energy and defence. Demand in the important mobile home and trailer segment remained at low levels, and the development in construction, bath, kitchen and outdoor recreation sectors were also weak. Organic growth amounted to -2.6 percent, indicating an improvement to the previous quarter (-6.6 percent). The region Asia-Pacific showed a new trend with organic growth of a strong 13.2 percent, driven by particularly strong growth in China.

We have continued our efforts to strengthen the gross margin, which increased by 1.6 percentage points in the quarter to an all-time high of 30.6 percent. The gradual strengthening over the past few quarters is a result of the long-term work that began in 2023 to improve our customer and product mix, develop our value creation for customers, and achieve purchasing savings.

The adjusted operating margin was in line with last year, amounting to 12.7 (12.6) percent, which is a stable level given the challenging market conditions. Our dedicated work with cost control throughout the organisation have yielded the expected results, primarily due to staff reductions, but also reduced overhead costs. At the same time, we continue to invest in driving growth and improving profitability in the long term, and have continued to invest in our customer offering during the quarter.

Region Europe North & East showed particularly strong profitability with an adjusted operating margin over 14 percent and region Europe West also showed good results, while Asia-Pacific noted a weak profit development in the quarter.

Cash flow from operating activities remained stable and amounted to 322 MSEK (371) for the quarter. The net debt/EBITDA was 2.4 (2.7), and our strengthened financial position gives us room for value-creating acquisitions. We see an increase in M&A activity and are in ongoing discussions with several potential acquisition candidates.

We continue, according to plan, implementing our strategy where our short-term priorities remain; to gain market share, gradually improve our margin, and deliver a strong cash flow. A focus area in our strategy is to lead the development of sustainability in our industry and continue to strengthen our customer offering. An example of our customer offering is our many different logistics solutions that create great value for our customers through less administration, lower indirect costs, and ensuring efficient material supply. In 2024, we have installed a record number of new solutions that both strengthen our customer relationship and increase our growth rate.

Uncertainty regarding the general economic outlook remains, but we see indications of improved demand from general industry, likely not until the first half of 2025. At the same time, a weaker economy creates favourable conditions for a strong player such as Bufab to take new market shares. This, together with our focused work on strengthening our gross margin and on cost savings, will put us in a strong position once the market rebounds.

Finally, I would like to thank all our customers, partners and employees for your continued support and commitment.

Erik Lundén
President and CEO

Conference call
A conference call will be held on 24 October 2024 at 10:00 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