Year-end 2014 Presentation
Värnamo, February 20, 2015
2
Bufab Group
Fourth quarter
Established
in 1977
Around 800
employees
30 wholly owned
subsidiaries in23 countries
Approx 2 200 MSEK in turnover
Headquarters in
Värnamo, Sweden
120 000
articles
Listed on the stock exchange
12 000customers
In-house
production
3
Volume vs. value
Fourth quarter
4
Fourth 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
6
Financial targets
Fourth 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
6
Fourth quarter
� Growth strategy proven, but need better leverage
– Second highest sales ever…
– ..despite weak underlying demand, especially in second half and in Sweden
– Excellent market shares gain in International - now 57% of sales
– However, investments in sales organization puts pressure on margins. Starting 3Q 2014, opex increase has leveled out.
� Efficiency - satisfying results so far but need for intensified focus
– Continued purchasing savings
– Headwind toward end of year in mix, currency combined with weak
demand in Sweden� Focus area for 2015 - direct and indirect cost + price
� Acquisitions – pipeline established
� IPO
Summary 2014
7
Financial highlights, Group
Fourth quarter
Fourth quarter
Net sales - weak ending 2014
�Order intake in line with net sales
�Weaker net sales growth compared to earlier
quarters - adjusted for currency translation 1.6 %
�Continuing growth in International with
increased market shares
�Lower underlying demand, especially in Sweden
*Excluding IPO costs of 18 MSEK in Q1, 2014
Operating margin
�Negatively affected by higher costs for sales
organization – levelling out
�Negative impact from currencies– 6 MSEK in Q4
�Strong comparable Q4 2013
Quarter 4 Δ Jan-Dec Δ
SEK millions 2014 2013 % 2014 2013 %
Order intake 533 519 2.7 2,195 2,072 5.9
Net sales 532 512 4.0 2,198 2,031 8.3
Gross margin, % 28.1 30.3 29.2 29.3
Adjusted operating profit* 33 55 -40.2 192 203 -5.3
Adjusted operating margin, % 6.2 10.8 8.7 10.0
0
50
100
150
200
250
0
500
1000
1500
2000
2500
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
MS
EK
LT
M N
et sale
s, S
EK
mill
ions
LTM Net sales 12 M, MSEK LTM Adj Op Res, MSEK
-6
-8
-1
6
4
10
8
6
2
-10
-5
0
5
10
15
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Quarterly year-on-year net sales growth, %*
8
Financial development, Group
Fourth quarter
*Adjusted for currency translation effects
9
Segment Sweden
Fourth quarter
Fourth quarter
Order intake in line with net sales
Net sales decreased
• Weak underlying demand, likely worsened by
“long Christmas”, inventory adjustments
• Unchanged market shares, except one customer
to manufacturing subsidiary
Weaker operating margin
• Lower volumes
• Adverse exchange rates
• Higher operating costs
*Pertains to net sales and order intake from external customers
Quarter 4 Δ Jan-Dec Δ
SEK millions 2014 2013 % 2014 2013 %
Order intake* 232 241 -3.7 968 998 -3.0
Net sales* 229 243 -5.6 982 970 1.2
Adjusted operating profit 27 40 -33.9 144 143 0.2
Adjusted operating margin, % 11.7 16.7 14.6 14.8
0
50
100
150
200
0
500
1000
1500
2000
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
MS
EK
LT
M N
et sale
s, S
EK
mill
ions
Net sales LTM, MSEK LTM Adj Op Res, MSEK
-7-9
-6
-2
3
6
21
-6
-10
-5
0
5
10
15
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Quarterly year-on-year net sales growth, %
10
Financial development, segment Sweden
Fourth quarter
11
Segment International
Fourth quarter
Fourth quarter
Order intake in line with net sales
Strong sales growth
�Adjusted for currency effects 7.9 %
�Strategic initiatives showing results
�Higher market shares –
underlying demand somewhat weaker than in 1H
Operating margin
�Negatively by higher cost for stronger sales organization
�Q4 2013 strong comparable
*Pertains to net sales and order intake from external customers
Quarter 4 Δ Jan-Dec Δ
SEK millions 2014 2013 % 2014 2013 %
Order intake* 301 277 8.6 1,227 1,074 14.3
Net sales* 303 269 12.7 1,217 1,061 14.7
Adjusted operating profit 12 19 -36.0 75 83 -10.0
Adjusted operating margin, % 4.0 7.0 6.2 7.8
0,0
50,0
100,0
150,0
200,0
0
500
1000
1500
2000
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
MS
EK
LT
M N
et sale
s, S
EK
mill
ions
Net sales LTM, MSEK LTM Adj Op Res, MSEK
-5
-7
5
13
6
14 14
10
8
-10
-5
0
5
10
15
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Quarterly year-on-year net sales growth, %*
12
Financial development, segment International
Fourth quarter
*Adjusted for currency translation effects
13
Fourth quarter
25,0%
30,0%
35,0%
40,0%
45,0%
50,0%
0
200
400
600
800
1000
Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014
As o
f%
ofnetsale
sS
EK
mill
ions
Net Working Capital As of % of net sales
Net working capital
14
Challenges faced toward end 2014 -and focus areas for 2015
Fourth quarter
Focus areas
Weak demand, especially Sweden
• Implementing new cost savings package of 15 MSEK yearly, full
effect from Q3:Merger two subsidiaries, streamlining backoffice, staff reduction
one manufacturing subsidiary• Continued investments and efforts in sales - some promising signs
Challenges
Adverse currencies: weak SEK, strong USD
• Weak SEK: Price increases being implemented since mid-Q4
Strong USD: Increased efforts in purchasing – organization strengthened and tools improved – helped by good outlook for raw
material prices
Insufficient leverage on growthin International
• Investments made 2014 are “good cost”, …
• …but we are holding back increases from level of Q3, 2014 untilwe see positive margin effects from growth
• Strong focus on landing and ramping up business already awarded