Year-end 2014 Presentation Vrnamo, February 20, 2015 Fourth quarter - - PowerPoint PPT Presentation

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Year-end 2014 Presentation Vrnamo, February 20, 2015 Fourth quarter - - PowerPoint PPT Presentation

Nov 30, 2022 111 likes •259 views

Year-end 2014 Presentation Vrnamo, February 20, 2015 Fourth quarter Bufab Group Established Approx 2 200 MSEK in turnover in 1977 Around 800 Headquarters in 120 000 employees Vrnamo, Sweden articles 12 000 30 wholly owned Listed

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Year-end 2014 Presentation

Värnamo, February 20, 2015

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Bufab Group

Fourth quarter Established in 1977 Around 800 employees 30 wholly owned subsidiaries in 23 countries Approx 2 200 MSEK in turnover Headquarters in Värnamo, Sweden 120 000 articles Listed on the stock exchange 12 000 customers In-house production

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Volume vs. value

Fourth quarter

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Fourth quarter

Bufab´s Strategy

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Quality and Customer First!

Accelerated organic

Growth

Improved cost/capital

Efficiency

Value-adding

Acquisitions

  • New Business Growth -

Customer Value Creation

  • All of Bufab, All the Time
  • Global Parts Productivity ™
  • Consolidate Sourcing
  • Logistics Productivity
  • Common Tools and

Processes

  • Good Base Performance
  • Growth Synergies
  • Products
  • Geography
  • Customer
  • Shared Value Creation
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Financial targets

Fourth quarter Sales growth Bufab’s goal is to achieve average annual organic growth over a business cycle exceeding the growth of the manufacturing industry in countries where Bufab is active by three percentage

  • points. In addition, Bufab intends to grow through acquisitions.

+3 ppt

Profitability Bufab targets an average operating margin of 12 percent over a business cycle.

12 %

Capital structure Bufab’s capital structure shall provide a high degree of financial flexibility and make acquisitions possible. The net debt/equity ratio should not exceed 80%.

<80%

Net working capital Bufab’s long-term goal is to achieve a net working capital/net sales ratio of 30 percent.

30%

Dividend policy Bufab’s target is to pay 50 percent of its net profit in dividends. However, the company’s financial condition, cash flow, acquisition opportunities and future prospects will be taken into account in any dividend decision.

50%

ACCELERATED ORGANIC GROWTH IMPROVED EFFICIENCY VALUE-ADDING ACQUISITIONS

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Fourth quarter

Growth strategy proven, but need better leverage – Second highest sales ever… – ..despite weak underlying demand, especially in second half and in Sweden – Excellent market shares gain in International - now 57% of sales – However, investments in sales organization puts pressure on

  • margins. Starting 3Q 2014, opex increase has leveled out.

Efficiency - satisfying results so far but need for intensified focus – Continued purchasing savings – Headwind toward end of year in mix, currency combined with weak demand in Sweden Focus area for 2015 - direct and indirect cost + price Acquisitions – pipeline established IPO

Summary 2014

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Financial highlights, Group

Fourth quarter Fourth quarter Net sales - weak ending 2014 Order intake in line with net sales Weaker net sales growth compared to earlier quarters - adjusted for currency translation 1.6 % Continuing growth in International with increased market shares Lower underlying demand, especially in Sweden

*Excluding IPO costs of 18 MSEK in Q1, 2014

Operating margin Negatively affected by higher costs for sales

  • rganization – levelling out

Negative impact from currencies– 6 MSEK in Q4 Strong comparable Q4 2013

Quarter 4 Δ Jan-Dec Δ SEK millions 2014 2013 % 2014 2013 % Order intake 533 519 2.7 2,195 2,072 5.9 Net sales 532 512 4.0 2,198 2,031 8.3 Gross margin, % 28.1 30.3 29.2 29.3 Adjusted operating profit* 33 55

  • 40.2

192 203

  • 5.3

Adjusted operating margin, % 6.2 10.8 8.7 10.0

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50 100 150 200 250 500 1000 1500 2000 2500 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 MSEK LTM Net sales, SEK millions LTM Net sales 12 M, MSEK LTM Adj Op Res, MSEK

  • 6
  • 8
  • 1

6 4 10 8 6 2

  • 10
  • 5

5 10 15 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014

Quarterly year-on-year net sales growth, %*

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Financial development, Group

Fourth quarter

*Adjusted for currency translation effects

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Segment Sweden

Fourth quarter Fourth quarter Order intake in line with net sales Net sales decreased

  • Weak underlying demand, likely worsened by

“long Christmas”, inventory adjustments

  • Unchanged market shares, except one customer

to manufacturing subsidiary Weaker operating margin

  • Lower volumes
  • Adverse exchange rates
  • Higher operating costs

*Pertains to net sales and order intake from external customers

Quarter 4 Δ Jan-Dec Δ SEK millions 2014 2013 % 2014 2013 % Order intake* 232 241

  • 3.7

968 998

  • 3.0

Net sales* 229 243

  • 5.6

982 970 1.2 Adjusted operating profit 27 40

  • 33.9

144 143 0.2 Adjusted operating margin, % 11.7 16.7 14.6 14.8

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50 100 150 200 500 1000 1500 2000 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 MSEK LTM Net sales, SEK millions Net sales LTM, MSEK LTM Adj Op Res, MSEK

  • 7
  • 9
  • 6
  • 2

3 6 2 1

  • 6
  • 10
  • 5

5 10 15 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014

Quarterly year-on-year net sales growth, %

10

Financial development, segment Sweden

Fourth quarter

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Segment International

Fourth quarter Fourth quarter Order intake in line with net sales Strong sales growth Adjusted for currency effects 7.9 % Strategic initiatives showing results Higher market shares – underlying demand somewhat weaker than in 1H Operating margin Negatively by higher cost for stronger sales organization Q4 2013 strong comparable

*Pertains to net sales and order intake from external customers

Quarter 4 Δ Jan-Dec Δ SEK millions 2014 2013 % 2014 2013 % Order intake* 301 277 8.6 1,227 1,074 14.3 Net sales* 303 269 12.7 1,217 1,061 14.7 Adjusted operating profit 12 19

  • 36.0

75 83

  • 10.0

Adjusted operating margin, % 4.0 7.0 6.2 7.8

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0,0 50,0 100,0 150,0 200,0 500 1000 1500 2000 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 MSEK LTM Net sales, SEK millions Net sales LTM, MSEK LTM Adj Op Res, MSEK

  • 5
  • 7

5 13 6 14 14 10 8

  • 10
  • 5

5 10 15 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014

Quarterly year-on-year net sales growth, %*

12

Financial development, segment International

Fourth quarter

*Adjusted for currency translation effects

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Fourth quarter

25,0% 30,0% 35,0% 40,0% 45,0% 50,0% 200 400 600 800 1000 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 As of % of net sales SEK millions Net Working Capital As of % of net sales

Net working capital

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Challenges faced toward end 2014 - and focus areas for 2015

Fourth quarter

Focus areas

Weak demand, especially Sweden

  • Implementing new cost savings package of 15 MSEK yearly, full

effect from Q3: Merger two subsidiaries, streamlining backoffice, staff reduction

  • ne manufacturing subsidiary
  • Continued investments and efforts in sales - some promising signs

Challenges

Adverse currencies: weak SEK, strong USD

  • Weak SEK: Price increases being implemented since mid-Q4

Strong USD: Increased efforts in purchasing – organization strengthened and tools improved – helped by good outlook for raw material prices

Insufficient leverage

  • n growth

in International

  • Investments made 2014 are “good cost”, …
  • …but we are holding back increases from level of Q3, 2014 until

we see positive margin effects from growth

  • Strong focus on landing and ramping up business already awarded