Net sales rose in Q2 and across the first half of 2017 for BUFAB.
In Q2, the same period that saw the acquisition of Southampton's Thunderbolts, BUFAB saw organic growth at 3%, with net sales up 8% to SEK 823m. Order intake grew 13%. However operating profit declined 13% to SEK 77m with operating margin at 9.4%.
The half year statement saw net sales up 11% to SEK 1,628m, with organic growth at 6%. Order intake was slightly higher than net sales and operating profit was more healthy - seeing a rise to SEK 167m (from SEK 153m) and the operating margin at 10.2%.
Greater global market share
President and CEO Jörgen Rosengren noted healthy underlying demand and a higher market share. Organic growth was lower in Q1 and entirely attributable to calendar effects, he added:
"In the segment International, we increased our market share in most markets, which continues the good trend since many quarters. Growth was favourable in the UK and continental Europe, but softer in Norway, Finland and Asia. The segment's gross margin was weaker than in previous year.
"We also continued to increase our market share in Sweden. Unfortunately, we noted a deterioration in the gross margin during the quarter compared to the same period last year and the first quarter. The decline was the result of rising purchasing prices in recent quarters, driven in turn by higher prices for raw materials, which now impacted our income statement. However, we saw signs that the trend towards rising purchasing prices slowed in the latter part of the quarter. We continue to focus on raising prices for customers, although to date these have not been enough to offset the cost increases."
"Acquisitions are developing well"
The acquisitions we have completed in recent years continue to develop well. During the quarter, we completed the acquisition of Thunderbolts, complementing our other operations in the UK. We continue looking for suitable acquisition targets.
Due to acquisition costs and to a better than expected development in acquired companies, the result was charged with SEK 3 million in the quarter.
Overall, the result in the second quarter was influenced by calendar effects and raw material prices. Looking at the first six months as a whole, sales increased by 11% and operating profit by 8%. We also noted a deterioration in the gross margin during the quarter driven primarily by rising purchasing prices. Offsetting these is our main challenge in the short term. At the same time, we will continue to work on growing our market share and to seek more value-generating acquisitions. Because of the unusually strong order intake in the quarter, we remain optimistic ahead of 2017 as a whole."