First quarter 2016
|12 month rolling|
|Quarter 1||D||Full year|
|Gross margin, %||28.6||28.0||27.8||27.5|
|Operating margin, %||9.9||8.0||8.5||8.0|
|Profit after tax||49||33||48||141||125|
|Earnings per share, SEK||1.30||0.88||48||3.69||3.27|
During the first quarter, net sales rose by 18 percent to SEK 718 million, Bufab's highest net sales ever for a single quarter. Most of the increase stems from the three acquisitions carried out since February 2015. All acquisitions report good growth in market shares, net sales and profitability for the quarter. Moderate organic growth of 2 percent due to higher market shares in the segment International contributed to the Group's increase in net sales.
The quarter's gross margin strengthened to 28.6 percent (28.0). This increase is a direct result of our focus on improved sourcing prices and higher customer prices which counteracted negative currency effects. These measures, paired with good contributions from the acquired companies, increased sales volumes and good cost control have enabled us to considerably improve our operating margin to 9.9 percent (8.0). We still have a way to go before we reach our operating margin target of 12 percent, but we are moving in the right direction.
We have long worked systematically to improve our tied-up capital, particularly in terms of trade payables and inventory. Consequently, it was very satisfying to see that we together with the improvement in tied up capital were able to convert the good operating profits into a robust increase of our operating cash flow, from SEK 8 to 44 million.
Segment International performed well. Adjusted for currency effects and acquisitions, net sales increased by 5 percent. The organic growth rate was lower than during 2015, particularly at the start of the quarter. However, we estimate that our market shares increased during the period. Weaker sales growth in Norway, Finland and Asia was compensated for by strong growth in the rest of Europe. Due to good cost control, the higher net sales generated a stronger operating margin. Better sourcing prices and higher customer prices also contributed. We continue to reinforce the segment's organisation in both sales and sourcing, and feel that we have excellent potential to further expand our market share moving forward.
In segment Sweden, net sales declined by 3 percent, primarily the result of low demand in the telecommunications sector. Our ambition is to gradually expand our market share for segment Sweden from what is already a good level. We continue to work intensively to increase new sales in Sweden but have not yet reached sufficient growth levels. Despite weak sales growth, we managed to reinforce both gross and operating margins and increase the segments' operating profit. This was accomplished through sourcing savings, higher customer prices and lower operating expenses.
In March, we acquired Magnetfabriken AB, one of the leading suppliers of magnets and magnet systems in the Nordic region with annual sales of around SEK 20 million. As previously, we are continuously evaluating additional acquisition opportunities.
We face some important challenges: to continue to achieve organic growth, also in Sweden, and to further improve our operating margin. But the year has started well for Bufab. Our ambition level is high, and we look ahead with confidence on the conditions for the remainder of 2016.
President & CEO
A conference call will be held on 27 April 2016 at 10:00 a.m. CET. Jörgen Rosengren, President and CEO, and Thomas Ekström, CFO, will present the results. The conference call will be held in English.
To participate, please use one of the following numbers: +44 1452 555566, UK: 08444933800, Sweden: 0850336434, or US: 16315107498. Conference code: 86378099.
Please dial in 5-10 minutes ahead in order to complete the short registration process.
This interim report is published in accordance with the Swedish Securities Market Act, the Swedish Financial Instruments Trading Act and/or the regulations of Nasdaq Stockholm. The information was submitted for publication at 27 April 2016 at 08.00 a.m. CET.
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Bufab AB (publ), Corporate Registration Number 556685-6240, is a trading company that offers its customers a full-service solution as Supply Chain Partner for sourcing, quality control and logistics for C-Parts (screws, nuts, etc.). Bufab's Global Parts Productivity TM customer offering aims to improve productivity in customers' value chain for C-Parts.
Bufab was founded in 1977 in Småland and is an international company with operations in 23 countries. The head office is located in Värnamo, Sweden and Bufab has about 935 employees. Bufab's net sales for 2015 amounted to SEK 2.5 billion and operating margin was 8 percent. The Bufab share is listed on Nasdaq Stockholm, under the ticker "BUFAB." For more information visit www.bufab.com .