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Bulten Interim / Quarterly Report 2018

Feb 7, 2019

3019_10-k_2019-02-07_7328426a-d5e6-40ee-b86e-90da02af3d08.pdf

Interim / Quarterly Report

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FULL YEAR REPORT

Bulten wins new contracts for electric vehicles and takes market shares despite weaker market conditions

fourth quarter

  • Net sales amounted to SEK 747 (740) million, an increase of 1.0% on the same period last year.
  • Operating earnings (EBIT) totaled SEK 48 (55) million, equating to an operating margin of 6.4% (7.5).
  • Earnings after tax amounted to SEK 30 (47) million.
  • Order bookings totaled SEK 741 (839) million, a decrease of 11.7% on the same period last year.
  • Cash flow from operating activities totaled SEK 60 (2) million.
  • Earnings per share were SEK 1.50 (2.26).
  • Bulten has signed a Full Service Provider (FSP) contract for the driveline of an electric car, initially worth in the region of EUR 2 million a year at full production in 2021, starting in late 2020.
  • Bulten has signed a Full Service Provider (FSP) contract for the driveline of an electric car, initially worth in the region of EUR 5 million a year at full production in 2021, starting in 2020.

january – december

  • Net sales amounted to SEK 3,132 (2,856) million, an increase of 9.7% on the same period last year.
  • Operating earnings (EBIT) totaled SEK 210 (210) million, equating to an operating margin of 6.7% (7.4).
  • Earnings after tax amounted to SEK 143 (159) million.
  • Order bookings amounted to SEK 3,098 (3,015) million, an increase of 2.8% on the same period last year.
  • Cash flow from operating activities totaled SEK 125 (58) million.
  • Earnings per share were SEK 7.19 (7.98).
  • Net debt amounted to SEK 181 (49) million and the equity/assets ratio was 64.8% (66.8) at the end of the period.

significant events after the end of the reporting period

  • Bulten has signed a Full Service Provider (FSP) contract for fasteners in a new vehicle program, worth in the region of EUR 13 million a year at full production in 2021, starting in late 2019.
  • The Board of Bulten AB will propose to the Annual General Meeting a dividend of SEK 4.00 (3.75) per share for 2018.

ceo's comments

"Vehicle production fell during the quarter due to greater uncertainty on the market. The increased volatility in demand for vehicles is partly an effect of new environmental tax regulations in several European countries, as well as uncertainty regarding Brexit.

Bulten continues to win new business and take market shares despite weak market conditions. Net sales increased by 1%, and we are thereby compensating to some degree for the weak market development by start-up of new contract.

Order bookings during the quarter were in line with sales, but down 12 % compared to the previous year's strong order bookings thanks to the start of new contracts and model shifts.

Operating earnings during the quarter were down on the previous year, primarily due to reduced volume development in the latter part of the quarter. The reduction in volume came with very little advance notice. Adaptations to production have begun but will take some time. Earnings were also egatively impacted by currency effects and the beginning of restructuring in China. Raw material prices stabilized during the quarter, although at continued high level.

Our financial position is strong and we are continuing with the strategic development and adaptation of our operation in line with the communicated plan. Demand for hybrids and electric cars is increasing, and this is a favorable development for Bulten. We are well positioned in this area and we signed two new FSP contracts during the quarter, for electric car drivelines.

As I now hand over to my successor Anders Nyström, Bulten is in an excellent position to continue winning new contracts and market shares."

BULTEN IN BRIEF

development during the quarter

Vehicle production fell during the quarter due to increased uncertainty on the market. The increased volatility in demand for vehicles is partly an effect of new environmental tax regulations in several European countries, as well as uncertainty regarding Brexit.

Bulten continues to win new business and take market shares despite weak market conditions. Net sales increased by 1%, and Bulten is thereby compensating to some degree for the weak market development with start-up of new contract.

Order bookings during the quarter were in line with sales, but down 12% compared to the previous year's strong order bookings thanks to the start of new contracts and model shifts.

Operating earnings were down on the previous year, primarily due to reduced volume development in the latter part of the quarter. The reduction in volume came with very little advance notice. Adaptations to production have begun but will take some time. Earnings were also adversely impacted by foreign exchange effects and the beginning of restructuring in China. Raw material prices stabilized during the quarter, although at continued high levels.

The financial position is strong and Bulten is continuing with the strategic development and adaptation of its operation in line with the communicated plan.

A decision was made in October 2018 to relocate the Chinese operation from Beijing to Tianjin. Restructuring costs for this relocation, which has already begun, have also impacted on the operating earnings with SEK 1 million in Q4. Costs are expected to total SEK 16–20 million across the moving period, the main part in 2019.

In autumn 2017, Bulten decided to invest approximately PLN 80.5 million (approx. SEK 177 million) in a new, strategically important production and logistics plant in Poland. The project has been delayed due to negotiations on land exploitation and building, and will raise the costs somewhat.

The investment in a new heat treatment plant in Hallstahammar is proceeding according to plan, and the plant should be ready to come nto operation at the end of Q1 2019. The investment will raise capacity by 25% in Hallstahammar while also increasing energy efficiency.

Demand for hybrids and electric cars is increasing, a favorable development for Bulten since the value of fasteners is currently far higher in these vehicles compared to those with conventional combustion engines. During the quarter, Bulten signed two Full Service Provider (FSP) contracts for electric car drivelines with major European automotive manufacturers. The contracts are initially worth approximately EUR 2 million over seven years, and EUR 5 million over five years respectively.

Since the end of the quarter, Bulten has also signed an FSP contract for delivery of fasteners in a new vehicle program for a major European automotive manufacturer. The contract is worth approximately EUR 13 million a year at full production. Deliveries are expected to begin in November 2019 and will run for three years, with potential for an extension of several years thereafter.

As announced on June 20, 2018, Anders Nyström has been appointed the new President and CEO of Bulten. He will take up the post on February 8, succeeding Tommy Andersson who is retiring after 19 successful years with Bulten.

market and outlook

Approximately 86% of Bulten's net sales are attributable to light vehicles and roughly 14% to commercial vehicles. Around 91% of total sales are attributable to direct deliveries to vehicle manufacturers (OEMs) and the remainder to their tiers and other players.

European car sales (EU and EFTA) finished on a downward trend during Q4 and 2018 as a whole, thereby showing a marginal increase of 0.1% over 2017, according to ACEA statistics. In December 2018, car sales in Europe fell by 8.4%. The Q4 decline in Europe can be

explained by new environmental tax regulations (WLTP) in several European countries, as well as concerns about Brexit in the UK. According to LMC Automotive, China saw the same kind of development trend in December with a decline of almost 14%.

According to the latest LMC Automotive forecast in Q4 2018, European production of light vehicles is expected to increase by 0.2% and heavy commercial vehicles by 0.7% in 2018. Weighted for Bulten's business exposure, this means a rise of 0.3% in the corresponding period, compared to 0.7% previously. In 2019, European production of light vehicles is expected to decrease by -0.5% and heavy commercial vehicles to increase by 2.1%. Weighted for Bulten's business exposure, this means a decrease of -0.1% in the corresponding period.

Bulten's products are mainly distributed to Europe, but demand is governed by the production of vehicles for the global market.

The management team estimates that Bulten's market share at the end of 2018 amounted to about 18% of the European market for fasteners for the automotive industry, which is an increase by 1 percentage from 2017. On the same market, Bulten's estimated market share for FSP business was around 65% at the end of 2018, which an increase by 4 percentage compared to 2017. The information is based on data from the European Industrial Fasteners Institute (EIFI) relating to European automotive industry purchases of fasteners during 2017.

Bulten has a strong position in its niche, and long-term growth opportunities are looking good despite the current market unease, with incoming volumes from already signed contracts worth just over EUR 65 million annually when full production is reached in 2020. The conditions for winning new business are also still deemed strong.

order bookings and net sales

Fourth quarter

Order bookings amounted to SEK 741 (839) million, a decrease of 11.7% on the same period last year.

Group net sales amounted to SEK 747 (740) million, an increase of 1.0% on the same period last year.

Adjusted for foreign exchange effects, organic growth totaled -3.3% for the same period.

January – December

Order bookings amounted to SEK 3,098 (3,015) million, an increase of 2.8% on the same period last year.

Group net sales amounted to SEK 3,132 (2,856) million, an increase of 9.7% on the same period last year.

Adjusted for foreign exchange effects, organic growth totaled 4.1% for the same period.

earnings and profitability

Fourth quarter

The Group's gross profit was SEK 139 (142) million, corresponding to a gross margin of 18.6% (19.3). Earnings before depreciation (EBITDA) amounted to SEK 71 (76) million, corresponding to an

EBITDA margin of 9.6% (10.2). Operating earnings (EBIT) totaled SEK 48 (55) million, equating to an operating margin of 6.4% (7.5).

Profitability was affected negatively by high global market prices for steel and other metals as well as an uneven rate of production. Operating earnings were affected negatively by exchange rate fluctuations of SEK -3 (3) million net when converting operating capital at the closing day rate. Initiated restructuring costs in China amount to SEK 1 million in the quarter.

The Group's net financial items were SEK -4 (6) million. Financial income totals SEK 0 (7) million. The previous year included a foreign exchange gain of SEK 7 million. Financial expenses were SEK -4 (-1) million, primarily comprising interest expenses of SEK -1 (-1) million, foreign exchange losses of SEK -2 (-) million and other financial expenses of SEK -1 (-0) million.

The Group's earnings before tax amounted to SEK 44 (61) million and earnings after tax were SEK 30 (47) million. Profit after tax for the period was positively affected by SEK 4 million as a result of reversal of previously recognized costs attributable to the company's long-term share-based incentive programs.

January - December

The Group's gross profit was SEK 586 (558) million, corresponding to a gross margin of 18.7% (19.6). Earnings before depreciation (EBITDA) amounted to SEK 300 (290) million, corresponding to an EBITDA margin of 9.6% (10.1). Operating earnings (EBIT) totaled SEK 210 (210) million, equating to an operating margin of 6.7% (7.4).

Profitability was affected negatively by higher global market prices for steel and other metals as well as an uneven rate of production, but was partly balanced out by foreign exchange effects; the operating earnings were affected positively by exchange rate fluctuations of SEK 2 (-2) net on converting working capital at the exchange rate on the closing day. In the previous year, operating profit was affected positively by an amount of SEK 4 million attributable to a recovered claim. Initiated restructuring costs in China amount to SEK 1 million. The total expense for restructuring and relocation of the Chinese operation is estimated at SEK 16–20 million, the main part burdening the 2019 figures.

The Group's net financial items were SEK -12 (0) million. Financial income totals SEK 0 (6) million. The previous year included a foreign exchange gain of SEK 6 million. Financial expenses were SEK -12 (-6) million, comprising interest expenses of SEK -4 (-4) million, foreign exchange losses of SEK -5 (-) million and other financial expenses of SEK -3 (-2) million.

The Group's earnings before tax amounted to SEK 198 (210) million and earnings after tax were SEK 143 (159) million. Profit for the year after tax was positively impacted by SEK 3 million as a result of reversal of previously reported costs attributable to the company's long-term share-based incentive programs.

cash flow, working capital, investments and financial position Fourth quarter

Cash flow from operating activities totaled SEK 60 (2) million. The effect on cash flow of the change in working capital amounted to SEK 2 (-71) million. Inventories increased during the period by SEK 68 (71) million, while current receivables changed by SEK -67 (109) million. Current liabilities increased by SEK -5 (96) million. Cash flow from investing activities amounted to SEK -51 (-43) million. Investments of SEK 56 (44) million relate to property, plant and equipment.

Cash flow from financing activities was affected by the buy-back of own shares in the amount of SEK -22 million.

January - December

Cash flow from operating activities totaled SEK 125 (58) million. The effect on cash flow of the change in working capital amounted to SEK -129 (-201) million. Working capital has been driven by positive developments in volume. Inventories increased during the period by SEK 176 (83) million, while current receivables changed by SEK -52 (212) million. Current liabilities changed by SEK -29 (93) million.

Cash flow from investing activities amounted to SEK -160 (-55) million. Investments of SEK 164 (122) million relate to tangible fixed assets.

Last year the change in financial assets was SEK 66 million, relating to a loan to the joint venture company BBB Services Ltd. which was replaced by working capital financing. The change had a negative impact on consolidated cash flow from operating activities of SEK 66 million, with a corresponding positive impact on consolidated cash flow from investing activities.

Cash flow from financing activities was affected by a dividend to Parent Company shareholders of SEK -76 (-92) million. Cash flow from financing activities was affected by the buy-back of own shares in the amount of SEK -22 (-) million.

On the closing date, net debt amounted to SEK 181 million, of which SEK 18 million was cash and cash equivalents. In the previous year, net debt was SEK 49 million, of which SEK 48 million was cash and cash equivalents. Net debt adjusted for financial leasing agreements amounted to SEK 145 million. Adjusted net cash for the previous year amounted to SEK 12 million.

new financing agremeent signed

During the second quarter, the company signed a new, extended financing agreement with an operating and real estate credit facility totaling SEK 750 million, compared to the previous SEK 460 million. The agreement covers a period of 4+1+1 years and initially runs until the end of June 2022.

Otherwise the new financing agreement entails no significant changes compared to the previous one.

NET SALES OPERATING EARNINGS

OPERATING MARGIN 6.4%

FINANCIAL SU MMARY Q4 FULL YEAR
SEK MILLION 2018 2017 2018 2017
Net sales 747 740 1.0% 3,132 2,856 9.7%
Gross profit 139 142 -3 586 558 28
Earnings before depreciation (EBITDA) 71 76 -5 300 290 10
Operating earnings (EBIT) 48 55 -7 210 210
Operating margin, % 6.4 7.5 -1.1 6.7 7.4 -0.7
Earnings after tax 30 47 -17 143 159 -16
Earnings per share before dilution, SEK 1.50 2.26 -0.76 7.19 7.98 -0.79
Order bookings 741 839 -11.7% 3,098 3,015 2.8%
Return on capital employed, % 12.8 14.4 -1.6
Return on capital employed, excluding goodwill, % 14.6 16.7 -2.1

Q4

OTHER INFORMATION

accounting principles

This full-year report has, for the Group, been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The financial reporting for the Parent Company has been prepared in accordance with the Swedish Annual Accounts Act and RFR 2 Accounting for legal entities, issued by the Swedish Financial Reporting Board. The accounting principles applied are unchanged compared to those outlined in the 2017 Annual Report, with the following exceptions:

From 1 January 2018, the Group is applying IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers. IFRS 9 covers the classification, measurement and recognition of financial assets and liabilities. It replaces the parts of IAS 39 that concern the classification and measurement of financial instruments. IFRS 15 contains a combined model for revenue recognition for customer contracts not covered by other standards. It replaces IAS 11 Construction Contracts, IAS 18 Revenue and the related interpretations IFRIC 13, 15, 18 and SIC-31.

The implementation of IFRS 9 and IFRS 15 does not have any significant effect on the Group's financial reports. Consequently, no transition effects have arisen as a result of introducing these accounting standards.

IFRS 16 Leases will be applied from 1 January 2019. The standard requires that assets and liabilities relating to all leases, with some exceptions, be recognized in the balance sheet. The income statement recognizes depreciation of the asset and an interest expense for the lease liability. Under the current IAS 17, lease payments are expensed over the term of the lease for operating leases. The Group is a lessee in operating leases that are expected to be affected by IFRS 16.

The Group has reviewed all leasing agreements, where information has been collected and compiled as a basis for calculations and quantifications in connection with conversion to IFRS 16. The Group primarily includes leasing agreements for the lease of premises and to some extent equipment. The Group has decided to apply the simplified transition method, which means that comparative figures do not need to be recalculated, and that there will be no impact on the equity entered. In the opening balance for 2019, fixed assets and interest-bearing liabilities increase by approximately SEK 223 million.

All amounts in SEK million unless otherwise stated. Figures in brackets refer to the previous year. Some figures are rounded, so amounts might not always appear to match when added up.

incentive PROGRAM

At the Annual General Meeting on April 26, 2016, it was decided to establish a long-term share-based incentive program for approximately 15 senior executives and key employees in the Bulten Group. The program runs over three years starting in April 2016 and comprised a maximum of 300,000 shares, which corresponds to a dilution effect of approximately 1.5% of the total number of outstanding shares. The program means that the participants invest in shares in the company and for each invested share the participant receives free of charge and so-called matching share. All in all, the number of matching shares amounts to 34,817, which corresponds to the number of shares that the participants invested in shares within the framework of the program. In addition, the participant has the opportunity to receive additional shares free of charge, so-called performance shares provided that a performance target (earnings per share) determined by the Board is met. At the end of 2018, it has been established that the performance targets have not been met and, in accordance with IFRS 2, previously incurred costs attributable to the performance shares are reversed. As a result, profit after tax for the fourth quarter was positively affected by SEK 4 million. Correspondingly for the full year 2018, a positive profit effect after tax of SEK 3 million.

risks and risk management

Exposure to risk is a natural part of a business and this is reflected in Bulten's approach to risk management. This aims to identify risks and prevent risks from occurring and to limit any damage resulting from these risks. The most significant risks for the Group relate to the economic situation's effect on demand, access to and price fluctuations in raw materials, and geopolitical and financial external factors.

For a more detailed description of risks, please see Note 5 Risks and risk management in the 2017 Annual Report.

seasonal variations

Bulten has no traditional seasonal variation but the year reflects the customers' production days, which vary between quarters. Generally speaking, the lowest net sales and operating earnings are seen in the third quarter with the lowest number of production days. The other quarters are relatively even but may vary slightly.

transactions with related parties

There have been no significant transactions between related parties during the reporting period. For further information, please see Note 37 of the 2017 Annual Report.

employees

The average number of employees (FTE) in the Group during the period January 1 – December 31, 2018 was 1,433 (1,305).

contingent liabilities

Three were no significant changes in contingent liabilities during the interim period.

parent company

Bulten AB (publ) owns, directly or indirectly, all the companies in the Group. The equity/assets ratio was 71.8% (75.1). Equity amounted to SEK 1,115 (1,124) million. There were no cash or cash equivalents on the closing date. The company had nine employees on the closing date.

significant events after the end of the reporting period

Bulten has signed a Full Service Provider (FSP) contract for delivery of fasteners in a new vehicle program for a major European automotive manufacturer. The contract is worth approximately EUR 13 million a year at full production. Deliveries are expected to begin in November 2019 and will run for three years, with potential for an extension of several years thereafter.

proposed appropriation of earnings

Bulten's target over time is to pay out a dividend of at least one third of net earnings after tax. Consideration is given, however, to the company's financial position, cash flow and outlook.

The Board of Bulten AB will propose to the Annual General Meeting a dividend of SEK 4.00 (3.75) per share for the 2018 financial year. This represents a dividend of approximately 55% of net earnings after tax.

It is proposed that April 29, 2019 be the settlement date for the dividend.

2019 annual general meeting

The Annual General Meeting of Bulten AB (publ) will be held on April 25, 2019 in Gothenburg.

Shareholders wishing to have a matter discussed at the AGM should send their suggestion to the Board by e-mail at [email protected] or by mail to: Bulten AB (publ) Annual General Meeting Box 9148 SE-400 93 Gothenburg, Sweden

The suggestion must reach the company by February 15, 2019.

annual and sustainability report 2018

Bulten's Annual and Sustainability Report for 2018 should be available by April 5, 2019 when it will be published on the Bulten website at www.bulten.se; it may also be ordered in print from the website.

auditor's review

This full-year report has not been reviewed by the company's auditors

nomination committee

According to an AGM decision, the nomination committee shall comprise four members: one representative for each of the three largest shareholders on the final banking day in September who wish to appoint a member, and the Chairman of the Board. The three largest shareholders are considered to be the three largest shareholders as registered with Euroclear Sweden AB on the final banking day in September.

The nomination committee ahead of the 2019 AGM is composed as follows:

  • Claes Murander, appointed by Lannebo Fonder
  • Öystein Engebretsen, appointed by Investment AB Öresund
  • Pär Andersson, appointed by Spiltan Fonder AB
  • Ulf Liljedahl, Chairman of the Board of Bulten AB

Gothenburg, February 7, 2019 Bulten AB (publ)

Tommy Andersson President and CEO

ABOUT BULTEN

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

vision

Supporting the global automotive industry with state of the art fastener technology and services.

business concept

Bulten shall:

  • be the leading business partner and the most cost-effective supplier of fasteners and services to the automotive industry.
  • with empowered and dedicated people continuously develop its full service concept and actively launch innovations.
  • develop long-term relations based on professionalism and good business ethics.

financial targets and dividend policy

  • The Group's goal is to achieve profitable organic growth and to grow more strongly than the industry average.
  • The Group's goal is to achieve an operating margin of at least 7% (7).
  • The Group's goal is to achieve a return on average capital employed of at least 15% (15).
  • The Group's dividend policy is, over time, to pay out a dividend of at least one third of net earnings after tax. Consideration shall, however, be given to Bulten's financial position, cash flow and outlook.

strategy

Global system supplier of fastener solutions

Bulten shall be a global full service provider (FSP) of fastener solutions to the automotive industry.

Value enhancement throughout the value chain

Bulten creates value throughout the value chain: from predevelopment, technology and product development, production, purchasing and logistics, to final delivery at the customer's production line.

Organic growth

Bulten's primary strategy is to grow organically. Acquisitions and joint ventures deemed to complement the offering either in terms of products, processes or geography are also of interest.

Customers in the automotive industry

Vehicle manufacturers and suppliers in the automotive industry are the primary target groups.

Geographic proximity

Bulten's geographic spread allows global delivery capacity to the automotive industry.

Innovation drives development

An innovative climate serves to develop technological know-how to create optimal, sustainable, cost-effective solutions for the customer.

Global purchasing strategy

Bulten's global purchasing strategy harmonizes and consolidates the purchase of intermediate goods in a sustainable, cost-effective way

Sustainable, cost-effective production

Bulten's production technology and structure ensures sustainable, cost-effective production of the highest quality.

Strong balance sheet for growth investments

A strong balance sheet and low indebtedness provide flexibility and preparedness for investments in increased capacity and growth, as well as for strategic acquisitions.

Personnel and a unique corporate

culture create a sustainable operation

Bulten's employees contribute to sustainable development with their expertise and keen dedication. The company's core values are the foundation of Bulten's unique corporate culture.

Development of sustainability work

All activities within Bulten should be sustainably designed and in line with the company's ethical guidelines, based on social responsibility, environmental principles and responsible corporate governance.

SHAREHOLDER INFORMATION

Q4 FULL YEAR
PRICE-RELATED SHARE DATA 2018 2017 2018 2017
Share price at end of period (price paid), SEK 88.20 122.50 -34.30 88.20 122.50 -34.30
Highest share price during the period (price paid), SEK 112.20 129.50 -17.30 124.40 135.50 -11.10
Lowest share price during the period (price paid), SEK 85.90 109.00 -23.10 85.90 89.00 -3.10
Market value at end of period, SEK million 1,856 2,577 -721 1,856 2,577 -721
P/E 12.26 15.36 -3.10
Yield, % 4.54 3.06 1.48
Data per share
Earnings before depreciation (EBITDA) *) 3.55 3.72 -0.17 14.78 14.22 0.56
Operating earnings (EBIT) *) 2.38 2.72 -0.34 10.32 10.32
Earnings after net financial items (EAFI) *) 2.20 2.98 -0.78 9.76 10.32 -0.56
Earnings for the period *) 1.50 2.26 -0.76 7.19 7.98 -0.79
Equity *) 74.70 70.76 3.94
Cash flow from operating activities *) 2.93 0.14 2.79 6.14 2.88 3.26
Cash flow for the period *) -0.33 -2.06 1.73 -1.56 -3.13 -1.57
Dividend 4.00 3.75 0.25
Total outstanding ordinary shares, 000
Weighted number during the period *) 20,216.9 20,359.7 -142.8 20,323.7 20,359.7 -36.0
At the end of the period *) 20,133.0 20,359.7 -226.7 20,133.0 20,359.7 -226.7

*) Before dilution.

bulten's ten largest shareholders

SHAREHOLDERS NO. OF
SHARES
SHARE
HOLDING, %
Volito AB 4,750,000 22.6
Investment AB Öresund 2,900,000 13.8
Lannebo fonder 2,674,367 12.7
Bulten AB 907,220 4.3
Spiltan Fonder AB 388,620 1.8
Lazard Freres Banque 385,000 1.8
Handelsbanken fonder 383,894 1.8
CBNY-DFA-INT SML CAP V 380,655 1.8
State Street Bank & Trust Com., Boston 372,528 1.8
HSBC Bank PLC, 357,144 1.7

Total number of shareholders: 7,401

Source: Euroclear Sweden AB on 31 December 2018

information about interim reports

Bulten strives for sustainable business, and to find areas where we can minimize environmental impact. From Q2 2016, interim reports are no longer available in printed form.

All of Bulten's reports are available to read and download at bulten.se. Shareholders who are unable to access the reports digitally can order printed copies by contacting Bulten.

Our subscription service at bulten.se also enables users to subscribe to Bulten's reports and press releases by e-mail.

FINANCIAL INFORMATION

CONSOLIDATED INCOME STATEMENTQ4 FULL YEAR

SEK MILLION NOTE 2018 2017 2018 2017
Net sales 1 747 740 7 3,132 2,856 276
Cost of goods sold -608 -598 -10 -2,546 -2,298 -248
Gross profit 139 142 -3 586 558 28
Other operating income 5 10 -5 19 25 -6
Selling expenses -57 -52 -5 -229 -196 -33
Administrative expenses -39 -47 8 -173 -177 4
Other operating expenses -3 0 -3 -1 -4 3
Share of profit in joint ventures 3 2 1 8 4 4
Operating earnings 48 55 -7 210 210
Financial income 0 7 -7 0 6 -6
Financial expenses -4 -1 -3 -12 -6 -6
Earnings before tax 44 61 -17 198 210 -12
Tax on earnings for the period -14 -14 -55 -51 -4
Earnings after tax 30 47 -17 143 159 -16
Attributable to
Parent Company shareholders 30 46 -16 146 162 -16
Non-controlling interests 0 1 -1 -3 -3
Earnings after tax 30 47 -17 143 159 -16
Earnings per share attributable to
Parent Company shareholders
Earnings per share before dilution, SEK 1.50 2.26 -0.76 7.19 7.98 -0.79
Earnings per share after dilution, SEK 1.50 2.25 -0.75 7.18 7.93 -0.75
Weighted number of outstanding ordinary shares
before dilution, 000
20,216.9 20,359.7 -142.8 20,323.7 20,359.7 -36.0
Weighted number of outstanding ordinary shares
after dilution, 000
20,251.7 20,464.4 -212.7 20,358,5 20,464.4 -105.9

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Q4 FULL YEAR
SEK MILLION 2018 2017 2018 2017
Earnings after tax 30 47 -17 143 159 -16
Other comprehensive income
Items not to be reversed in the income statement
Revaluation of defined-benefit pension plans, net after tax 0 -1 1 0 -1 1
Items that may later be reversed in the income statement
Exchange differences -6 27 -33 17 25 -8
Total comprehensive income 24 73 -49 160 183 -23
Attributable to
Parent Company shareholders 25 73 -48 164 187 -23
Non-controlling interests -1 -1 -4 -4
Total comprehensive income 24 73 -49 160 183 -23

CONSOLIDATED BALANCE SHEET

SEK MILLION 31-12-2018 31-12-2017
ASSETS
Fixed assets
Intangible fixed assets 1) 205 206
Tangible fixed assets 702 628
Financial assets 6 5
Deferred tax assets 5 8
Total fixed assets 918 847
Current assets
Inventories 709 533
Current receivables 693 750
Cash equivalents 18 48
Total current assets 1,420 1,331
Total assets 2,338 2,178
EQUITY AND LIABILITIES
Equity
Equity attributable to Parent Company shareholders 1,504 1,440
Non-controlling interests 10 14
Total equity 1,514 1,454
Long-term liabilities
Long-term interest-bearing liabilities and provisions 201 97
Total long-term liabilities 201 97
Current liabilities
Current liabilities, interest-bearing 3 4
Current liabilities, non interest-bearing 620 623
Total current liabilities 623 627
Total equity and liabilities 2,338 2,178

1) Of which goodwill SEK 201 (203) million.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

SEK MILLION 31-12-2018 31-12-2017
Equity at start of period 1,454 1,357
Comprehensive income
Earnings after tax 143 159
Other comprehensive income 17 24
Total comprehensive income 160 183
Transactions with shareholders
Transaction with non-controlling interests 4
Share-based remuneration to employees -2 2
Buy-back of own shares -22
Dividend to Parent Company shareholders -76 -92
Total transactions with shareholders -100 -86
Equity at end of period 1,514 1,454

CONSOLIDATED CASH FLOW STATEMENT

Q4
SEK MILLION 2018 2017 2018 2017
Operating activities
Earnings after financial items 44 61 198 210
Adjustments for items not included in cash flow 18 18 82 74
Taxes paid -4 -6 -26 -25
Cash flow from operating activities before changes in working capital 58 73 254 259
Cash flow from changes in working capital
Change in working capital 2 -71 -129 -201
Cash flow from operating activities 60 2 125 58
Investing activities
Acquisition of intangible fixed assets -0 -1 -1
Acquisition of tangible fixed assets -56 -44 -164 -122
Divestment of tangible fixed assets 5 1 5 2
Change in financial assets 66
Cash flow from investing activities -51 -43 -160 -55
Financing activities
Change in overdraft facilities and other financial liabilities 6 -1 101 21
Dividend to Parent Company shareholders -76 -92
Buy-back of own shares -22 -22
Transactions with non-controlling interests 4
Cash flow from financing activities -16 -1 3 -67
Cash flow for the period -7 -42 -32 -64
Cash flow for the period -7 -42 -32 -64
Cash and cash equivalents at start of period 25 86 48 109
Exchange rate difference in cash and cash equivalents 4 2 3
Cash and cash equivalents at end of period 18 48 18 48

CONSOLIDATED NET CASH/NET DEBT COMPOSITION

SEK MILLION 31-12-2018 31-12-2017
Long-term interest-bearing liabilities -185 -84
Provision for pensions -16 -13
Current interest-bearing liabilities -3 -4
Financial interest-bearing receivables 5 4
Cash and bank 18 48
Net cash (+)/net debt (-) -181 -49
Less interest-bearing liabilities attributable to financial leases 36 37
Adjusted net cash (+)/net debt (-) -145 -12

KEY FIGURES FOR THE GROUP

Q4 FULL YEAR
GROUP 2018 2017 2018 2017
Margins
EBITDA margin, % 9.6 10.2 9.6 10.1
EBIT margin (operating margin), % 6.4 7.5 6.7 7.4
Net margin, % 4.0 6.3 4.6 5.6
Capital structure
Interest coverage ratio, times 13.2 48.6 18.2 38.8
Earnings per share attributable to Parent Company shareholders
Earnings per share before dilution, SEK 1.50 2.26 7.19 7.98
Earnings per share after dilution, SEK 1.50 2.25 7.18 7.93
Number of outstanding ordinary shares
Weighted number of outstanding ordinary shares before dilution, 000 20,216.9 20,359.7 20,323.7 20,359.7
Weighted number of outstanding ordinary shares after dilution, 000 20,251.7 20,464.4 20,358.5 20,464.4
GROUP
31-12-2018
31-12-2017
Capital structure
-0.1
Net debt/equity ratio, times
-0.0
Equity/assets ratio, %
64.8
66.8
Other
Net cash (+)/net debt (-), SEK million
-181
-49
-145
Adjusted net cash (+)/net debt (-), SEK million
-12
Equity per share attributable to Parent Company shareholders
74.73
Equity per share before dilution, SEK
70.76
Equity per share after dilution, SEK
74.86
70.39
Number of outstanding ordinary shares
Number of outstanding ordinary shares before dilution on the closing date, 000
20,323.7
20,359.7
20,133.0
Number of outstanding ordinary shares after dilution on the closing date, 000
20,464.4
GROUP, 12-MONTH ROLLING 2018 2017
Profitability ratios
Return on capital employed, % 12.8 14.4
Return on capital employed, excluding goodwill, % 14.6 16.7
Return on equity, % 9.9 11.7
Capital structure
Capital turnover rate, times 1.9 1.9
Employees
Net sales per employee, SEK 000 2,186 2,189
Operating earnings per employee, SEK 000 146 161
Average number of full-time employees (FTE) 1,433 1,305

DEFINITIONS

Definitions of calculated key indicators are unchanged compared to the definitions in the 2017 Annual Report.

Other key indicators not in the Annual Report or on page 13 of this interim report are explained below.

1) Adjusted return on capital employed: Earnings before financial expenses adjusted for non-recurring items as a percentage of average capital employed.

2)Adjusted return on equity: Net earnings adjusted for non-recurring items divided by average equity.

QUARTERLY DATA FOR THE GROUP

2018 2017
SEK MILLION Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Order bookings 741 723 855 779 839 691 765 720
Income statement
Net sales 747 722 810 853 740 630 708 778
Gross profit 139 132 156 159 142 122 141 153
Earnings before depreciation (EBITDA) 71 61 80 88 76 55 76 83
EBITDA margin, % 9.6 8.4 9.8 10.4 10.2 8.7 10.8 10.6
Operating earnings (EBIT) 48 38 57 67 55 35 57 63
EBIT margin (operating margin), % 6.4 5.2 7.1 7.8 7.5 5.5 7.9 8.1
Earnings after tax 30 25 40 48 47 22 39 51
Net margin, % 4.0 3.5 4.9 5.7 6.3 3.5 5.5 6.6
Cash flow from
operating activities 60 -15 54 26 2 21 37 -2
investing activities -51 -34 -36 -39 -43 -40 2 26
financing activities -16 48 -35 6 -1 26 -82 -10
Cash flow for the period -7 -1 -17 -7 -42 7 -43 14
Earnings per share attributable to
Parent Company shareholders
Earnings per share before dilution, SEK 1.50 1.26 1.99 2.43 2.26 1.11 2.01 2.59
Number of outstanding ordinary shares
Weighted number of outstanding ordinary
shares before dilution, 000
20,216.9 20,359.7 20,359.7 20,359.7 20,359.7 20,359.7 20,359.7 20,359.7
SEK MILLION 31-12-2018 30-09-2018 30-06-2018 31-03-2018 31-12-2017 30-09-2017 30-06-2017 31-03-2017
Balance sheet
Fixed assets 918 895 886 877 847 823 808 832
Current assets 1,420 1,433 1,386 1,428 1,331 1,189 1,161 1,205
Equity 1,514 1,515 1,498 1,533 1,454 1,381 1,367 1,420
Long-term liabilities 201 191 145 104 97 100 80 69
Current liabilities 623 622 629 668 627 531 522 548
Other
Net cash (+)/net debt (-) -181 -164 -118 -60 -49 -13 3 54
Adjusted net cash (+)/net debt (-) -145 -128 -80 -22 -12 23 40 91
Equity per share attributable to
Parent Company shareholders
Equity per share before dilution, SEK 74.73 73.86 73.01 74.66 70.76 67.18 66.64 69.08
Number of outstanding ordinary shares
Number of outstanding ordinary shares on
closing date before dilution, 000
20,323.7 20,359.7 20,359.7 20,359.7 20,359.7 20,359.7 20,359.7 20,359.7
Share price
Share price at end of period (SEK) 88.20 107.20 104.40 112.00 122.50 126.00 120.00 112.25

GROUP, 12-MONTH ROLLING

SEK MILLION JANUARY 2018–
DECEMBER 2018
OCTOBER 2017–
SEPTEMBER 2018
JULY
2017–
JUNE
2018
APRIL
2017–
MARCH
2018
JANUARY 2017–
DECEMBER 2017
OCTOBER 2016–
SEPTEMBER 2017
JULY
2016–
JUNE
2017
APRIL
2016–
MARCH 2017
JANUARY 2016–
DECEMBER 2016
Order bookings 3,098 3,196 3,164 3,074 3,015 2,920 2,831 2,738 2,717
Income statement
Net sales 3,132 3,125 3,033 2,931 2,856 2,790 2,760 2,739 2,676
Gross profit 586 589 579 564 558 556 551 548 531
Earnings before depreciation (EBITDA) 300 304 299 295 290 285 287 282 271
EBITDA margin, % 9.6 9.7 9.8 10.1 10.1 10.2 10.4 10.3 10.1
Adjusted earnings before depreciation
(EBITDA)
300 304 299 295 290 285 287 282 271
Adjusted EBITDA margin, % 9.6 9.7 9.8 10.1 10.1 10.2 10.4 10.3 10.1
Operating earnings (EBIT) 210 217 214 214 210 207 211 208 200
EBIT margin (operating margin), % 6.7 7.0 7.1 7.3 7.4 7.4 7.6 7.6 7.5
Adjusted operating earnings (EBIT) 210 217 214 214 210 207 211 208 200
Adjusted EBIT margin (operating margin), % 6.7 7.0 7.1 7.3 7.4 7.4 7.6 7.6 7.5
Earnings after tax 143 160 157 156 159 149 157 157 146
Net margin, % 4.6 5.1 5.2 5.3 5.6 5.4 5.7 5.7 5.5
Adjusted earnings after tax 143 160 157 156 159 149 157 157 146
Adjusted net margin, % 4.6 5.1 5.2 5.3 5.6 5.4 5.7 5.7 5.5
Employees
Net sales per employee, SEK 000 2,186 2,185 2,139 2,111 2,189 2,161 2,145 2,140 2,117
Operating earnings per employee, SEK 000 146 152 151 154 161 160 164 163 158
Average number of full-time employees
(FTE) on closing date 1,433 1,430 1,418 1,388 1,305 1,291 1,287 1,280 1,264
Profitability ratios
Return on capital employed, % 12.8 14.0 14.1 13.7 14.4 13.9 15.0 14.4 13.9
Adjusted return on capital employed, % 1) 12.8 14.0 14.1 13.7 14.4 13.9 15.0 14.4 13.9
Return on capital employed,
excluding goodwill, %
14.6 16.0 16.2 15.8 16.7 16.1 17.4 16.7 16.2
Adjusted return on capital employed,
excluding goodwill, % 1)
14.6 16.0 16.2 15.8 16.7 16.1 17.4 16.7 16.2
Return on equity, % 9.9 11.3 11.2 10.9 11.7 11.5 12.4 11.9 11.5
Adjusted return on equity, % 2) 9.9 11.3 11.2 10.9 11.7 11.5 12.4 11.9 11.5
Other
Net cash(+)/net debt(-)/EBITDA -0.6 -0.5 -0.4 -0.2 -0.2 -0.0 0.0 0.2 0.1
Adjusted net cash(+)/net debt(-)/EBITDA -0.5 -0.4 -0.3 -0.1 -0.0 0.1 0.1 0.3 0.3

NOTE 1 INCOME

Bulten is engaged in manufacturing and sales of fasteners. Revenues from product sales are reported at the time the control of the product is transferred to the customer. This usually takes place at the time of delivery to the customer and ownership is transferred. Bulten's customers are mainly in the automotive industry in Europe, Asia and the United States. The tabel below refers to income by geographic market where the customer's delivery point is located. The Group has the major of its income from customers in Northern Europe, but part of the sales is then exported to other markets in the rest of the world. Customers are mainly manufacturers of light vehicles but also heavy commercial vehicles and other suppliers, so-called tiers. For heavy commercial vehicles, most of the deliveries are for critical fasteners for engines. Of the total sales, the majority goes to the chassis.

income by geographic market

Q4 FULL YEAR
SEK MILLION 2018 2017 2018 2017
Sweden 135 128 7 499 457 42
Germany 106 149 -43 545 563 -18
UK 184 227 -43 856 881 -25
Poland 7 7 28 27 1
Rest of Europe 208 146 62 808 588 220
China 34 25 9 137 111 26
USA 30 20 10 102 86 16
Rest of the world 43 38 5 157 143 14
Total income 747 740 7 3,132 2,856 276

income by customer group

Q4 FULL YEAR
SEK MILLION 2018 2017 2018 2017
OEM Light vehicle 563 566 -3 2,412 2,178 234
OEM Heavy commercial vehicle 114 106 8 437 387 50
Tiers 70 68 2 283 291 -8
Total income 747 740 7 3,132 2,856 276

income by chassis and powertrain

Q4 FULL YEAR
SEK MILLION 2018 2017 2018 2017
Chassis & other 558 479 79 2,345 2,054 291
Powertrain 189 261 -72 787 802 -15
Total income 747 740 7 3,132 2,856 276

RECONCILIATION BETWEEN IFRS AND KEY INDICATORS USED

Some of the information in this report used by company managers and analysts to assess the Group's development is not produced in accordance with IFRS. Company managers consider that this information makes it easier for investors to analyze the Group's results and financial structure. Investors should see this information as a complement to, rather than a replacement for, financial reporting in accordance with IFRS.

adjusted net sales, organic growth

Q4 FULL YEAR
SEK MILLION 2018 2017 2018 2017
Net sales 747 740 7 3,132 2,856 276
Currency effect, current period -32 -32 -159 -159
Adjusted net sales 715 740 -25 2,973 2,856 117

When calculating adjusted net sales, organic growth, net sales are adjusted using currency effects of the current period and if necessary with net sales from completed acquisitions. This measurement gives a figure for comparing net sales with the previous year.

earnings before depreciation, ebitda

Operating earnings excl. depreciation (EBITDA) 71 76 -5 300 290 10
Depreciation/amortization and impairments 23 21 2 90 80 10
Operating earnings (EBIT) 48 55 -7 210 210
SEK MILLION 2018 2017 2018 2017
Q4 FULL YEAR

When calculating operating earnings excluding depreciation (EBITDA), depreciation and impairments are returned to operating earnings (EBIT). This measurement provides a figure for operating earnings excluding depreciation which are in turn based on investments.

adjusted net cash/net debt

Adjusted net cash (+)/net debt (-) -145 -12
Less interest-bearing liabilities attributable to financial leases 36 37
Net cash (+)/net debt (-) -181 -49
SEK MILLION 31-12-2018 31-12-2017

When calculating adjusted net cash/net debt, interest-bearing debt attributable to financial leases is deducted from net cash/net debt. This measurement provides a figure for a refined financial structure excluding lease liabilities.

BALANCE SHEET, PARENT COMPANY

Q4 FULL YEAR
SEK MILLION 2018 2017 2018 2017
Net sales 6 6 32 31 1
Gross profit 6 6 32 31 1
Administrative expenses -6 -14 8 -46 -51 5
Operating earnings 0 -8 8 -14 -20 6
Interest expenses and similar loss items -1 -0 -1 -3 -3
Earnings after net financial items -1 -8 7 -17 -23 6
Appropriations 132 99 33 132 99 33
Earnings before tax 131 91 40 115 76 39
Tax on earnings for the period -29 -20 -9 -26 -17 9
Earnings after tax 102 71 31 89 59 30

INCOME STATEMENT, PARENT COMPANY

SEK MILLION 31-12-2018 31-12-2017
ASSETS
Fixed assets
Intangible fixed assets 1 1
Tangible fixed assets 1 1
Total intangible and tangible fixed assets 2 2
Financial assets
Participations in Group companies 1,382 1,382
Deferred tax assets 1 3
Other long-term receivables 2
Total financial assets 1,385 1,385
Total fixed assets 1,387 1,387
Current assets
Current receivables from Group companies 163 106
Other current receivables 4 4
Total current assets 166 110
Total assets 1,553 1,497
EQUITY AND LIABILITIES
Equity
Restricted equity 110 110
Non-restricted equity 1,005 1,014
Total equity 1,115 1,124
Long-term liabilities
Long-term liabilities to Group companies 335 290
Total long-term liabilities 335 290
Current liabilities
Current liabilities to Group companies 67 67
Other current liabilities 36 16
Total current liabilities 103 83
Total equity and liabilities 1,553 1,497

JANUARY – DECEMBER 2018

As announced on June 20, 2018, Anders Nyström has been appointed the new President and CEO of Bulten. He will take up the post on February 8, succeeding Tommy Andersson who is retiring after 19 successful years with Bulten.

financial calendar

April 25, 2019 Interim report January–March 2019
July 10, 2019 Half year report January–June 2019
October 24, 2019 Interim report January–September 2019
February 6, 2020 Full-year report January–December 2019

The reports can be found on the Bulten website at www.bulten.se on their date of publication.

contact

Kamilla Oresvärd, SVP Corporate Communications Phone: +46 (0)31-734 59 00, e-mail: [email protected]

invitation to presentation

Investors, analysts and media are invited to participate in the teleconference on February 7 at 15:30 CET. The report will be presented by Tommy Andersson, President and CEO and Helena Wennerström, Executive Vice President and CFO via audiocast.

The presentation will be held in English and can be followed live via the link: https://tv.streamfabriken.com/bulten-q4-2018. It will also be possible to access the audiocast afterwards at the same address or via www.bulten.com/ir.

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

SE: +46856642706 UK: +443333009261 US: +16467224902

This information is information that Bulten AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the Senior Vice President Corporate Communications set out above, at 13:30 CET on February 7, 2019.

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

Bulten AB (publ) Box 9148, SE-400 93 Göteborg Visiting address: August Barks Gata 6 A Phone +46 (0)31-734 59 00 www.bulten.se