Stable end to a very strong year. Board proposes raised dividend.

Fourth quarter 2022

• Net sales increased by 30 percent to SEK 2,074 million (1,599), of which 1 percent was organic
• Order intake increased by 29 percent and was somewhat higher than net sales
• Operating profit (EBITA) increased 43 percent to SEK 242 million (169), which corresponded to a margin of 11.7 percent (10.6). Adjusted for remeasured additional purchase considerations, operating profit (EBITA) amounted to SEK 239 million (184), corresponding to an operating margin of 11.5 percent (11.5)
• Earnings per share increased by 13 percent to SEK 3.58 (3.17)
• Operating cash flow increased to SEK 138 million (-20), corresponding to a cash conversion ratio of 54 percent (-11)

Full-year 2022

• Net sales increased by 44 percent to SEK 8,431 million (5,878), of which 12 percent was organic
• Order intake increased by 39 percent and was in line with net sales
• Operating profit (EBITA) increased 42 percent to SEK 990 million (695), corresponding to a margin of 11.7 percent (11.8). Adjusted for remeasured additional purchase considerations, operating profit (EBITA) increased to SEK 1,084 million (736), which corresponded to an operating margin of 12.9 percent (12.5)
• Earnings per share increased by 29 percent to SEK 16.23 (12.57)
• In 2022, Bufab achieved its highest-ever annual sales, operating profit and earnings per share
• The Board of Directors proposes a dividend of SEK 4.75 (3.75) per share.
• Operating cash flow amounted to SEK 99 million (209), corresponding to a cash conversion ratio of 10 percent (28)
  
  

The Group in brief

Stable end to a very strong year

For the full year Bufab delivered its highest ever net sales, operating profit, and earnings per share. We completed three strategic acquisitions with a combined annual sales of more than SEK 1 billion and continued to develop our business towards continued long-term and profitable growth.

The year ended on a stable note, despite the market uncertainty. We saw strong growth in the quarter of 30 percent, primarily driven by the latest year’s acquisitions. Organic growth amounted to a modest +1 percent and was positively impacted by Segment West, but negatively impacted by strong comparative figures and weak demand at the end of the quarter, this weaker demand was primarily seen in Segment East and UK/North America. We believe also that the modest organic growth in the quarter is partly a result of customer inventory reductions prior to year-end. The conclusion is drawn on the grounds that demand was particularly weak in December but then recovered slightly in January 2023.

The gross margin was slightly higher in the quarter, primarily driven by a positive business mix. This, in combination with a lower share of operating expenses, driven by continued good cost control, resulted in an increase in both the operating profit and the operating margin.

Overall, the operating profit increased by 43 percent and the operating margin improved by more than 1 percentage point. Specifically Segment North and Segment West contributed to the good result development.

As expected, cash flow strengthened at the end of the quarter as a direct result of reduced inventory build-up, but also as a result of lower organic growth. We expect that cash flow will continue to improve during the coming quarters of 2023.

Our market share has continuously increased in recent years and our intention is to continue to grow, both organically and through acquisitions. We assess that a considerable part of the market will continue to consolidated in the long run, and that this market consolidation will result in fewer but larger players with a global presence and with the ability to guarantee sustainability throughout the supply chain. During the year, we undertook intensive work on integrating the recent acquisitions, with a priority of realising growth synergies high on the agenda. We have also continued to develop our operations long term by both broadening our customer offering and increasing our degree of digitalisation and productivity.

Bufab shall take a leading position when it comes to sustainability within C-parts. This means that we will integrate sustainability in our internal processes as well as throughout our external supply chains. During the quarter, our climate goals under the Science Based Targets initiative were validated. Through this, we commit to work for significant reductions in our carbon emissions from our operations and supply chain going forward.

Given the geopolitical and macroeconomic situation, there is great uncertainty ahead of 2023 and we have noted increased caution among our customers in certain industrial segments. During the end of 2022, we have prepared our operations for potentially more difficult times and subsequently lower demand. At the same time, a weaker economy creates favourable conditions for a strong player such as Bufab to capture market shares, as customers increase their focus on reducing their indirect costs, many times within C-Parts. We also have a well-diversified customer- and article portfolio, with a good diversification of risk in various industries. All these opportunities, combined with a constantly broadened customer offering, provide a solid basis for a continued long-term, sustainable and profitable growth journey.

Finally, I want to thank all our customers around the world for the trust you have shown us during the year and, at the same time, extend a big thank you to our more than 1,800 “solutionists” throughout the world. Without your great commitment and drive, we would not have delivered such a strong 2022 as we are doing now.

Erik Lundén
President and CEO

Conference call

A conference call will be held on 9 February 2023 at 10:00 a.m. CET. Erik Lundén, 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: UK +44 (0)203 33 0551 0211, UK 08 444 93 3 57, Sweden +46 (0)8 5051 0086 or the US +1 786 496 5601. Conference code: 1149816#.

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

Contact

Erik Lundén
President and CEO
+46 370 69 69 01
erik.lunden@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 9 February 2023 at 7:30 a.m. CET.