Dear gentlemen, thank you for standing by and welcome to the presentation of the Q4 Results Conference Call. At this time, all participants are listen-only mode. After the speaker presentation, there will be a Q&A session. To ask a question during the session, you will need to press star one on your telephone. I must advise that this conference is being recorded today, Tuesday, 11th of February, 2020. We would now like to hand the conference over to first speaker today, Jörgen Rosengren . Thank you. Please go ahead, sir.
Thank you, and good morning, everybody. My name is Jörgen Rosengren, and I am the CEO of Bufab. Welcome also, everybody, to this conference call presenting the Q4 2019 results. I am here together with our CFO, Marcus Andersson , who will be handling part of this call, and we will be referring throughout the call to a PowerPoint presentation which is available on our website, www.bufab.com, Investor Relations, and to the page numbers in [S]. And we will start on page two, which is called Q4 2019 in brief. In the last quarter of 2019, we had, as in previous quarter of the year, good sales growth, 16%. But all of that sales growth was acquired, and we recorded in the quarter a -5% organic growth, which was lower than previously in the year. However, the order intake exceeded net sales by a small margin.
The low organic growth in the quarter was primarily due to a lower underlying demand, but it was also affected by longer-than-usual production stoppages at our major customers over the week over the holidays, Christmas and New Year's. Also, we managed according by inventory effects at our major customers. The operating profit in the quarter was unchanged, if adjusted for the acquisition cost of SEK 9 million, which we had in the quarter. But the operating margin, however, was down rather sharply and to an unsatisfactory level. And the deterioration of the operating margin was mainly due then to the low demand previously mentioned. In our two segments, in Segment International, we had rather a sharp decline in the profit and the operating margin compared, however, to a strong Q4 of 2018.
This decline was due to negative organic growth, to an unfavorable business mix, especially in one of our subsidiaries in that segment, and also to insufficient sourcing savings relative to our plans. In Sweden, we had a slight operating profit increase, which is good. However, it was compared to a rather weak quarter in Q4 2018. The increase in itself, however, is due to the acquisition made in Bufab Sweden in 2019 and also partially to an acquisition in 2018, and also to good cost control, managing then to maintain margins relatively stable on an organic basis despite negative organic growth. We had strong cash flow in the quarter, and that concluded the year where every quarter has had a good cash flow, and the full-year cash flow was a little bit more than double, actually, the cash flow we had in 2018, which is good.
Now, looking ahead, of course, we are continuing to focus on sourcing savings, and we believe the market is quite favorable for it as well. The overall low demand in the industry and the world leads to, of course, low utilization in our suppliers and also to low raw material prices. Therefore, we are quite confident in our ability to secure further sourcing savings. We have also, since the Q2 of last year, been running on an efficiency program globally in our group. In this last quarter, we have intensified it and also quantified it and are now aiming for a total of SEK 40 million of cost savings on a full-year basis, which we intend to show a full effect of in the Q4 of this year, 2020.
After the end of the quarter, we have also announced a new organization, which I will get back to later on this call, aiming at more focus on growth internationally but also on more operational focus on our individual subsidiaries. An important step for Bufab in the Q4 of 2019 was also a very strategic acquisition of a company called American Bolt & Screw in North America. This acquisition comes after a long period of search for a good partner for us in the U.S., which we can then use in order to accelerate the growth with our global customers in North America. The acquisition is also sizable. The turnover of last year was approximately SEK 500 million with an 11% EBITDA margin.
As part of the communiqué for the full-year results, we are also communicating that our board is proposing to our annual general meeting an increased dividend, SEK 5.25, let me see now, to SEK 2.75. That concludes the headlines of the quarter. I would now turn it over to Marcus Andersson to take you through the financials for the group and also for individual segments. We turn them to page three of this presentation. Please, Marcus Andersson.
Thank you very much, Jörgen Rosengren. By starting going through the financial highlights of the group on page three, you can see that order intake increased with 17% compared to previous year. Net sales increased with 16%, mainly driven by acquisition of HT Bendix and American Bolt & Screw. Organic growth was actually -5% this quarter. The underlying demand was lower, but the market share was seen to be somewhat higher. If we look at the gross margin, we can see that the gross margin declined to 26.4% compared to 28.51% in the comparable quarter. But adjusted for acquisition, the gross margin was actually 27.2% compared to 28.1% comparable quarter. The organic decline was mainly attributed to poor product sorry, business mix in Segment International and also a lower level of capacity utilization in our manufacturing companies, mainly in Sweden, also had a negative impact on the gross margin.
Well-priced increases and purchase savings provided a positive contribution to the gross margin. If we look at the OpEx, we can see that the quarter was charged with acquisition costs of SEK 9 million, as Jörgen Rosengren just said. Adjusted for those, the share of operating expenses actually declined to 19.1% compared to 19.6% previous year. Of course, the EBITDA figure was negatively affected by low organic growth but positively by lower share of operating expenses in acquired companies. Also, during the quarter, we saw the first results of the group-wide efficiency program that was launched in the Q3 and is now being intensified. All in all, the operating profit EBITDA declined to SEK 73 million, equal to a margin of 7.5%. But as said, adjusted for acquisition costs of SEK 9 million, the operating profit was SEK 82 million, which is exactly the same as the comparable quarter 2018.
If you take a look at the EBITDA bridge in the lower left corner, you can see that currencies added about SEK 2 million to the EBITDA, volume -SEK 18 million, price cost mix and other + SEK 4 million, and acquisition, excluding acquisition costs, added about SEK 12 million, making the EBITDA on continuing business basis still the same as previous year, SEK 82 million. And then also, as said, acquisition costs of SEK 9 million, making the EBITDA as reported to end at SEK 73 million. If you turn page two- page four, you can now see that we in this quarter actually had negative growth. If we look back, the other 24 consecutive quarters or actually 25 consecutive quarters, we have seen good growth, both organically and through acquisitions.
Even though we had a negative growth in the Q4 of 2019, as you can see, the acquisitions we have made helped us quite a bit, so the total growth ended up on almost 16%. If we take a look on the right graph, you can also see we have had a strong net price development, just as the left graph shows, for more or less 26 consecutive quarters. The EBITDA development, however, has been a bit bumpy, you can say, mainly back in 2015 due to negative currency fees, mainly weak SEK , and also due to raw material price increase back in 2017. In Q4 2019, the full decrease of the EBITDA is actually related to those SEK 9 million acquisition costs. So except those, we are flat compared to the comparable quarter, so to say.
Of course, our ambition is to continue a good historical year-on-year track record when it comes to the EBITDA development. If we turn to page five and take a look at Segment International, we can see that Segment International had a good order intake in this quarter. Net sales was up with about 9% to SEK 699 million. Organic growth also in International was -5%. Underlying demand was considerably lower, but the market share is seen to be slightly higher compared to quarter- to- quarter last year. The gross margin was 28.8% compared to 30.6%, and the decline is mainly due to a poor business mix than in the strong comparable quarter of 2018. If we take a look at OpEx, we can see that the share of operating expenses increased during the period, which was mainly attributed to low growth and investments made in Leadership 2020.
The review of the cost base for the purpose of addressing potential lower growth in the future quarters was intensified. Due to the poor mix and a higher share of costs, the operating profit EBITDA declined to SEK 55 million compared to SEK 58 million, which equals a margin of 7.8% compared to 10.6% in the comparable quarter. If we take a look at the EBITDA reach on the lower right corner, we can see that currencies added about SEK 4 million. The low demand affected the volume by -13 million SEK, price cost mix and other -10 million SEK, and the acquisitions added about SEK 6 million, and acquisitions, in this case, is American Bolt & Screw. If we turn to page six, we can also in Segment Internationals see that we had negative growth as said, but total growth ended up on 9%.
As you can also see, even though we had negative growth in this quarter, we have had a really good track record of 26 consecutive quarters of growth. If we look at the right graph, we can also see that growth as said, year-on-year, has been really good in Segment International. Also, EBITDA development has been strong but has been decreasing the last two quarters, mainly due to unfavorable business mix and investments made in Leadership 2020 initiatives. If we turn to page number seven and take a look at Segment Sweden, we can see that Segment Sweden had an order intake that was more or less in line with net sales. Net sales, on the other hand, rose by about 22% to SEK 424 million, and the increase in Segment Sweden's net sales is fully attributable to the acquisition of HT Bendix.
Organic growth was -5%, and those 5% was achieved mainly due to lower underlying demand, and the market share is seen to be unchanged compared to comparable quarter. Gross margin declined to 23.5% compared to 25.1%. Additional product acquisition at HT Bendix, it was more than what, 24.9% compared to 25.1%. The organic decline was mainly attributable to lower capacity utilization in the segments manufacturing companies relative to comparable quarter, which was driven mainly by the low demand in the quarter. If we look at the operating profit, we can see that EBITDA increased to SEK 29 million compared to SEK 28 million, corresponding to a margin of 6.8% compared to 8.7% in the comparable quarter.
If we also take a look at the EBITDA reach on the lower right corner, we can see that currencies affected with -SEK 2 million, volume with -SEK 5 million, price cost mix and other +SEK 1 million, and acquisition, mainly HT Bendix, contributed with +SEK 7 million. If we turn to page eight, we can see that we also had negative in the left graph, we can see that we also had negative growth in Segment Sweden as said. But given the acquisition of HT Bendix, the total growth came in on a strong 32%. Also, Segment Sweden has shown good growth rates, not only total growth but also organic growth in the last 15 quarters.
And if you look at the right graph, you can see that net price level is going in the right direction since more or less 2015, so good growth state. The EBITDA development has been quite bumpy, mainly due to the reasons explained under the group's financial development, namely weak SEK during 2015/2016, raw material price increases during 2017, and weak Swedish krona, you can say, during 2018 and 2019. That was the financial highlights for the group and the two segments, and I'll leave the word over to you, Jörgen Rosengren, to talk about page number nine.
Yes. So we're turning down to page nine. I will speak a little bit about the challenges and opportunities that we're seeing in this now somewhat weaker market than we've had in the past few years, at least. It's part of business and business model to be able to respond to the organic growth changes that occur in industrial environments. We were, I guess, back in 2015 or so exposed to rather weak organic growth. And what we will do now, what we did then, which is to try to adjust our cost base to the weaker underlying growth and to do so mainly using efficiency measures and thereby be able to continue to invest in our leadership strategy.
The internal efficiency measures that we're making now are being helped actually not to a very small extent by the investments that we have made over the past several years in our digital infrastructure and in making many of our manual processes digital. Also, the interfaces with our customers and suppliers are now increasingly digital rather than manual, and all that helps us be able to continue to increase our efficiency and thereby have room also for further investments in leadership. In a weaker market, however, there are also very strong opportunities. First, our customers are much more focused on efficiency in a weaker market, and they also have time to work on it, and that creates new business leads. Our suppliers have less work, and that means that they are easier to deal with when it comes to price of the service.
We're also seeing some competitors who are in big trouble, and that, of course, creates business opportunities on the market as well. We also think that this kind of market climate generates more acquisition candidates, which can then potentially be quite good for this one. We've focused a lot in this quarter on our growth margin. Part of the reason for that is that we're not happy with it, and I'll get back to that. First, to clear up the effect of the acquisitions, you can see on page 10 the growth margin for Segment Sweden and for the group with and without the effects of the acquisition of primarily HT Bendix. HT Bendix has a lower growth margin but a comparable operating margin as the rest of the group.
As you can see, the growth margin development in Segment Sweden took a step down in the middle of last year, but since then has been stable. It is, of course, however, our ambition to improve the growth margin during this year, both for Segment Sweden and for the group, and the main tools we're going to use for that are the source and savings I spoke about earlier. To wrap up this section about the finances, I guess it's also good to take a broader view on the developments. If you then turn to page 11, you can see our EBITDA development over the past one, two, three, four, five, six, seven, eight years.
And as you can see, this year, 2019, that we're now talking about was its fourth year in a row where we achieved an all-time high in sales, actually, and EBITDA. We have developed our EBITDA by about 13% a year since 2012 and by about 18% a year since 2015. Overall, a long-term, rather stable and good development, which we, of course, intend to continue also going forward. On page 12, some information about the new organization I spoke about earlier. We have adjusted our organization in order to both support growth and also efficiency. Firstly, we've moved from two to four operating segments.
The segments we are currently reporting in, Sweden International, have been in place since 2013, and now we're reflecting these with and also our increase in international scope and reach with four subgeographical segments for West, North, East, covering Eastern Europe and also Asia-Pacific, and then finally, U.K., U.S. Within these segments, we are changing from previously six regions to 10 business units, and the purpose of that is to increase the focus on growth opportunities but also on operational improvements for every subsidiary and to allow for future scalability. Finally, as we spoke about, we have launched already in the middle of last year an efficiency project, which we have now both intensified and quantified, and we expect that it will yield savings of SEK 40 million on a full-year basis and that those savings will be fully visible from the Q4 of 2020.
Neither the efficiency project nor these organizational changes are expected to generate any significant restructuring cost nor have they generated any significant restructuring cost in 2019. On page 13, an overview of the acquisitions we made in the past years, now nine of them since 2014, so approximately two a year. And the latest and one of the largest as well, I guess the largest, is the acquisition of the company American Bolt & Screw we made in North America in November, which helped our strategic footprint on that continent and adds about SEK 500 million of net sales with a good profitability. Turning then to page 14, Marcus Andersson, would you like to comment on the EBITDA bridge?
Yes. I will not go through it in every detail, but I will focus on the group. As said, if we take a look on the quarterly figures for the group, as said, we see that currency affected the EBITDA with +SEK 2 million due to the low demand we saw. Volume, the lower volume decreased the EBITDA with SEK 18 million. Price cost mix and other added about SEK 4 million. And the acquisition of HT Bendix and American Bolt & Screw, excluding those SEK 9 million in acquisition costs, contributed with SEK 12 million. So EBITDA quarter-to-quarter is unchanged to those SEK 82 million. Acquisition costs, as said, were SEK 5 million, so EBITDA as reported ended up or came in on SEK 73 million. If we look at the three-year figures, we can see that currency added about SEK 5 million to EBITDA.
Volume is + SEK 19 million. Price, cost, mix and other - SEK 23 million. Acquisitions, which in the full-year figures actually relates to also Rudh ä ll Industri AB added about SEK 28 million. Total acquisition cost for the year was - SEK 12 million. EBITDA Q4 2019, as reported, ended up on SEK 385 million.
Okay. So let me then try to summarize the year of 2019. First, on the Q4, I guess a very short summary is the operating profit was unchanged for the ongoing business, but the margin was quite unsatisfactory for the reasons that we have gone through now. I'm now on page 15 of the presentation. The full year of 2019, we regard as a very important step forward for this one, but obviously, the margin needs to improve. We saw margin growth in a challenging market, actually, and that was partly due to acquisitions and partly also due to our improved market share. And we did show very good progress in our leadership initiatives. We didn't need too long to go into all of them now, but on many fronts, we are moving forward there and strengthening Bufab's long-term competitiveness.
We made two large acquisitions, which helped us have a stronger offering to our customers and which increased our international reach in a very, very good way. And we recorded an all-time net sales, an all-time operating profit, but as said before, an unsatisfactory margin. For this year, 2020, our priorities are number one to have even more focus on new business generation, which we think, as said before, will be helped by the market conditions. We are going to focus on improving our profits, and that involves mainly sourcing and OpEx savings when it comes to organic improvement, and then also, of course, to safeguard a very good contribution from our two recent sizable acquisitions. And we intend to continue investing in building our leadership platform according to our established strategy, which has proven, we think, rather successful so far.
With that, that concludes the comments that we had prepared for the Q4 of 2019. Operator, please, if there are any questions, now is a good time.
Thank you. Ladies and gentlemen, we'll now begin the Q&A session. As a reminder, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Once again, if you have questions, please press star and number one on your telephone keypad. Your question comes from the line of Robert Redin. Please ask your question.
Yeah. Hi. Just a small detail question. I found this in the EBITDA bridge, the volume impact in international, SEK -13 million, sounds like a big number sort of in the quarter given the organic drop. Was there something extraordinary there, or am I wrong?
Robert Redin, you're hard to hear, Robert Redin. Good morning. I think the question should be this: that you saw a negative volume effect in Segment International of SEK -13 million in the quarter, and you're asking what caused it. Is that correct?
Yeah, exactly. It sounds like a big number to me.
Yeah. Well, it's more or less directly related, I think, to the 5% organic negative growth that we have. So as you can see, that 5% translates into -5% for Sweden and -13% for International, and International is about 3x as big as Sweden. So it's related to that, basically, to the 5% organic.
Okay. Okay. Perfect. Also, on acquisitions, I mean, you get the numbers now. So you see how much they add to basically sales and earnings. How are those developing? I think maybe the addition in Sweden from acquisitions to EBITDA is a bit smaller than what you could have expected.
Yeah. I think that's a fair assessment. The company that's acquired in Sweden last November, I think, Rudh ä ll Industri, is consisting of about 50/50 manufacturing and trading. And especially the manufacturing part of that company is more exposed to it's basically more cyclical than the rest of the business group, so more exposed to short-term swings in the demand, especially when it comes to margin because of the fixed cost nature of such an operation. We've also had, as we mentioned earlier in the call, rather low utilization both in those companies and also in our previously the companies in manufacturing that we previously owned, right? So in manufacturing, our experience is when this kind of volume swings come, then the customers reduce inventory, reduce deliveries, especially when it's right at the year-end for cash flow purposes. And that, of course, impacts manufacturing entity harder than the trading entity.
All right. Right. Of course. Okay. Perfect. Thanks. Those are my questions. Thanks.
You're welcome.
Once again, please press star one on your telephone. There are no further questions. Please continue.
Okay. If there are no further questions, then I'd like to thank everybody for attending this morning's call, and I wish you a nice day going forward. Take care and goodbye.
Thank you for participating in my all-day schedule. Speak time now.