Sweden-headquartered Bufab saw net sales grew a whopping 44% to SEK 8,431 (2021: 5,878) in 2022, 12% of which was organic.
The group had a busy year, with three strategic acquisitions – including TIMCO, Pajo Bolte and CDA Polska Sp.z.o.o. It saw order intake up 39% while operating profit grew 42% to SEK 990 million (2021: 695). Adjusted for additional purchase considerations, operating profit (EBITA) increased to SEK 1,084 (2021: 736).
In 2022, Bufab achieved its highest-ever annual sales, operating profit and earnings per share.
Even Q4 was strong for the group. Net sales increased 30% to SEK 2,074 million (2021: 1,599), though a modest 1% of which was organic.
Order intake increased 29% and was somewhat higher than net sales. Operating profit (EBITA) increased 43 percent to SEK 242 million (2021 Q4: 169). Adjusted for remeasured additional purchase considerations, operating profit (EBITA) amounted to SEK 239 million (2021 Q4: 184).
President and CEO Erik Lundén said: “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 % 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 intention is to continue to grow, both organically and through acquisitions”
“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.”
2022 also saw Bufab discontinue its operations in Russia.