Healthy growth and improved operating margin. Acquisition of Montrose Holdings Ltd. 2016 Bufab`s best year to date.
Fourth quarter of 2016
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Net sales rose by 14 percent to SEK 699 million (612). Organic growth was 4 percent
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Order intake was significantly higher than net sales
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Operating profit rose to SEK 53 million (38) and the operating margin rose to 7.6 percent (6.2)
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Earnings per share declined to SEK 0.22 (0.49), because of an item affecting comparability for tax. Adjusted earnings per share rose to SEK 0.85 (0.49)
Full-year 2016
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Net sales rose by 16 percent to SEK 2,847 million (2,458). Organic growth was 4 percent
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Order intake was higher than net sales
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Operating profit rose to SEK 272 million (197) and the operating margin to 9.5 percent (8.0)
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Earnings per share rose to SEK 4.29 (3.27) and adjusted earnings per share to SEK 4.92 (3.27)
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Net sales, operating profit and profit after tax were all the highest on record for Bufab
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The Board of Directors proposes raising the dividend for 2016 to SEK 2.00 (1.70) per share
| | Quarter 4 | | D | | Jan-Dec | | D |
| SEK millions | 2016 | | 2015 | | % | | 2016 | | 2015 | | % |
| Order intake | 744 | | 618 | | 20 | | 2,887 | | 2,463 | | 17 |
| Net sales | 699 | | 612 | | 14 | | 2,847 | | 2,458 | | 16 |
| Gross profit | 205 | | 167 | | 23 | | 828 | | 677 | | 22 |
| Gross margin, % | 29.4 | | 27.4 | | | | 29.1 | | 27.5 | | |
| Operating expenses | -152 | | -129 | | 18 | | -556 | | -480 | | 16 |
| Operating profit | 53 | | 38 | | 39 | | 272 | | 197 | | 38 |
| Operating margin, % | 7.6 | | 6.2 | | | | 9.5 | | 8.0 | | |
| Profit after tax | 8 | | 19 | | -55 | | 163 | | 125 | | 31 |
| Adjusted profit after tax | 32 | | 19 | | 74 | | 187 | | 125 | | 50 |
| Earnings per share, SEK | 0.22 | | 0.49 | | -55 | | 4.29 | | 3.27 | | 31 |
| Adjusted earnings per share, SEK | 0.85 | | 0.49 | | 74 | | 4.92 | | 3.27 | | 50 |
During the fourth quarter, net sales rose by 14 percent. The increase was partly due to organic growth in most markets and partly to a good contribution from our acquisitions, which all performed well.
As previously in the year, we saw a substantially stronger gross margin compared with the preceding year, primarily thanks to purchasing savings. On the other hand, our operating expenses were high during the quarter, in part owing to non-recurring acquisition-related expenses of SEK 6 million. Of these, SEK 3 million referred to an increased additional purchase price for one of our acquisitions, which has developed far better than expected. Despite these expenses, we achieved a considerable improvement of operating margin, and operating profit rose by 39 percent.
Both Sweden and International improved their net sales and operating profit. The strong development in Sweden was particularly gratifying. The segment achieved its best result for three years despite a weak SEK and moderate growth in the industry. Operating profit in the segment rose by 58 percent. Segment International also developed in the right direction, but was burdened in the quarter by slightly high operating expenses.
All in all, we are satisfied with development during the fourth quarter and for 2016 as a whole. A robust increase in net sales, operating profit, net profit and cash flow meant Bufab reported its best earnings ever. This development is no accident, but the result of purposeful work in line with the growth strategy we established in 2012.
Our long-term efforts to develop the competence and working methods in our sales organisation have resulted in increased market shares and thereby growth, despite unimpressive industry demand. We have successfully compensated for weak European currencies and a strong USD through higher prices and through systematisation and professionalisation of purchasing procedures. In this way, we have significantly strengthened our gross margin during the year. These efforts have also helped to lower tied-up working capital and thus strengthened cash flow.
The acquisition of Montrose Holdings Ltd in the UK in December is our fourth acquisition in two years and shows that our acquisition strategy is continuing to generate results. The acquired companies are developing well, work well with the other subsidiaries and made a strong contribution to Bufab`s earnings trend and cash flow during the year. We are continuously evaluating additional acquisition opportunities. As a result of a healthy cash flow in 2016 and an increased credit line, we have the financial capacity for more acquisitions.
We have worked intensively with developing and implementing "Bufab Best Practice": working methods, processes and systems for sales, sourcing, quality and logistics. The main aim of this work is to improve growth, efficiency and sustainability, as well as to offer a better development for recently acquired companies. In parallel, we are rolling out the Group`s new IT-system, which is now fully implemented at the majority of our subsidiaries. These initiatives are supported by training courses at the Bufab Academy.
We can thus look back on a successful 2016. Going into 2017, we see challenges in the prevailing exchange rates as well as a trend towards rising commodity prices. On the other hand, we hope to continue to increase our market share. We also witnessed a healthy order intake during the fourth quarter, which bodes well for the beginning of 2017.
Against this background, we aim to continue in the same direction and remain confident that we can achieve a favourable development also in the future.
Jörgen Rosengren
President and CEO
A conference call will be held on 21 February 2017 at 10:00 a.m. CET. Jörgen Rosengren, President and CEO, and Thomas Ekström, 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 1452 555566, UK: 08444933800, Sweden: 0850336434, or the US: 16315107498. Conference code: 51490510.
Please dial in 5-10 minutes ahead in order to complete the short registration process.
Jörgen Rosengren
CEO
+46 370 69 69 01
jorgen.rosengren@bufab.com
Thomas Ekström
CFO and IR Director
+46 370 69 94 01
thomas.ekstrom@bufab.com
Bufab AB (publ), Corporate Registration Number 556685-6240, is a trading company that offers its customers a full-service solution as Supply Chain Partner for sourcing, quality control and logistics for C-Parts (screws, nuts, etc.). Bufab`s Global Parts ProductivityTM customer offering aims to improve productivity in the customers` value chain for C-Parts.
Bufab was founded in 1977 in Småland and is an international company with operations in 24 countries. The head office is located in Värnamo, Sweden, and Bufab has about 1,000 employees. Bufab`s net sales for the past 12 months amounted to SEK 2.9 billion and the operating margin was 10 percent. The Bufab share is listed on Nasdaq Stockholm, under the ticker "BUFAB". Please visit www.bufab.com for more information.
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 21 February 2017 at 8:00 a.m. CET.
Bokslutskommunike 2016_engelsk final
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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Bufab Group via GlobeNewswire
HUG#2080074
