q1 2020 presentation - bufab grouppresentation first quarter q1 2020 in brief • sales up +21% o...
TRANSCRIPT
April 21, 2020
Q1 2020Presentation
First quarter
Q1 2020 in Brief• Sales up +21%
o 24% acquired, -5% organic and 2% currency. Order intake in line with net sales o Lower underlying demand but unchanged market share
• All-time-high sales, order intake and operating profit. Strong cash flow.
• Overall, impact on of the COVID-19 pandemic was low in Q1, …
• …but in April demand so far is down by 30% due to customer closures and government restrictions in Europe and North America.
• Forceful measures taken to protect Health, Customer Quality and Delivery, and to meet lower demand in Q2
o Short-time work schemes and some layoffs – working time reduced by 30% in Aprilo Reduction all other cost and capex where possibleo Ready to take more measures if demand falls furthero Action program prioritises speed and retained flexibility
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EBITA Q1 2019 119Currencies -6
Volume -16
Price/cost/mix/other +5
Acquisitions +24
EBITA Q1 2020 126
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First quarter
Financial highlights, GroupQuarter 1 Δ
12-monthsrolling Full year
SEK million 2020 2019 % 2020/19 2019Order intake 1,321 1,084 22 4,591 4,354Net sales 1,316 1,091 21 4,573 4,348Gross profit 351 304 16 1,230 1,183% 26.7 27.9 26.9 27.2
Operating expenses -226 -184 22 -841 -799% -17.2 -16.9 -18.4 -18.4
Operating profit (EBITA) 126 119 5 390 384% 9.5 10.9 8.5 8.8
Profit after tax 86 84 3 255 253Earnings per share, SEK 2.31 2.23 4 6.83 6.75
Financial development, Group
-10
-5
0
5
10
15
20
25
Perc
ent
Quarterly Net Sales growthOrganic growth Total growth
0
50
100
150
200
250
300
350
400
450
500
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
LTM
EBI
TA, S
EK m
illion
LTM
Net
Sal
es, S
EK m
illion
s
Net Sales EBITA
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First quarter
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First quarter
Bufab’s priorities during Corona crisis
1Protect
Health(team, families, society—prove we’re Responsible Partner)
2Protect
Customers(deliveries, flexibility, troubleshooting—prove we’re Solutionists)
3Protect
Bufab(it’s where we work—prove we’re Entrepreneurs w/Big Hearts)
Protect…Health
Customers
Bufab6
First quarter
In April, we are entering the second phase
Jan-March
Secure health and delivery
Protect…Health
Customers
April-
Flexibly adapt to changing market
First quarter
Corona virus pandemic means tough Q2
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Negative Impact on Q2 Sales
Strong Measures Taken, Flexibility Retained
• Demand in China sharply down in February, but recovered in March
• From April on, substantial customer closures and lockdowns in Europe and North America
• Some countries, industries harder hit—diversification helps
• April started at -30% sales relative normal levels
• Unclear how long effect will last• Some customers restarting production
now or soon• Development pandemic and
government action impossible to predict
• Thanks to actions taken, no health, delivery or quality red flags
• Q3 -19 efficiency program intensified (opex, capex, margin, NWC)
• Short-time work actions taken in most subsidiaries to flexibly reduce work hours in line with sales
• April hours worked -30%relative normal levels
• New government regulations and support in many countries beneficial
• Focus on protection of key people, customer relations, and flexibility
First quarter
New organisation for continued growth and improved efficicency
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2 4 Operating Segments
To better reflect the Group’s international reach and opportunities, Sweden/International will be replaced by West, North, East, and UK/North America
6 Regions10 Business Units
To increase focus on growth opportunities and operational improvement, and to allow for future scalability, the existing 6 regions will be replaced by 10 business units
Efficiency project • New organization fully operational• Efficiency project launched in Q3 2019 aiming at
40 MSEK savings on full-year basis, intensified during Q1• No significant restructuring costs incurred
First quarter
Segment North
Good start for trading activity but lower demand towards end of March Weak performance in Demark and within furniture and fittings Producing units in Sweden noted a low demand, due to the automotive industry Gross margin down mainly attributable to recent acquisition EBITA improvement despite negative organic growth due to acquisitions and good cost control
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Quarter 1 ΔRolling 12
months Full year
SEK million 2020 2019 % 2020/19 2019
Order intake 565 451 25 1,980 1,866
Net sales 554 453 22 1,966 1,865
Gross profit 137 119 25 501 474
% 24.8 26.3 25.5 25.4
Operating expenses -82 -69 19 -313 -300
% -14.8 -15.2 -15.9 -16.1
Operating profit (EBITA) 56 50 11 180 174
% 10.1 10.9 9.1 9.3
Segment West
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First quarter
Strong start but demand weakened in the middle of the quarter Demand fell mainly in Germany, the Netherland and France and among customers within the automotive
industry Gross margin was significantly lower mainly due to a poorer business mix EBITA fell compared to a very strong comparison quarter in 2019, but improved sequentially
Quarter 1 ΔRolling 12
months Full year
SEK million 2020 2019 % 2020/19 2019
Order intake 299 310 -4 1,146 1,157
Net sales 301 308 -2 1,148 1,155
Gross profit 75 84 -10 297 306
% 25.1 27.3 25.9 26.5
Operating expenses -52 -51 3 -208 -207
% -17.4 -16.6 -18.2 -17.9
Operating profit (EBITA) 23 34 -32 88 99
% 7.7 11.0 7.7 8.6
First segment to be hit by the crisis Demand was weaker at the beginning of the quarter in China, but stronger at the end of the quarter Somewhat lower gross margin, but good cost control led to an unchanged EBITA
Segment East
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First quarter
Quarter 1 ΔRolling 12
months Full year
SEK million 2020 2019 % 2020/19 2019
Order intake 189 183 3 727 721
Net sales 189 185 2 727 723
Gross profit 59 58 1 231 230
% 31.0 31.4 31.7 31.8
Operating expenses -32 -32 0 -134 -134
% -17.0 -17.3 -18.4 -18.5
Operating profit (EBITA) 27 27 2 97 97
% 14.1 14.2 13.4 13.4
Good start but substantially lower demand towards end of March when restrictions started Strong EBITA improvement mainly due to acquisition of American Bolt & Screw i November 2019
Segment UK/North America
12
First quarter
Quarter 1 ΔRolling 12
months Full year
SEK million 2020 2019 % 2020/19 2019
Order intake 268 139 94 732 602
Net sales 272 143 90 727 598
Gross profit 85 45 89 225 185
% 31.4 31.8 31.0 30.9
Operating expenses -56 -30 87 -164 -138
% -20.6 -21.0 -22.6 -23.1
Operating profit (EBITA) 29 15 95 61 47
% 10.8 10.5 8.4 7.9
First quarter
Gross margin development
13
22,0%
24,0%
26,0%
28,0%
30,0%
32,0%
Q2 19 Q3 19 Q4 19 Q1 20
Segment NorthGP%-development
Segment North, excl. HT Bendix
Segment North, as reported
22,0%
24,0%
26,0%
28,0%
30,0%
32,0%
Q2 19 Q3 19 Q4 19 Q1 20
GroupGP%-development
Group, excl. HT Bendix & ABS
Group, as reported
First quarter
Acquisitions since 2014
14
First quarter
EBITA Bridge
15
Q1
EBITA 2019 119
Currency -6
Volume -16
Price/cost/mix/other +5
Acquisitions +24
EBITA 2020 126
Q1
EBITA 2019 119
North +6
West -11
East +0
UK/North America +14
Group/Other -2
EBITA 2020 126
Outlook
Summary and outlook
First quarter: strong growth, improved profit and cash flow• Limited effects of corona virus in Q1• Drop in demand noted toward end of the quarter
Outlook:
• Challenging demand situation in Q2
• Comprehensive action program in place
Priorities 2020• During Corona crisis: Protect Health, Customers and Bufab• Continued focus on new business generation• Continue building Leadership platform
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Q&A