Bufab reported growth of 10 percent and strong order intake in the third quarter. Organic growth was solid as a result of continued favourable underlying demand and higher market shares. While an increase was noted in operating profit, the operating margin declined compared with the preceding year.

Segment International increased its net sales by 13 percent, of which organic growth accounted for 8 percent. Underlying demand was strong and we grew our market share in most markets. The gross margin was in line with the preceding year, while the operating margin was negatively impacted by higher operating expenses. We are continuing to expand and strengthen the sales organisation in the segment. These initiatives are important for Bufab in the long term, but we are nonetheless dissatisfied with the cost trend in the segment during the year.

In segment Sweden, net sales rose by 4 percent, driven entirely by organic growth. Growth was thus slightly lower than earlier in the year. Gross margin for the quarter deteriorated compared with the preceding year. The decline is the result of rising purchasing prices in recent quarters, which have now impacted our income statement. This in turn is the result of higher prices for raw materials. We are continuing to work to offset these cost increases by raising the prices for customers, but the results to date have been insufficient. We have intensified efforts during the quarter in light of the margin trend and the risk of further increases in raw material prices.

Overall for the third quarter, Bufab reported strong growth and increased operating profit but somewhat weaker margins.

Strong order intake in the two most recent quarters and positive signals from customers and industry provide a basis for optimism ahead of the remainder of 2017. In the years ahead, we intend to grow organically with healthy margins and to make additional value-generating acquisitions. For example, Bufab has now opened a subsidiary in Mexico to leverage growth opportunities in the country. Our ambition is to be the leading player in our industry by 2020. To reflect this ambition, Bufab's Management and Board of Directors has decided to raise the Group's target for average annual growth to 10 percent.

Jörgen Rosengren
President and CEO

Conference call

A conference call will be held on 26 October 2017 at 10:00 a.m. CET. Jörgen Rosengren, President and CEO, 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 1452 555566, UK: 08444933800, Sweden: 0850336434, or the US: 16315107498. Conference code: 95793239.

Please dial in 5-10 minutes ahead in order to complete the short registration process.

Contact

Jörgen Rosengren  
CEO
+46 370 69 69 01
jorgen.rosengren@bufab.com

This information is such that Bufab AB (publ) is obliged to disclose in accordance with the EU's Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication by the aforementioned contact on 26 October 2017 at 7:30 a.m. CET.