q3 presentation (4) - bufab groupq3 2014 presentation värnamo, november 4, 2014 2 third quarter...
TRANSCRIPT
Q3 2014 Presentation
Värnamo, November 4, 2014
2
Third quarter
Bufab is a leading Supply Chain Partner. We provide C-Parts,
covering everything from traditional fasteners to complicated
processed and assembled components in different materials, and
services to the industry worldwide, providing solutions in
manufacturing, quality, sourcing and logistics.
Bufab’s offering – Global Parts ProductivityTM
It helps our customers reduce total cost and complexity, free up
capital, achieve stable quality and deliveries.
Who we are
3
Bufab Group
Third quarter
Established
in 1977
Around 800
employees
30 wholly owned
subsidiaries in23 countries
Approx 2 000 MSEK in turnover
Headquarters in
Värnamo, Sweden
120 000
articles
Listed on the stock exchange
12 000customers
In-house
production
4
Volume vs. value
Third quarter
5
Global Parts Productivity™
Third quarter
Over 120 000C-Parts
GlobalSupplierNetwork
In-houseProduction
CUSTOMERSATISFACTION
Lower total cost
Secured quality
Reliable delivery
Less complexity
Focus on core
6
Financial targets
Third 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
7
Third quarter
Bufab´s Strategy
2
Quality and Customer First!
Accelerated organic
GrowthImproved cost/capital
EfficiencyValue-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
8
Financial highlights, Group
Third quarter
Strong growth in a weaker market
�Order intake weaker than net sales
�Adjusted for currency translation 6.2 %
�Strategic initiatives showing result – higher
market shares for segment International
�Weaker underlying demand
*Excluding IPO costs of 18 MSEK
Operating margin
�Positively affected by higher sales
�Negatively affected by higher costs for sales
organization – now levelling out
�Strong comparable Q3 2013
12 month rollingQuarter 3
Δ Jan-Sep Δ Full year Δ
SEK millions 2014 2013 % 2014 2013 % 2013/14 2013 %
Order intake 528 503 5.0 1,656 1 553 6.7 2,175 2,072 5.0
Net sales 536 490 9.4 1,667 1 519 9.7 2,178 2,031 7.3
Gross margin, % 28.4 28.2 29.5 29.0 29.7 29.3
Adjusted operating profit* 48 49 -3.7 159* 148 7.8 214 203 5.7
Adjusted operating margin, % 8.9 10.1 9.5 9.7 9.8 10.0
0
3
6
9
12
15
0
500
1000
1500
2000
2500
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Marg
in, %
LT
M N
et sale
s, S
EK
mill
ions
LTM Net sales 12 M, MSEK
Adjusted Operating Margin 12 M, %
-6 -6
-8
-1
6
4
10
8
6
-10
-5
0
5
10
15
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Quarterly year-on-year net sales growth, %*
9
Financial development, Group
Third quarter
*Adjusted for currency translation effects
10
Segment Sweden
Third quarter
Weaker order intake
• Decreased order intake from one customer to
manufacturing subsidiary
Net sales in line with last year
• Negatively affected by customers moving
production abroad which shows up in segment
International, weaker demand
Slightly weaker operating margin
• Higher operating costs
• Q3 as a rule weaker than other quarters
12 month rolling
Quarter 3 Δ Jan-Sep Δ Δ
SEK millions 2014 2013 % 2014 2013 % 2013/14 2013 %
Order intake* 212 237 -10.2 736 757 -2.8 977 998 -2.1
Net sales* 220 218 1.2 752 727 3.5 995 970 2.6
Adjusted operating profit 29 31 -6.1 117 103 13.3 157 143 9.6
Adjusted operating margin, % 13.3 14.3 15.5 14.2 15.8 14.8
*Pertains to net sales and order intake from external customers
0
5
10
15
20
0
500
1000
1500
2000
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Marg
in, %
LT
M N
et sale
s, S
EK
mill
ions
Net sales LTM, MSEK Adjusted Operating Margin, %
-6 -7
-9
-6
-2
3
6
21
-10
-5
0
5
10
15
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Quarterly year-on-year net sales growth, %
11
Financial development, segment Sweden
Third quarter
12
Segment International
Third quarter
Order intake in line with net sales
Strong sales growth
�Adjusted for currency effects 10.0%
�Strategic initiatives showing results
�Higher market shares
Operating margin
�Positively affected by higher sales
�Negatively by higher cost for stronger sales organization
�Comparable earnings in 2013 positively impacted by
better business mix as well as of revaluation items of 4
MSEK
12 month rolling
Quarter 3 Δ Jan-Sep Δ Δ
SEK millions 2014 2013 % 2014 2013 % 2013/14 2013 %
Order intake* 316 267 18.5 921 797 15.6 1,198 1,074 11.5
Net sales* 316 272 15.9 914 792 15.4 1,183 1,061 11.5
Adjusted operating profit 23 27 -13.6 63 64 -2.4 82 83 -1.9
Adjusted operating margin, % 7.3 9.8 6.9 8.1 6.9 7.8
*Pertains to net sales and order intake from external customers
0,0
5,0
10,0
15,0
20,0
0
500
1000
1500
2000
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Marg
in, %
LT
M N
et sale
s, S
EK
mill
ions
Net sales LTM, MSEK Adjusted Operating Margin LTM, %
-6-5
-7
5
13
6
14 14
10
-10
-5
0
5
10
15
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Quarterly year-on-year net sales growth, %*
13
Financial development, segment International
Third quarter
*Adjusted for currency translation effects
14
Third quarter
25,0%
30,0%
35,0%
40,0%
45,0%
50,0%
0
200
400
600
800
1000
Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
As o
f%
ofnetsale
sS
EK
mill
ions
Net Working Capital As of % of net sales
Net working capital
15
Third quarter
� Strong growth in a weaker market – increased market shares
� Order intake in Sweden weaker than net sales
� Margin somewhat weaker than strong Q3 2013
� Increased earnings per share
Summary Q3 2014
16
BACK UP
Third quarter
Consolidated income statement
17
Quarter 3
SEK millions 2014 2013
Net sales 536 490
Cost of goods sold -384 -352
Gross profit 152 138
Distribution costs -77 -61
Administrative expenses -28 -29
Other operating income 6 8
Other operating expenses -5 -5
Operating profit Note 1 48 51
Profit/loss from financial items
Interest and similar income 0 0
Interest and similar expenses -6 -10
Profit after financial items 42 41
Tax on profit of the period -11 -11
Profit for the period 31 30
Third quarter
Consolidated balance sheet
18
30-sep-14 30-sep-13 31-dec-13SEK millions
ASSETS
Non-current assets
Intangible assets 745 739 739
Property, land and equipment 144 130 145
Financial assets 25 26 25
Total non-current assets 914 895 909
Current assets
Inventories 670 585 626
Current receivables 516 470 440
Cash and cash equivalents 94 97 98
Total current assets 1,280 1,152 1,164
Total assets 2,194 2,047 2,073
EQUITY AND LIABILITIES
Equity 1,121 966 1,012
Non-current liabilities
Non-current liabilities, interest bearing 600 507 479
Non-current liabilities, non-interest bearing
29 25 29
Total non-current liabilities 629 532 508
Current liabilities
Current liabilities, interest bearing 86 203 227
Current liabilities, non-interest bearing 358 346 326
Total current liabilities 444 549 553
Total equity and liabilities 2,194 2,047 2,073
Third quarter
Key figures
19
Quarter3 Δ
2014 2013 %
Order intake, SEK million 528 503 5,0
Net sales, SEK million 536 490 9,4
Gross profit, SEK million 152 138 10,1
Adjusted EBITDA, SEK million 56 57 -2,8
Operating profit, SEK million 48 51 -6,5
Adjusted operating profit, SEK million 48 49 -3,7
Profit after tax, SEK million 31 30 3,0
Gross margin, % 28,4 28,2
Operating margin, % 8,9 10,4
Adjusted operating margin, % 8,9 10,1
Net margin, % 5,8 6,1
Net debt, SEK million 592 613 -3,4
Debt/equity ratio, % 53 63
Net debt / adjusted EBITDA 2,4 2,7
Working capital, SEK million 828 709
Working capital / net sales, % 36,2 35,5
Equity/assets ratio, % 51 47
Operating cash flow, SEK million 34 46
Earnings per share, SEK 0,81 0,79
20
Expected market growth for Supply Chain Partners in Europe of 6-7%
Fundamental trend for C-Parts supply chain solutions… …drive strong growth for Supply Chain Partners*
In-house production
Direct sourcing from
manufacturer
Wholesaler
Supply Chain Partner
Today
* The total market growth for Supply Chain Partners in Europe is expected to be, on average, 6-7% per year in the years to come.
Source: Company information.
% of direct material cost
Expected growth in
underlying
European C-Parts
market
Expected growth
premium for
Supply Chain
Partners
in Europe
~6-7%
~4%
~2-3%
Expected total
growth for Supply
Chain Partners
in Europe
Third quarter
21
Strategy - Efficiency
Improved cost/capital efficiency
• Consolidate Sourcing
• Logistics Productivity
• Common Tools & Processes
Improved cost/capital
Efficiency
Logistics ProductivityConsolidate Sourcing Common Tools & Processes
Third quarter
Case: Global leader in power and automation technologies
Global business together
In 18 countries at 90 factories
Bottom unit
2005
2013
”I believe that Bufab care about us, and that
they would make that extra effort if needed”
Geographical expansion
2005-2012
Started 2005 with 3 countries and
9 MSEK in sales
2013 Bufab delivered in
18 countries with sales of > 120 MSEK
Started as supplier of commodity
2005
In 2013 Bufab provide wide range
of C-Parts
Sales development
2005-2012