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Q2 2020 Presentation July 16, 2020 Second quarter Stable result - PowerPoint PPT Presentation

Q2 2020 Presentation July 16, 2020 Second quarter Stable result in a very weak market Sales down -6% 20% acquired, -25% organic and -1% currency o o Overall, strong impact of the COVID-19 pandemic. Segment North and West were the


  1. Q2 2020 Presentation July 16, 2020

  2. Second quarter Stable result in a very weak market • Sales down -6% 20% acquired, -25% organic and -1% currency o o Overall, strong impact of the COVID-19 pandemic. Segment North and West were the hardest hit, while segment East had a strong development. • Extensive measures taken to meet demand drop… o Short-time work schemes and some layoffs Significant reduction of cost and capex o Action program prioritizes speed and retained flexibility o • …resulting in a stable operating result and margin, and a strong cash flow in the quarter • Gradual recovery during quarter Adj organic growth: 30% in April, -25% in May, -15% in June o • Increased cost savings program from 40 to 100 MSEK, with full effect from January 2021 • Continued focus on growth and increased market share 2

  3. Second quarter Financial highlights, Group 12- months Quarter 2 Jan–June rolling Full year Δ Δ SEK million 2020 2019 % 2020 2019 % 2020/19 2019 Order intake 987 1,080 -9 2,308 2,164 7 4,498 4,354 Net sales 1,022 1,089 -6 2,337 2,180 7 4,505 4,348 Gross profit 258 303 -15 609 607 0 1,185 1,183 % 25.2 27.8 26.1 27.8 26.3 27.2 Operating expenses -165 -200 -391 -385 -805 -799 -18 2 % -16.2 -18.4 -16.7 -17.6 -17.9 -18.4 Operating profit (EBITA) 92 103 218 222 379 384 -10 -2 % 9.1 9.5 9.3 10.2 8.4 8.8 Profit/loss after tax 46 71 132 155 230 253 -35 -14 Earnings per share, SEK 1.24 1.91 3.54 4.14 6.15 6.75 -35 -14 EBITA Q2 2019 103 Currencies 0 Volume -100 Cost reduction + price/mix/other +70 Acquisitions +19 EBITA Q2 2020 92 3

  4. Second quarter Financial development, Group Quarterly Net Sales growth Net Sales EBITA Organic growth Total growth 5 000 500 30 4 500 450 20 4 000 400 LTM Net Sales, SEK millions 3 500 350 LTM EBITA, SEK million 10 3 000 300 Percent 2 500 250 0 2 000 200 -10 1 500 150 1 000 100 -20 500 50 0 0 -30 4

  5. Second quarter Segment North Rolling 12 Quarter 2 Jan–June months Full year Δ Δ SEK million 2020 2019 % 2020 2019 % 2020/19 2019 Order intake 437 450 -3 1,001 901 11 1,966 1,866 Net sales 448 454 1,001 907 1,960 1,865 -1 10 Gross profit 94 121 -22 231 240 -4 465 474 % 20.9 26.7 23.1 26.5 23.8 25.4 Operating expenses -55 -74 -25 -137 -143 -4 -294 -300 % -12.3 -16.2 -13.7 -15.8 -15.0 -16.1 Operating profit (EBITA) 39 48 -19 94 98 -4 170 174 % 8.7 10.5 9.4 10.8 8.7 9.3  Strong impact of the Covid-19 pandemic on the segment  However, gradual recovery during the quarter  Gross margin significantly down  Manufacturing units in Sweden (automotive industry; fixed cost absorption)  Acquisition of HT BENDIX A/S  Short-time work support credited to Opex even for personnel costs in COGS  Substantially lower cost had positive impact on operating profit and margin 5

  6. Second quarter Segment West Rolling 12 Quarter 2 Jan–June months Full year Δ Δ 2020 2019 % SEK million 2020 2019 % 2020/19 2019 Order intake 188 300 -37 487 610 -20 1,034 1,157 Net sales 202 309 503 617 1,041 1,155 -35 -18 Gross profit 49 83 125 167 264 306 -41 -25 % 24.4 26.8 24.8 27.1 25.3 26.5 Operating expenses -33 -55 -85 -106 -188 -207 -40 20 % -16.4 -17.7 -17.0 -17.2 -18.0 -17.9 Operating profit (EBITA) 16 28 -43 39 62 -37 76 99 % 7.9 9.1 7.8 10.0 7.3 8.6  Strong drop in demand, especially Germany, the Netherlands and France and among customers within the automotive industry  Gradual recovery during the quarter, but from low levels  Gross margin significantly lower mainly due to lower volumes and a poorer business mix  However, lower gross margin mitigated by a lower share of operating expenses 6

  7. Second quarter Segment East Rolling 12 Quarter 2 Jan-June months Full year Δ Δ SEK million 2020 2019 2020 2019 2020/19 2019 % Order intake 165 194 354 378 697 721 -15 -6 Net sales 162 191 351 376 698 723 -15 -7 Gross profit 53 61 112 119 223 230 -13 -6 % 32.7 31.9 31.8 31.6 32.0 31.8 Operating expenses -26 -35 25 -58 -67 -13 -124 -134 % -16.0 -18.3 -16.5 -17.8 -17.8 -18.5 Operating profit (EBITA) 27 25 8 53 51 4 99 97 % 16.7 13.1 15.1 13.6 14.2 13.4  Positive development despite a continued weak market  China and Southeast Asia developed strongly, while Eastern Europe experienced a bigger drop in demand  Strong contributions from purchasing savings and good cost control led to strong EBITA and record margin 7

  8. Second quarter Segment UK/North America Rolling 12 Quarter 2 Jan–June months Full year Δ Δ SEK million 2020 2019 2020 2019 % 2020/19 2019 % Order intake 197 134 47 465 272 795 602 71 Net sales 210 134 57 481 277 74 803 598 Gross profit 64 42 150 87 247 185 52 72 % 30.5 31.3 31.1 31.4 30.8 30.9 Operating expenses -45 -30 -50 -101 -60 -68 -179 -138 % -21.4 -22.4 -21.0 -21.7 -22.2 -23.1 Operating profit (EBITA) 19 12 58 49 27 81 69 47 % 9.1 8.9 10.1 9.8 8.6 7.9  Substantially lower demand towards end of March when restrictions started. However, as from end of May strong recovery, especially in North America  Lower gross margin due to lower volumes. Good cost control.  Strong EBITA improvement due to acquisition of American Bolt & Screw in November 2019 8

  9. Second quarter Stable operating margin thanks to cost savings Organic growth, % COVID-19 resulted in very weak demand in 15% Q2-20 in all segments, 5% …sending organic -5% growth down to –25% -15% -25% Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 However, fast and EBITA% flexible cost savings during Q2 protected 15% operating margin 10% Mid-term cost savings 5% program increased from 40 to 100 MSEK 0% Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 9

  10. Second quarter Strengthened financial position Operating cash-flow and Cash conversion Net debt/EBITDA adj. 400 100% 4,5 (3) (1) 4,0 350 (2) 80% 3,5 300 3,0 250 60% 2,5 200 2,0 40% 150 1,5 100 1,0 20% 50 0,5 0,0 0 0% 2017 2018 2019 H1 2019 H1 2020 Operating cash-flow, LTM Cash conversion, % Net debt/EBITDA adj, x (1) = Acquisition of APEX (appr 300 MSEK cash) (2) = Acquisition of HT BENDIX (appr 215 MSEK cash) (3) = Acquisition of ABS (appr 200 MSEK cash) 10

  11. Second quarter Acquisitions since 2014 11

  12. Second quarter EBITA Bridge EBITA Q2 2019 103 Currencies 0 Volume -100 Price/cost/mix/other +70 Acquisitions +19 EBITA Q2 2020 92 EBITA Q2 2019 103 North -9 West -12 East +2 UK/North America +7 Group/Other +2 EBITA Q2 2020 92 12

  13. Second quarter Priorities 2020-2021 Jan-June 2020 July-Dec 2020 January 2021 Restart Invest Protect Health, Customers Profitable In and Bufab Growth Leadership 13

  14. Outlook Summary and outlook Second quarter: significant drop in sales, but stable result and cash flow • Overall, strong impact of the Covid-19 pandemic. • Extensive measures taken to mitigate negative impact Outlook: • Gradual recovery during 2Q expected to continue during second half of 2020 • In view of remaining uncertainty, cost program increased from 40 to 100 MSEK Priorities 2020 • So far during 2020: successful program to Protect Health, Customers and Bufab • Second half 2020: Restart Profitable Growth • Quickly adjust cost base • Renewed efforts to increase market share—”Get out there and sell!” • By January 2021, in position to continue investment in Leadership strategy 14

  15. Q&A 15 www.bufab.com

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