For the third consecutive year Bufab reported record full year sales – up 18% year-on-year. Operating and net profits were also at new record levels.
Bufab net sales in 2018 increased 18% to SEK 3.786 billion, of which 8% was organic growth. Operating profit (EBITA) increased to SEK 367 million (2017: SEK 311 million), corresponding to an operating margin of 9.7%, unchanged from 2017. Fourth quarter net sales rose 17% (4% organic). Operating margin for the quarter eased to 8.5% (Q4 2017: 8.7%).
President and CEO, Jörgen Rosengren, said Q4 growth was primarily due to strong contributions from acquisitions, but also exchange rates and market shares. "We saw no signs of a substantial slowdown in the economy, but did note increased caution among our customers. This drove a certain postponement of volumes until after the end of the year, which, on the other hand, led to a healthy start for sales in January 2019."
Rosengren said Q4 gross margin was considerably weaker than Q4 2017 and Q3 2018, entirely due to performance in Sweden, where the business had been under pressure throughout the year from high purchasing prices and a weak Swedish Krona. Lower margins in a newly acquired subsidiary also impacted Q4 results.
The consolidated gross margin remained unchanged in 2018. “We have implemented major price increases for our customers in both segments, thereby fully offsetting the higher purchasing prices,” Rosengren noted. “At the end of 2018, the increases in the prices of raw materials levelled off. The prerequisites are thus favourable for purchasing savings to be made this year.”
Rosegren continued: “We captured market shares throughout 2018. This was not a matter of a few random successes, but of many hundreds of new customers across all of our markets. Such a broad increase would not have been possible without the focus in prior years on recruitment, personal development, processes and tools in our sales organisation. We also significantly increased the pace of our purchasing by appointing a person in Group management in charge of this and, under her leadership, invest in our organisation, tools and processes.”
Rosengren noted the acquisition of Rudhäll Industri in late 2018 and reiterated: “We have our sights set on other acquisitions”. He concluded, "Ahead of 2019, there is unusually large macro-economic uncertainty. However, regardless of how the market performs, we will continue to work towards our goal: to be the strongest company in our industry in 2020."
Having held senior management roles in leading automotive and fastener businesses, Phil joined Fastener + Fixing Magazine as editor in 2002. Convinced there is no substitute for ‘being there’, over 15 years of visits and interviews around the world means he has accumulated an extraordinary knowledge and perspective of the global fastener industry, reflected in his incisive and thought provoking reporting.