Interim report January-September 2021

Continued strong growth and earnings development in a challenging environment

Third quarter of 2021

Net sales rose by 21 percent to SEK 1,425 million (1,181). Organic growth was 20 percent and order intake was higher than net sales
Operating profit (EBITA) increased to SEK 164 million (142) and the operating margin was 11.5 percent (12.1)
Adjusted for acquisitions and remeasured additional purchase considerations, operating profit (EBITA) increased to SEK 182 million (142) and the operating margin to 12.8 percent (12.0)
Earnings per share rose by 18 percent to SEK 2.90 (2.46)
Staffan Pehrson was appointed new President and CEO and joins the company in February 2022
Component Solutions Group, with annual sales of about SEK 280 million, was acquired
Jenny | Waltle GmbH and Tilka Trading AB with annual sales of about SEK 190 million and SEK 50 million respectively were acquired after the end of the quarter

January-September 2021

Net sales rose by 22 percent to SEK 4,279 million (3,518). Organic growth was 25 percent and order intake was higher than net sales
Operating profit (EBITA) increased to SEK 526 million (361) and the operating margin was 12.3 percent (10.2)
Earnings per share rose by 56 percent to SEK 9.40 (6.01)

THE GROUP IN BRIEF (FOR DEFINITIONS, SEE PAGE 22)

		Quarter 3 Δ			Jan-Sep		12- months rolling	Full year
SEK million	2021	2020	%	2021	2020	%	2021/20	2020
Order intake	1,454	1,219	19	4,461	3,528	26	5,760	4,827
Net sales	1,425	1,181	21	4,279	3,518	22	5,517	4,756
Gross profit	405	320	27	1,195	929	29	1,518	1,252
%	28.4	27.1		27.9	26.4		27.5	26.3
Operating expenses	-241	-178	35	-669	-568	18	-872	-771
%	-16.9	-15.0		-15.6	-16.2		-15.8	-16.2
Operating profit (EBITA)	164	142	16	526	361	46	647	482
%	11.5	12.1		12.3	10.2		11.7	10.1

Operating profit	157	135	16	505	338	49	618	452
%	11.0	11.4		11.8	9.6		11.2	9.5
Profit after tax	113	91	24	355	223	59	431	299
Earnings per share, SEK	2.90	2.46	18	9.40	6.01	56	11.43	8.04

CEO's overview

The good demand that we saw during the first half of the year continued in the third quarter. Bufab delivered a high organic growth and strong earnings, despite a continued very challenging operational situation following the strained supply chains. During the quarter, we acquired the US company Components Solutions Group, and after the quarter end Jenny | Waltle and Tilka Trading.

Organic growth amounted to 20 percent which, alongside a weak comparative quarter, was primarily due to continued strong underlying demand in all segments, but also due to continued captured market shares.

The economic recovery and strong increase in demand after the pandemic created major challenges for the industry globally. This is primarily in the form of an extremely strained supply chain and higher prices for raw materials and freight, but also because there is now a shortage of capacity at many stages of the supply chain. Overall, this creates uncertainty and consequently, additional work throughout our organisation, which is expected to continue for at least the first half of 2022.

Similar to most other companies, we have been affected by large price increases for raw materials and freight, but have succeeded to date in offsetting this by passing these costs on to the customer. This work, together with the higher volumes relative to the comparative quarter, resulted in a good gross margin in the quarter.

The proportion of operating expenses increased during the quarter but adjusted for acquisitions and remeasured additional purchase considerations it is nonetheless at a historically low level. As society has started to open up in most markets, we have begun, for example, to increase the pace of recruitment and investments in our own operations to secure future growth. These investments will not only lead to increased growth, but also to enhanced efficiency, which in turn, will generate positive and sustainable profitability for us going forward. Adjusted for acquisitions and remeasured additional purchase considerations our operating profit and the operating margin increased significantly relative to the comparative quarter.

We have a continued focus on acquisitions and we have a strong pipeline of potential acquisition candidates in several geographies. During the quarter, this resulted in our acquisition of

Components Solutions Group, a company we have been monitoring since 2013. The company, which has annual sales of approximately MSEK 280 million and 85 employees, will strengthen our position in the North American market, which we regard as one of our potentially large growth markets going forward. Through many meetings in recent years, we have become very familiar with the company and we can see many similarities with Bufab.

After the reporting period we also acquired Jenny | Waltle and Tilka Trading with annual sales of MSEK 190 and 43 employees and net sales of MSEK 50 and 18 employees respectively. The companies have operations in Austria and Sweden, and we have followed them for some years and also here we see several similarities with Bufab.

During the quarter, the Board of Directors appointed Staffan Pehrson as new CEO of Bufab effective from 1 February 2022. Staffan has long and solid experience of senior positions, primarily at Nefab Group and Ericsson Group, and his proven leadership ability, technical expertise and business acumen are well matched with Bufab's future needs. We all look forward to welcoming him in February.

The challenge going forward will be to address the normalisation of the cost level by further increasing productivity and to continue to manage the strained supply situation in the market, as well as continuing to pass on the higher costs of raw materials and freight to customers. I do however take a positive view of the future. This is because Bufab's offering, in times such as these, should be perceived as even more relevant in terms of securing the companies' own supply of C-parts. In addition, the healthy demand looks to continue in the fourth quarter. Combined with continued low inventory levels throughout the manufacturing industry in Europe and North America, I foresee good conditions for a favourable development also going forward.

Overall, we are very proud that we, despite a challenging environment, have succeeded in maintaining supplies to our customers in a favourable manner. I want to sincerely thank all of our 1,450 solutionists for the incredible focus and flexibility they demonstrated during the year.

Johan Lindqvist President and CEO

The Group in brief

THIRD QUARTER

Order intake was SEK 1,454 million (1,219), which was higher than net sales. Net sales rose by 21 percent to SEK 1,425 million (1,181). Of the total growth of 21 percent, -2 percent was attributable to currency effects, +2 to acquisitions and a full +20 percent to organic growth.

The strong demand that we saw during the first half of the year continued in the third quarter and we delivered robust organic growth and strong earnings, despite a continued very challenging operational situation. During the quarter, the North American company Components Solutions Group was also acquired.

Organic growth amounted to 20 percent and, alongside a weak comparative quarter, was primarily due to continued strong underlying demand in all segments, but also that we continued to capture market shares.

Gross margin rose to a strong 28.4 percent (27.1). The higher gross margin relative to the comparative quarter is mainly attributable to higher volumes and that we so far have successfully passed on increased costs for raw materials and freight to customers.

The proportion of operating expenses increased to 16.9 percent (15.0). The increased proportion of operating expenses is mainly attributable to Segment North remeasuring its provisions for additional purchase considerations of SEK -15 million, due to a better performance than expected in the acquired company HT Bendix, and that Segment Other assumed acquisition costs of SEK - 5 million attributable to the company acquired during the quarter, Component Solutions Group. Adjusted for this, the share of operating expenses amounted to 15.5 percent (15.0).

As society in most markets now continues to open up, the Group has again accelerated the pace of recruitment for the purpose of securing long-term growth.

Operating profit (EBITA) rose to SEK 164 million (142), corresponding to a margin of 11.5 percent (12.1).

Exchange-rate fluctuations impacted operating profit negatively by SEK -3 million, volumes positively by

SEK +55 million, cost savings and the price/mix and other factors negatively by SEK -12 million and acquisitions, including the remeasurement of additional purchase considerations, negatively by SEK -18 million.

Earnings per share rose by 18 percent to SEK 2.90 (2.46)

JANUARY-SEPTEMBER

Order intake was SEK 4,461 million (3,528), which was clearly higher than net sales. Net sales rose by 22 percent to SEK 4,279 million (3,518). Of the total growth of 22 percent, -4 percent was attributable to currency effects, +1 to acquisitions and +25 percent to organic growth.

Underlying demand was clearly higher and was observed in all of the Group's segments. The strong organic growth during the nine-month period was mainly attributable to demand being significantly lower in the comparative period. The market share increased.

The gross margin rose to 27.9 percent (26.4). The higher gross margin was primarily attributable to significantly higher volumes relative to the comparative period, but also to purchasing savings in the first quarter of the year and the fact that price increases for customers have to date offset higher prices for raw materials and freight.

The proportion of operating expenses declined to a low 15.6 percent (16.2), mainly due to positive operational leverage on increased volumes and good cost control.

In total, operating profit (EBITA) rose to SEK 526 million (361), equal to an operating margin of 12.3 percent (10.2).

Exchange-rate fluctuations impacted operating profit negatively by SEK -20 million, volumes positively by SEK +252 million, cost savings and the price/mix/other negatively by SEK -35 million and acquisitions, including the remeasured additional purchase considerations, negatively by SEK -31 million.

Earnings per share rose by 56 percent to SEK 9.40 (6.01)

The Group in brief, continued

FINANCIAL ITEMS AND TAX

The Group's net financial items amounted to SEK -8 million (-16) for the third quarter, of which exchangerate differences accounted for SEK -2 million (-3).

During the nine-month period, net financial items amounted to SEK -34 million (-46), of which exchange-rate differences accounted for SEK -4 million (-4). The Group's profit after financial items was SEK 149 million (118) for the quarter and SEK 471 (292) for the nine-month period.

The improved net financial items compared with the preceding year was attributable to a lower indebtedness and reduced interest rates relative to the comparative period.

The tax expense for the quarter was SEK -37 million (-27), implying an effective tax rate of 25 percent (23). The tax expense for the nine-month period was SEK -115 million (-69), which implies an effective tax rate of 24 percent (24).

CASH FLOW, WORKING CAPITAL AND FINANCIAL POSITION

	Quarter 3		Jan-Sep
SEK million	2021	2020	2021	2020
EBITDA, adjusted	176	152	562	391
Other non-cash items	16	2	30	-6
Changes in working capital	-138	54	-346	37
Cash flow from operations	54	208	246	422
Investments excluding acquisitions	-4	-18	-13	-31
Operating cash flow	50	190	233	391
Cash conversion ratio	28%	125%	41%	100%

Operating cash flow was significantly lower both during the quarter and during the first nine months, primarily due to increased working capital, which was attributable in its entirety to the strong organic growth in the first nine months, combined with the low inventory levels at the end of the preceding year.

Average working capital in relation to net sales amounted to 29.5 percent (34.8). The level of working capital is the lowest for many years and the improvement is mainly due to the robust increase in sales in the last four quarters, together with low inventory levels during the first half of 2021.

On 30 September 2021 the adjusted net debt amounted to SEK 1,450 million (1,392). The increase is explained by the acquisition of Component Solutions Group.

The debt/equity ratio was 81 percent (90).

The performance measure ND/EBITDA, adjusted, was a multiple of 2.1x (2.9x) at the end of the quarter, which is a reduction of 0.8x relative to the comparative quarter, despite the acquisition of Component Solutions Group. In the past year, this performance measure improved particularly due to strong cash flow in the second half of 2020, as well as a strong improvement in operating profit in the last four quarters.

Net debt / EBITDA, adjusted, multiple

Segment North

Segment North comprises Bufab's operations in Sweden, Finland, Norway and Denmark, as well as a purchasing office in China, which is affiliated to one of the Swedish subsidiaries. The business mainly comprises trading companies, but also some manufacturing of particularly demanding components in proprietary plants.

THIRD QUARTER

The strong demand noted by the segment during the first half of the year continued in the third quarter. Organic growth was +17 percent and was mainly attributable to strong underlying demand, as well as to a weak comparative quarter. As during the first half of the year, the trend was particularly strong in Denmark and in the segment's manufacturing companies. Order intake was in line with net sales.

The gross margin for the third quarter was significantly higher than in the comparative quarter, primarily due to higher volumes in the segment's manufacturing units and because increased raw material and freight prices were successfully passed on to customers.

The proportion of operating expenses increased. The increase was primarily attributable to costs of SEK -15 million being charged to the quarter due to the remeasurement of additional purchase considerations attributable to the acquisition of HT BENDIX A/S, which performed significantly better than expected, continued investments in future growth, and the proportion of expenses in the comparative quarter being exceptionally low.

Adjusted for remeasured additional purchase considerations, operating profit and the operating margin increased significantly relative to the comparative quarter. During the autumn and winter, the focus will be on capturing market shares and on managing the continued challenging supply chain situation in the market.

	Quarter 3		Δ	Jan-Sep		Δ	Rolling 12 months	Full year
SEK million	2021	2020	%	2021	2020	%	2021/20	2020
Order intake	543	486	12	1,828	1,487	23	2,393	2,052
Net sales	545	470	16	1,753	1,471	19	2,286	2,005
Gross profit	145	110	32	458	341	34	581	465
%	26.7	23.5		26.1	23.2		25.4	23.2
Operating expenses	-95	-65	46	-268	-201	34	-343	-276
%	-17.4	-13.8		-15.3	-13.7		-15.0	-13.7
Operating profit (EBITA)	50	45	11	189	141	35	238	189
%	9.2	9.7		10.8	9.6		10.4	9.4

Net sales, SEK million Operating profit (EBITA), SEK million

Segment West

Segment West comprises Bufab's operations in France, the Netherlands, Germany, the Czech Republic, Austria and Spain.

THIRD QUARTER

The strong demand noted by the segment during the first half of the year continued in the third quarter. Organic growth was +17 percent and was mainly attributable to strong underlying demand, as well as to a weak comparative quarter. The operations in the Netherlands had an especially strong performance. Order intake was clearly higher than net sales.

The gross margin for the quarter was lower than in the comparative quarter and lower than in the first half of 2021. The lower gross margin is primarily attributable to the work to pass on higher raw materials and freight prices to customers not having fully offset the higher purchasing prices in the quarter. In addition to this, the segment had a somewhat disadvantageous product mix compared with the first half of 2021.

The proportion of operating expenses was essentially unchanged relative to the comparative quarter as a result of good cost control.

Due to the lower gross margin, operating profit and the operating margin declined during the period. During the autumn and winter, the focus will be on intensifying the work to pass on the price increases for raw materials and freight, capturing market shares and on managing the continued challenging supply chain situation in the market. The segment will also work further on the restructuring of one of the large companies, and with recruitment to key positions for continued growth.

		Quarter 3	Δ	Jan-Sep	Δ	Rolling 12 months	Full year
SEK million	2021	2020	%	2021	2020	%	2021/20	2020
Order intake	316	271	17	959	758	26	1,248	1,047
Net sales	289	251	15	910	754	21	1,183	1,028
Gross profit	70	63	11	229	188	22	298	257
%	24.3	25.0		25.2	24.9		25.2	25.0
Operating expenses	-46	-40	15	-138	-125	10	-183	-171
%	-15.8	-15.9		-15.1	-16.6		-15.5	-16.7
Operating profit (EBITA)	24	23	4	92	62	48	116	86
%	8.5	9.1		10.1	8.2		9.8	8.3

Net sales, SEK million Operating profit (EBITA), SEK million

Segment East

Segment East comprises Bufab's operations in Poland, Hungary, Romania, the Baltic States, Russia, Slovakia, Turkey, China, Singapore and other countries in Southeast Asia, and India.

THIRD QUARTER

The strong demand noted by the segment during the first half of the year continued in the third quarter. Organic growth was 18 percent. The growth was primarily due to healthy underlying demand in both Eastern Europe and Asia, but also to many companies increasing their market shares and a weak comparative quarter. The segment's customers who benefit from the so-called "staycation" trend, as well as customers who operate in medical devices, for example, continued their strong performance. Order intake was higher than net sales.

The gross margin during the quarter was lower than in the comparative quarter and also somewhat lower than in the first quarter of 2021, primarily due to continued price pressure from a couple of the segment's major customers and to the inability to fully offset higher raw material and freight prices through customer price increases.

The proportion of operating expenses increased. The increase was mainly attributable to the segment continuing to invest in future growth and that the proportion of expenses in the comparative quarter was exceptionally low.

In total, operating profit increased somewhat, while the operating margin declined. During the autumn and winter, the focus will be on capturing market shares and on managing the continued challenging supply chain situation in the market. The work to pass on price increases for raw materials and freight to customers will also be intensified. The focus of the segment is to invest in further growth, for example, by strengthening the sales team in Eastern Europe and Asia.

	Quarter 3		Δ	Jan-Sep		Δ	Rolling 12 months	Full year
SEK million	2021	2020	%	2021	2020	%	2021/20	2020
Order intake	228	188	21	698	542	29	881	725
Net sales	222	187	18	656	538	22	833	715
Gross profit	67	60	12	203	172	18	259	227
%	30.4	32.0		30.9	31.9		31.0	31.8
Operating expenses	-33	-26	26	-87	-85	3	-127	-125
%	-14.8	-13.9		-13.2	-15.7		-15.2	-17.4
Operating profit (EBITA)	35	34	2	116	87	33	132	103
%	15.6	18.1		17.7	16.2		15.8	14.4

Net sales, SEK million Operating profit (EBITA), SEK million SHARE OF TOTAL SALES

Segment UK/North America

Segment UK/North America comprises Bufab's operations in the UK, Ireland, the US and Mexico.

THIRD QUARTER

Most companies in the segment reported continued very strong demand during the third quarter. Organic growth was a full 26 percent Order intake was in line with net sales. The operations in North America performed very strongly and benefitted from the staycation trend, as noted by customers in the mobile home industry in the past year. The operations in the UK also noted continued strong demand during the quarter. It is the subsidiary APEX, which focuses on stainless steel C-parts, that had a particularly robust performance.

The higher gross margin is primarily attributable to successful work on passing on higher raw materials and fright prices to customers and higher volumes relative to the comparative quarter.

The proportion of operating expenses declined relative to the comparative quarter. The reduced proportion of operating expenses is a result of effective operational leverage of the higher volumes in both North America and the UK, as well as good cost control.

In total, both operating profit and the operating margin increased significantly relative to the comparative quarter. During the autumn and winter, the focus will be on capturing market shares and on managing the continued very challenging supply situation in the market.

		Quarter 3	Δ	Jan-Sep		Δ	Rolling 12 months	Full year
SEK million	2021	2020	%	2021	2020	%	2021/20	2020
Order intake	366	275	33	976	740	32	1,238	1,002
Net sales	369	273	35	960	755	27	1,214	1,008
Gross profit	122	88	38	310	238	30	389	317
%	33.0	32.3		32.2	31.5		32.1	31.4
Operating expenses	-60	-46	29	-153	-147	4	-194	-189
%	-16.2	-16.9		-15.9	-19.5		-16.0	-18.7
Operating profit (EBITA)	62	42	49	157	91	73	195	128
%	16.9	15.4		16.4	12.0		16.1	12.7

Net sales, SEK million

Consolidated Income Statement

Quarter 3			Jan-Sep
SEK million	2021	2020	2021	2020
Net sales	1,425	1,181	4,279	3,518
Cost of goods sold	-1,020	-861	-3,084	-2,589
Gross profit	405	320	1,195	929

Distribution costs	-143	-119	-429	-416
Administrative expenses	-87	-69	-248	-215
Other operating income	11	17	53	89
Other operating expenses	-28	-15	-65	-48
Operating profit	157	135	506	338

Profit from financial items
Interest income and similar income items	0	1	1	2
Interest expenses and similar expenses	-8	-17	-35	-48
Profit after financial items	149	118	471	292

Tax on net profit for the period	-36	-27	-115	-69
Profit after tax	112	91	355	223

Statement of Comprehensive Income

		Quarter 3	Jan-Sep
SEK million	2021	2020	2021	2020
Profit after tax	112	91	355	223

Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Translation differences / Currency hedging net after tax	22	-9	42	-50
Other comprehensive income after tax	22	-9	42	-50
Total comprehensive income	134	82	397	173

Total comprehensive income attributable to:
Parent Company shareholders	134	82	397	173

Earnings per share

	Quarter 3		Jan-Sep
SEK	2021	2020	2021	2020
Earnings per share before dilution	2.90	2.46	9.40	6.01
Weighted number of shares outstanding before dilution, thousands	37,479	37,169	37,393	37,167
Diluted earnings per share, SEK	2.85	2.42	9.21	5.97
Weighted number of shares outstanding after dilution, thousands	38,134	37,752	38,148	37,361

Consolidated Balance Sheet

SEK million	30 Sept 21	30 Sept 20	31 Dec 20
ASSETS
Non-current assets
Intangible assets	2,163	1,982	1,893
Property, plant and equipment	563	577	548
Financial assets	36	33	37
Total non-current assets	2,762	2,591	2,478
Current assets
Inventories	1,731	1,364	1,316
Current receivables	1,224	964	905
Cash and cash equivalents	303	319	292
Total current assets	3,258	2,647	2,513

Total assets	6,020	5,239	4,991
EQUITY AND LIABILITIES
Equity	2,243	1,926	1,931
Non-current liabilities
Non-current liabilities, interest-bearing	1,973	1,884	1,744
Non-current liabilities, non-interest bearing	445	482	364
Total non-current liabilities	2,418	2,366	2,108
Current liabilities
Current liabilities, interest-bearing	137	175	95
Current liabilities, non-interest-bearing	1,223	771	857
Total current liabilities	1,360	946	951

Total equity and liabilities	6,020	5,239	4,991

Consolidated Statement of Changes in Equity

SEK million	30 Sept 21	30 Sept 20
Equity at beginning of year	1,931	1,750
Comprehensive income
Profit after tax	355	223
Other comprehensive income
Items that may be reclassified in profit or loss
Translation differences / Currency hedging net after tax	42	-50
Total comprehensive income	397	173
Transactions with shareholders
Call option premium	4	3
Redemption call option programme	14	–
Dividends	-103	–
Total transactions with shareholders	-85	3
Equity at end of period	2,243	1,926

Consolidated Cash Flow Statement

	Quarter 3		Jan-Sep
SEK million	2021	2020	2021	2020
Operating activities
Profit before financial items	158	135	505	338
Depreciation/amortisation and impairment	49	46	137	137
Interest and other finance income	0	-1	1	0
Interest and other finance expenses	-8	-14	-35	-45
Other non-cash items	16	2	30	-6
Income tax paid	-23	-28	-99	-78
Cash flow from operating activities before changes in working capital	193	140	539	346
Changes in working capital
Increase (-)/decrease (+) in inventories	-186	63	-362	100
Increase (-)/decrease (+) in operating receivables	-3	-67	-305	-138
Increase (+)/decrease (-) in operating liabilities	51	58	336	75
Cash flow from operating activities	55	194	193	383

Investing activities
Acquisition of intangible assets	–	0	-2	0
Acquisition of property, plant and equipment	-4	-18	-13	-31
Company acquisitions including additional purchase considerations	-207	0	-207	-15
Cash flow from investing activities	-211	-18	-222	-46

Financing activities
Dividend paid	0	0	-103	0
Call option premium	0	0	4	3
Redemption call option programme	4	0	14	0
Increase (+)/decrease (-) in borrowings	199	-103	119	-235
Cash flow from financing activities	203	-103	34	-232

Cash flow for the period	47	73	5	105
Cash and cash equivalents at beginning of period	256	246	292	216
Translation differences	0	0	6	-2
Cash and cash equivalents at end of period	303	319	303	319

The Group's segment reporting

SEK million		2019	2020				2021
North	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
Net sales	451	507	554	448	470	533	599	608	545
Gross profit	111	124	137	94	110	124	159	154	145
%	24.6	24.4	24.8	20.9	23.5	23.2	26.5	25.2	26.7
Operating expenses	-73	-85	-82	-55	-65	-75	-86	-88	-95
%	-16.2	-16.7	-14.8	-12.3	-13.8	-14.0	-14.4	-14.4	-17.4
Operating profit (EBITA)	38	39	56	39	45	49	73	66	50
%	8.4	7.7	10.1	8.7	9.7	9.2	12.2	10.8	9.2

SEK million		2019	2020				2021
West	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
Net sales	279	259	301	202	251	274	314	307	289
Gross profit	74	65	75	49	63	69	82	78	70
%	26.7	24.9	25.2	24.4	25.0	25.3	26.1	25.3	24.3
Operating expenses	-50	-52	-52	-33	-40	-46	-47	-45	-46
%	-17.9	-20.1	-17.4	-16.4	-15.9	-16.7	-15.0	-14.8	-15.8
Operating profit (EBITA)	24	13	23	16	23	23	35	32	24
%	8.8	4.8	7.7	7.9	9.1	8.4	11.1	10.5	8.5

SEK million		2019		2020				2021
East	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
Net sales	179	168	189	162	187	177	216	218	222
Gross profit	57	55	59	53	60	56	68	67	67
%	31.8	32.5	31.0	32.7	32.0	31.5	31.5	30.8	30.4
Operating expenses	-31	-35	-32	-26	-26	-40	-29	-25	-33
%	-17.3	-20.8	-17.0	-16.0	-13.9	-22.6	-13.4	-11.5	-14.8
Operating profit (EBITA)	26	20	27	27	34	16	39	42	35
%	14.5	11.7	14.1	16.7	18.1	9.0	18.1	19.3	15.6

SEK million		2019	2020				2021
UK/North America	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
Net sales	134	188	272	210	273	254	293	298	369
Gross profit	42	56	85	64	88	79	93	95	122
%	31.5	29.6	31.4	30.5	32.3	31.1	31.7	32.0	33.0
Operating expenses	-31	-47	-56	-45	-46	-42	-52	-42	-60
%	-23.2	-24.8	-20.6	-21.4	-16.9	-16.5	-17.7	-14.0	-16.2
Operating profit (EBITA)	11	9	29	19	42	38	41	54	62
%	8.3	4.7	10.8	9.1	15.4	14.8	14.0	18.0	16.9

SEK million	2019			2020			2021
Other	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
Net sales	2	2	2	1	0	0	1	0	0
Gross profit	-5	-2	-5	-3	-1	-5	-5	-1	1
Operating expenses	-6	-6	-2	-6	-1	0	-6	-8	-7
Operating profit (EBITA)	-11	-8	-7	-8	-2	-5	-11	-9	-7

*Other includes unallocated costs of a Group-wide nature and costs for the Sourcing offices in China and Taiwan.

SEK million		2019	2020				2021
Group	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
Net sales	1,044	1,124	1,316	1,022	1,181	1,238	1,423	1,431	1,425
Gross profit	279	297	351	258	320	323	397	393	405
%	26.7	26.4	26.7	25.2	27.1	26.1	27.9	27.4	28.4
Operating expenses	-191	-224	-226	-165	-178	-202	-220	-208	-241
%	-18.3	-19.9	-17.2	-16.2	-15.0	-16.3	-15.5	-14.5	-16.9
Operating profit (EBITA)	89	73	126	92	142	121	177	185	164
%	8.5	6.5	9.5	9.1	12.1	9.8	12.4	12.9	11.5

Consolidated Key Figures

For definitions, see page 21	Quarter 3		Δ	Jan-Sep		Δ
	2021	2020	%	2021	2020	%
Order intake, SEK million	1,454	1,219	19	4,461	3,528	26
Net sales, SEK million	1,425	1,181	21	4,279	3,518	22
Gross profit, SEK million	405	320	27	1,195	929	29
EBITDA, SEK million	203	181	12	638	475	34
EBITDA, adjusted, SEK million	176	152	16	562	391	44
Operating profit (EBITA), SEK million	164	142	16	526	361	46
Operating profit, SEK million	157	135	16	505	338	49
Profit after tax, SEK million	113	91	24	355	223	59

Gross margin, %	28.4	27.1		27.9	26.4
Operating margin (EBITA), %	11.5	12.1		12.3	10.2
Operating margin, %	11.0	11.4		11.8	9.6
Net margin, %	7.9	7.7		8.3	6.3

Net debt, SEK million	1,807	1,740	4
Net debt, SEK million, adjusted	1,450	1,392	4
Debt/equity ratio, %	81	90	-10
Net debt / EBITDA, adjusted, multiple (1)	2.1	2.9
Working capital, SEK million	1,832	1,584	16
Average working capital, SEK million	1,648	1,631	1
Average working capital in relation to net sales, %	29.5	34.5
Equity/assets ratio, %	37	37
Operating cash flow, SEK million	50	190	-74	233	391	-40
Earnings per share, SEK	2.90	2.46	18	9.40	6.01	56

(1) Paid purchase prices have been charged in full to adjusted net debt while EBITDA, adjusted, has only been credited from the respective acquisition date.

Parent Company Income Statement

	Quarter 3			Jan-Sep
SEK million	2021	2020	2021	2020
Administrative expenses	-5	-4	-16	-12
Other operating income	2	2	7	5
Operating loss	-3	-2	-9	-7

Profit/loss from financial items
Interest expenses and similar expenses	–	–	–	–
Earnings from shares in Group companies	0	–	150	–
Profit/loss after financial items	-3	-2	141	-7

Appropriations	–	–	–	–
Tax on net profit/loss for the period	–	–	–	–
Profit/loss after tax	-3	-2	141	-7

Other comprehensive income	–	–	–	–
Total comprehensive income	-3	-2	141	-7

Parent Company Balance Sheet

SEK million	30 Sept 21	30 Sept 20	31 Dec 20
ASSETS
Non-current assets
Financial assets
Participations in Group companies	845	845	845
Total non-current assets	845	845	845

Current assets
Receivables from Group companies	110	49	61
Other current receivables	52	50	46
Cash and cash equivalents	–	–	–
Total current assets	162	100	107

Total assets	1,007	944	952

EQUITY AND LIABILITIES
Equity	907	827	851

Untaxed reserves	81	100	81

Non-current interest-bearing liabilities
Other non-current liabilities	–	–	–
Total non-current liabilities	0	0	0

Current non-interest-bearing liabilities
Other current liabilities	19	18	20
Total current liabilities	19	18	20

Total equity and liabilities	1,007	944	952

Other information

ACCOUNTING POLICIES

This interim report has been prepared pursuant to IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The Parent Company's financial statements were prepared in accordance with the Swedish Annual Accounts Act, Chapter 9 and the Swedish Financial Reporting Board's recommendation RFR 2. The accounting policies applied correspond to the accounting policies and measurement principles presented in the 2020 Annual Report. The 2020 Annual Report is available at www.bufab.com.

RISKS AND RISK MANAGEMENT

Exposure to risk is a natural part of business activity, as reflected in Bufab's approach to risk management. The aim is to identify and prevent risks and to limit any loss or damage from these risks. The main risks to which the Group is exposed relate to the impact of the economy on demand.

For further information regarding risks and risk management, see Note 3 of the 2020 Annual Report.

SEASONAL VARIATIONS

Bufab has no significant seasonal variation in its sales, but sales over the year vary based on the number of production days in each quarter for customers.

RELATED-PARTY TRANSACTIONS

No related-party transactions occurred during the interim period, except for the payment of the fee to the Board of Directors, remuneration of the President and senior executives, and new subscription for call options within the framework of the long-term share-based incentive programme adopted at the Annual General Meeting under the terms outlined in more detail below. Further, the redemption of the long-term share-based incentive programme adopted at the 2018 Annual General Meeting was implemented on the terms contained in the 2020 Annual Report.

NOMINATION COMMITTEE

Bufab's Annual General Meeting 2021 decided to establish a Nomination Committee with the task of presenting to the Annual General Meeting 2022 proposals concerning, among other things, election of the members of the Board of Directors, Chairman of the Board of Directors and auditors, as well as fees to the Board members and auditors.

The members of the Nomination Committee are to be appointed from the company´s four largest shareholders, in terms of votes, who, when asked, expressed their desire to participate in the Nomination Committee´s work. The Nomination Committee shall also include the Chairman of the Board of Bufab.

The Nomination Committee consists of the following members:

Fredrik Liljedahl (Liljedahl Group, Johan Ståhl (Lannebo Fonder), Adam Gerge (Didner & Gerge), Niklas Johansson (Handelsbanken Fonder) and Bengt Liljedahl (Chairman of the Board of Directors.

FINANCING AGREEMENT

During the quarter, Bufab signed a new credit agreement with two Swedish banks with a maturity of three years and an extension option of two oneyear periods. The new credit agreement replaces a credit agreement signed earlier and entails an increase of the total credit framework from SEK 2,200 million to SEK 3,000 million, which can be used for general company purposes, including the financing of acquisitions. The process to release the international collateral package pledged for the obligations under the earlier credit agreement has commenced. No collateral is pledged for the obligations under the new credit agreement.

LONG-TERM SHARE-BASED INCENTIVE PROGRAMME

Incentive programme 2021/2024

The 2021 Annual General Meeting resolved to adopt a long-term share-based incentive programme based on call options, comprising the CEO, senior executives and other key employees within the Group. The programme comprises a maximum of 350,000 call options, corresponding to approximately 0.9 percent of the total number of shares in the company. The purchase price for the call options has been set, using a Black & Scholes valuation, at SEK 45.98, corresponding to the market value of the options at the date of transfer. Each call option entitles the holder to acquire one share in Bufab during the period 15 May 2024–15 November 2024. The purchase price per share is SEK 261.25, corresponding to 115 percent of the volume-weighted average price paid for the company's share on Nasdaq Stockholm during the period 4 May 2020–10 May 2020. During the interim period, a total of 90,070 call options were subscribed for.

To encourage participation in the programme, the Board of Directors has resolved on a subsidy in the form of gross salary additions to participants, which may correspond to not more than the price paid for the call options. Payment of the subsidy will occur in June 2024 and requires that participants remain at that date in their positions or in another corresponding position of employment within the Bufab Group.

To hedge Bufab's delivery of shares, the Annual General Meeting also resolved to authorise the Board of Directors to repurchase a maximum of 350,000 shares in the company, and to transfer a maximum of 350,000 of the repurchased shares to the participants of the programme. No shares were repurchased during the interim period.

Incentive programme 2018/2021

During the interim period, the redemption of the long-term share-based incentive programme adopted at the 2018 Annual General Meeting was implemented on the terms contained in the 2020 Annual Report. During the interim period, 197,903 shares were transferred.

ACQUISITIONS

Acquisitions made during 2019-2021.

	Date	Net sales*	Employees

HT BENDIX A/S	16 July 2019	500	80
American Bolt &	6 November
Screw Corp.	2019	500	90
Component
Solution Group	8 Sep 2021	280	85

*Estimated annual net sales at the date of acquisition

Acquisition during the year – Component Solutions Group

On 8 September 2021, Bufab acquired 100 percent of the shares in Component Solutions Group with operations in North America. The purchase consideration amounted to SEK 288 million, of which SEK 68 million is conditional. The conditional portion of SEK 68 million comprises 80 percent of the maximum outcome of the additional purchase consideration and is subject to the company's future earnings performance.

The acquisition added SEK 28 million to the Group's accumulated net sales since the transfer. The net impact, after acquisition costs, on operating profit (EBITA) so far is a negative SEK -3 million and the effect on profit after tax was a negative SEK -4 million. This acquisition would have positively impacted the Group's net sales by an estimated SEK 220 million, EBITA by about SEK 17 million, operating profit by about SEK 14 million and profit after tax for the period by about SEK 8 million had it

been implemented on 1 January 2021.

The amounts of the assets and liabilities included in the acquisition according to the preliminary acquisition analysis were as follows:

Component Solutions Group A/S	Fair value
Intangible assets	42
Other non-current assets	15
Inventories	66
Other current assets	47
Cash and cash equivalents	32
Deferred tax liabilities	-12
Other liabilities	-91
Acquired net assets	99
Goodwill	190
Purchase consideration*	288
Less: cash and cash equivalents in acquired operations	-32
Less: conditional
purchase	-68
consideration
Effect on the
Group's cash and	188
cash equivalents

* The consideration is stated excluding acquisition expenses

The acquisition analysis above is preliminary. Goodwill arising in connection with the acquisition is attributable to the knowledge accrued in the acquired company and the established and consolidated market positions and the anticipated profitability related to it. Goodwill is tested annually for any impairment requirement. Intangible assets will be amortised over a period of ten years.

SIGNIFICANT EVENTS DURING THE PERIOD

Bufab joins the Science Based Targets initiative On 25 February 2021, Bufab signed the UNsponsored Science Based Targets initiative, which entails a substantial increased in the ambition to further reduce the company's greenhouse gas emissions.

The Group has thus committed to set targets that are aligned with the Paris Agreement, intended to limit global warming to 1.5°C.

New financial targets

On 17 March 2021, Bufab's Board of Directors resolved on new financial targets for the period through 2025. The new targets are:

Profitable growth

Average annual increase of net sales by 10 percent and of earnings per share by 15 percent, through both organic growth and acquisitions.

Profitability

Achieve an annual operating margin (EBITA) of 12 percent latest by 2023.

Dividend

A dividend of 30–60 percent of annual net profit.

Financial stability

Net debt in relation to operating profit before depreciation and amortisation (ND/EBITDA) shall normally be in the range of 2–3x.

The new financial targets are based partly on Bufab's strong performance in recent years and partly on Bufab's new "Sustainable Leadership" strategy. This strategy was communicated externally at Bufab's capital markets day on 18 March 2021.

Organisation

On 15 July 2021, the Board of Directors of Bufab appointed Staffan Pehrsson as new President and CEO. Staffan, who is currently President and CEO of Nefab Group AB, will join the company on 1 February 2022. As communicated earlier, Johan Lindqvist, Regional Director of Bufab's Segment North, was appointed Acting President and CEO between 1 September 2021 and 1 February 2022.

EVENTS AFTER THE END OF THE REPORTING PERIOD

After the reporting period, Bufab has acquired two companies, Jenny | Waltle GmbH and Tilka Trading AB. Jenny | Waltle was acquired 20th of October, has net sales of about SEK 190 million, 43 employees and with operations in Austria. Tilka Trading was acquired 21st of October, has net sales of about SEK 50 million, 18 employees and with operations in Sweden.

The costs of the acquisitions amounted to SEK 3 million and will be accounted for in the fourth quarter of 2021. The acquisitions are expected to contribute to Bufab's earnings per share from the fourth quarter of 2021.

EMPLOYEES

The number of employees in the Group at 30 September 2021 amounted to 1,454 (1,329). The higher number of employees was mainly due to the acquisition of Component Solutions Group, which added 85 employees to the Group in the third quarter of 2021.

CONTINGENT LIABILITIES

In the fourth quarter 2019, Bufab received the Swedish Tax Agency's decision to deny deduction of input VAT on certain costs that arose in 2015- 2018. Bufab appealed the decision, and in the beginning of the fourth quarter 2021 the Administrative Court in Jönköping ruled that Bufab was entitled to deduct input VAT in accordance with what had been filed in Bufab's tax return for the relevant years. Since the appeal was successful, the Swedish Tax Agency is now obligated to recalculate Bufab's tax and repay the amount paid by Bufab as a result of the decision.

No other significant changes were made to the company's contingent liabilities during the interim period.

CALENDAR

Year-end report 2021: 10 February 2022 Interim report Q1, 2022: 21 April 2022 2022 Annual General Meeting: 21 April 2022 Interim report Q2, 2022: 13 July 2022 Interim Report Q3 2022: 27 October 2022 Year-end report 2022: 9 February 2023

AUDITORS' REVIEW REPORT

Bufab AB (publ), Corp. Reg. No. 556685-6240

Introduction

We have conducted a review of the financial information in summary (interim report) for Bufab AB (publ) (556685-6240) as of 30 September 2021 and the nine-month period that ended on that date. The Board of Directors and the President are responsible for preparing and presenting this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express an opinion on this interim report based on our review.

Focus and scope of the review

We have conducted our review in accordance with the Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (ISA). The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Opinion

Based on our review, nothing has come to our attention that causes us to believe that, in all material respects, the accompanying interim report has not been prepared for the Group in accordance with IAS 34 and the Annual Accounts Act and for the Parent Company in accordance with the Annual Accounts Act.

Gothenburg, 27 October 2021

Öhrlings PricewaterhouseCoopers AB

Fredrik Göransson Helena Pegren Authorised Public Authorised Public Accountant Accountant Main responsible

Definitions of key figures

Gross margin, %

Gross profit as a percentage of net sales for the period

EBITDA

Operating profit before depreciation, amortisation and impairment

EBITDA, adjusted

Operating profit before depreciation, amortisation and impairment, less amortisation on right-of-use assets according to IFRS 16 Leases. This key figure is intended to present a comparable EBITDA as though IAS 17 continued to be applied.

Operating profit (EBITA)

Gross profit less operating expenses.

Net debt, adjusted

Interest-bearing liabilities, lease liabilities according to IFRS 16, less cash and cash equivalents and interestbearing assets, calculated at the end of the period

Debt/equity ratio, %

Net debt divided by equity, calculated at the end of the period