Continued strong growth and earnings in an uncertain world. Bufab once again achieved its highest ever quarterly result.
First quarter 2022
Net sales rose by 41 percent to SEK 2,002 million (1,423). Organic growth was +21 percent and order intake was higher than net sales
Operating profit (EBITA) increased 37 percent to SEK 243 million (177) and the operating margin was 12.1 percent (12.4). Adjusted for costs related to the discontinuation of Bufab’s Russian operations amounting to SEK -15 million (0), remeasured additional purchase considerations amounting to SEK -15 million (-6) and acquisition costs amounting to SEK -8 million (0), operating profit (EBITA) increased by 53 percent to SEK 281 million (183), corresponding to an operating margin of 14.0 percent (12.9)
Earnings per share rose by 39 percent to SEK 4.42 (3.18)
During the quarter, Pajo-Bolte A/S and TIMCO (TI Midwood & Co Ltd.) were acquired, with annual sales of approximately SEK 190 million and SEK 730 million, respectively
The Board of Directors appointed Erik Lundén as new President and CEO of Bufab. He takes office mid-August 2022. At the same time Johan Lindqvist will take on the role as Vice President and Deputy CEO
Bufab once again achieved its highest ever sales, operating profit, and earnings per share for a single quarter
The group in brief
Quarter 1
Δ
12-months rolling
Full year
SEK million
2022
2021
%
2021/22
2021
Order intake
2,041
1,481
38
6,644
6,084
Net sales
2,002
1,423
41
6,456
5,878
Gross profit
561
397
41
1,801
1,638
%
28.0
27.9
27.9
27.9
Operating expenses
-318
-220
45
-1,040
-942
%
-15.9
-15.5
-16.1
16.0
Operating profit (EBITA)
243
177
37
761
695
%
12.1
12.4
11.8
11.8
Operating profit
233
170
37
727
664
%
11.6
11.9
11.3
11.3
Profit after tax
166
119
39
517
470
Earnings per share, SEK
4.42
3.18
39
13.81
12.57
Continued strong results in an uncertain world
During the first quarter of 2022, Bufab once again delivered its highest ever sales, operating profit and earnings per share for a single quarter. In addition, we completed two strategic acquisitions with combined annual sales of approximately SEK 930 million.
The healthy level of demand continued into the first quarter of this year, and we noted a strong organic growth of 21 percent. The organic growth is a result of strong underlying demand in all segments, price increases, and higher market shares.
We have offset increased costs of raw materials and freight by passing these on to the customers, given us a stable gross margin for the quarter.
The share of operating expenses increased somewhat during the quarter but adjusted for costs related to the discontinuation of our Russian operations, remeasured additional purchase considerations and acquisitions costs, the share of operating expenses declined compared with the preceding year. This combined with the healthy growth, explains the strong results in the quarter.
Overall, operating profit rose by 37 percent and the margin was 12.1 percent. Adjusted for the items in the preceding paragraph, operating profit increased by a full 53 percent and the margin amounted to a strong 14.0 percent.
During the quarter, we acquired TIMCO, which conducts operations in the UK, and has annual sales of approximately SEK 730 million. The acquisition is the largest to date for Bufab and is a significant strategic addition to our operations in the UK. TIMCO is a strong brand with a long history of suppling C-parts to the construction industry and this acquisition will reinforce Bufab’s customer offering in this industry. During the quarter, we also acquired the Danish company Pajo-Bolte, with annual sales of nearly SEK 200 million, which will help us to improve our position in Denmark, as well as our customer offering to the construction industry in the Nordic market.
We have already begun working with the business opportunities brought about by both of these acquisitions. Acquisition costs of approximately SEK 8 million were charged to the quarter.
The Board has decided to discontinue our small inventory- and sales office in Russia. In total, this operation corresponds to approximately 0.5 percent of the Group’s total annual sales. As a result of this discontinuation of operations, we have recognised costs of SEK 15 million for the quarter.
Looking ahead, the war in Ukraine will affect us in many ways, perhaps primarily through supply chain disruptions. In the past month it has become clear to us that a great deal in this global world is interconnected and is impacted by this conflict. We currently invest a large amount of energy in securing deliveries to our customers as there continues to be major disruptions in supply chains continue. We will need to offset the higher inflation in Europe and the US by increasing productivity and continuing our work to pass on cost increases for raw materials and freight to our customers.
Under these circumstances, it is however important that we also continue working on the development of our operations in areas such as digitalisation, efficiency, and strengthening our team. The aim of this is to be even more relevant for our customers. We have made much progress, but still have a lot of work left.
To wisely integrating the acquisitions we have made recently is also a priority area. By using our Best Practice model, both existing and newly acquired companies are strengthened.
We are also working on several activities within the area of sustainability, a strategically important area for Bufab and, among other activities, we intend to have our Science Based Target Initiatives validated during the summer and the autumn.
A strong first quarter, with a healthy order intake, creates the conditions for stable development also in the second quarter of this year. However, considering all of the challenges that the geopolitical situation entails, it is difficult to comment on the future.
Regardless of the developments, however, Bufab’s position is significantly stronger overall than it was a year ago. I want to thank all of Bufab’s 1,750 “solutionists” for their excellent work so far this year.
Johan Lindqvist President and CEO
Conference call
A conference call will be held on 21 April 2022 at 9:00 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)203 0095710, Sweden 08 506 921 85 or the US 1 866 869 23 21. Conference code: 4298442.
Please dial in 5-10 minutes ahead in order to complete the short registration process.
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 April 2022 at 7:30 a.m. CEST.
