Bufab (BUFAB) Q2 2024 earnings summary

Executive summary

• Q2 net sales declined 6% year-over-year to SEK 2,142 million, with organic growth at -6.6% and order intake slightly higher than net sales.

• Gross margin reached an all-time high of 29.8%, up 1.3 points year-over-year, driven by improved customer/product mix and purchasing savings.

• Adjusted operating margin was 12.2% (down from 13.5%); adjusted EBITDA/EBITA at SEK 261 million, down 15-16% year-over-year.

• Strong cash flow from operating activities at SEK 427 million, supported by reduced net working capital and a cash conversion ratio of 153%.

• Divestment of Bufab Lann and Hallborn Metall completed for SEK 230 million, representing 5% of group sales, to strengthen the balance sheet and focus on core businesses.

Financial highlights

• Net sales: SEK 2,142 million, -6% year-over-year.

• Adjusted EBITDA/EBITA: SEK 261 million (vs. SEK 307 million), -15-16% year-over-year.

• Gross margin: 29.8%, up 1.3 points year-over-year.

• Net debt/EBITDA: 2.8 at quarter-end, improved from 2.9 year-over-year.

• Cash flow from operating activities: SEK 427 million in Q2.

Outlook and guidance

• Market environment remains challenging, but signs of a turnaround are visible for H2.

• OPEX expected to decrease slightly from Q2 levels in the next two quarters.

• Continued focus on cost savings, margin improvement, and market share growth.

• M&A agenda remains active, with potential new targets and increased activity under evaluation.