Bufab Group: Interim report January – June 2022

Strong second quarter in a continued challenging market

Second quarter 2022

• Net sales increased by 57 percent to SEK 2,241 million (1,431). The organic growth was 16 percent and order intake was in line with net sales
• Operating profit (EBITA) increased by 26 percent to SEK 233 million (185) and the operating margin was 10.4 percent (12.9). Adjusted for remeasured additional purchase considerations of SEK -80 million (-7), operating profit (EBITA) increased by 64 percent to SEK 313 million (192), corresponding to an operating margin of 14.0 percent (13.4)
• Earnings per share increased by 10 percent to SEK 3.51 (3.18)
• During the quarter, CDA Polska Sp.z.o.o. was acquired with annual sales of approximately SEK 90 million

January – June 2022

• Net sales increased by 49 percent to SEK 4,235 million (2,854). Organic growth was 26 percent and order intake were slightly higher than net sales
• Operating profit (EBITA) increased by 31 percent to SEK 476 million (362) and the operating margin was 11.2 percent (12.7). Adjusted for remeasured additional purchase considerations of SEK -95 million (-7), operating profit (EBITA) increased by 55 percent to SEK 572 million (369), corresponding to an operating margin of 13.5 percent (12.9)
• Earnings per share increased by 20 percent to SEK 7.76 (6.49)
  
  

CEO’S OVERVIEW

The second quarter was another strong quarter for Bufab. We reported continued strong growth, a stable gross margin, a robust result, and continued acquisitions.

We noted strong growth of 57 percent in the quarter, of which 21 percent was organic growth. This organic growth was a result of price increases and healthy underlying demand in all segments. It is also gratifying that we continue to capture market shares and that our order intake is stable.

The gross margin strengthened but the proportion of operating expenses increased sharply due to remeasurement of additional purchase considerations in previous acquisitions within Segment UK/North America.

Adjusted for remeasured additional purchase considerations, Bufab’s operating profit increased by a full 64 percent and the margin was significantly strengthened.

Although the quarter continued to be affected by supply chain disruptions, long delivery lead times and some component shortages, the situation has stabilized. We are seeing indications among our companies of improved availability and shorter lead times, which together creates fewer disruptions and thus a better flow.

Cash flow was weak during the quarter as a direct result of a continued increase in working capital. It is mainly the longer lead times in the wake of the recent strained supply chains that have meant that we have had to increase our inventory. We expect the trend to reverse during the fall.

In April, we acquired the Polish company CDA Polska, specialized in solutions and components to the Polish construction sector, with annual sales of approximately SEK 90 million. The acquisition is a strategic addition to our business in Segment East and, together with the previous acquisitions of Pajo-Bolte and TI Midwood (TIMCO), strengthens our offering in the construction industry.

The process of integrating the recent acquisition is well under way. By applying our Best Practice model, this work strengthens both existing and newly acquired companies.

We also continue to develop our operations in the long term by gradually broadening our customer offering and increasing our degree of digitalization and productivity. For example, we launched a new e-commerce solution during the quarter, implemented more logistic solutions, and improved the efficiency of several processes using Robotic Process Automation (RPA). Our sustainability program is an increasingly important aspect for our customers and us and is an area in which we can really make a difference for our customers. Our efforts have intensified significantly in recent times under the framework of the Science Based Target initiative.

The geopolitical situation and rising Inflation are causing an uncertainty concerning the future development. On the other hand, we have noted a certain improvement in the supply chain with shorter lead times and fewer disruptions. Bufab is also an entrepreneurial company with a history of tackling challenges in a flexible and dynamic manner. This, combined with the fact that we are significantly stronger today than we were a year ago, provides a solid basis for continued long-term, sustainable, and profitable growth.

After the summer, I will hand over the reins to Erik Lundén as new President and CEO and I wish him a very warm welcome to Bufab.

Without Bufab’s 1,800 "solutionists,” it would not have been possible to deliver these excellent results and I would like to take this opportunity to thank them for their great work in the first half of the year.

Johan Lindqvist
President and CEO

CONFERENCE CALL

A conference call will be held on 13 July 2022 at 10:00 a.m. CEST. Johan Lindqvist, 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: +44 (0)330 165 3641, UK +46 08 5664 2754, Sweden or USA +1 646-828-8082. Conference code: 467585.

Please dial in 5-10 minutes ahead in order to complete the short registration process.

CONTACT

Johan Lindqvist
CEO
+46 370 69 69 00
johan.lindqvist@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. The information was submitted for publication by the aforementioned contacts on 13 July 2022 at 7:30 a.m. CEST.

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

Attachment

• Delarsrapport Q2 2022 ENG