Ladies and gentlemen, thank you for standing by and welcome to the presentation of the Q3 2020 results. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star and one on the telephone. I must advise you that this conference is being recorded today. I would now like to hand the conference over to your speaker today, Jörgen Rosengren. Please go ahead, sir.
Thank you. Good morning, everybody. We're joining this call. Welcome also. My name is Jörgen Rosengren. I'm the CEO of Bufab, and I have with me here in the room Marcus Söderberg, who is Bufab's CFO, and we'll together be taking you through this presentation today. As the operator said, there will be an opportunity for questions and answers at the end of the call, and you'll be given instructions there. But we would first like to take you through a presentation of the quarterly results, and that presentation is obtainable on our homepage, www.bufab.com/investors, and then you can find it under the Q3 presentation heading. We'll be referring throughout this call to that presentation by page number, and I'll be starting on page two, which is called Healthy Growth and Strong Increase in Profit, and that is also indeed the situation.
As some of you may be aware, we pre-released the third-quarter results, or at least the headlines of them, last week because the results were so good, and we can say also that we have indeed in the third quarter enjoyed healthy growth and an increase in profit. In fact, we have also enjoyed healthy growth and an increase in profit for the nine-month period ending in September this year. Starting with growth, we had good growth in the quarter. Sales was up 13%, but maybe more importantly, there was organic growth in the quarter of 1%, which is a very, very strong improvement sequentially over the second quarter of this year when we had very large negative organic growth. We'll get back to that in a moment.
And on top of that, 1% organic growth, and we also had a healthy portion of acquired growth, most of it due to our latest acquisition, American Bolton Screw, in the U.S. We saw a recovery in demand, as I mentioned earlier, and it was spread rather evenly across all segments. We also saw a recovery of the demand during the quarter. We had minus 10% negative organic growth in July, but we had plus 4% organic growth in both August and September, adjusted for working days, which is then a good sign, I suppose, that despite this worldwide pandemic, there is still a good level of demand in our product industries. Coming then to our results, we recorded an all-time high operating profit, an all-time high sales, in fact, also, and an all-time high net profit in the quarter.
The same goes for the year-to-date results, where the sales, the operating profit, and the net profit are all at all-time high levels. The margins were also quite good. The operating margin is the best in many, many years in a single quarter, and this is due to two groups of things. First, we had a very strong contribution of our acquisitions, and in particular in this quarter, our latest acquisition, but in the year-to-date figures also from our two latest acquisitions last year. The organic improvement is due to a couple of different things. First, we had the benefit of having global operations, and in this case, in China and in Singapore and Southeast Asia.
We were one of the first companies, we think, in Europe to be hit by the pandemic and were therefore forced to, but also able to adapt to it in those geographies, but also learn in our geographies about how to handle this. And that meant that when the pandemic then came to North America, to the U.S. in particular, and also to Europe in the beginning of March, beginning of April, we were able to very quickly put the right measures in place. And that was, of course, important to protect the health of our employees and of their families and our partners and so on, which was our first priority. But it was also very important to be able to keep sustained and high-quality deliveries to all our customers in all our markets at a reasonable cost.
Because, as you will recall, during the spring, the supply chains in most of the world were in quite a bit of disarray. But given a bit of head start, we were able to then adjust to that quickly. The second reason for the good results development is that we already had a comprehensive efficiency and savings program in place since the middle of last year, and that made it easier for us to scale that up and adjust it to our then expected tougher demand situation and also put those actions in place quickly. And the third, and I think most important reason really is that Bufab has a business model and also an organization that allows us to be flexible when it comes to cost and allows us to be fast when it comes to adjusting and reacting to variations in the market demand.
All these three things taken together, plus the contribution from our acquisitions, led to this very strong result. I mentioned our cost savings programs. It was scaled up during the second quarter from a previous 40 million SEK target to 100 million SEK target. It is delivering as planned. It's quite evident also in this quarter's results that we are seeing results from it, and we are convinced that it will have delivered its full potential, these 100 million SEK, by the 1st of January of 2021. We had in the quarter also a very strong cash flow, as I mentioned, and the cash flow is important for us, of course, for a variety of reasons.
But here, we're especially proud of it in this quarter because we had a good cash flow despite the fact that we had organic growth, and therefore we built up, again, working capital, of course, relative to sequentially the second quarter. But despite that working capital build-up, we had a very strong cash flow, and the reason for that is that we have had good inventory control throughout the year due to the fact that we acted quickly to the changed demand situation in the first and second quarters of this year. Our focus going forward is to restart the business in a profitable way and then to go on to invest in our leadership strategy, and I'll come back to those topics at the end of this call.
Now I'd like to turn over to Marcus, who will take you through the financial results starting on page three of the presentation. Please, Marcus.
Thank you very much, Jörgen. Yes, let's start on page three. There you can see that net sales increased with 13%. Those 13% were mainly driven by the acquisition of American Bolton Screw, but as Jörgen said as well, the organic growth was also positive, 1%, and as Jörgen also said, the organic growth is a result by stepwise recovery from the low levels recorded in the second quarter. The organic growth adjusted for the number of working days was -10% in July, +4% in August, and +4% in September. The gross profit increased slightly. This increase was mainly driven by good development in segment East and segment UK North America. The operating expenses as a share of net sales noted a sharp decline due to the expanded cost savings program that was expanded during the second quarter of 2020.
The program will achieve savings of approximately SEK 100 million on a full-year basis, with full effect from January 2021, and so far, the program is progressing according to plan in all segments, and the reason for the program being successful, so to say, is mainly due to good cost controls and good flexibility in general in all subsidiaries throughout the group, and as well as efficiency measures taken under the framework of our leadership strategy. All in all, operating profit increased with strong 61% to SEK 142 million , meaning an all-time high for an individual quarter for Bufab. The operating margin also increased with about 3.6 percentage points to solid 12.1%. The net profit, or profit after tax, and the earnings per share also noted an all-time high for an individual quarter. Net profit increased with 55% and earnings per share with 57%.
If you take a look on the lower left corner, you can see the EBITDA bridge for the third quarter. You can see that currencies had a negative impact of about SEK 8 million, volumes positive by SEK 2 million, cost reduction and price cost mix and other big positive figure, plus SEK 31 million, and acquisitions also contributed strongly with about SEK 28 million. If you turn to page number four, you can see two graphs, one showing the quarterly net sales growth and one showing the development of the rolling 12-month net sales and EBITDA. If you start with the left graph, you can see that we now in the third quarter once again are back showing solid and healthy growth, not only total growth but also organic, as earlier said.
If you look at the right graph, you can see that we are once again adding growth to the rolling 12-month net sales graph, which is, of course, very good. But most importantly, you can see the big leap upward in the gray dotted graph showing the rolling 12-month EBITDA figure, which has, of course, increased quite much in this quarter due to the cost savings mainly. If we turn to page number five, we can start having a look at the segments. I will just go through these quite quickly. But as you can see, Segment North also saw growth in the period, mainly due to the acquisition of HT Bendix. We have seen a gradual recovery throughout the trading companies. Also, in the manufacturing units are going in the right directions, but from very low levels from the second quarter.
Gross profit decreased with about a percentage point, mainly driven by lower volumes in the manufacturing companies. The lower gross margin was more than fully offset by really good operating expenses in comparison to net sales, which due to efficiency measures and cost savings programs, etc., had a really good impact on the total operating profit, which increased with about SEK 7 million- 45 SEK million . If we turn to page number six and have a look at Segment West, we can see that net sales decreased with about 10%, and the organic decrease was about -6%. And the reason for the organic decrease is mainly related to lower volumes in our business in France and Netherlands. The gross margin was slightly lower due to lower volumes and a poorer business mix.
However, the lower gross margin was mitigated by a lower share of operating expenses, leaving a slightly lower operating profit versus previous year of SEK 24 million. If we turn to page number seven and have a look at Segment East, we can see that Segment East had a strong development net sales-wise, increased with 5%, or also good addition organically. Gross profit slightly increased, mainly due to cost savings on purchases. Operating expenses also really good development due to the cost savings program and the implementation of that throughout the quarter. All in all, the operating profit increased with about 31% to SEK 34 million, which is, of course, a very good result for that segment. If we continue to page eight and have a look at U.K. North America, of course, the nice development we can see in this segment is mainly achieved through the acquisition of ABS.
but we have also, during the quarter, seen gradual recovery in demand in the quarter, especially in North America, as said, but also in the businesses within the U.K. High gross margin, mainly due to strong contribution from the acquisition of ABS, but also from purchase savings. All in all, really strong operating profit increase, not only from the acquisition of ABS, but also from the already existing companies in the segment. If we take a look on page number nine, you see three graphs. The first one showing the development of the organic growth during the last seven quarters. You can see that we come from good, healthy organic growth in the beginning of 2019. then, from the mid of 2019 or so, we started to see an economic slowdown, which was then in the second quarter of 2020 exacerbated by the COVID-19 effect.
But anyway, significant recovery during the third quarter. What happened during the second quarter and the third quarter, mainly, if you look at the mid graph, was that we, throughout the year, worked with the efficiency program that Jörgen talked about. We launched it in the second quarter 2019, and we accelerated it in the second quarter of 2020. And this, of course, as you can see here, this is a graph over the price cost mix, which is, as you can see, a really good saving trend from the fourth quarter of 2019, but especially during the second and the third quarter of 2020. So significant savings achieved. And as a result of that, the operating margin has been able to keep that on a solid and stable level. Not only solid and stable, also actually increasing during the last quarter, the third quarter.
If we turn to page number 10, and on that page, I will leave the word to you, Jörgen.
Okay. Thank you, Marcus. The efficiency program that we've referred to a couple of times now is mentioned on the page, and as we have also said, it's now expanding its scope and targets SEK 100 million of savings by the end of 2020 on a full-year basis and relative to the cost base 2019. It has many components, and just to mention a few of them, we have worked now for a long time on investment in our digital platform, which we are making for a variety of reasons, but one of them is that we want to digitize our internal processes, which are, generally speaking, quite work-intensive in order to increase the efficiency and also the precision of those processes.
We have, since the beginning of this year, a new business unit organization where we've implemented 10 business units throughout Bufab, and this new organization and business unit is helping in driving efficiency because we have grouped together companies that have a lot in common and that have cooperation opportunities and efficiency opportunities in common. And this new organization is then working on those opportunities and trying to center both investment and also competence in a few places and a few organizations that we then refer to as centers of excellence. We've had, in the past 12 months or so, some restructuring either planned or already being carried out or already completed in some especially hard-hit companies. And that restructuring, of course, took off with new energy or with increased energy in the beginning of the second quarter of this year due to the corona pandemic.
All those things are part of our efficiency program, and on top of that, of course, we are keeping and emphasizing even more now the historical Bufab DNA thing about being quite picky with costs and very careful with costs, and that is something that, of course, has gotten more emphasis, more focus during this year than before. We also have a trading business model. I mentioned that before as well, and that enables us to both move quickly because of the nature of the business, but also to reduce costs quickly because most of our costs are, in one sense or another, variable. We have very few absolutely fixed costs. For instance, as one example, we have a relatively low level of depreciation, a cost that otherwise is part of a fixed cost base and is hard to shift.
Also, I think that our organizational model is one of the keys to success, one of the keys to success in this case. We are, as many of our long-term investors know, very focused on having a local responsibility and also local influence on managing the P&L and the balance sheet of each subsidiary, and in a situation like this, which is fast-moving and moving at different paces and at different levels throughout the globe, it's a definite strength to be able to rely on strong, good business people and individual subsidiaries and having them make the decisions in the general framework that are the best for their company on a day-to-day basis, and that is, again, proving its worth now that the pandemic is speeding up again, especially in Europe.
As a result of this, we have some charts to the right here, which are a bit busy, but we think important, and the first one, the top one, shows the increased efficiency and where we, as a proxy for efficiency, we've shown here the last 12 months' gross profit divided by the number of full-time equivalent employees at the end of each quarter, and as you can see, we had from the middle or so of last year an accelerating trend in this efficiency. Naturally, when we had this huge sales drop in the second quarter, the output per employee went down, but now we have continued restarted, I guess, the trend upwards, and it's definitely our ambition to have a long-term improvement in this KPI, but you can also see a more straightforward KPI, and that's the number of full-time equivalent employees we have in Bufab.
As you can see, we were in kind of an investment phase until the second quarter of 2019. These numbers are adjusted, of course, for acquisitions performance. Since we then started our efficiency program, we have reduced our numbers of employees quite substantially from about 1460 or so plus to this current level, which I believe is just around 1330, right? About 130 employees less in Bufab. We've been able to do this in a good way, we feel, with very few actual dismissals, but instead using natural turnover. That also means that our restructuring program, our efficiency program, has been able to, has been possible to execute with relatively low restructuring costs. I think we're targeting SEK 50 million as restructuring costs for this savings program of 100.
And even though SEK 50 million is a lot of money, it's a small amount relative to the total savings amount. As a result, in the bottom diagram, you can also see that our cost level, OpEx as percent of sales, then has been decreasing consistently since the fourth quarter of last year when the efficiency program started to take a hold. And in the second quarter, especially, I guess we're proud of being able to, despite this very low sales level we had then, have such a low percentage. I think at the time it was an all-time low cost level, I believe, even though we had a very severe drop in sales. But as you can see, we're continuing that, and we are now for the first time, I believe, again in Bufab's history, below 15% OpEx as a percent of sales.
There are opportunities going forward to further work on our cost efficiency and our general efficiency in our company, and we're certainly working on that. Another thing about efficiency is, of course, capital efficiency, and now I'm turning to page 10, sorry, 11, so to page 11. There you can see there's a small typo there. It says quotating cash flow, but it's supposed, I guess, to say operating cash flow. Anyway, we have had a good operating cash flow in 2019 already. Part of that, of course, was due to the somewhat lower growth, but it was also due to our work on operating more efficiently when it comes to working capital.
In 2020, we've had a much higher operating cash flow, and part of that, again, of course, was due to the negative organic growth in the second quarter, but we are, however, now in a situation where we're back and have built up ourselves again in the third quarter, so most of this improvement is not, in fact, due to that, but it's, in fact, due to a lower usage of working capital in our company and also to some extent lower CapEx, and that cash flow has come in very handy this year because we ended last year with a relatively high net debt to EBITDA multiple, so we were up close to four, which is possible for Bufab to be, but not something that we would like to be over sustained periods of time.
But as you can see, over this year, we have reduced this both by having a good cash flow and, of course, also by our profit improvements. And we're now back at a much more comfortable level, at least of below three. I think it's 2.9, maybe or something like that. So that's good. And that brings us to acquisitions. Bufab has made quite a number of acquisitions in the past five, six years, and those are depicted on page 12 of the presentation. We are seeing an increased level of activity from acquisition candidates in the past months, and we also feel that we are able to make acquisitions because now we have our internal operations and sales and profitability in good order. We have restored our debt gearing to a comfortable level. So we are definitely working on making further good acquisitions.
However, we're also working equally hard on avoiding to make bad acquisitions. So we will make acquisitions also going forward, no doubt, and we will do so when we find the right candidates. But it's not so that that is somehow put on hold or something like that, quite the contrary. To summarize then our result presentation, we have an EBIT bridge, an EBITDA bridge on page 13 of the presentation. And I'll just refer to the top. There are actually four pages there for the really interested people, but I'll refer to the top right one, which bridges between last year's year-to-date EBITDA, first to third quarter, and to this year's year-to-date EBITDA, first to third quarters. And as you can see, we started at 311, and then we had a bit of a negative currency effect, mostly due to translation effect due to a stronger Swedish krona.
And then we had a huge hit out of volume, and most of that hit, of course, came in the second quarter of this year when we had a very, very large negative organic growth, but also, in fact, in the first quarter. But we have countered that in a, what we feel, good way by absorbing almost all of that with various forms of cost decreases. So out of the 114 of lost organic growth, we have absorbed 105 with various forms of cost decreases. And on top of that, we've had a very, very good contribution from the two acquisitions that were new this year of 73, which brings us to an all-time high EBITDA year-to-date of SEK 361 million . Our progress going forward have already been communicated in the last call.
They are depicted on page 14 of the presentation, where, now successfully through, we find this protect phase where we worked a lot on the health and on protecting our customers in terms of deliveries and resolving their issues and so on, but also protecting Bufab. And now we're in a phase which we call restart, and the focus now is very much on being out with customers, working close to our suppliers on improving the operations with them, and, of course, making sure that our cost level continues to match the development of sales in the good way that it has during this particular last quarter. And this puts us in a position we feel where we can continue to invest in our leadership strategy.
And just to have a date, we said we'll be fully back in that phase on the 1st of January, but in fact, we're already working quite hard on those things, especially in terms of finding out where the investments will do most good and marshaling our team and so on. But we feel fully confident that despite the uncertainty inherent in the corona pandemic situation, we will be able to continue to invest in being one of leading players in our industry going forward. That's what this picture is supposed to say. And finally then, I'll summarize this presentation, and then I'll open up finally for questions and answers. The third quarter was, as we've tried to show here, a quarter of strong demand recovery, but also a quarter where we recorded all-time high sales and profits and a very, very strong cash flow.
The outlook, of course, is extremely uncertain when it comes to the market and the societal situation, and there, of course, we're humbled, I guess, by the strong negative development of the pandemic in Europe and in North America in the past weeks only, which is something that we're dealing with and have to deal with like most businesses. But we feel that with this lower cost level that we've achieved, the good cash flow, and by the good cash flow, the lower debt level, and our proven flexibility, that we're in a good position to tackle whatever comes at us, so to speak. And we're quite confident that it will not be so bad as in the second quarter next year, last year, sorry, second quarter this year, I should say.
So in fact, we feel that the demand uncertainty going forward is something that we can handle as a day-to-day thing as part of our ordinary operations. And that brings us to our progress going forward. And as I said before, our progress has been already to first protect health customers in Bufab and then to restart profitable growth. We think we're well on the way into the restart phase, and that's also, we believe, evident in our figures for the third quarter of this year. And that's where we are now focusing 100% going forward on, number one, reaching our savings target by January 1st, and on January 2nd in the morning to then restart our investment in becoming the leading company in our industry in the world. And that brings me to the end of our prepared comments and our prepared presentation.
And now, operator, please, if there are questions from the audience, now is a good time to ask them.
Thank you. As a reminder, if you wish to ask a question, please press star and one on the telephone. We don't have questions at this time, sir. Please continue.
Okay. Then I guess the presentation was clear enough in itself. I'd like to thank everybody for attending this call, and I wish you a nice Friday, the rest of it, and a nice weekend. Take care. Goodbye.
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