Q2 2020 Presentation July 16, 2020 Second quarter Stable result - - PowerPoint PPT Presentation

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Q2 2020 Presentation July 16, 2020 Second quarter Stable result - - PowerPoint PPT Presentation

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Q2 2020 Presentation July 16, 2020 Second quarter Stable result in a very weak market Sales down -6% 20% acquired, -25% organic and -1% currency o o Overall, strong impact of the COVID-19 pandemic. Segment North and West were the

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SLIDE 1

July 16, 2020

Q2 2020 Presentation

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SLIDE 2

Second quarter

Stable result in a very weak market

  • Sales down -6%
  • 20% acquired, -25% organic and -1% currency
  • Overall, strong impact of the COVID-19 pandemic. Segment North and West were the hardest

hit, while segment East had a strong development.

  • Extensive measures taken to meet demand drop…
  • Short-time work schemes and some layoffs
  • Significant reduction of cost and capex
  • Action program prioritizes speed and retained flexibility
  • …resulting in a stable operating result and margin, and a strong cash flow in the quarter
  • Gradual recovery during quarter
  • Adj organic growth: 30% in April, -25% in May, -15% in June
  • Increased cost savings program from 40 to 100 MSEK, with full effect from January 2021
  • Continued focus on growth and increased market share

2

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SLIDE 3

EBITA Q2 2019 103 Currencies Volume

  • 100

Cost reduction + price/mix/other +70 Acquisitions +19 EBITA Q2 2020 92 3

Second quarter

Financial highlights, Group

Quarter 2

Δ

Jan–June

Δ

12- months rolling Full year SEK million 2020 2019

%

2020 2019 % 2020/19 2019 Order intake 987 1,080

  • 9

2,308 2,164

7

4,498 4,354 Net sales 1,022 1,089

  • 6

2,337 2,180

7

4,505 4,348 Gross profit 258 303

  • 15

609 607 1,185 1,183

% 25.2 27.8 26.1 27.8 26.3 27.2

Operating expenses

  • 165
  • 200
  • 18
  • 391
  • 385

2

  • 805
  • 799

%

  • 16.2
  • 18.4
  • 16.7
  • 17.6
  • 17.9
  • 18.4

Operating profit (EBITA) 92 103

  • 10

218 222

  • 2

379 384

% 9.1 9.5 9.3 10.2 8.4 8.8

Profit/loss after tax 46 71

  • 35

132 155

  • 14

230 253 Earnings per share, SEK 1.24 1.91

  • 35

3.54 4.14

  • 14

6.15 6.75

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SLIDE 4

Financial development, Group

  • 30
  • 20
  • 10

10 20 30

Percent

Quarterly Net Sales growth

Organic growth Total growth

50 100 150 200 250 300 350 400 450 500 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000

LTM EBITA, SEK million LTM Net Sales, SEK millions Net Sales EBITA 4

Second quarter

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SLIDE 5

Second quarter

  • Strong impact of the Covid-19 pandemic on the segment
  • However, gradual recovery during the quarter
  • Gross margin significantly down
  • Manufacturing units in Sweden (automotive industry; fixed cost absorption)
  • Acquisition of HT BENDIX A/S
  • Short-time work support credited to Opex even for personnel costs in COGS
  • Substantially lower cost had positive impact on operating profit and margin

5 Quarter 2

Δ

Jan–June

Δ

Rolling 12 months Full year SEK million 2020 2019

%

2020 2019 % 2020/19 2019 Order intake 437 450

  • 3

1,001 901

11

1,966 1,866 Net sales 448 454

  • 1

1,001 907

10

1,960 1,865 Gross profit 94 121

  • 22

231 240

  • 4

465 474

% 20.9 26.7 23.1 26.5 23.8 25.4

Operating expenses

  • 55
  • 74
  • 25
  • 137
  • 143
  • 4
  • 294
  • 300

%

  • 12.3
  • 16.2
  • 13.7
  • 15.8
  • 15.0
  • 16.1

Operating profit (EBITA) 39 48

  • 19

94 98

  • 4

170 174

% 8.7 10.5 9.4 10.8 8.7 9.3

Segment North

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SLIDE 6

6

Second quarter

  • Strong drop in demand, especially Germany, the Netherlands and France and among customers within the

automotive industry

  • Gradual recovery during the quarter, but from low levels
  • Gross margin significantly lower mainly due to lower volumes and a poorer business mix
  • However, lower gross margin mitigated by a lower share of operating expenses

Quarter 2

Δ

Jan–June

Δ

Rolling 12 months Full year SEK million 2020 2019

%

2020 2019 % 2020/19 2019 Order intake 188 300

  • 37

487 610

  • 20

1,034 1,157 Net sales 202 309

  • 35

503 617

  • 18

1,041 1,155 Gross profit 49 83

  • 41

125 167

  • 25

264 306

% 24.4 26.8 24.8 27.1 25.3 26.5

Operating expenses

  • 33
  • 55
  • 40
  • 85
  • 106

20

  • 188
  • 207

%

  • 16.4
  • 17.7
  • 17.0
  • 17.2
  • 18.0
  • 17.9

Operating profit (EBITA) 16 28

  • 43

39 62

  • 37

76 99

% 7.9 9.1 7.8 10.0 7.3 8.6

Segment West

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SLIDE 7
  • Positive development despite a continued weak market
  • China and Southeast Asia developed strongly, while Eastern Europe experienced a bigger drop in demand
  • Strong contributions from purchasing savings and good cost control led to strong EBITA and record margin

7

Second quarter

Quarter 2

Δ

Jan-June

Δ

Rolling 12 months Full year SEK million 2020 2019

%

2020 2019 2020/19 2019 Order intake 165 194

  • 15

354 378

  • 6

697 721 Net sales 162 191

  • 15

351 376

  • 7

698 723 Gross profit 53 61

  • 13

112 119

  • 6

223 230

% 32.7 31.9 31.8 31.6 32.0 31.8

Operating expenses

  • 26
  • 35

25

  • 58
  • 67
  • 13
  • 124
  • 134

%

  • 16.0
  • 18.3
  • 16.5
  • 17.8
  • 17.8
  • 18.5

Operating profit (EBITA) 27 25

8

53 51

4

99 97

% 16.7 13.1 15.1 13.6 14.2 13.4

Segment East

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SLIDE 8
  • Substantially lower demand towards end of March when restrictions started. However, as from end of May

strong recovery, especially in North America

  • Lower gross margin due to lower volumes. Good cost control.
  • Strong EBITA improvement due to acquisition of American Bolt & Screw in November 2019

8

Second quarter

Quarter 2

Δ

Jan–June

Δ

Rolling 12 months Full year SEK million 2020 2019

%

2020 2019 % 2020/19 2019 Order intake 197 134 47 465 272

71

795 602 Net sales 210 134

57

481 277

74

803 598 Gross profit 64 42

52

150 87

72

247 185

% 30.5 31.3 31.1 31.4 30.8 30.9

Operating expenses

  • 45
  • 30
  • 50
  • 101
  • 60
  • 68
  • 179
  • 138

%

  • 21.4
  • 22.4
  • 21.0
  • 21.7
  • 22.2
  • 23.1

Operating profit (EBITA) 19 12

58

49 27

81

69 47

% 9.1 8.9 10.1 9.8 8.6 7.9

Segment UK/North America

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SLIDE 9

Second quarter

Stable operating margin thanks to cost savings

9

  • 25%
  • 15%
  • 5%

5% 15%

Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20

Organic growth, %

0% 5% 10% 15%

Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20

EBITA%

COVID-19 resulted in very weak demand in Q2-20 in all segments, …sending organic growth down to –25% However, fast and flexible cost savings during Q2 protected

  • perating margin

Mid-term cost savings program increased from 40 to 100 MSEK

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SLIDE 10

Second quarter

Strengthened financial position

10

0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5

Net debt/EBITDA adj.

Net debt/EBITDA adj, x

(1) (2) (3) (1) = Acquisition of APEX (appr 300 MSEK cash) (2) = Acquisition of HT BENDIX (appr 215 MSEK cash) (3) = Acquisition of ABS (appr 200 MSEK cash)

0% 20% 40% 60% 80% 100% 50 100 150 200 250 300 350 400

2017 2018 2019 H1 2019 H1 2020

Operating cash-flow and Cash conversion

Operating cash-flow, LTM Cash conversion, %

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SLIDE 11

Second quarter

Acquisitions since 2014

11

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SLIDE 12

Second quarter

EBITA Bridge

12 EBITA Q2 2019 103 Currencies Volume

  • 100

Price/cost/mix/other +70 Acquisitions +19 EBITA Q2 2020 92 EBITA Q2 2019 103 North

  • 9

West

  • 12

East +2 UK/North America +7 Group/Other +2 EBITA Q2 2020 92

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SLIDE 13

13

Second quarter

Priorities 2020-2021

Protect

Health, Customers and Bufab

Restart

Profitable Growth

Invest

In Leadership

Jan-June 2020 July-Dec 2020 January 2021

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SLIDE 14

Outlook

Summary and outlook

Second quarter: significant drop in sales, but stable result and cash flow

  • Overall, strong impact of the Covid-19 pandemic.
  • Extensive measures taken to mitigate negative impact

Outlook:

  • Gradual recovery during 2Q expected to continue during second half of 2020
  • In view of remaining uncertainty, cost program increased from 40 to 100 MSEK

Priorities 2020

  • So far during 2020: successful program to Protect Health, Customers and Bufab
  • Second half 2020: Restart Profitable Growth
  • Quickly adjust cost base
  • Renewed efforts to increase market share—”Get out there and sell!”
  • By January 2021, in position to continue investment in Leadership strategy

14

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SLIDE 15

15

www.bufab.com

Q&A