Bufab AB (publ) (STO:BUFAB)

CMD 2021

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Mar 18, 2021

Welcome to BUFAB Capital Markets Day. We're sending live right now this afternoon from Gummifabrikan in Varna, we're not so far away from the headquarters at BUFAB Sweden. It will be a slightly different than ordinary Capital Markets Day. At first, we will be online, so we will not see each other face to face, but you can still be a big part of this event because we have the opportunity to actually ask some questions during those sessions we soon will go through. I will come back to you on that one. So again, I hope that you feel that you are warm welcome to this event. And we have a really, really exciting afternoon coming up. So why wait? We go through it directly. So we start off with meeting our CEO at BUFAB, Jorgen. A warm welcome to live stream. Thank you, Jonas. And it's a great pleasure to be here, I have to say. And most of all, it's a great, Pleasure to welcome so many of our shareholders and other stakeholders to this event this afternoon. It would have been even nicer if we could meet in person, of course, but Now we're here, and we will make the absolutely best of it. Yes, we will. And are you excited for the topics during this session. Well, I'm very excited about PIFAB generally, so I'm very excited about what we'll do this afternoon. It's not often that I get to talk 2 hours nonstop So it's a great opportunity, I think. Yeah. So 2 hours, maybe some of you think right now, but we will have some pause in it. That's right. Yes. And we will actually start off this Capital Markets Day right away because we're going to talk a little bit about Pfaff. Maybe we have some new faces that are actually sitting here and watching this as a shareholder and want to know more about the company. That's exactly right. The program is approximately we'll start by talking about PULFAP, our history, our business idea, what we do for our customers And why we exist, so to speak. And that's for the new shareholders who may not know so much about Bafab. But then the rest of the day, we'll talk mostly about our future. We'll talk about Our plan for the next 5 years, our targets for the next 5 years, and the shareholders will also get a glimpse into some of the Business segments we have and some of the more detailed plans we have. We have a great team lined up, I think, and also a great program. So let's start. Aft. Of course, we're going to hit it off directly. And as I said earlier on here when we started. You can be a big part of this session because if you go down a little bit on your web browser from the stream, You don't have to leave the stream in any way. You just go down a little bit, and then you see a box there saying Ask a question. Afternoon. If you press that box, you can actually address a question directly into this place where we are sitting right now. Maybe you want to ask something that we have gone through here or something in general because I know a lot of you guys have booked face to face meetings, so to say 1 to 1 on Teams later on. But maybe there are some questions that you have in your heart that you want to actually address to the session here today. So feel free and we will take as many of them as we can. But now, as Jorgen say, Let's move on because we're going to start off with the topic about us. So over to you, Jorgen. That's right. I'm going to be talking about us now for a few minutes, And this is, I guess, mostly for the benefit of our new shareholders who may not know so much about Bifab's history, our business ID and so on. App. And the first thing that you need to know about Pfab is that we are an entrepreneurial company, and we put that quality we praise it very highly, and we value it very highly, and we try to keep it in the company. We have, meanwhile, improved and developed quite after a bit from our very humble start in the small town here outside Wernemont, but we try to keep that entrepreneurial spirit. We've grown For many, many years, both organically, much, much faster than the markets, but also through 50 acquisitions that we made since our founding in 1977. And we've done so with good profitability and cash flow and using our own money to expand our business just like any entrepreneurial family business. More recently, we've also had a good performance because we are just now chalking up our 28th consecutive quarter of year on year growth. And if you want to say that this is just words, then you can say let's look at these figures instead. And there you see how we've grown since 1977 with a fairly good clip. And the green bars here represent our growth Since our IPO, our stock market introduction in 2014, which has been 14% per year, so pretty good. Now some facts about that. We were founded, like I said, in 1977, and we've been a public company since 2014, about SEK 5,000,000,000 of sales, Good profitability, about 10% last year. The most important fact about Bufav though is the number 1300. That's the number of people We manage 150,000 so called sea parts, which I will get back to us in a moment, and we're present in about 28 countries around the world. Aft. I just said sea parts. What are sea parts? Well, sea parts are kind of hard to explain, but let's take a concrete example and look at this bus. App. This bus consists of many, many parts, 1,000 probably, and some of them are super important and very large and expensive. But there is also like an ocean of small parts, which you can see here on this picture, like these electrical terminals and these hoses and so on. Those are called sea parts. Why are those especially important? Well, let's take the customer's perspective on that. I think that's always a good thing to do in business, start with the customer. Aft. If you start with the A parts then, those are the most expensive and most valuable, most strategic parts of, let's say, a bus then, in this case, a diesel engine. And the thing with the A and B parts is that they're strategic. They account for most of the value, but they're also under good control by the customer because aft. The C parts, however, have quite a different look from the customer's point of view. They're considered necessary evil, after. And there are lots and lots of them, and we have lots and lots of suppliers delivering them, but yet there is no money in them. So you cannot, at the customer, become a hero managing the seaports. In fact, You can only have hassle with them. So from the customer's perspective, the seat parts are a constant headache. We have something in this industry we call the eightytwenty rule, and that's that the total cost for a part is quite differently distributed for an A or B part or for a C part. For an A part, the direct cost of the part, the cost of the actual part is most of the cost. But for a C part, it's quite a different story. For a Seaport, the direct cost is only a small portion of the total cost. And the indirect cost, everything that customer has to do to source the part, to work with its logistics to ensure its quality and so on. Those costs account for almost 80% of the total cost. And this is why Bifab exists, you could say, because the customers being concerned with Seaports is to reduce the total cost, which means reduce the indirect cost, So what our customers want is to reduce the many, many suppliers they have, and here we have a quote from one of our top 10 customers. Such quotes are easy to find. You just Google it, and there are hundreds of them. But this particular customer then says that they want to get rid of the small suppliers because these are responsible for costly and time consuming administration, as it says in this quote, and that's where Baefab comes in. Now to deal with Seaports, you have to be a special kind of person, and you have to have also special kind of values. And these values are mirrored also in our customer promise, which says that we should be always fast and flexible, that we should be committed app. Put together in the single word, solutionist, which is what we want to represent to our customers. Now our profitable growth, therefore, is fueled by a global trend of customers who want to outsource their C plus management to somebody like us. And this trend has been going on for decades, but now we see it accelerating. And to put all of it in one word, you can say that the customers want to reduce the risk and the total cost, And that's what makes it possible for us to be profitable. And they want to do so increasingly, and that is a global trend, and that's what is driving our growth. Putting this together, you get profitable growth, and profitable growth is what Bifab has been delivering for the last 45 years. Now Can I have the next picture, please? Now we're going to talk a little bit about how this has played out for the shareholders and what the performance of BFF has been In the past 6 years or 7 years since we went on the stock exchange. And to help you with that, I have a colleague here, BFF's CFO, excuse me, Markus Anderson. And you need to talk to our shareholders here about how have we done since our IPO in 2014. Go ahead. Thank you very much. Thank you. Hello, everybody. Markus Soderberg is my name, and I'm the CFO of BUFUB since couple of years. And I will, as Jorgen said, just walk you through the performance of BUFAB. So if we start by looking at the performance from the last 6 or 7 years really, actually since the IPO, AF. Bifab has had quite a good growth year, I have to say. But first, before we go into that, we have to just talk a bit about can I have the next Thank you? First of all, just something about the market that we are operating in. After the market in which BUFAB operates grows with approximately 2% a year. BUFAB, however, has shown a good track record of organic growth, app, which is almost 5% a year. The reason for us growing faster than the market is actually due to that we take market share. We take market share both when it comes to bringing new businesses, but we also grow on existing businesses, Meaning that we increased our share of wallet of existing customers, so to say. On top of this rather good growth organically, I have to say, We have grown an additional 10% through acquisitions, so acquired growth about 10%. And we have made about 9 acquisitions since 2014. And those acquisitions are splitted geographically between our various markets, so to say, but Asia, North America and also Europe. So a good track road growth wise the last years. Profitable growth is another thing. And we have shown profitable growth also since the IPO, you can say, or since 2014. As you can see on this picture, this is a picture of our EBITDA margin, which has been very stable but also improving the last couple of years. And it should be mentioned also that we have invested quite much in our business since the IPO in sales organization, executing the sales strategy, Also investing in our sourcing organization, etcetera. And that is actually the result we have seen in the growth rate that we looked at on the previous page and also stable profitability during those years. Next picture, please. Profit is also one thing, but cash flow is another thing. And when it comes to cash flow, we have also had a good development Having a trading business model, so to say, means that we normally do not put too much of cash into our balance sheet, so to say. What we invest in is mainly into net working capital, so to say. But we get quite much after cash flow left over, so to say, after paying off these kind of things. The rather good cash flow you see in 2019 2020 app is mainly achieved due to that we had slower market Or market dropdown, releasing a lot of cash from our balance sheet, and we have been able to use that cash in order to pay off our debt, so to say. If you take the next As you can see here, we have been having an average of around 2.5x since 2014. But you can also see that we have a couple of red bars there Where we were up on quite high level, so to say. And that was actually right after we acquired some companies. Back in 2014, we acquired Apex. Next picture, please. And you can show all of the picture, please. Yes. And as you can see, we have been after. Getting in about SEK 2,500,000,000 in EBITA. And as I said, most of the money that we bring in, Some of it is tied up in net working capital, not too much in CapEx actually because we have low fixed assets. So most of the available cash, We have actually been able to use to financing our acquisition strategy. So most available cash flow has went into acquisitions. Of course, we have increased our net debt a bit, but the leverage has been more or less the same compared to 2014. Aft. So all in all, you can say that we have seen good performance, and this good performance has generated good results. So strong growth, strong profitability, strong cash flow. Net sales increased with about 14% a year, after EBITA with about 17% a year and net profit with about 18% a year. And we have been able to do this, as said, by holding the net debt to EBITA More or less unchanged since 2014. Next picture, please. And even though Our main focus, of course, is to focus just on strong growth, profitability and good cash flow. It's, of course, very nice to see And just to summarize this a bit then. Since the IPO, we have continued to invest in our customers, Thank you so much, Markus. Thank you. We are live here on this Capital Markets Day, and you will be back later on also talking a little bit here in Part 2. And also, if you have any questions about this or anything others, they can just type it in and we will come back to you on those. But we will move from this stage to the little bit of a launch area here. So Follow me here, and I know that is sitting in his share here. And we need to talk a little bit about of course, we're going to all the way put focus on the future here today. But we had a really, really special year, 2020. It was difficult in many ways for a lot of people. And I know a lot of those that are watching this right now thinking how was BUFabs 2020. And we need to take a little bit of look at on the 2020 side of things. So Well, I mean, 2020 was a very tough year, I think, for many people privately and also for many people in BUFA, both privately and professionally. It was tough year for our customers and for the industry as a whole and still is tough, in fact, because we're still not out of the woods when it comes to that. But it was also a year when we think that we proved some things about Bafab that even we didn't know before. So let's go and talk about 2020. Can I have the next picture, please? We soon will have the next picture coming up here. So as we said And one more, please. So we started out 2020 early in March, I guess. We saw the pandemic hit our companies in Asia, our sister companies in Asia earlier than the rest of the world. And that was But for them, but good for BIFA because it made it possible for us to think a little bit and to take the solutions that they developed for how to deal with the pandemic And be able to deploy them in the rest of Bufab. So I guess you could say that we got a week or 2 extra headroom to think, and we used that week to basically set 3 priorities of our people, of our solutionists, of their families, our suppliers, customers and so on. And secondly, to protect our customers Because there was, at that time, also a lot of uncertainty about demand and logistics and such things. And there, we had to work really hard to meet those changing afternoon. And lastly, also to protect BIFAB because BIFAB is our place of work, and it belongs to the shareholders. We have to protect it. And There it was very much a question of making sure that our cost level was in sync with the rest of the with the demand that was in the market. Aft. Then we started the phase when we saw that, that was working, so to speak. We went into a phase called restart because we didn't feel that we could waste the whole year and not app move our positions forward with our customers. So from July and onwards, we focus quite a lot on our customers, strengthen relationships with them And also getting more business basically with them because we have a habit of increasing our market share every year, and we wanted to do so in 2020 also. 2 first phases and where we're now basically thinking ahead and seeing what we're going to do for 2023 and what we're going to do for 2025. And like we said before, that's what the rest of today is about. But let's stay in 2020 for a while. If I could have the next picture, please. So first about growth then. We outgrew the market in a dramatic way actually in 2020. Afton. Those 3 percentage points, that's increased market share. And on top of that, we had 2 new acquisitions that had come into the company at the tail end of 2019, And those provided another 10% of growth. So in total then another 15% of growth, I'm sorry. So in total then, 10% of growth, Approximately 18 points faster than the market. Bifab moved its position forward dramatically during 2020. Next one, please. And how are we able to do that? Well, we had already in 2019 And before, invested quite a lot in new productivity solutions for the company, which we have not quite been able to try out, so to speak, because we had been growing and been app with our ordinary day to day stuff. But we saw in the middle of 2019 already that the market was a bit weak. And by being one step ahead, we started then a cost savings program, which we were then able to just accelerate when we saw where the market was headed in 2020. Those are important steps that made it possible to perform so well in 2020, but more important and the most important is our Entrepreneurial and decentralized organization, because when you're in a crisis, then you want to make faster decisions and good decisions, And that's much easier to make if you're close to the customer, close to the market and are able to decide. And that's a feature of Belfast's organization that really proved itself in 2020. Let's look at some numbers then on the next picture, please. Firstly, we can take the whole picture in one. Firstly, we had share gains. So you can see here in the 1st quarters, we had really large negative growth, especially in the 2nd quarter, but then we returned to very good after. Organic growth also in the Q4. And also in January February this year, we've grown. Then we have the question of cost. We are trying always to increase our productivity so we can do the same work. So we can do more work because we're growing, but the same people by working more cleverly. And that was also something that continued in a good way in 2020. We reached at the end of last year the lowest cost level we've had ever. And finally, cash is important in a family business, and it's important in any business. And by managing our inventories well and our supply chain well, we managed to have a Very good control over cash flow last year and recorded an all time high cash flow and which is maybe not what we expected in March when things looked the darkest, The best profit margin we've had in more than 10 years in this crisis here. So we think that this is proof of concept of a new kind of buffer, app more agile, more flexible, more productive and that it also proves the value of our decentralized entrepreneurial organization. Let's go to the next one, please. So we put this summary here. It basically says that we face the biggest crisis that we face for many, many years. I've been in BUFA for almost 10 years, but there are people who have been there for 25 years, and they've never seen anything like it. But in that crisis, we really showed what we can do, app. And that is something that our customers have already rewarded us with more business for, but that for sure will strengthen our relationships with our customers also going forward, Enabling us to continue to grow in years to come. Let's have the next one, please. Now This was a bit of a summary of 2020, but now we really have to do what we promised, which is talk about the future. Yes. And that's why we're all here today. That is so. So I think the past is the past. And let's move on to take a little bit of a look into the future and see what it's like. And we will be having a really, really good topics coming up during this afternoon's session. So app. Make sure that you stay tuned on this stream. And also, as we said before, please ask your questions because This day is for you, and we want to answer every question that we actually have managed to get time to answer. So now. The past is the past. 2020 is gone. We're sitting here. It's March 2021. And as said, we need to take a look into the future. So please, Joergain, take it away. I'm back. So we're going to talk about the future now and specifically, we're going to talk about the next 5 years. So It is going to be characterized, as it has been in the past, in our business by fragmented supply. In fact, in our business, there are thousands of companies. It's easy to enter the business Because the so called barriers to entry are quite low. So there are thousands of companies, but there are only a few large players, maybe less than 50, That are so large that they can play a significant role in the region, let's say, in Europe, based in Germany. And if you look at the players that are global, such as we, There are only a handful, maybe less than 5 players who have a global ambition and a global scope in our business. One more, please. Looking at the demand, though, our customers and especially the larger, more complex, more advanced customers, they really want one global partner, and they want a good one because some of them still source many seaports themselves, but they do want to derisk and simplify their supply And this is becoming more important the more trade barriers there are, such as the ones caused now by Brexit. It's becoming more important because of sustainability because of digitization and other factors. Now moving from having your own seaport supplier base to Acquiring your seat parts on something like BIFAB is a time consuming, costly, bothersome process. Our customers want to do it. They do want to do it, but they want to do it exactly once in a life. And that means that they're quite picky on who they turn to when they want to do this. And that's where Bifo comes in, of course. Can I have the next one, please? Now if you look at a typical customer and Look at their supplier base. It looks something like this graph. They have 50, 60 suppliers or something like that, and they ordered them from big to small Along an axis like this. And if I can have the next one, please. And one more. What they do then is they consolidate from the smallest suppliers and put all those together and give that volume to the largest suppliers. So our job is basically to be one of the green suppliers on this list. And if we do a good job there, our customers will do a little bit of our sales work for us and consolidate their smaller suppliers to us, and that's because we and some other companies like us can fulfill the most stringent demands that the customers have on things like quality, cost, aftermarket. Delivery performance and increasingly also sustainability, so environmental and social and governance issues. Next one, please. On this journey, it's a long journey, and we've only just gotten started. We believe that over time, a large Probably the most attractive part of the market will go to a few global players with a very good value proposition. And if we can grow 10% or 15% a year, we will double our share from our currently very low levels every 5 years or 6 years, something like that. And that leads us to our ambition, which is to become one of less than a handful global consolidators. Next one, please. And of course, how that looks, we don't know exactly, but we have today a very low market share, well below 5% Globally, probably more in the neighborhood of 1%. Still, we're one of the largest players. So we think that we can keep growing our market share every year for a very long time to come Now we don't only want to grow, we also want to grow, like Mark is underlined, with improved margin. And we have today Improved our margin quite a bit last year compared to the year before and the year before that. But we still feel that there is more potential. So can one more, please. More potential to improve the market. Margin, we want to stabilize the gross margin and gradually edge it upwards. But most of all, we want to make sure that by productivity increases, we can run more sales volume, more money basically through the company app with less effort. And to do that, we work with things like digitization and centers of excellence that will all be explained later in this program today. App. And by having then continued market growth and continued market share growth, we can then get what is called operational leverage, And that basically means more sales through the same machine, so to speak. And by doing that, we intend to increase the margin to 12% in short order, afternoon, which is also something we'll get back to. Please, next one. So is this something that is And those investments that we were absolutely necessary to make in order to get that improvement, to get that market share increase, The company is not larger now than it was in 2014, and the cost percentage is much, much lower despite the fact that we've invested dramatically in things app. Like digitalization and things like our sourcing organization, quality organization, IT and things like that. One more, please. And in the future, our ambition is to accelerate this. We intend to keep outgrowing the market by more than 10%. We intend to use the excess growth, the growth above the market, to finance investment in things that I just mentioned and also more acquisitions. And in that way, we intend to grow even faster. Next picture, please. We just communicated yesterday, in fact, new financial targets, and we're going to look at all 4 of them together here. The first one is that we intend to have continued profitable growth. We intend to grow our earnings per share by 15% a year until 2025. By doing so, we intend to also increase our EBITA margin, our operating margin, to 12%, latest 23. We intend to continue to divide out significant portions of our profit to our shareholders, thereby enabling good dividend growth. Next one, please. Our ambition in this area, we call leadership, and it has 2 parts. Firstly, we want to be the leader in the market exactly in the way I described before. But secondly, one more please, is that we also want to be a leadership in financial performance. And these things, in fact, strengthen each other. The better we can make our financial performance, the more we're able to invest in leadership. The more we are able to invest in leadership, the more we are able to return to our financial performance and thereby invest again. So it's a virtuous circle. One more, please. This leadership thing is something that we've been working on for a while, and we're starting to feel that we get there, but now we're adding a new element to that, and that is sustainability. Aft. And with sustainability, we're intending to make it an integrated part of our day to day business. We're intending to place it, in fact, at the center of everything we do. And there are three reasons for that, and let us have them, please. The first reason is that our customers need it. They are not good at handling seaports, so they do not know how to do that exactly when it comes to sustainability either. And also our owners want it. I have a dialogue, of course, with many of our large shareholders, and they are very much into this, and our own team wants it. All of this makes us place sustainability at the centre of our business model going forward, and that's why we call the new plan we have for the next 5 years sustainable leadership. Plan, which consists of 4 elements. We intend to, firstly, grow. And by grow, we mean to grow faster than the market as we have done now for many years. Then we intend to improve the business, improving hair beans, for instance, improving the margin, but also And finally, we intend, of course, to acquire more companies that come into this Bifab wheel, this Bifab family, so that we can really get to the sustainable leadership level. All this is words, right? It's just four words. But that's why we're hoping now that you'll be able to get a little bit more insight on how we're going to do this To do that, to give me a bit of a break also, I will be joined here by 2 of my colleagues. So here we have Johan Sandberg and Karina Loev. And they will be the ones explaining to you how we will deal with growth and how we will deal with improvement, right? So please, Johan, the word is yours. Thank you, Johan. Let's see if the mic works here. Everything's okay, good. My name is Johan Sandberg, and I'm responsible for growth. You can take the next slide here. And together with me, I have Karina Loeb standing here. We can move to the next one. We will start to talk about the growth area in our sustainable leadership. Brilliant. One important thing is to be able to explain what it is that we actually do for our customers more than just delivering a Sea part to them. To improve this, we have repackaged our complete offer. You can go back. As you can see on the right part of this picture. This will build better clarity and trust in the customer dialogue. It will as well open up the customers' thoughts about what actually can be achieved in efficiency if you choose the collaboration with BUFAB app and that they will find more time to focus on their core business. But to do this with success, Our people need to know what they talk about. And that's why we will further invest in local solution expertise to build credibility in customer meetings and professional deliveries. We investments will be done in training tools for our sales people to maximize their skills to be trusted advisers in Seaport's supply chain management and know what you sell. Afternoon. This will increase our skills in selling all of Bufab all the time because our people will know more solutions to meet more customer needs and as well be the leading partner. Here, we built a solutions investment road map in our strategy. It works. Brilliant. Here we have a customer example. I think this is quite interesting to see some stuff from reality. This is from India, And we have a rail oil industry manufacturer that we are supporting. We've gone from 0 to 2,500 parts in 2 years. The picture that you see on the right hand side there was taken last week in Pune. And you can see quite a nice installation, I think, going from a rather chaotic seapart management into a nice structure. This is then digitally integrated using BUFAB's EZ FLOW programs with EasyTrack kiosk for the operators to find the parts. We will have weekly deliveries from our Puna warehouse into this, and the customer gets what's in the middle of our customer offering peace of mind. And the next step for us is to expand this into a site near Delhi. BUFAB has a history of very long customer relationships, and the majority of our customers are here for the long run. Then they market their solutions and find partners and plan for success. Some of our relationships has contributed to growth more than others. And one very nice example is Schneider Electric that's been a customer for decades and we have a very good relationship with. Aft. Bifab is now one of 3 strategic seaparts supply chain partners, and we service them with more than 4,000 unique parts in 135 factories in 34 countries. And we're extremely proud of that in 2019, Bifab was named most responsive out of 20,000 suppliers globally. Another area for investment is sales excellence. We have looked at our sales process, We call it sales excellence, and the aim is to grow faster and with a higher hit rate. Despite the COVID pandemic that we have ad and are in. We've pushed forward in this. And in 2020, we have trained all our senior sales managers in our largest business units, and we have continued with this in 2021. So by focusing these three areas, invest in productivity solutions, build customer partnerships That is above 10%, which is significantly above market, and it will be supported by a very much higher hit rate. And with this, we move over to the Improve area, and I leave it to you, Karina. And here's the remote control. I hope it works now, yes. Thank you very much, Johan. Thank you. So hello, everybody. My name is Karina Ljur, responsible for Global Sourcing inside BUFAB. Working to widen our margin and improve our productivity. And we are doing that by using our platform or operating system with our best practice. That is our guideline. And that is a guideline how we work in the most efficient way to our knowledge today. That process is constantly reviewed, and we are doing improvement there all the time. And I will show you some examples afterwards. We are also working with So sorry. On the digitalization with the customers, app, and we are using EDI. And both of those give large gain in efficiency and imprecision. On the supply side, we have worked since 2019 with our supply portal. We are on a level today with 35 percent of our order lines and around 110 digital supply solution. It's a really large upside here when we work with consolidation and partnership. It also helps a lot when we do the onboarding Sorry. Here, I will show you more in detail This is a case to streamline initial sample process where we gather cross functional team with the stakeholders that is involved. The green notes is the part of the process that works well. And the pink, yellow and purple ones, Those are the areas of improvement. So good potential, as you can see. For the large number of inquiries Historical, if we look back to 2014 and 2019. We can see that we have had productivity gains around 2%. Most of those Improvements are reinvested into the organization, both sales sourcing, quality, business units, leadership teams and our digital tools and solutions. The latest years, if we look back to that, we have Of course, we are working in a very classical way when it comes to partnership and consolidation. We have our approval part that is the C, the platform, the large tail of suppliers. F. B is our preferred supplier net and A is our partners. Key to the future success is that we continue Sharing the same targets and learn more from each other, we will further focus on networking capital by different consignment solutions. We also have a long tail of approved suppliers. Those will be handled more or less digital in the future. And that is the initiative, how to handle 1,000 approved supplier, but could also be like 5,000. Who knows? We integrate a lot of suppliers all the time. The initiative that we have regarding supply base for growth, aft. Here is our focus projects where we do the evaluation of our largest customer growth Since 2018, we have also been investing a lot in our centers of excellence aft. And these are our competence centers where we have the responsibility for best practice sourcing, quality, logistic and F's sustainability in our business units. They are also the tool for driving productivity, and it's here where we concentrate our investments. App. So again, we have them in Sweden, Bufab Sweden, Bufab Poland. In Gdansk. Yes. And Bufabendelux in Einhove. So app. I think the viewers also are really exciting to look at those centers of excellence. So shall we give them a little bit of a tour, so to say. Sounds like a really good idea. Yeah, because for a couple of days ago, we were at one of those centers of excellence at BUFAB Sweden here in Vanamor. So from us here to you, here is a film from BUFAB Sweden. There you go. What a place to work at, Johan. Thank you. Thank you. That was one of those centers of excellence, a little bit glimpse from BUFAV Sweden. And I'm aftening here together with the manager of Segment North, and that's what we're going to talk about right now. So, Johan Lindqvist, the stage is yours. Thank you very much. So my name is Johan Linkqvist. I'm the Manager for Segment North. Afternoon. And I've been in BUFA for 23 years now, so a long time. And I would see if I can explain a little bit more what we do in Segment North there. So we are approximately 11 companies in 4 countries: Denmark, Finland, Norway and Sweden, and we are 500 employees and stands for about 43% of the group total sales. Afternoon. And if we look at the net sales the last 6 years, We have had annual growth of 8%, a quite good figure, I think. But mainly of this growth had come from the acquisition company, after. The organic growth hasn't been so good, but now we see that we catch up quite a lot than the last years. Then if we go to the margin instead, We've had a tough year last year, 2020, due to corona, of course, especially in the manufacturing companies. They have pretty much full closed down in the Q2. That affect us quite a lot, I would say. But the target is 12%, and we think we can reach it. Why? Because we have companies already now in the segment that are above 15%. And we also think that we have a lot to do regarding productivity, restructuring, growing and also pricing and savings. So I'm quite sure that we can reach that FL. Now I'm going to go to see a customer example. Aft Siemens. It's a world leading gas turbine manufacturer, and they have a lot of sea parts to their products. The administration and handling internally is a big thing for them, and that takes a lot of time and efforts for them. So we offer them our supplier consolidation package, and that was a really good thing to offer them, to be honest, because today We see that we supply 2,500 unit part numbers, and we have reduced these 2 20 suppliers to 1, BUFAB. And of course, during that years, 4 years, I think now, we have add a lot of different products that we didn't have before. So weekly deliveries, and we're also using our logistics solutions, EZflow. About the future then, we think that we can add even more products into our category, and that's nice, of course, because that we can also use for other customers. And we also would like to follow Siemens to other countries. And next in line is U. K. And Germany, and that will be a really fun trip to do. So what have we done with Siemens then? Yes, we have helped them with sourcing and also simplify, meaning The customer says to us, we have a problem. The administration handling of these products drives more costs than the parts themselves. Okay. Then we go for the Seaport consolidation and also the logistics solution, Easyflow. And you can say, of course, this is a really good business in itself with Siemens, but it also developed us to do this consolidation solution and also to go to other customers with the same solution. We also enter a lot of new products, categories that we didn't have before, and there's also an opportunity for us in the future. And then last, of course, we can go together with the customer to other countries. And Siemens, as you know, they're all located pretty much everywhere. Then I will talk a little bit about acquisition. And we have H. Bendix, a big company in Denmark, working with CPaaS for kitchen and furniture. We acquired them 2019, and I think it has been a really good fit for both us and HE Bendix. And why? Yes, we try to help them and we can help them to improve their business outside Denmark because we are located in many countries in Europe, That's Eastern Europe but also Central Europe where they are weak today, but we see big opportunities to help them there. We also think that IKEA could be the good business for them because we have had them for many years and it's a new customer for HE Bandy. So that will be also a good opportunity for us, I think. And the growth for HPNIC last year, even if it was this corona year and quite a big shutdown, you can say, in Q2. There was a really good growth even then. So I'm really happy with this acquisition, to be honest. And now I think it's time for an interview with Kai, the Manager of ATBendix. So welcome, Kai. Afternoon. Nice to see you. And for those that don't know you and your company, tell us a little bit about your company. We founded HT Bendix in 90/75, and we are a trade And we make business to furniture and kitchen factories. And we have an Opinion, it is very important with long term cooperation with customers. So, we look for that. Our product and our ideas to develop together with customers also. So, we are ready to af. Make new products together with customers. We are ready to make drawers and ready to make, 3 d print and something Like that to the customers. So when did you become a sister company in BUFAB? Yeah. We become a sister company in 20 So for me, it's important they also have a good company in the next generation. So what has the first time in BUFA been like? For the 2 years we have been there. I will say, all employees are satisfied, and we have a lot of dialogue. Even the management team in BUFAB are also some operation people in BUFAB. It has been very good. And I must also say The BUFA management team are very good to they have a good impact, and they understand app. I'm really looking forward to follow your journey, and good luck to you. Thank you very much, Parekh. You are very welcome. So what's coming up next couple of years then? Regarding Gro, we will continue to develop our logistics solutions We will, as said before with Siemens, widen our product range quite much, I would say. We will also try to cooperate more between the companies in the group, but also in the segment, of course, to if we have a big and great customer in Finland, try to follow them to other countries and also try to do this what we the segments that they have and also bring them to Sweden or Norway, whatever it is. We have some work to do in the restructuring regarding manufacturing companies, and we'll also invest quite heavily in sales, I would say. And improve. We need to improve, of course, also. I will mention maybe most this digitalization because I think this is a future for also. There is a lot of internal processes and manual handling that we can move to digitalization instead. We have this OneTouch RFQ and we have a lot of other stuff going on in the company right now to develop that because we can save a lot of time and instead focus on the customer and their needs, I think. We will also, as maybe Karina said before, working hard with a partnership with the key suppliers Because we also think there is a big benefit for us, but also for our customers, of course, if we can have great suppliers that have a good quality and delivery position and also sustainability, of course. And then as last, we have this time to market. If we can shorten the time to market and the lead time, we can be more efficient but also get much better service to our customer, of course. So thank you very much for that. Now I think it's time to go to Johan in the segment West, I think. You're exactly correct on that one. Johan, thank you so much. That was segment. North, and as you said, we're going to move on to Jorn because I think we have Germany now on the line. So this is live offshore. So hello, John. How are you? Hello, Jonas. Hello. I'm pretty fine. Thanks. We're sending live from Wanauma, and we just recently talked about segment north. And now it's your turn to talk a little bit about segment west. So by wait, Jorn, the stage is yours. Thank you very much, But never give up, I would say. First of all, may I can introduce myself very briefly. My name is Maura, located as already mentioned in Frankfurt, Germany. Over the years, I went through several positions and responsibilities. Yes, that's pretty much about me. And this is the segment West, 22% of the Krug sales. We are having 7 sister companies and about 244 colleagues, we can say, Look on some numbers and facts about the segment West. West is doing pretty fine. Net sales developed positively. We are able to grow annually by approximately 12%, Mainly organically, but we also made one very successful acquisition in 2015. In a moment, we will have the chance to listen to the previous co owner and today's MD of that acquired company called Floss and the guy called Tuan van der Sande from the Netherlands. Overall, I would say it's a pretty nice development apart from the COVID circumstances And that economy economical impact, but we are looking very positive forward. Next part of that slide shows us the operating margin. We were in line We see net sales development before West took approximately 1.5 years ago care on one restructuring process And the fact that the biggest margin drivers of the segment West developing Pretty, pretty fine. We are more than confident to close that gap, which we can see here on the right side pretty, pretty soon. Creative component solutions. It's about the Dutch based International agriculture, family owned agriculture company. They supply from milking to cleaning Everything what you need as in pharma, you can say. And the background overall was that the customer, of course, app. That milking unit is a pretty complex product. It is consisting out of 86 different components. It's screws, it's nuts, springs, plastic components, ceilings, etcetera. It's completely assembled and tested by BUFA. Plus in technical Improvement or further research and developing work, which we've done for the customer. And it's an excellent example of our concept Creative component solutions, which offers us in segment West a very strong growth area. And this is also, as we say, a mega trend in our industry, On the next slide, we can say if we should pinpoint exactly the customer example And reflecting the customer needs, I would say it's all about peace of mind. As the customer said, It's the overall solution. It's the peace of mind feeling, so to say. It's the complete assembly. It's a technical improvement. And that is exactly what they were looking for. Overall, it's a great partnership You can see that here on the bars on the light on the left side. So it develops fantastic slowly at the beginning, but then One moment in a super, super good way. And on this year, 2021, it looks Even better, I would say much, much better. So the outlook for with that customer and those kind of services are really It's an ideal showcase also for our concept, CCS concept. And It is a great opportunity also for other companies and subsidiaries in the segment West. On the next slide, I mentioned it already at the beginning. We made just one acquisition, but a very successful one, 2015, a Which were focused already at that time, 2015, pretty much on a similar concept as we call it now Creative Component Solutions. It were the first acquisition in the new wave after the IPO. And The development so far is strong, is super positive. Yes, we had this Small dip in last year. Everybody knows about the circumstances with COVID and the effect. But It's time for Netherlands and Thwan. Hi, Thwan. Hi Jonas, Nice to see you. Hope everything is good with you. And tell us a little bit about your company in Holland. It's an honor to tell something about one of the most beautiful companies in Holland, Floss, a very old company. We are located in the Brainport region, the region in the neighborhood of Eindhoven, Where all the things are happening in Holland at this moment, we have a lot of beautiful companies in our region, Which we also supply like DEF, Philips, ASML, Vanderlande, so big companies. And, yeah, we are a spin in the web. So we are very happy that we are located over here. Afternoon. When did you become a sister company in BUFAB? In 2015, you became a sister company. And I can tell you also why. Please do that. Yes, because in 2014, we have a lot of Companies from over the world who are who wants to deal with us, and one of them was BUFAP. Why did we choose BUFAP? I think two reasons are very important. In BUFAP, it's one thing very popular and that's MD is king. And when you want to be an entrepreneur In your own country and you know the best what's happening in your country, then it's very important that you can be an entrepreneur in a big company. That's one thing. The second thing is that we have a lot of young people in this Brain Post region, Which are a lot of companies are very pulling on those people. And young people, They want to live in an environment in the world. Yeah. And within BUFAP, we have a lot of companies in the world. So, they can talk with a lot of people in the world and that young people like. So, they can develop a lot. Afternoon. So, Thorne, thank you so much for that report from the Netherlands. Thank you also. So, till next time. On the next slide here, which you can already see, I want to summarize a bit and look also a bit ahead of our strategy. We will demonstrate the potential of BUFA. And when I should Given statement or should describe why we are able to do that. I would say we do things with passion and we are So overall, we are In segment West, we are confident convinced that we can look forward to a great future. Definitely. I'm absolutely sure. And that's about segment rest. I would like to thank you here from your segment West. We have done 2 segments and we have 2 more to go, but it's time for a little bit of a break now. We're going to have a break for 10 minutes. So check your watch right now because we have a break for 10 minutes, but This is also a time for you to actually take some time and figure out some questions that you want to ask, maybe for something that you heard up here on the States during this afternoon. So please go down a little bit from the stream and you see a box. Ask a question, press that box and then you type in your questions and we will take that question later on in this program. And as many as we have time for, we will answer them. We promise you that. So time for a break and we see you here in 10 minutes. Launch area of this Capital Markets Day here at BUFAB. And thank you so much for your questions. It has been a lot of questions. App. And Jorgen, I think we're going to start off directly. So this is a good one. I'm a retired high school teacher who has placed a lot of my economics in BUFAB. We are a group here who meets and discuss shares together. Interesting, but we should have started earlier. But now to the question. I'm wondering, aft. Aft. Passat in particular right now. Okay, good. Well, it's a really good question. I'll try to look at you when I answer. I hope that you're seeing this now. We don't sell directly to carmakers because carmakers are not usually so they're so advanced that they basically do not have any seat parts. But we sell some bit actually, maybe 5%, 10% or so of our sales go to the transportation industry. And there we have many customers who in turn deliver to carmakers. So if it's in the actual Passat, I cannot tell you, but it's quite possible that there is a bit of a part in the rearview mirror Or in the seat. Yes. Or in the steering wheel maybe or so. And that's really hard to tell. But if you take it all apart, I'm sure that there's a good chance app. And generally, Biffa sells to almost everybody in the industry. So there are lots and lots of Biffa parts around us. Aft. Furniture, trucks. So we think it's in there. It's a good chance. Yeah. We take one more. App talking about vehicles. How do you see the future with electrified vehicles as they contain much fewer components, so to say, less SKUs and so on? Yes. That's also a very good question. Like I said, after the car industry is a relatively small portion of our sales overall, and that goes for most industries. So we have an enormous spread of our sales over many, many industries in many countries. And generally, therefore, to be entirely honest, we don't think so much about such things Because in total, there is always demand for not only screws, but also any kinds of seaports. But secondly, specifically now about electric cars, We don't sell screws and washers and nuts. We sell seaports. And seaports are any kind of small part that goes into manufactured goods. App. And that will be the case also for electric vehicles. So we're absolutely unworried by this particular phenomenon, but we look forward to good electric cars. Yes. App. We will come back to because it has been a lot of questions about the sea parts, but we'll take that later on. Okay. So thank you so much. As I said, please type the questions down below. But now we're going to move on in the program here because I know that Marcus are ready to talk about Invest and Acquire, and I know that Markus and Urban will take that. So the stage is yours, Markus. Thank you very much, Jonas. So going into the 3rd part of our strategy. Johan has talked about growth. Karina has talked about improve. And of course, we are aiming to both grow and improve, but we also aim to invest in our business mainly for future growth, so to say. So I will walk you through that. Next picture, please. When it comes to invest, app. What we are aiming to invest in going forward is mainly in our supplier base and our customer base. And when it comes to our supplier base and customer base, what we are talking about is to make sure that operational excellence is handled in a good way. And when talking about operational excellence, we are talking about app processes and tools in order to ensure customer fulfillment, warehouse logistics and manufacturing. We also aim to invest in our platform, our global platform. We are investing in making sure that we integrate more digitally with our suppliers, customers, transportation companies, and we are continuing to invest in our sense of excellence as well, as Kerena talked about earlier. We also invest in an open IT architecture. Open but yet secure IT architecture should be mentioned. We have invested in a basic, very good, droop wide layer in which each business units more or less can choose what they want to handle on their own side, But also what they want the group to handle when it comes to IT services, which is a good flexibility when it comes to IT. Let me just have a minute talking about the BUFA Best Practice because it's actually something that we're quite proud about. BUFA Best Practice, we started that work back in 2015, and it has been accelerating ever since. The BUFA Best Practice is basically a handbook It's basically a commonality layer across our BUs that is owned by global BU process owners who cooperate and drive it forward. Aft. The BIFA Best Practice is actually a key competitive advantage in SAIL. It has been proved. The BIFA Best Practice is also, after since a couple of years. Also a framework for our sustainability work, and will talk more about sustainability in a couple of minutes. Also, BUFAB Best Practice has become the basis for digital process automation within BUFAB. So those five process areas, which you see on the right corner, are included in BIFA Best Practice and also the main 5 operational areas, so to say. But we also have some supporting processes, namely people, quality, finance and performance. And I will just talk If we go back in time and start by just before the IPO in 2014, we put quite much time and effort and investment in making sure that we have correct reporting that we are compliant, that all our sister companies are doing correct and that we can trust the figures, etcetera, basics, so to say. Since then, we have put quite much invest into making sure that we can analyze and understand the business. We have a huge amount of data. Due to that, we have thousands of suppliers, thousands of customers, hundreds of thousands of items. So we have good data, app which can be used in order to analyze our business, so to say. So we have put a lot of time and effort into that, and we are now in On top of this, we, of course, need to invest in one of the most important areas in Beifab, and that is our people. We will invest in strength and our solutions values. We will help drive personal development inside Bifab. We have been good at this also before, And a good receipt of that is due to that when people join Bussab, normally they stay quite a long time actually. And we have several examples of people coming in, starting as trainees, becoming salespeople, becoming sales managers, MD And become an MD for yet another company, yet another company, yet another company within Bifab. But we need to continue invest in that going forward as well. Also, Buford Academy, something that we need to invest in as well. We are investing in best practice when it comes to human resource as well, It's very important for us to keep our decentralized organization and to make sure that the business is owned by each subsidiary, so to say, but still focus on teamwork going forward globally. So This kind of concludes Invest. Focus will be to invest in best practice and quality, people and performance, platform, Open IT and also partnerships that Karina talked about earlier. When we do this, And by that said, that concludes Invest. And the next part is actually acquire. And after. And firstly, maybe myself, I'm Urban Bilho, responsible for North American market, and I was after the acquisition show. Okay, next slide please. In 2014, we restarted the acquisition activities and has since acquired about 9 companies with SEK 1,900,000,000 in net sales and about 5 50 employees. You can say that we are a consolidator in a fragmented market. During the same time, we have organically grown about SEK 900,000,000 Acquisitions provide a very good return, but organic growth is always a king. It has nearly doubled return on investment before pretax, up 30%, acquired growth about 15% depending on the price tag of the company. But it also provides a strategic strength. The acquisitions in 2015 to 2020 have dramatically afternoon. We are quite picky. We only look for well run companies with growth synergies and we aim for win win deals. Afternoon. The recent acquisitions have moved us into North America, Southeast Asia and in new products and new customer segments. Next slide, please. Our required companies are quite different. There are different countries, different business models, etcetera, but they're still alike. They have good stable platform, F. C. And I believe in So common factors are low risk, good growth synergies and high return on investment. Next slide. The pool integration has been really a key to our success. We never say subsidiaries. We say sister companies. We never look at the cost synergies. We always look at the growth synergies. We never imposed a top down type of integration. We aim for the pool integration. New systems used to be for best practice where it helps the most, not just because they have to. As a result, this has given us Both opportunities to acquire has given us a favorable pricing and a good development of the acquired companies. As a summary, the acquisition strategy going forward, we will continue. We shall have a pipeline in all business units. And we believe this will give us growth of more than 10% and a stronger build up. Thank you. For talking about Invest and Acquire. And we move on again to the launch session because, Jorgen, it's time for another topic now. And it's a topic that I know for you is really important. We're talking about the global footprint and we're talking about sustainability. So please take your take the chance now to do a little bit of a presentation about sustainability in Dufab. Certainly. So sustainability is a little bit hard to place on the agenda because it's really something that does and in the future should even more permeate the entirety of our business. We placed it here after invest because it's one of the areas that we really want to invest in also going forward. So What do we mean with sustainability? Well, there are many, many parts. And go back one, please. There are many parts in this. It means, for instance, that we have to decrease our footprint in terms of the greenhouse gases that FPC as part of our operations. It means other things as well. It means, for instance, that we have to have a good F. Whistleblowing function in our company. So if something is not happening the way it should, if somebody is treated badly or if a supplier is not performing In the way they should. There should be an anonymous way to get that fact to a bureau and agency that can investigate and alert either Myself, if it's in lower levels or if it's I'm doing something wrong, they should alert the board or the shareholders. And it means many other things as well. All of these things we write rather much about in our sustainability report, which is due to be published next week. So these are some of the examples from that report that run this picture. But a lot of people, when they hear sustainability, also think about carbon dioxide and about greenhouse gases and global warming, and F. That's as it should be. Let's have the next picture, please. And we can have the whole picture. If we look at the Seaport, in this case, it is a bolt. The carbon footprint of the Seaport, once it is in the Passat of this school teacher who wrote in, Has generated throughout its life cycle, so to speak, carbon dioxide in several different steps. And actually, the activities of BIF are only a small portion of that, approximately 10%. And in the actual manufacturing of the steel, usually steel then that goes into it or some other metal. And here, in all these areas, we're going to have to work. So the easiest part is really what we do ourselves and there we have already started work, but we're going to have to work also together with our suppliers and our transporters to reduce the carbon that comes from that part of the chain. And we're going to have to work actually with our customers quite a lot to put pressure This is a long journey, and we've only just started, but we're taking some important steps. If I can have the next picture, please. So these are some previews, I guess, of the sustainability report from next week. So here are the shareholders who participate on our Capital Markets Day, get the preview. After that. And as you can see, there are many KPIs that we started measuring 2 years back, 3 years back, but where we now feel the confidence that we can publish them So let's just take 2 examples or let the numbers to the left here, the 3 first numbers are examples of how we reduce The carbon intensity of our own business. And there we have quite a high target that we want to be entirely carbon neutral in our own business in what is called scope 1 and scope 2 By 2,030. But there is also another number here, it is 92 that we pay in tax. And we put it on there just to say that sustainability is not only about global warming. It's also about the contribution that Baefab makes to society. So sustainability, often you say people and planet, but also profit Because growth and tax paying tax on the growth and the profits that you make is good and is a contributor to society. And last year, F. We have a very explicit tax strategy, which says that we should pay taxes where we have operations So that we contribute to the societies in those countries where we also have employees basically. And last year, we increased the tax paid quite dramatically by 20 6%, I think it says. Yes. And that's more money then to the societies where Bifab operates, and that's also part of our sustainability strategy and of our sustainability effort. Let's have next one, please. In this year, but as a result of the preparation and the work we did on our leadership strategy last year. We have now committed to something called the Science Based Targets Initiative, which is UN sponsored And also connected to the World Wildlife Fund initiative to make sure that the Paris Accord for reducing the Carbon emissions in the entire world is lived up to. And there, companies can sign up to, in a scientific way, Make sure that their contributions to the carbon dioxide emissions worldwide and other greenhouse gases is in line with the Paris Accord, which in turn means that we should keep global warming below 1.5 degrees, so Celsius then as we say in Sweden. And now since March, we signed up for that. And within 2 years, we will come with very precise targets for how we're going to make that happen. As one example. Let's move on. Now, Seaport sustainability is a bit of a challenge because our customers find it, Like I said before, very hard to manage the 1,000, sometimes tens or sometimes 100 of 1,000 of Seaports that they have. But it's also an opportunity because for us, if we can have the second half, please, what we do is we help our customers manage the CPARS for them. And But increasingly, our customers turn to us because they, in turn, have promised their customers that they have a supply a sustainable supply chain. And with Seaport's, all they can do is turn to us or some other supply chain partner to fix that. And that's then the opportunity for us, But also a big challenge, of course. It's though a challenge that's pretty important to many people in the fab. And I have to say now 53 years old, but the younger people are, the more important it is for them, which is perhaps natural. So it's also something we have to do to feel good about ourselves, I guess. Let's go on. That concludes the sustainability session, but there is so much more to tell about this. And unfortunately, we don't have time to go through it all. So I would like to encourage all the shareholders app. To read the annual report if they want to, but to absolutely download the sustainability report because there we're able to tell the whole story about Bifab's sustainability work. Aft. And also we can say that if you think it goes quickly, 1 or 2 slides here from the stage, you will all had the chance to actually download it later on so you can go through it again. So thank you so much. You're welcome. Let's talk about sustainability. As said, a really, really important topic. And we're going to move on here this session because as you remember, before the break, we had 2 segments. We had segment North and segment West, and now it's time for segment East. Jorgen, you are sitting here, and you actually have to talk a little bit about Segment East Live. I do because we run into a bit of a complication here, and that is that Jaroslav Baselian, Who lives in Gdansk and is responsible for part of Segment East for the business unit in Eastern Europe. He has had a family issue with corona, with COVID, day, which makes him mad, but now I get the pleasure instead of speaking about Segment East. Yes, and Segment East. So let's go then. Absolutely. Let's have the next picture And the next one. So Segment East looks huge on the map and it is huge also, covers many, many time zones. It basically consists of 2 parts, Eastern Europe, where we have business in most of the in many important countries And also a very important growth area for us, which is Asia and Southeast Asia, but we also have large operations in India. All right. App. The really big part of the map, of course, is Russia, which is an important area for us and a growth area. But of course, it's on the map. It looks huge. App. So we're spread out there. About 14% of group sales. We're in 10 plus countries. It's getting on Now in segment East, we've had a really good development. So we grew from a little over SEK 300,000,000 in 2014 to well over SEK 700,000,000 Last year, we saw a very good growth rate, most of which has been organic, but we have made one acquisition and a very good one, A company called Cairnsun in Singapore, which is now the base of our operations in Southeast Asia. Let's go One more, please. And when it comes to the margin, this is a problematic area for me as a boss because In segment EAST, the margin is actually better than our target. So what can you say then? It's actually several percentage points better than our target, but we have said this, that after. Business units that get to this level with this kind of good growth and this kind of good profitability, they should grow faster. So we'll take the profit, the excess profit, if you like, Invested in more salespeople, invested in starting more companies in Southeast Asia, and we'll grow faster. Okay. That's the plan. Let's go on. Here's a customer example from Singapore. In Singapore, we invested a few years back in a clean room facility Because just like we showed before an example of this milking unit for this agricultural customer, we also have medtech customers, and they also want to reduce the number of parts and the complexity of their supply chain. And in this particular case, we're then in our clean room assembling parts for our customers For delivery as a complete part rather than as 10 or 20 separate parts. Let's have the next one, please. This is a segment then that is growing for us. One more, please. And where we're doing part of the simplify, but also part of the improvement part of our offering, right? So the customer wants Very, very, of course, critical operations since this is met tech. It has to do with life and death, right? And our solution is then a variety of these creative component solutions that we talked about before, But here with an emphasis on cleaner. One more, please. And this has given us a good growth opportunity and a good growth business, But it's also something that we always try to push the envelope to try to find new ways to add values to our customers. And when Cansun, then this newly acquired company, came up with this idea to invest in a clean room, it was an easy decision. Let's go to the next one, please. We're going to talk about Canson. We acquired Canson a while back in 2017, and it is one of our most successful acquisitions. We've been looking a long time for a partner in Southeast Asia because it's a difficult area to enter. We have many countries, many cultures, many languages and so on. App. And we found the ideal partner in Cairnsun. They have come into Buford and they've had a very good development, but the best thing I think is to go directly and listen to the MD of Cairnsun, app. Yes. He's also a member of the family, the ex owners. So he can tell a little bit both about what Kjanssen was like before And also now that is part of the Bizhub family. And there we're turning to Chris Pinnen, who will join us here also, I think. So go ahead, Jonas, and introduce Chris. Yes. Chris, I talked to Chris last week. So Chris, the stage is yours. Okay. A warm welcome to Christopher. Hi. Afternoon. Hello. Hi Jonas. Nice to meet you. Nice to meet you. I hope you are good and your family are well. We are all well. We're all well. And I hope it's app. -It's the same for you and your family in Sweden? -Yeah, absolutely. So, you are, right now, sending this message from Singapore. Aft. That's right. And tell me a little bit about your company, please. Yes. My company is known as Cairncoon. Okay. We're a group of companies based primarily in Singapore, but with operations all around Southeast Asia, including Philippines, Indonesia aft. In Thailand, right? We are essentially BUFAB Southeast Asia's operation. So, afternoon. When did you become a sister company in BUFUB? It happened on the 1st December 2017. All right. So Why did you sell to BUFUB to start with? It's a family business, you said. So why did you sell to BUFUB? That's correct. It's a family business that was founded in 1977. So many, many years. Same year that BUFA was founded. Okay. But as a family, we think that this business at that point in time was difficult to continue aft. If we do not partner up with someone strong like Buffa. Okay. And Buffa made a good offer to us in terms, not so much the money, right, but aft. In terms of the fact that they wanted us as family members to stay on to continue to manage the company. And also, Pufa did not have any operations in Singapore. Okay. So we were not worried about any kind of redundancy Because our staff, Kinston staff, like an extension of our family. So we care for them. All right. So those are the Thank you for that. So Christopher, it's 2021 right now. What are your plans for the future for the company? We have an ambition to double the sales by 2025. Okay. 2020 is sort of a lost year, right? So let's not talk about it. But in 2021 is the year of To borrow the words of our CEO Mr. Yeoghan, restart, right? Restart the growth initiatives, really start to look at where We need to put in our investments in order to reach this ambitious goal of doubling our revenue by 2025. So this year is, again, ready to get those All right. Thank you so much, Christoph. I really glad to have your report all the way from Singapore here this afternoon at BUFAB. So I wish you really good luck 2021 and looking forward to follow your journey. Wow, book. Yes, it's very nice to see Chris here like this, and we're happy to have an ex owner with us still after several years, working so hard to keep his spend in the company. That's part of our culture and our heritage also that we try to keep improving the companies that join the BIFA family. For the whole of the Region East Segment East, our aim, like I said before, is to grow faster. And there are many opportunities on this slide, Further expansion in Southeast Asia, further expansion in Eastern Europe and of course also improve the business here because we have the same digitization opportunities and other opportunities in this segment as well. But here, we will use the extra money we make off of the optimization of the improvement to invest in even further growth. After. But we have one more segment to talk about today. Yes, we sure have. Thank you so much, Segment East and Jaroslav. Yes, Jaroslav. Thank you. And let's move on. As asset. Said we have one more segment to talk about here and it's time for North America and UK and that will be Johan and Urban again. So welcome, Johan, again on stage. Thank you. Thank you. And now it's time to talk a little bit about North America UK, and I know that Urban is with us on the line directly from the other side of the Atlantic. So let's hit it off. Good. So Johan Sandberg again and Urban Bulov. I'm responsible for UK and Ireland and Urban is responsible for North America. North America, UK has 20% of BUFAB Group's sales. However, we have had very good organic growth in all the acquired companies in 2020. When it comes to the margin, We are in 2020 delivering 12.7% and that's actually above the target, in one of the business units in this segment, and we have further improvements in U. S. To provide additional upside on the margin side. Afternoon. And now over to you, Urban. Okay. I think we will start now, obviously, afternoon. She is the CEO of our newly acquired city company, American Boatengs Group, Before the end of 2019, I'll hand over to Jonas. Good morning or good afternoon to Cynthia and BUFAB US. Very glad to have you with us. Everything good with you, Cynthia? Good morning. Yes, everything is good. Everything is good out here. A little bit of rain, but other than that, we are good and just busy. Very busy. After. So tell me something about your company in the U. S. Well, American Bolt and Screw is the name of Our company in the U. S. And we are a distributor of fasteners and hardware. We sell to OEM, and we mostly import from Asia. That's the majority of our product is coming from Asia, China and Taiwan, mostly. What has the first time in BUFA been like for yourself and the team? So it's been a difficult year, for sure. Very strange, definitely. Aft. You know, BUFAB has given us a lot of work, a lot of meetings. No, but seriously, I think the workload has gotten heavier. You know, we have had to make a lot of changes, to improve our efficiencies, Which we have, and I'm very proud of the changes that we've made, and we've become much more efficient than we were in the past. Aft. But the workload is very heavy. So, you know, bringing people back, maybe bringing some more people back to alleviate the workload, aft. That's been, I think, my biggest struggle with BUFAM. Other than that, I have no complaints. They have let us do our thing for the most part, And they don't really get too involved, unless they have to, but thankfully they haven't really had to. So It's been good. It's been a good year, just very strange with COVID and everything else that's been going on. Yes. And How has the company developed now when it's a part of the BUFAB family, so to say? Yeah. Again, very interesting year because our sales actually have gone skyrocket. We are Record breaking almost every month since June. Yes. And we have done, you know, several months to aft. Back to back monthly sales of over $5,000,000 which for us is, you know, record. Our biggest struggle right now with that has been Inventory. Getting inventory in. And I know that's a problem everybody is having. So app. Every day is a new challenge. But we even went through it. Afternoon. It seems like you had a really good year regarding business behind you. Thank you so much, US, and thank you, Cynthia. App. Great to hear about your journey in the BUFAB family. Are you excited for the future? Excited for the future, absolutely. And thank you so much afternoon. Thank you. Until next time. Bye bye. Bye bye. Thank you. Okay. Thank you, Ian. Okay. To illustrate the type of customers ABS have, I will present Forresterriber, where we have line feed component supply and co development. Shortly about the background, Forest River and also other recreational vehicle Manufacturers have been ABS customers since decades, and they are really essential for ABS. You can see an example in the bottom low right corner. That's an RV that they are called, produced in Elkhart, Indiana. This market has a demand for continuous streamlining of manufacturing and improved productivity. And this is Even though there is a despite this extreme seasonal product generation shift. So it's really tough market to service. They best positioned today. They are now a main supply chain partner to key RV and trailer sites. A very important factor in this is that we have a dedicated office and warehouse in Elkhart, Indiana. Elkhart is the, You could say the RB capital of the world. ABS has also a wide solution offering, including weekly cycle counts, F. BMI and supplying weekly maintenance of line feed racks in the customer production. We have seen an expansion into own developed parts, For example, flash locks, which show great potential for the future. A little bit about the future, We will further expand the product range covered. We will also intend to continue our own design of key components. We plan to break into even more customers in the same segment, and we will also investigate the possibilities to expanding to the Marine segment. You see an example up in the top right corner. That's a pontoon boat produced by boat, really impressive. I move over to another customer example then for UK. It's a customer, Ocado, which is a fast expanding, U. K.-based, global automated warehouse innovator. They have really, really boomed here during the pandemic in 2020. On the right hand side, you see massive installation that they do. Bufab is supplying seaports to Ocado, and we have helped them then to support this rapid expansion. We have used the extensive global network that BUFAB has and especially the sourcing offices in Asia and warehousing in Taiwan. We Ocado today utilized 2 parts of our offering, the sourcing part, where we buy parts, secure the supply and then deliver. They also, on the blue part, they are on the simplified side, use us because we consolidate their supply base. And instead of using 10 suppliers, they use us instead, for example, on the seaport. And we are moving them down into the approved area because we have started to assemble parts for them as well also so they can get ready parts to point of usage then. But the expansion has been tremendous. And you can imagine Ocado be having to force themselves to focus on sea parts. Deliveries with this volume expansion has been hard, and we have supported them with that instead. So they could have done their core business. Now I think we move into an interview with a sister company, Montrose in UK, where we have the MD Liam Wheeler connected, I think. So it's time for the U. K. Part of BUFAB Group, and I think that we have Liam with us. Hi, Liam. Hi, how are you doing? And welcome to Capital Market Day here. Tell us a little bit about the UK business. What about your company in UK? It looks very different than they did 3 years ago. BriefHub, as a sort of end user business didn't really have much of a presence in the UK. Had a small sourcing office around 3 or 4 years ago. They took the decision to buy a company called Montrose in December 2016, and then they also bought another business called Thunderbolts in July 17. And basically, the project has been since then is to kind of put them all together and create this this new entity called called Buffet UK which has got sort of 4 locations across the UK and aft. Yeah. It's been a it's been an eventful journey, let's say. We did a lot a lot of that work over the last 18 months, even during the pandemic, f. But we now have probably the best facilities and sort of single legal entity that we've had for since we started. So we kind of f. It's an exciting time, really. We've been kind of primed and ready to to to grow. We built a platform. We've put all these companies together. We're all on the same computer system now. And it's kind of time to get on, really, from my perspective. So how has the company developed now when it's a part of the BUFAB family? I think if you look just beyond net sales, because obviously that's the first measure, I think if you actually had a look at the processes, the tools we have available to us, after the resource availability. It's a different animal. I think we've improved so much. You know we've got an electronic warehouse management system. We've got VMI offerings to our easy track, those kinds of things to customers. We've got, f. Like I said, resource that if we want to undertake large scale projects, the availability is there. And The brand is a big thing. You know going into a customer as booth fab is a very different prospect to going in as a small private business in the UK. And I think we've definitely benefited from that. And even the biggest customer we won last year, we're using the broader app. For UFAB network, so we're sending goods directly from Taiwan to customers. We're using other sister businesses to help distribution. So aft. It's a lot of different things really that's added to it. We've all had to learn though. I mean, it's not just, you know, when you're Like myself, you've come from a small business and you've worked in a small business for a long time. Corporate culture is a little bit different. But I think we're learning and I think the results are starting to show through. Okay. That was everything from the U. K. Market. Thank you so much, Liam. Thanks very much. Take care. Bye bye. Thank you. Bye bye. Good. That was nice to hear Liam telling us more about Montrose place in BUFAB as a sister company. Now Urban, app. You want to conclude here and summarize the growth and improve areas in U. K, North America? Okay. I'll make a very short summary. The very short summer is grew faster. When it comes to growth, there will be a focus on sales time. We need more hunting and less farming. We'll be sure through increased focus on prioritization of sales products, increased sales spot and the high degree of digitalization. We also have a focus on the global and strategic account. There will be more emphasis on developing, identifying the right customers. We, for example, develop a priority tool that will be rolled out. And finally, there will be an expansion of product services and offering. There we need to focus on value add. We need to upscale the sales teams, afternoon. We have to have the right price delivery quality ratio. In regards to improve, we will really work hard with them. We have started already since a couple of years back, but we have even more emphasis on improving the margins. Of course, this is about aftermarketing service but also into getting paid for value. Furthermore, we need to develop our product expansion. This includes both after. Boosting the skills not only for the sales team, as I just said, but also for the QA and sourcing people, etcetera. App. We will also build center of excellences. For example, in Los Angeles where we just acquired ABS, we will build up best in class QA facilities, afternoon. Thank you so much, Urban, and thank you, Joanne. We have now gone through all the segments: North, West, East and North America and UK. Now what we're going to do is it's up to you because on this iPad. We receive a lot of questions right now. So please, we will have a little bit of a break now, but only 3 minutes. It's 3 minutes break to go and grab a cup of coffee or a glass of water and also type in your questions. And we will see and manage to get as many as we can in this time, Jurgen, in just a couple of minutes. So we see you in 3 minutes. We're back here from the launch area at the Capital Markets Day and it's time for the Q and A. And thank you so much to start with for all the questions that we received on this iPad. And I think we just take some random questions here, year again and we'll see how many we have time for. Absolutely. Depends on how much we talk, I guess. Yes. So let's hit it off directly. This question. You receive many RFQs every year. How many clients today ask for your ESG policy compared 5 years ago? Yes, that's a great question. I don't have an exact number for that, but I can tell you for sure that the number has increased dramatically. And not only do more of them ask, but they also mean it now. 5 years ago, it was okay if we just showed them a piece of paper. Now they show up sometimes with large teams of people who want to go into detail how we handle these GE issues. So it's certainly becoming a key issue for many of our customers. Yeah. Good. Thanks for that answer, and we keep going here in the questions. BUFAB seemed to sell and deliver a number of services. How is BUFAB charging for that? Yes, That's a great question. Often or sometimes, we say, okay, so we did this or here's an extra bill for that. But aft. Most of the cases, we do what the customer wants. And what the customer wants is for the price of the all the work we do to be baked into, so to speak, the price of the individual sea parts because for them it becomes a variable cost and very easy to track. But that means that we have to charge for our sea parts Enough so we can pay our suppliers and have enough left over to pay for salaries and so on and also a little bit for the shareholders, of course, right? Yes. Plus how much effort that particular supply chain will cost us. So pricing is a key skill in Birfbaum, 1 that we're Hoping to also improve going forward. And for instance, this pricing best practice initiative that we spoke about earlier. This is a pretty long one. I try to do it as clear as again. If Bifab were to carry out a new emission in the future, how would the company tackle the issue? Follow the example of Cinch and BHG by addressing big and international investors and then stop the trading for a day or 2 and then reopen the trade when the amount of the new emission has been reached. In this manner, Bufab can disregard all present small shareholders. And one of the small shareholders asking this. Ask this question. Okay. Yes, so tell you the truth, I don't know the answer to that because I'm not familiar with what Cinci did or didn't do, And I can't speak for them, but I can say this, that number 1, Bilibili has grown for a long while with its own capital because we're such a cash generative business that we're often able to grow Just financing it off of the growth, so to speak. But if we run into a huge and very important acquisition opportunity for us, that would mean an important expansion, That's what I can say. Yeah. Cinch needs to answer for Cinch. Yeah. They sure do. And but we take next question. Sure. Why do you use EBITDA as a measure of profitability rather than, what do you think? IBTDA. Okay. So quite a technical question. We have something we call the operating profit, And we measure that as EBITDA, as we say, EBIT plus A. And that means the operating profit, but before the amortization of The amortization of the intangibles that occur from acquisitions. And that's because we're a very acquisitive company. We make many acquisitions. And then we want to make we want the profitability measure to be the actual profit of the companies and not regard so much So that has never been one of our measures. I don't know if I answered that correctly, but I guess it also requires a longer, more comprehensive answer to answer that fully. Yes. Thanks for that answer, and we keep going here. What kind of segment are most important for BUFAB? Yes. Actually, we are quite happy that none of our segments is the most important for Bifab Because it turned out that when you have, as we do, customers in many countries, in many industries, in many customer segments and also with different business models, Then there is a risk, a moderation effect in that. So right now, of course, aerospace is bad and Oil and Gas is bad, but medtech is good and furniture is good. Good, but we have all those four segments. So we have some that after. Some other year, maybe aerospace is very good and maybe furniture is bad. So we kind of like to have spread our eggs out and not put them all in one basket. And that's why we don't try actively to grow one segment at the expense of some other segments. All right. App another not so much a question here, but to say well done from a happy shareholder. Well done. That's a good one. Thank you. Thank you. Thank you. It's a very nice year of I know that we have a lot of meetings coming up now, 1 to 1. That's true. You that are part of this session today had the opportunity to actually book the 1 to 1 meetings on Teams. And we would like to sit here, like, for a couple of hours and answering questions, but we can't answer them all because then we won't be on time for the 1 to 1 meeting. So Jorgen. Actually, it's time for a little bit of a wrap up now. So it's time for a summary. So let me try to wrap up then. I'm going to just say a few words here about what we've said today. Next picture, please. So what we've been trying to show you is our past, of course, our present, but also our future. And when we look at the future, we see a global megatrend where the manufacturers who are customers need to simplify, make more safe, time, but we actually see it accelerating now as the result of recent developments. In this market, we are one of very few, Most importantly, we've grown faster than the market. We've grown faster than competitors and also we've had a good development in the share market, as you can see. Now It's not so often that you run into a company where the business model allows 45 years of unbroken profitable growth, but Befeb is such a company. And on that basis, we feel a lot of confidence when we now raise our targets for the future And in this period, we also intend to improve our operating margin to 12%. But we intend to do that not at the expense of building a stronger company, but because we are building a stronger company. In fact, we're aiming now to become the world's best supply chain partner when it comes to Seaparts, and that is what we mean when we say that we're aiming for sustainable leadership. Let's head to the next page, please. This would not be possible unless in such a So we intend to strengthen, emphasize Bifab's values going forward, and those are, as you know, that we're a family of entrepreneurs, that we always deliver no matter what. Even if it's corona times, we deliver and that we're a responsible partner also, for instance, with regards to sustainability. And that after. Underlies also or underpins our customer promise, and let's have that, please, which is that we are fast and flexible, we're dedicated and we're trustworthy. And all of this we summarize in the word solutionists. And there are 1300 such delightful creatures, 1300 solutionists, app. And into this very nice place, we also intend to bring further sister companies by acquisitions. How we're going to do this? Let's have one more, please. By using our pull integration strategy and cooperation strategy in Bifab and by always emphasizing that the business is local And that's where you can make fast and flexible decisions, but that in BUFAB our sister companies can also benefit from global teamwork and our customers can also benefit from that. That's our plan. And if I can have the next one, please. That summarizes what we had to tell you today. So we talked about the past, We talked about the present, and now we've shown you a bit of what we're planning to do for the next 5 years. And with that, I'm Left to me is only to say then thank you very much for joining us here today in such numbers, and thank you for all the interesting questions that we got. We'll try to find a way to answer those. But if you feel that you didn't get an answer, you can always mail us a question and we will answer it that way instead. App. Thank you. I actually have one last question for you. Oh, one last question. Let's hear it. And what are you looking forward the most in 2021? I'm looking forward the most to be able to travel and visit some customers because that's been really hard in the last time. Yeah. And I know that you're really, really into that. And hopefully we meet you live the next time. Absolutely. And thank you all for that you've been a part of this, and thank you all the solutionists out there doing the job. And again, if you didn't have the time to read it all on those slides. They can download it later on. Absolutely. And it will be put on our homepage later tonight. Yeah. App, and you can also see this session afterwards. So if you missed something or skipped something, you can go back and see it again. Jorgen, thank you so much for this Capital Markets Day. Thank you, Jonas. Thank you, everyone. It's a pleasure. Everyone on stage, good job. And everyone out effort. Good job. Thank you for your questions. And we do as they do today. We tackle each other and say thank you. Thank you. Bye.