Earnings call transcript: Bufab Holding AB reports steady growth in Q1 2025

Bufab Holding AB demonstrated a stable financial performance in the first quarter of 2025, with net sales reaching 2.184 billion SEK, marking a 1.6% increase. According to InvestingPro data, the company maintains strong financial health with a current ratio of 2.8x, indicating robust liquidity. Despite a slight decline in organic growth, the company improved its gross and operating margins. In light of these results, Bufab’s stock experienced a minor decline, reflecting broader market trends and specific sector challenges.

Key Takeaways

• Net sales increased by 1.6% to 2.184 billion SEK.
• Gross margin improved to 30.3%.
• Operating margin rose to 12.7%.
• Stock price fell by 0.86% following the earnings announcement.

Company Performance

Bufab Holding AB reported a solid performance in Q1 2025, with increased net sales and improved margins. The company maintained its strategic focus on value-based pricing and alternative sourcing to mitigate the impact of US tariffs. While the market demand was cautious, Bufab’s strong presence in niche markets and sectors like energy and defense contributed to its resilient performance.

Financial Highlights

• Revenue: 2.184 billion SEK, up 1.6% year-over-year.
• Gross margin: 30.3%, an increase of 1.2 percentage points from the previous year.
• Operating margin: 12.7%, up from 12.1% last year.
• Cash flow: 164 million SEK.
• Net debt leverage: 2.5.

Market Reaction

Following the earnings release, Bufab’s stock price decreased by 0.86%, closing at 372.8 SEK. This movement reflects cautious investor sentiment amid mixed market conditions and sector-specific challenges. InvestingPro analysis suggests the stock is currently fairly valued based on its comprehensive Fair Value model, with the stock trading near its intrinsic value. The stock remains within its 52-week range of 34.13-50.73 USD, indicating stable long-term investor confidence.

Outlook & Guidance

Looking forward, Bufab anticipates continued market stabilization and is optimistic about future opportunities. InvestingPro data reveals the company has raised its dividend for 5 consecutive years, with a current dividend yield of 1.41%. The company plans to focus on improving its gross margin and continuing its acquisition strategy. Projected earnings per share for the upcoming quarters suggest gradual growth, with a forecast of 0.4 USD in Q2 2025 and 0.42 USD in Q3 2025. InvestingPro subscribers have access to 6 additional key insights about Bufab’s financial health and growth prospects.

Executive Commentary

CEO Erik Lundin expressed confidence in Bufab’s strategic positioning, stating, "Tough times is also market share times for a player like BUFAB." He emphasized ongoing cost control measures and optimism about the company’s future prospects.

Risks and Challenges

• US tariffs impacting sourcing and pricing strategies.
• Weak demand in agriculture, automotive, and furniture sectors.
• Potential supply chain disruptions.
• Global economic uncertainties affecting market demand.

Q&A

During the earnings call, analysts inquired about the impact of US tariffs and the company’s performance in China. Bufab confirmed its strong market share gains in China and clarified that no additional bad debt expenses are expected.

Full transcript - Bufab Holding AB (BUFAB) Q1 2025:

Moderator, BUFAB Group: Good morning and good afternoon everyone,

Erik Lundin, President and CEO, BUFAB Group: and a warm welcome to this presentation of Q1 report. My name is Erik Lundin, president and CEO of BUFAB Group. And together with me here, I have Per Iskog, my CFO. This presentation will be recorded. And by attending to the meeting, you agree to the recording.

I will start this presentation to go through the first quarter highlights, and then I’ll leave the word over to Per Iskug for some financial highlights. After that, I will take you through the different regions’ performance in the quarter. And at the end, we will have a slide about the situation in U. S. And tariffs before we ramp up and sum up the quarter and outlook.

So let’s start with the first quarter highlights. I think it was a good start of the year. If we start with the top line and sales growth, we had a sales growth of 1.6% in the quarter after several quarters of negative growth. Our organic growth was minus 0.1%, and this is an improvement versus Q4 when we have minus 1.5 Region Asia Pacific showed strong organic growth of 17.2%, led by China. If you look at the market demand, we see continued cautious market out there.

It’s still a large variation across industries. We continue to see very strong development in energy, defense and also in medical, while agriculture, automotive, furniture had weaker demand. General industry, construction, mobile home and our trailer segment in U. S. Then were stable.

Moderator, BUFAB Group: If we continue down and

Erik Lundin, President and CEO, BUFAB Group: look at the gross margin, we had a strong gross margin in the quarter, reaching 30.3% compared to 29.1% last year’s Q1. And this is driven mainly by our trading business. We have now, for the last seven quarters, have gradually strengthened our gross margin compared to compared to the quarters, and this is something I’m very pleased to see. For us, the gross margin is a driving factor reaching our profitability target next year and also, of course, a clear signal that we are continuing creating value for our customers. If you look at the cost base, our underlying cost base in the quarter was lower than last year if we adjust for one offs, restructuring cost and currency effect in the quarter.

And then if you look at our operating margin also improved, ending up at 12.7% versus 12.1% last year, also a step in the right direction, to reach our profitability target. I will then leave the word over to Per for some financial highlights. Please, Per.

Per Iskog, CFO, BUFAB Group: Good morning, and good afternoon. Per Ishkug here. I will take you through the financial highlights then, starting with sales. Our net sales is up by 1.6% amounting to SEK 2,184,000,000 in quarter one, which is a trend break after several quarter of negative growth. The 1.6% is built up of a negative organic growth of 0.1%.

We had a positive currency effect of 0.6%. And then we had the effect of both Vital, the acquired company, we acquired in Q4 last year, but also that we sold Halban and Lan last year. So the net effect is positive 1.1%. Our gross profit ended up at 30.3%, which is an improvement of 1.2 points versus Q1 last year, but also an improvement of 0.6% versus Q4, our last quarter last quarter in 2024. The improvement is mainly driven by our traditional trading business.

And then moving to EBIT adjusted on the right side, we see also an improvement there, ending up at 12.7%, a clear improvement from quarter four last year, but also a 0.6% improvement versus Q1 twenty twenty four. Then coming to our operational expenses. We have an improvement on the underlying cost level compared to last year when we adjust for one offs and restructuring costs and currency effect. We continue to place a strong focus on cost control across the organization, and several measures have been implemented to reduce our cost base. And we will have additional minor restructuring costs during the upcoming quarters.

Our, cost level ended up at 17.2% in quarter one compared to 17%. The underlying cost level after adjusting for these one offs ended up at 16.7%. Then moving over to the cash flow. Cash flow ended up SEK164 million in quarter one. The main reason for the lower cash flow versus q one last year is is less reduction in inventories.

Last year in q one, we had a quite big reduction in our inventory that contribute to very strong cash flow. We don’t see as previously communicated, we don’t see the the same level of reduction in inventories going forward. We have had an an overstock the the last two years, and we have gradually reduced that. And now we are we are coming to a more normal situation. Yep.

And then moving on to our debt. Our net debt has been reduced to the leverage to 2.5. And the reason for that is reduction in our loans, partly coming from real reduction in loans, but also from positive currency effect on our foreign loans.

Moderator, BUFAB Group: Thanks a lot, Per. I will then continue and take

Erik Lundin, President and CEO, BUFAB Group: you through the regional highlights, and I will start with the biggest region, and that is Europe North And East. Total growth in the region was minus 11%, and organic growth was positive, 0.8%. The difference then between the total growth and organic growth is divestment of the Duftehrablan and Halborn that took place in Q3 last year. The market situation remains uncertain in the region, and there’s also big variation between countries and different customer segments. We can see that Finland also continued weak development, while Bifur Poland saw improvement in their demand in the quarter.

Gross margin ended up very strong in the quarter, up by 3.6 points. And this strength in gross margin in the region is due to improved customer product mix as well as conservation of purchasing volumes, which generate the savings. And this is part of our updated strategy as well according to outsourcing. If you look at the OpEx, it’s lowered in the quarter, mainly due to regulation of additional purchase considerations. That is the divestment of Bifferbland Halborn and also currency effect.

We end up to have very strong operating margin in the region of 14.2% versus 10.6% last year. If we continue with the Europe West, total growth amounted to 22.7%, and organic growth was minus 2.3%. Here, the difference between the total growth and organic growth is the acquisition of Vital. The lower organic growth is due to lower activity levels in the automotive and construction industries in the West. Stable gross margin, up by 0.2 points.

And OpEx was in line with last year. The adjusted operating margin improved in the region, ending up at 13.4%. And also the maybe worth to mention that integration of Vital goes according to plan in the region, and Vital has contributed positively to the margin improvement for West in the quarter. We then continue with the region Americas. The total growth in the region amounts to minus 1.5%, and the organic growth was minus 4.2%.

Demand was stable for our important RV and trailer market in The U. S, which is big then for ABS. We saw lower demand in the automotive industry that is impacting the CSG operation in U. S. Automotive manufacturers are trying to navigate U.

S. Tariffs, which is causing some factories slowing down the production that’s impacting CSG in a negative way. Our gross margin decreased by one point, driven by the automotive industry and also the general uncertainty in the market. The gross margin for ABS, though, have strengthened during the quarter as expected. Lower share of OpEx in the region due to good cost control, and the adjusted operating margin ended up on 12.5.

I will later on talk more about and give some more insights about US and the impact of The US tariffs. If we then continue with the region UK and Ireland, total growth amounted to 0.4%, and organic growth was minus 1.7%. The decline in the region was attributed to lower market prices for APEX in stainless and also, to a certain extent, lower demand in the manufacturing industries that are impacting Biffle UK and Biffle Ireland. We saw a decrease also in the gross margin, 0.5% points, mainly driven by price pressure than for within stainless that’s impacting APEX. We had a higher OpEx versus last year, NOK 11,000,000, but this was impacted by bad debt expense of NOK 6,000,000 and also some restructuring costs that we have taken in the region.

Adjusted for this, operating expenses increased by NOK 4,000,000. And all in all, we ended up then on an operating margin of 9.5%. If we then exclude the bad debt, our adjusted operating margin ended up at 11% for UK Ireland in the quarter. And then finally, we go through the region of Asia And Pacific that performed very well in the quarter. The total growth amounted to 19%, and organic growth was 17.2%.

We saw strong organic growth in all companies, but mainly driven by China, beef up Shanghai business. We also had a good development on the gross margin side, up 0.6 points. This is driven by purchasing savings and also active work with value based pricing in the region. We had some higher share of OpEx compared to last year, mainly driven by investments in sales force, but also some negative currency effects for the region. And if you look at the adjusted operating margin, ended up at SEK16.1 billion, a small improvement versus Q1 last year.

I will then take you through a little bit about the situation in U. S. And the impact from The U. S. Tariffs as well.

So, first of all, I would like to start to talk to you a bit about our US business to give you some context. In US, as of today, we have two niche companies, and that is ABS and CST Group. ABS, as you know, are very strong in the mobile home and trailer market, and CST are heavy within automotive, EV vehicles and SUV and trucks. If you look at the total sales in the BUFA Group, twelve percent is coming from our U. S.

Operation as of 2024. If we then look at the impact from the tariffs that have been taking in place now the last couple of weeks and start with how we’re sourcing in US as of today. ABS sourced 38% and CSG eight percent from, from China. And for us, we don’t expect any impact or negative impact on BUFA’s margin, now due to the tariffs. But, of course, with those high tariffs from on China goods, it could lower the demand in The US, especially for CST.

But we also see some positive things about the tariffs. We expect that the bias market will continue from China, so that we’ll continue to have low prices from China to the rest of the world. And if we look at the overall risk with the tariffs, we see that on the on the global economy, that if this continues, that that could impact the global economy. But we are not that worried, in the longer run for BFAB. We see ourselves, and we are also, within our niche industries, a large and stable player in The US market, and we are often better at handling the those type of disruptions better than competition that are for our small local players.

Of course, we take actions to handle the situation in the best possible way. First of all, we put price increases passed on to the customers in line with the tariffs. That’s the reason why we don’t see any margin decline in our US operation. We do our best to prepare ourselves for different tariff scenarios in the coming weeks. And also, what we do is that we’re looking at alternative sources when needed.

US sourcing is generally not that option. It’s not developed in in US, so they are dependent on sourcing from from Asia. But, of course, in some small cases, we we do find alternative sources. And, also, what we do, we have done that also, the last couple of years, is to building up other, alternative sources outside China and Asia as well, like India and Turkey. And, also, what we do is, of course, working closely with different stakeholders, such as suppliers, customers and border control to ensure that everyone knows what’s going on and understand how we are best mitigating negative impact of the situation in in US and tariffs.

But to

Moderator, BUFAB Group: sum up, all in all, I’m not

Erik Lundin, President and CEO, BUFAB Group: that concerned about this. We focus on things we can control. And so far, I think we have done a good job, and we are, of course, monitoring the situation and development very closely also going forward. If we then sum up the quarter and also say a few words about the outlook and our priorities. Once again, I would like to emphasize that I’m pleased with the start of the year.

I’m very happy to see that we have continued to improve our gross margin and also delivering a stable operating margin in the quarter and also that the organic growth is continuing the right way, and we’re getting very close now to show positive organic growth. We continue to take actions when it comes to our cost base. That helped us now in Q1, and we’ll continue to take actions also in the coming quarters. That will give positive effect on our cost the cost level in the continue of the year, but also in 2026. There are still a lot of uncertainty in the market, that’s for sure, but we are optimistic, about the future.

As I said many times, tough times is also market share times for a player like BUFAB. So we’ll do our best to ensure that we take market share, continue to invest in in sales where it makes sense, and, of course, focus on things that we have within our control, our how we work with the offering and our cost base and taking market share. I’m pleased that we have, during 2024, also in q one, have executed on our strategy, and that work we continue doing rest of 2025. As I mentioned, continue to secure new business and take the market share that will help us to grow later on when the market bounce back. Continue to work on our margin improvement, focus on strength and gross margin that should continue to improve in the coming quarters, but also, of course, ensure that we have our cost base under control.

And continue to work on our net working capital, mainly then focus on our inventory levels and also secure a solid and strong cash flow in the coming quarters. That was my final slide for today. I will now leave the floor open for q and a. So please.

Q&A Moderator, BUFAB Group: So welcome to this q and a session. I would like to ask you to use the function raise your hand if you have a question, and don’t forget to unmute when it’s your turn. We start with the first question from Henrik Hinze. Welcome to ask your question.

Henrik Hinze, Analyst, ABG: Thank you. This is Henrik, from ABG. So starting off with comment that the general market has shown some signs of stabilization, but still remains cautious taking this in combination with that the organic growth trend has been positive for the past few quarters. Is it fair to say that you think this will continue based on that?

Erik Lundin, President and CEO, BUFAB Group: Yes. We expect this trend to continue. We do not expect any major differences versus the last couple of quarters, but more or less the same trend is what we can see right now.

Henrik Hinze, Analyst, ABG: Yes. All right. And one question on the tariffs as well. Growth in the Americas segment was still negative but quite a bit better. Do you see any than the previous quarter?

Do you see any like pre buying effect in Q1? And how did this shift in April? If you can give any comment on that.

Erik Lundin, President and CEO, BUFAB Group: Yes. It’s a good question, but difficult to answer how much impact we saw in the numbers. We think there could be some positive impact on the sales numbers in the end of the quarter linked to the used tariffs. But it’s difficult to tell, obviously, but, most likely, it is partly helping situation. Having said that, we have seen that the underlying trend and, looking at forecast and others also was going in the right direction for the, RV industry.

So it’s, also something that we saw before this, thing started with the the tariffs. But most likely, yes, some impact. And when it comes to the beginning of the quarter, I don’t have any comments there to share about the start of the Q2. But what I said is that we have at least don’t expect in the short term any big impacts. That’s what I can say.

Henrik Hinze, Analyst, ABG: Thank you. And then finally from me. The gross margin continued to improve year on year. How happy are you with the development so far? And how much do you think remains to be done here on the gross margin?

Erik Lundin, President and CEO, BUFAB Group: I am pleased with the with the development. I’ve said that many times before. I think that what I want to happen is that we’re gradually improving and working on our offering and the value that we give our customers. And if we do that in the right way, our gross margin should gradually continue to improve every quarter. And I don’t see that in the end to this after this quarter.

I think we still have a lot of work to do here and a lot of potential and that we are very strong in our offering and how we serve our customers. So gradual improvement, I expect also in the in the coming quarters.

Henrik Hinze, Analyst, ABG: Alright. Thank you very much for that.

Moderator, BUFAB Group: Thank you.

Q&A Moderator, BUFAB Group: Karl and Maria, welcome to ask your question.

Carl, Analyst: Yes, good morning. A question from my side here as well. I’m just wondering a bit on you just mentioned a bad debt expense here in the quarter. Just wondering, did you adjust for that in adjusted EBIT? Or is that’s not adjusted for, right?

Per Iskog, CFO, BUFAB Group: No. That’s not part of adjusted EBITA. That’s what we call one off, but it’s not part of adjustments.

Carl, Analyst: Okay. Yes, that’s clear.

Per Iskog, CFO, BUFAB Group: We specified the adjustments the adjusted Yes, I it.

Carl, Analyst: I just wondered if it was included or not, but that’s a good clarification then. Good. And then now with the stronger Swedish krona here, I’m just wondering how long will it take before we see it in your numbers in terms of lower purchasing prices? And how are you positioned to strengthen the gross margin out of that? Or will you need will you need to lower prices?

Or how do you see it on that?

Per Iskog, CFO, BUFAB Group: Yes. On the currency rates, we saw a big strengthening of the SEK in in March. But in January, February, we had a a weaker SEK. So it’s it’s going both directions, and it’s hard to tell, you know, what will happen. But of course, with the with the weaker, if that stays, it has an impact on us, of course.

But it’s hard to tell. We we don’t know where it will go. Yeah. On the on the

Carl, Analyst: sourcing prices. Weaker USD, I guess, is should be quite positive for your purchasing prices, especially from China, yes?

Per Iskog, CFO, BUFAB Group: Yes. Correct. If it stays. Yes.

Carl, Analyst: Yes, if it stays. Yes, let’s see. And just on The U. S. Business as well, mean, you already raised prices in ABS and CSG?

And when you say no impact on margins, do you mean that all that already in Q2, you should have compensated for that? Or how should we see it?

Erik Lundin, President and CEO, BUFAB Group: Yes. We didn’t do any adjustments in the Q1. But starting in Q2, we’ve done adjustments to ensure that we don’t get any negative impact on the margin side.

Carl, Analyst: Good, good. And on The U. S. Again, I mean, I guess you’re making quite large price increases given that the tariffs are quite high from for Chinese goods. But I was wondering, do you think that will lead to better organic growth in The U.

S? Or you think that demand will shrink quite a lot as well? I was curious to understand, like, the net net effect there.

Erik Lundin, President and CEO, BUFAB Group: Yes. And I think that’s a very good question. That’s very difficult to answer. I think it depends a lot of, how the development will be in the coming weeks, that is outside our control. So I I I don’t want to guess here what will happen.

But what I can say is that there’s not much alternatives, outside Asian sourcing, for customers. So they are dependent on, on Asian sourcing for most of the, items, And that will not change in the in the quarter or the coming quarters.

Per Iskog, CFO, BUFAB Group: I can I can add to that answer, Carl? Our organic growth definition is not the volume definition, it’s including price as well, actually. We don’t separately report price changes. So of course, if we increase prices related to tariffs, it will be shown in the organic growth as well.

Carl, Analyst: Yes. Yes, of course. And then just one final one on Region West, where you now have included Vital in the numbers here. I mean, can you say anything about how much of the margin improvement that comes from Vital? Because I think that has quite a high margin compared to the overall segments.

Per Iskog, CFO, BUFAB Group: We don’t disclose separate companies, but we can say that it has a positive it has a higher margin than average, so it has a positive impact.

Carl, Analyst: Okay. Yeah. Good. Thank you.

Q&A Moderator, BUFAB Group: Thanks. So, Matthias De Beleus, welcome to ask your question.

Matthias De Beleus, Analyst: Yes. Thank you. Hello, Erik and Per. I’m gonna stick to the theme and and talk about The US business, specifically the sourcing. 12% of the group sales is in The U.

S. Sourcing is much lower, and you mentioned it briefly there. But could you please give some more color here why sourcing is generally not an option in The U. S? Do you have a strategy to increase it slightly?

What are you doing here?

Erik Lundin, President and CEO, BUFAB Group: The main reason is because my ultimate product doesn’t have any production for it

Matthias De Beleus, Analyst: in

Erik Lundin, President and CEO, BUFAB Group: US. That is the reason why it’s not an option. It is, there are production for, for example, certain items in the for CSTU and automotive, they are sourcing in US. But here, we already do sourcing in US and have a good network. So that’s the the simple answer.

What we can see is that we have moved some sourcing from, exactly, from China to Taiwan to, mitigate impact, due to tariffs as it is lower tariffs on Taiwan than on on China, for example. So those kinds of alternative sources we have been doing now in the last couple of weeks, and that we’ll continue doing when needed to minimize to mitigate the impact for us and for our customers.

Matthias De Beleus, Analyst: Okay. And then a quick follow-up on the lower demand in automotive and the CSG operations. Did you see this accelerate by the end of the quarter due to the tariff situation? Was it stable throughout the quarter? Can you say something there?

Erik Lundin, President and CEO, BUFAB Group: Yeah. What we can say about automotive industry is that there’s been actually a disappointment after the election. There were a lot of people who estimated that, automotive industry in US should bounce back after the election, but that didn’t happen. And, so not in end of q four and, not in q one either. And, of course, the situation with the tariff didn’t help either, but what I can say is that’s been a quite general low level in the Q1, so not any major impact in the last couple of weeks or so.

It was quite similar level actually throughout the quarter.

Matthias De Beleus, Analyst: Okay. Thank you. Those were my questions.

Q&A Moderator, BUFAB Group: Thank you. Senu and Dolein, welcome to ask your question.

Moderator, BUFAB Group: Thank you, and good morning. If we jump over to another region, Asia Pacific showed strong organic growth. And you mentioned that all companies performed well there. Can you describe a bit more about the underlying drivers that sets this region apart from the others?

Erik Lundin, President and CEO, BUFAB Group: Yes. I think that, as I mentioned also, the main driver behind the strong development in the region is China. And here, the team have done a good job in, grabbing market share, and that is now paying off, in the in the in the numbers. So that’s the main driver. On top of that, I think this the region had a quite tough 2024, and now we see improvement happening also in the rest of the region.

For example, India and for Kyansu in Singapore region and Southeast Asia. So, they are also bouncing back from a little bit lower demand. India, possibly impacted by the election that took place last year and some stronger demand after that. And in Kiansun in Singapore, it was a small but gradual improvement also in demand. But the main driver for the good numbers are Bismarck Shanghai in China.

Moderator, BUFAB Group: Okay. Clear. And regarding the the cost initiatives, you mentioned that, will have some effect in ’25, ’20 ’6, which are not visible yet. Is it possible to to quantify or get, some some insight into the effect of those?

Per Iskog, CFO, BUFAB Group: We will not quantify them, but what we can say is that they are minor. There will not be a material effect on the result.

Moderator, BUFAB Group: Very good. And also a question on your view on acquisitions. Of course, you’re relatively recently closed Vital. Does this increased market turbulence make you relatively more cautious to acquisitions in the near term? Or do you see this as an opportunity?

Erik Lundin, President and CEO, BUFAB Group: No. Our strategy remain firms. So we are after buying good companies that suits BUFAG well, and that is number one priority. So we still are looking for acquisitions and have discussions ongoing, and that will not change. For us, it’s most important to find the right right company.

That is the the key thing for us.

Moderator, BUFAB Group: Very good. And just lastly, the bad debt costs in UK, Alen, is there any reason to expect more of this kind of cost in the upcoming quarter?

Per Iskog, CFO, BUFAB Group: No. We don’t expect any other bad debts in that region or in other region.

Moderator, BUFAB Group: Okay. Very good. That’s all for me. Thank you.

Q&A Moderator, BUFAB Group: So Markus, did you have a follow-up question?

Matthias De Beleus, Analyst: Yes. Just a follow-up on China here. You spoke about Americas, the pull forward effect. How much of the strong performance in China would you say or do you estimate as a pull forward effect from the tariffs? And do you expect this strong performance to continue in the sequential quarters?

Erik Lundin, President and CEO, BUFAB Group: No. There’s no link between the tariffs and the good performance that we have in China. So, there’s no link at all. We are having good development in China due to, taking market share, and that has been taking place for several quarters and is paying off. So it’s nothing to do with the tariffs.

And then, sorry, what was your second question there?

Matthias De Beleus, Analyst: Just if you expected this to continue, but but I think you answered it

Erik Lundin, President and CEO, BUFAB Group: very I did.

Matthias De Beleus, Analyst: Alright. Thanks.

Q&A Moderator, BUFAB Group: So Karl, did you have a follow-up question?

Carl, Analyst: Yeah. Just on Europe, North and East. I mean, it was a very strong quarter here by all metrics. I mean, is it something specific here that happened or in the quarter, would you say? Or can you say anything?

Because I think the gross margin was at, like, record levels and also EBITDA margin of 14% was it’s quite decent, to say the least.

Erik Lundin, President and CEO, BUFAB Group: No. I think it’s just payoff of hard work within different areas that helped the region to deliver a solid quarter. So nothing specifically that is happening in the quarter.

Carl, Analyst: Yes.

Erik Lundin, President and CEO, BUFAB Group: Maybe that’s the right word. And hopefully, continue in that direction.

Carl, Analyst: Yeah. Good. Thank you.

Erik Lundin, President and CEO, BUFAB Group: Okay. If there are no further questions

Q&A Moderator, BUFAB Group: Gustav Vannebla, did you you have a question?

Gustav Vannebla, Analyst: Yeah. Sorry. Just just to to to build on on that question from Carly on North and East. But because you mentioned, you know, it’s supported by customer mix effect, I was just wondering if it sounds like it’s more structural than just temporary. Or is that correct?

Erik Lundin, President and CEO, BUFAB Group: Yeah. So it’s nothing temporary happening. It’s just, as I said, they have done a a good job in in several areas then working in a such a way we’re improving the gross margin. That is a key focus areas for all companies and also, of course, working with the cost base. As we pointed out, we do that in all regions.

We we have plans for each region and for each company how to address the cost base, and they’re doing that. So all in all, ending up in a in a solid quarter.

Gustav Vannebla, Analyst: Yeah. Okay. Perfect. Thanks.

Moderator, BUFAB Group: Okay. That was the last question for today. So thanks everyone for joining, and, have a good day. Bye bye.

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