Bufab Group: Year-end report 2021

Continued strong growth in sales and profit in the fourth quarter. Bufab delivers highest-ever full-year result. Board proposes raised dividend.

Fourth quarter 2021

• Net sales rose by 29 percent to SEK 1,599 million (1,238), of which 19 percent was organic
• Order intake increased by 25 percent and was higher than net sales
• Operating profit (EBITA) rose 40 percent to SEK 169 million (121), corresponding to a margin of 10.6 percent (9.8). Adjusted for acquisition costs and remeasured additional purchase considerations, operating profit (EBITA) amounted to SEK 184 million (126), corresponding to an operating margin of 11.5 percent (10.2)
• Earnings per share rose by 57 percent to SEK 3.17 (2.03)
• During the quarter, Jenny I Waltle and Tilka Trading were acquired, with annual sales of approximately SEK 190 million and SEK 50 million, respectively

Full-year 2021

• Net sales rose by 24 percent to SEK 5,878 million (4,756), of which 23 percent was organic
• Order intake increased by 26 percent and was higher than net sales
• Operating profit (EBITA) rose 44 percent to SEK 695 million (482), corresponding to a margin of 11.8 percent (10.1). Adjusted for acquisition costs and remeasured additional purchase considerations, operating profit (EBITA) increased to SEK 744 million (477), corresponding to an operating margin of 12.7 percent (10.1)
• Earnings per share rose by 56 percent to SEK 12.57 (8.04)
• In 2021, Bufab achieved its highest-ever annual sales, operating profit and earnings per share
• The Board of Directors proposes a dividend of SEK 3.75 per share (2.75)

The Group in brief

Strong end to a very good year

Bufab has delivered its highest ever sales, operating profit and earnings per share for the full year. We completed three strategic acquisitions with combined annual sales of more than SEK 500 million and continued to invest in our own operations to ensure future sustainable and profitable growth.

As expected, the strong demand continued in the fourth quarter. We delivered a strong organic growth of 19 percent, explained by solid underlying demand in all segments, price increases and increased market shares.

We also reported a strong gross margin, driven by higher volumes and efforts to pass on increased raw materials and freight prices to customers. The high level of demand, together with the continued challenging situation in the supply chain, places high pressure on our organisation, but our assessment is that the situation improved somewhat during the fourth quarter.

The share of operating expenses increased during the quarter, but adjusted for acquisitions and remeasured additional purchase considerations, the share of operating expenses is at a stable and continued low level, which contributed to our strong result. This was primarily due to effective cost control, but also due to continued low level of activity in terms of travel, customer events, training, and trade fairs as a result of the pandemic. The challenge going forward will be to meet the normalisation of the cost level by further increasing productivity.

Overall, operating profit increased by 40 percent and the margin by 0.8 percentage points. Adjusted for acquisitions and remeasured additional purchase considerations the operating profit increased by 44 percent and the margin by 2.2 percentage points.

We are however not satisfied with the weak cash flow during the year and particularly during the fourth quarter. However, the weak cash flow is a natural result of strong organic growth, that we had very low inventory at the beginning of the year and the significantly longer lead times from suppliers that we noted in the wake of the strained supply chain. Overall, this meant that, in order to meet our customers’ demand, we needed to build up higher working capital, mainly in the form of increased inventory during the year. We deem that these effects will be normalised during the first half of 2022 and therefore expect cash flow to be significantly strengthened moving forward.

We have a continued focus on acquisitions, and we have a strong pipeline of potential acquisition candidates in several markets. During the quarter, we acquired Jenny | Waltle in Austria and Tilka Trading in Sweden, with combined annual sales of SEK 240 million. Similar to other companies we have acquired, these companies have a strong entrepreneurial spirit and several synergies with Bufab, which we will benefit from.

Our strong results the last quarters are partly due to the investments in processes and digital tools that we made in recent years. This has increased Bufab’s productivity. Moving forward, we will continue our investments in these areas, but also in areas such as sustainability. We also see the need to strengthen the organisation, particularly in sales, to continue creating profitable growth and increase our market share.

If we look ahead, we see that the strong demand we noted during the fourth quarter continued into January. Together with stable order intake, this indicates a continued positive trend in demand during the first quarter of 2022. The challenges continue to be the handling of the strained supply chain and to offset the increased inflationary pressure through higher productivity.

Overall, we are very proud that, despite a challenging business environment, we have succeeded in meeting our customers’ demand in a positive way. I want to end by thanking all of Bufab’s 1,500 employees for a great achievement during the year. Together, we have delivered Bufab’s best ever result!

Johan Lindqvist
President and CEO

Conference call

A conference call will be held on 10 February 2022 at 9:00 a.m. CET. Johan Lindqvist, President and CEO, and Marcus Söderberg, CFO, 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 (0)203 009 57 10, UK 08 444 93 3 57, Sweden 08 506 921 85 or the US 191 772 001 78. Conference code: 3386108.

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

Contact

Johan Lindqvist
President and CEO
+46 370 69 69 00
johan.lindqvist@bufab.com

Marcus Söderberg
CFO
+46 370 69 69 66
marcus.soderberg@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 contacts on 10 February 2022 at 7:30 a.m. CET.

Bufab AB (publ) Box 2266 SE-331 02 Värnamo, Corp. Reg. No. 556685-6240
Tel: +46 370 69 69 00 Fax +46 370 69 69 10
www.bufab.com

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