BUFAB AB Weaker demand, improved gross margin and stable cash flow. Divestment of manufacturing companies.
Second quarter of 2024
•Net sales declined by -6.0 percent to
•Adjusted operating profit (EBITA) was
•Operating profit (EBITA) was
•Earnings per share decreased by 27 percent to
•Cash flow from operating activities amounted to
•Net debt/EBITDA, adjusted, was 2.8 percent (2.9)
January –
•Net sales declined by -8.1 percent to
•Adjusted operating profit (EBITA) was
•Operating profit (EBITA) decreased by 19 percent to
•Earnings per share decreased by 28 percent to
•Cash flow from operating activities amounted to
CEO’s overview
During the second quarter,
The organic growth continued to be negative in the second quarter. As in previous quarters, the organic decline in sales was mainly in the construction, bath, kitchen and outdoor recreation sectors, while a positive trend was noted in energy and defence. We also observed continued weak demand from general industry, albeit with indications that a turnaround is in sight.
Sales growth amounted to -6.0 percent in the quarter and organic growth to -6.6 percent, which is an improvement on the preceding quarter. Order intake was slightly higher than net sales.
The work we initiated last year aimed at strengthening our gross margin continues show result, which I am particularly pleased with. The gross margin improved 1.3 percentage points year-on-year due to our focus on enhancing our customer and product mix and developing the added value we deliver to customers, in addition to purchasing savings.
The share of operating expenses increased year-on-year on account of the falling volumes and inflationary effects during the first half of the year. We purposefully continue with cost reduction activities throughout the organisation with the aim of strengthening the operating margin. The activities mainly include staff reductions, but also reduced overheads. At the same time, we continue to invest in our operations in order to drive growth and improve profitability in the long term. In recent quarters, for example, we have invested in our global sales force, in new warehouses in the
The adjusted operating margin was 12.2 percent (13.5), which is stable given the challenging market environment and a strong comparative quarter. All regions reported a stable operating margin except
Cash flow from operating activities amounted to
In line with our updated strategy, we divested our manufacturing companies Bufab Lann and Hallborn Metall to Arbona Industri at the beginning of July, for a purchase price of
We will continue to implement our strategy according to which our short-term priorities stand firm: to capture market share, gradually improve our margin and deliver a stronger cash flow. An area we will focus on as part of our strategy is leading the development of sustainability in our industry and continuing to strengthen our customer offering. As part of this, we organised a sustainability day during the quarter for our Swedish customers during which we discussed shared opportunities and challenges when it comes to structuring and maintaining a sustainable supply chain.
In summary, a weaker economy creates favourable conditions for a strong player such as
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
Box 2266
SE-331 02, Värnamo,
Corp. Reg. No. 556685-6240
Phone: +46 370 69 69 00
www.bufabgroup.com
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