Bulten’s Q1 report 2020

Strong start to Q1 slowed by COVID-19 pandemic – measures taken.

FIRST QUARTER

• Net sales amounted to SEK 821 (810) million, an increase of 1.4% on the same period last year.
• Operating earnings (EBIT) totaled SEK 43 (58) million, equating to an operating margin of 5.2% (7.1).
• Earnings after tax amounted to SEK 9 (44) million.
• Order bookings totaled SEK 688 (733) million, a decrease of -6.1% on the same period last year.
• Cash flow from operating activities totaled SEK 63 (-57) million.
• Earnings per share were SEK 0.63 (2.12).
• Net debt amounted to SEK 679 (501) million. Net debt (excluding lease liabilities) totaled SEK 391 (252) million.
• The equity/assets ratio was 51.5% (58.0) at the end of the period. The equity/assets ratio (excluding lease liabilities) totaled SEK 56.1% (62.9).
• Bulten has acquired all shares in PSM International Holdings Limited (PSM) for a purchase price of USD 24.5 (SEK 230) million on a cash-free and debt-free basis.
• Bulten is coordinating its business with PSM and moving into a shared building in Ohio, USA.
• Bulten is taking measures to mitigate the impact of COVID-19 in all affected markets.
• Bulten’s Board has decided to withdraw its  proposal to pay a dividend of SEK 4.00 per share.

SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD

• Executive VP & CFO Helena Wennerström has announced her resignation.
• Bulten’s Nominations Committee has withdrawn its proposal on an increase in fees to the Audit Committee.

CEO’S COMMENTS

“The year started off strongly for Bulten and was in line with the high order intake at the end of 2019. Since then, the situation for Bulten and the global automotive industry has changed dramatically due to the effects of COVID-19. Already in February, car production stopped in China, and during March most of Bulten’s customers closed down their production units in Europe and North America. As a consequence, Bulten has had significantly lower production and sales than planned during the first quarter. The decline in the market was reflected in the order intake and net sales for the quarter, the effects being partly offset by the acquisition of PSM. Net sales increased by 1.4 percent and order intake decreased by 6.1 percent. The prevailing uncertain production situation in the automotive industry means that the development in the coming months remains difficult to predict. At the end of the quarter, however, vehicle production in China started to recover from the COVID-19 situation, but has still not reached previous levels.

We have taken measures to adapt the company’s operations to the situation in each market. Different forms and degree of working time reductions and furloughs for around 1,200 employees are now in place at Bulten’s units in Europe and North America. Further measures have also been taken to reduce costs. Our focus is also on the capital structure and measures to improve cash flow, a restriction on investments is now in place and the SEK 250–300 million real estate investment in Poland has been postponed to a later date. The Board’s previous dividend proposal is withdrawn to the 2020 AGM.      

It is not possible to predict at this time how vehicle production will be affected during the year. The measures we have taken do, however, enable that the company is ready to increase production at short notice.

On 20 February Bulten held a Capital Market Day presenting its Stronger 24 strategy and the acquisition of PSM. The strategy also includes new financial targets, with an ambition of reaching net sales of SEK 5 billion within five years, an operating margin of at least 8%, and a return on capital employed of at least 15%. While 2020 will be a challenge, we are sticking to our strategy and our ambitious goals. We hold a strong position on our market, and we will get through these times with a focus on health, growth, profitability and cash flow.” 

Anders Nyström, President and CEO

The presentation will be held in English and can be followed live via the link:

https://tv.streamfabriken.com/bulten-q1-2020. It will also be possible to take part of the audiocast afterwards at the same address or at www.bulten.com/ir.

To participate in the teleconference, please call 5 minutes before the opening:

SE: +46850558373
UK: +443333009265
US: +18332498405

Copies of the presentation will be available at www.bulten.com/ir approximately 30 minutes before start.

For further information, please contact:

Anders Nyström, President and CEO
Tel: + 46 31-734 59 00

Kamilla Oresvärd, Senior Vice President Corporate Communications
Tel: +46 70-520 59 17, e-mail: kamilla.oresvard@bulten.com

This information is information that Bulten AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the Senior Vice President Corporate Communications set out above, at 13:30 CET on April 23, 2020.

Bulten is one of the leading suppliers of fasteners to the international automotive industry. The company’s product range includes everything from customer-specific standard products to customized special fasteners. The company also provides technical development, line-feeding, logistics, material and production expertise. Bulten offers a Full Service Provider concept or parts thereof. The company was founded in 1873, has some 1,400 employees in eight countries and head office in Gothenburg. In 2020, Bulten acquired PSM, a fastener supplier with 350 employees. The share (BULTEN) is listed on Nasdaq Stockholm. Read more at www.bulten.com.