Bufab saw significant growth in sales and profit in 2018.
In Q4, net sales rose 17% to SEK 966 million (828), 4% of which was organic. Order intake increased 14% and was higher than net sales, while operating profit (EBITA) rose to SEK 82 million (72), corresponding to an operating margin of 8.5% (8.7). Q4 saw the firm acquire Rudhäll Industri AB in October, with sales of approximately SEK 210 million in Sweden and China.
Full-year net sales rose 18% to SEK 3,786 million (3,201), of which 8% was organic. Order intake increased 17% and was higher than net sales, while operating profit (EBITA) rose to SEK 367 million (311), corresponding to an operating margin of 9.7% (9.7).
President and CEO Jörgen Rosengren noted increased caution from customers, postponing volumes until after year end, which had a knock on effect of creating healthy sales in January 2019.
Gross margin was considerably weaker in Q4, down to the performance of Bufab in Sweden. Year-long high purchasing prices and a weak Swedish krona contributed, but Rosengren said “the performance is not good enough. We are determined to change this trend in 2019.”
Higher purchasing prices were offset by “major price increases for customers”
"Overall, Bufab had a strong end to a good year. For the third consecutive year, we were able to note Bufab’s highest ever full-year sales, operating profit and net profit. Since we launched our growth strategy in 2012, our sales have increased by an average of 11% per year and operating profit by 14%. We see this as a clear indication that our strategy is working.
"Two years ago, we established a new long-term target for Bufab - "Leadership 2020”. This implies that we will become the strongest player in our industry and thus the preferred choice for customers, suppliers, acquisition candidates and talents. This was our highest priority in 2018, and will remain so in 2019.
"We captured market share throughout 2018. This was not a matter of a few random successes, but of many hundreds of new customers across all of our markets. Such a broad increase would not have been possible without the focus in prior years on recruitment, personal development, processes and tools in our sales organisation. We also significantly increased the pace of our purchasing by appointing a person in Group management in charge of this and, under her leadership, invest in our organisation, tools and processes.
"In parallel, we continued our work on digitalisation, thereby making the knowledge and work approach contained in “Bufab Best Practice” simpler to use, more efficient and more precise. Our digital integration with customers and suppliers increased. The work on sustainability issues advanced. We have financed all of these, to some extent costly, measures using organic growth, thereby retaining a stable operating margin.
"“Leadership” is also important for acquisitions. Our newly acquired companies gain access to our global platform and also performed strongly in 2018. Toward the end of the year, we made an additional acquisition, Rudhäll Industri, and, as usual, we have our sights set on others acquisitions.
"Ahead of 2019, there is unusually large macro-economic uncertainty. However, regardless of how the market performs, we will continue to work towards our goal: to be the strongest company in our industry in 2020."