Release Date: July 10, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bulten AB (LTS:0P49, Financial) maintained EBIT margins despite an 8.8% decline in net sales, showcasing effective cost management.
- The company saw strong growth in its medical technology and consumer electronics segments, which have higher margins compared to the automotive sector.
- Bulten AB (LTS:0P49) is focusing on high-growth, high-margin markets, which is expected to enhance profitability in the long term.
- The company is actively working on strategic reviews to optimize its organizational structure and resource allocation for future growth.
- Bulten AB (LTS:0P49) has secured significant wins in Europe and Asia in higher-margin businesses, such as C parts and microscrews, which is positive for future profitability.
Negative Points
- Sales volumes for the second quarter were down over 8% compared to the same quarter last year, primarily due to global customs discussions affecting order intake.
- The automotive sector, which is a major part of Bulten AB (LTS:0P49)'s business, is experiencing a soft market with low growth in Europe and North America.
- Net debt excluding lease liabilities is higher than last year, indicating increased financial leverage.
- The company's cash position is lower than the previous year's quarter, reflecting challenges in maintaining liquidity.
- Bulten AB (LTS:0P49) does not provide financial projections, which may limit investor visibility into future performance.
Q & A Highlights
Q: Could you provide insights on how the third quarter has started, considering the impact of global tariffs and holidays?
A: Historically, Q3 is weaker due to customer plant shutdowns for maintenance. The significant drop in order intake was mainly due to one customer halting deliveries to North America because of customs duties. This customer has resumed full production, and we don't foresee long-term volume concerns. – Axel Berntsson, President and CEO
Q: Can you explain the reasons behind the growth in gross margin and the impact of the mix change for non-automotive segments?
A: Non-automotive segments have significantly higher gross margins than automotive. As we grow this portion, we expect a higher gross margin overall. – Axel Berntsson, President and CEO
Q: How might current tariff indications, such as US tariffs on European imports, affect Bulten?
A: There's no major impact on our European business yet. We follow trends in customer volumes, particularly in automotive. In Asia, we haven't seen a major effect, but future production shifts to the US could impact us. – Axel Berntsson, President and CEO
Q: Could you comment on the tax rate, which seems a bit above the desired level?
A: We don't account for deferred tax losses carried forward in our calculations, which typically results in a tax rate around 25%-26%. – Anna Akerblad, CFO
Q: What are the non-controlling interests in your financials?
A: These relate to our joint ventures in Asia and Europe, and the current level is expected to continue. – Anna Akerblad, CFO
Q: Can you quantify potential cost reductions from your strategic review of the footprint?
A: We could, but we are not disclosing that information until we finalize and choose the scenario to implement. – Axel Berntsson, President and CEO
Q: Could you elaborate on the strategic agreement with a Tier 1 supplier in Europe and the revenue potential of the VMI model?
A: While we can't disclose numbers, it's a significant customer, and the VMI model will likely encompass all of that business over time, contributing positively to our profits. – Axel Berntsson, President and CEO
Q: How do you envision Bulten's competitive position evolving over the next three to five years, especially outside the automotive sector?
A: We plan to adopt a customer-centric business model, being decentralized and close to customers. We aim to be quick, service-oriented, and an excellent supplier. More details will be shared in our strategy presentation later this year. – Axel Berntsson, President and CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
