Quarter 3 continued the trends of H1 2021 for Bufab, with net sales, organic growth and operating profit all up.
Net sales rose 21% to SEK 1,425 million (2020: 1,181). Organic growth was 20% and order intake was higher than net sales. Operating profit (EBITA) increased to SEK 164 million (2020: 142).
After Q3, Bufab acquired Jenny | Waltle and Tilka Trading.
Johan Lindqvist, President and CEO, said: "The good demand that we saw during the first half of the year continued in the third quarter. Bufab delivered a high organic growth and strong earnings, despite a continued very challenging operational situation following the strained supply chains...
"Organic growth amounted to 20 percent which, alongside a weak comparative quarter, was primarily due to continued strong underlying demand in all segments, but also due to continued captured market shares.
"The economic recovery and strong increase in demand after the pandemic created major challenges for the industry globally. This is primarily in the form of an extremely strained supply chain and higher prices for raw materials and freight, but also because there is now a shortage of capacity at many stages of the supply chain. Overall, this creates uncertainty and consequently, additional work throughout our organisation, which is expected to continue for at least the first half of 2022.
"Similar to most other companies, we have been affected by large price increases for raw materials and freight, but have succeeded to date in offsetting this by passing these costs on to the customer. This work, together with the higher volumes relative to the comparative quarter, resulted in a good gross margin in the quarter.
"We have a continued focus on acquisitions and we have a strong pipeline of potential acquisition candidates in several geographies. During the quarter, this resulted in our acquisition of Components Solutions Group, a company we have been monitoring since 2013. The company, which has annual sales of approximately MSEK 280 million and 85 employees, will strengthen our position in the North American market, which we regard as one of our potentially large growth markets going forward. Through many meetings in recent years, we have become very familiar with the company and we can see many similarities with Bufab.
"After the reporting period we also acquired Jenny | Waltle and Tilka Trading with annual sales of MSEK 190 and 43 employees and net sales of MSEK 50 and 18 employees respectively. The companies have operations in Austria and Sweden, and we have followed them for some years and also here we see several similarities with Bufab...
"The challenge going forward will be to address the normalisation of the cost level by further increasing productivity and to continue to manage the strained supply situation in the market, as well as continuing to pass on the higher costs of raw materials and freight to customers. I do however take a positive view of the future. This is because Bufab’s offering, in times such as these, should be perceived as even more relevant in terms of securing the companies’ own supply of C-parts. In addition, the healthy demand looks to continue in the fourth quarter. Combined with continued low inventory levels throughout the manufacturing industry in Europe and North America, I foresee good conditions for a favourable development also going forward.
"Overall, we are very proud that we, despite a challenging environment, have succeeded in maintaining supplies to our customers in a favourable manner. I want to sincerely thank all of our 1,450 solutionists for the incredible focus and flexibility they demonstrated during the year."