Bufab AB (publ) (BUFAB) Earnings Call Transcript & Summary

Welcome to Bufab Capital Markets Day. We're standing live right now this afternoon from Gummifabriken in Värnamo, not so far away from the headquarters at Bufab Sweden. It will be a slightly different than ordinary Capital Markets Day. At first, we will be online, so we will not see each other face-to-face. But you can still be a big part of this event because we have the opportunity to actually ask some questions during those sessions we soon will go through. I will come back to you on that one. So again, I hope that you feel that you are warm welcome to this event. And we have a really, really exciting afternoon coming up. So why wait? We go through it directly. So we start off with meeting our CEO at Bufab. Jorgen, a warm welcome to live stream.

Thank you, Jonas. And it's a great pleasure to be here, I have to say. And most of all, it's a great, great pleasure to welcome so many of our shareholders and other stakeholders to this event this afternoon. It would have been even nicer if we could meet in person, of course. But now we're here, and we will make the absolutely best of it.

Yes. We will. And are you excited for the topics during these sessions?

Well, I'm very excited about Bufab generally. So I'm very excited about what we'll do this afternoon. It's not often that I get to talk 2 hours nonstop about Bufab. So it's a great opportunity, I think.

Yes. Yes. So 2 hours, maybe some of you think right now, but we will have some pause in it.

That's right.

Yes. And we will actually start off this Capital Markets Day right away because we're going to talk a little bit about Bufab. Maybe we have some new faces that are actually sitting here and watching this as a shareholder, and they want to know more about the company. So...

That's exactly right. The program is approximately -- we'll start by talking about Bufab, our history, our business idea, what we do for our customers and why we exist, so to speak. And that's for the new shareholders who may not know so much about Bufab. But then the rest of the day, we'll talk mostly about our future. We'll talk about our plan for the next 5 years, our targets for the next 5 years. And the shareholders will also get a glimpse into some of the business segments we have and some of the more detailed plans we have. We have a great team lined up, I think, and also a great program. So let's start.

Yes. Indeed. We will -- yes. Of course, we're going to hit it off directly. And as I said earlier on here when we started, you can be a big part of this session because if you go down a little bit on your web browser from the stream, you don't have to leave the stream anyway, you just go down a little bit. And then you see a box there saying Ask a Question. And if you press that box, you can actually address a question directly into this place where we are sitting right now. Maybe you want to ask something that we have gone through here or something in general because I know a lot of you guys have booked face-to-face meetings, so to say, one-to-one on Teams later on. But maybe there are some questions that you have in your heart that you want to actually address to this session here today. So feel free, and we will take as many of them as we can. But now, as Jorgen say, let's move on because we're going to start off with a topic about us. So over to you, Jorgen.

That's right. I'm going to be talking about us now for a few minutes. And this is, I guess, mostly for the benefit of our new shareholders who may not know so much about Bufab's history, our business ideas and so on. And the first thing that you need to know about Bufab is that we're an entrepreneurial company. And we put that quality, we appraise it very highly, and we value it very highly. And we try to keep it in the company. We have, meanwhile, improved and developed quite a bit from our very humble start in a small town here outside Värnamo, but we try to keep that entrepreneurial spirit. We've grown for many, many years both organically, much, much faster than the markets but also through 50 acquisitions that we made since our founding in 1977. And we've done some with good profitability and cash flow and using our own money to expand our business just like any entrepreneurial family business. And more recently, we've also had a good performance because we are just now chalking up our 28th consecutive quarter of year-on-year growth. And if you want to say that this is just words, then you can say let's look at these figures instead. And there, you see how we've grown since 1977 with a fairly good clip. And the green bars here represent our growth since our IPO, our stock market introduction in 2014, which has been 14% per year. So pretty good. Now some facts about Bufab. We were founded, like I said, in 1977, and we've been a public company since 2014. About SEK 5 billion of sales, good profitability, about 10% last year. The most important fact about Bufab, though, is the number 1,300. That's the number of people in our team, but we don't call them people. We call them solutionists, and I will explain in a bit why that word is so important to us. We manage 150,000 so-called C-Parts, which I will get back to also in a moment, and we're present in about 28 countries around the world. I just said C-Parts. What are C-Parts? Well, C-Parts are kind of hard to explain, but let's take a concrete example and look at this bus. This bus consists of many, many parts, thousands probably, and some of them are super important and very large and expensive. But there is also like an ocean of small parts, which you can see here on this picture, like these electrical terminals and these houses and so on. Those are called C-Parts. And why are those especially important? Well, let's take the customer's perspective on that. I think that's always a good thing to do in business, start with the customer. If you start with the A parts then, those are the most expensive and most valuable, most strategic parts of, let's say, a bus, then in this case, a diesel engine. If you then take all the parts and arrange them by decreasing value, you get a graph such as one to the left here. And the thing with the A and B parts is that they're strategic. They account for most of the value, but they're also under good control by the customer because they are A Parts. The C-Parts, however, have quite a different look from the customer's point of view. They're considered necessary evil. There are lots and lots of them, and we have lots and lots of suppliers delivering them. But yet, there is no money in them. So you cannot, at the customer, become a hero managing the C-Parts. And in fact, you can only have hassle with them. So from the customer's perspective, the C-Parts are a constant headache. And we have something in this industry we call the 80-20 rule, and that's that the total cost for a part is quite differently distributed for an A or a B part or for a C part. For an A part, the direct cost of the part, the cost of the actual part is most of the cost. But for a C part, it's quite a different story. For a C part, the direct cost is only a small portion of the total cost. And the indirect cost, everything that a customer has to do to source the part, to work with its logistics, to ensure its quality and so on, those costs account for almost 80% of the total cost. And this is why Bufab exists, you could say, because the customers being concerned with C-Parts is to reduce the total cost, which means reduce the indirect cost. And that means also reduce the risk. And this is where Bufab can help because we can reduce the number of suppliers, parts and, generally speaking, reduce the number of problems that the customers have with the part. The customers, when they work with us, therefore, experience a lower total cost, better quality, better deliveries and also, increasingly importantly, a secured end-to-end sustainability. So what our customers want is to reduce the many, many suppliers they have. And here, we have a quote from one of our top 10 customers. Such quotes are easy to find. You just google it, and there are hundreds of them. But this particular customer then says that they want to get rid of the small suppliers because these are responsible for costly and time-consuming administration, as it says in this quote. And that's where Bufab comes in. Now to deal with C-Parts, you have to be a special kind of person, and you have to have also special kind of values. And that's why we, in Bufab, put a large emphasis on our values. We -- as I said already, we regard ourselves as a family of entrepreneurs. And this family works together to always deliver as a team and to also be a responsible partner to our customer. And these values are mirrored also in our customer promise, which says that we should be always fast and flexible; that we should be committed and dedicated; and finally, and increasingly, importantly, that we should be trustworthy. And these things, we put together in the single word, solutionist, which is what we want to represent to our customers. Now our profitable growth, therefore, is fueled by a global trend of customers who want to outsource their C-Parts management to somebody like us. And this trend has been going on for decades, but now we see it accelerating. And to put all of it in one word, you can say that the customers want to reduce the risk and the total cost, and that's what makes it possible for us to be profitable. And they want to do so increasingly, and that is a global trend. And that's what is driving our growth. Putting this together, you get profitable growth, and profitable growth is what Bufab has been delivering for the last 45 years. Now can I have the next picture, please? Now we're going to talk a little bit about how this has played out for the shareholders and what the performance of Bufab has been in the past 6 years or 7 years since we went on the stock exchange. And to help me with that, I have a colleague here, Bufab's CFO, Marcus Andersson. Hello, Marcus.

Hello, Jorgen. Hello.

And you need to talk to our shareholders here about how have we done since our IPO in 2014. Go ahead.

Thank you very much. Thank you. Hello, everybody. Marcus Soderberg is my name, and I'm the CFO of Bufab since a couple of years. And I will, as Jorgen said, just walk you through the performance of Bufab. So if we start by looking at the performance from the last 6 or 7 years really, actually since the IPO, Bufab has had quite a good growth year-on-year, I have to say. But first, before we go into that, we have to just talk a bit about -- can I have the next picture, please? Thank you. First of all, just something about the market that we are operating in. Bufab -- the market in which Bufab operates grows with approximately 2% a year. Bufab, however, has shown a good track record of organic growth, which is almost 5% a year. The reason for us growing faster than the market is actually due to that we take market share. We take market share both when it comes to bringing new businesses, but we also grow on existing businesses, meaning that we increase our share of wallet of existing customers, so to say. On top of this rather good growth organically, I have to say, we have grown an additional 10% through acquisitions, so acquired growth about 10%. And we have made about 9 acquisitions since 2014, and those acquisitions are splitted geographically between our various markets, so to say, but Asia, North America and also Europe. So a good track record growth-wise the last years. But as Jorgen said, profit -- sorry, growth is one thing, but profitable growth is another thing. And we have shown profitable growth also since the IPO, Jorgen said, or since 2014. As you can see on this picture, this is a picture of our EBITA margin, which has been very stable but also improving the last couple of years. And it should be mentioned also that we have invested quite much in our business during -- since the IPO in sales organization executing the sales strategy, also investing in our sourcing organization, et cetera. And that is actually the result we have seen in the growth rate that we looked at on the previous page and also stable profitability during those years. Next picture, please. Profit is also one thing, but cash flow is another thing. And when it comes to cash flow, we have also had a good development when it comes to that. Being a rather -- being a trading business -- having a trading business model, so to say, means that we normally do not put too much of cash into our balance sheet, so to say. What we invest in is mainly into net working capital, so to say. But we get quite much cash flow left over, so to say, after paying off these kind of things. The rather good cash flow you see in 2019 and 2020 is mainly achieved due to that we had a slower market or a market drop then, releasing a lot of cash from our balance sheet. And we have been able to use that cash in order to pay off our debt, so to say. If you take the next -- show the next graph, please. This is a picture of our net debt versus EBITDA or leverage, so to say. And as you can see here, we have been having an average of around 2.5x since 2014. But you can also see that we have a couple of red bars there, where we were up on quite high levels, so to say. And that was actually right after we acquired some companies. In -- back in 2014, we acquired Apex. And in 2019, we acquired HT BENDIX and ABS. And as you can see, we were up on high levels. But due to good growth, good profitability and good cash flow, we have been able to bring down that leverage to a more normal level. Next picture, please. And you can show all of the picture, please. Yes. And as you can see, we have been getting in about SEK 2.5 billion in EBITA. And as I said, most of the money that we bring in, some of it is tied up in net working capital, not too much in CapEx actually, because we have low fixed assets. So most of the available cash, we have actually been able to use to -- financing our acquisition strategy. So most available cash flow has went into acquisitions. Of course, we have increased our net debt a bit. But the leverage has been more or less the same compared to 2014. Next picture, please. So all in all, you can say that we have seen good performance, and this good performance has generated good results. So strong growth, strong profitability, strong cash flow. Net sales increased with about 14% a year, EBITA with about 17% a year and net profit with about 18% a year. And we have been able to do this, as said, by holding the net debt to EBITDA more or less unchanged since 2014. Next picture, please. And even though our main focus, of course, is to focus just on strong growth, profitability and good cash flow, it's, of course, very nice to see that the performance of Bufab has been recognized in the share market as well because the shareholder returns has been far above index, which is, of course, very nice to see. And just to summarize this a bit then. Since the IPO, we have continued to invest in our customers, in our people and our platform. Also, we kept acquiring, rain or shine, and the results are easy to see, as we saw on the previous picture. So now we can say that we are ready for taking the next step.

All right. Thank you so much, Marcus.

Thank you, Jonas.

We are live here on this Capital Markets Day. And you will be back later on also talking a little bit here in part 2. And also, if you have any questions about this or anything others, they can just type it in, and we will come back to you on those. But we will move from this stage to the -- a little bit of a lounge area here, so follow me here. And I know that Jorgen is sitting in his chair here. And Jorgen, we need to talk a little bit about -- of course, we're going to, all the way, put focus on the future here today. But we had a really, really special year, 2020. It was difficult in many ways for a lot of people. And the -- I know a lot of those that are watching this right now, thinking, "How was Bufab's 2020?" And we need to take a little bit of look at -- on the 2020 side of things. So...

Well, I mean, 2020 was a very tough year, I think, for many people privately and also for many people in Bufab both privately and professionally. It was a tough year for our customers and for the industry as a whole and still is tough, in fact, because we're still not out of the woods when it comes to that. But it was also a year when we think that we proved some things about Bufab that even we didn't know before. So let's go and talk about 2020. Can I have the next picture, please?

We soon will have the next picture coming up here. So as we...

And one more, please? So we started out 2020 and early in March, I guess, we saw the pandemic hit our companies in Asia, our sister companies in Asia, earlier than the rest of the world. And that was bad for them but good for Bufab because it made it possible for us to think a little bit and to take the solutions that they developed for how to deal with the pandemic and be able to deploy them in the rest of Bufab. So I guess you could say that we got a week or 2 extra headroom to think, and we used that week to basically set 3 priorities for Bufab in 2020. And the first of those 2 priorities was protect: So first of all, first, protect the health of our people, of our solutionists, of their families, our suppliers, customers and so on; and secondly, to protect our customers because there was, at that time also, a lot of uncertainty about demand and logistics and such things. And there, we had to work really hard to meet those changing tides in the market, you could say. And lastly, also to protect Bufab because Bufab is our place of work, and it belongs to the shareholders. So we have to protect it. And therefore, it was very much a question of making sure that our cost level was in sync with the rest of the -- with the demand that was in the market. Then we started the phase -- when we saw that, that was working, so to speak, we went into a phase called Restart because we didn't feel that we could waste a whole year and not move our positions forward with our customers. So from July and onwards, we focused quite a lot on our customers, strengthened relationships with them and also getting more business basically with them because we have a habit of increasing our market share every year and we wanted to do so in 2020 also. And finally, we're now in the third phase, if we can have one more, please, which we call Invest. And it's built on the successes with the 2 first phases and where we're now basically thinking ahead and seeing what are we going to do for 2023 and what are we going to do for 2025. And like we said before, that's what the rest of today is about. But let's stay in 2020 for a while. If I could have the next picture, please. So first about growth then. We outgrew the market in a dramatic way actually in 2020. The market was down maybe 8%, mostly in the second quarter, but we grew organically only minus 5%, which was 3 percentage points faster than the market then. Those 3 percentage points, that's increased market share. And on top of that, we had 2 new acquisitions that had come into the company at the tail end of 2019, and those provided another 10% of growth. So in total then -- another 15% of growth, I'm sorry. So in total then, 10% of growth, approximately 18 points faster than the market. Bufab moved its position forward dramatically during 2020. Next one, please. And how are we able to do that? Well, we had already, in 2019 and before, invested quite a lot in new productivity solutions for the company, which we have not quite been able to try out, so to speak, because we have been growing and have been busy with our ordinary day-to-day stuff. But we saw in the middle of 2019 already that the market was a bit weak. And by being one step ahead, we started then a cost savings program, which we were then able to just accelerate when we saw where the market was headed in 2020. Those are important steps that made it possible to perform so well in 2020, but more important and the most important is our entrepreneurial and decentralized organization. Because when you're in a crisis, then you want to make faster decisions and good decisions. And that's much easier to make if you're close to the customer, close to the market and are able to decide. And that's a feature of Bufab's organization that really proved itself in 2020. Let's look at some numbers then on the next picture, please. Firstly, we can take the whole picture in one. Firstly, we had share gains. So you can see here in the first quarters, we had really large negative growth, especially in the second quarter. But then we returned to very good organic growth also in the fourth quarter. And also, in January and February this year, we've grown. Then we have the question of cost. We are trying always to increase our productivity so we can do the same work, so we can do more work because we're growing with the same people by working more cleverly. And that was also something that continued in a good way in 2020. We reached, at the end of last year, the lowest cost level we've had ever. And finally, cash is important in a family business, and it's important in any business. And by managing our inventories well and our supply chain well, we managed to have a very good control of our cash flow last year and recorded an all-time high cash flow and which is maybe not what we expected in March when things looked the darkest, the best profit margin we've had in more than 10 years in this crisis year. So we think that this is proof of concept of a new kind of Bufab, more agile, more flexible, more productive, and that it also proves the value of our decentralized entrepreneurial organization. Let's go to the next one, please. So we put this summary here. It basically says that we faced the biggest crisis that we faced for many, many years. I've been in Bufab for almost 10 years, but there are people who have been here for 25 years, and they have never seen anything like it. But in that crisis, we really showed what we can do, and that is something that our customers have already rewarded us with more business for. But that, for sure, will strengthen our relationships with our customers also going forward, enabling us to continue to grow in years to come. Let's have the next one, please. Now this was a bit of a summary of 2020. But now we really have to do what we promised, which is talk about the future.

Yes. And that's why we're all here today.

That is so.

So I think the past is the past, and let's move on to take a little bit of a look into the future and see what it's like. And we will be having really, really good topics coming up during this afternoon's session. So make sure that you stay tuned on this stream. And also, as we said before, please ask your questions because this day is for you, and we want to answer every question that we actually have managed to get time to answer. So now the past is the past. 2020 is gone. We're sitting here. It's March 2021. And as Jorgen said, we need to take a look into the future. So please, Jorgen, take it away.

I'm back. So we're going to talk about the future now. And specifically, we're going to talk about the next 5 years. So can I have the next one, please? We have some beliefs about the future. We think that the market is going to be characterized, as it has been in the past in our business, by fragmented supply. In fact, in our business, there are thousands of companies. It's easy to enter the business because the so-called barriers to entry are quite low. So there are thousands of companies. But there are only a few large players, maybe less than 50, that are so large that they can play a significant role in a region, let's say, in Europe, based in Germany. And if you look at the players that are global such as we, there are only a handful, maybe less than 5 players, who have a global ambition and a global scope in our business. One more, please. Looking at the demand, though, our customers and especially the larger, more complex, more advanced customers, they really want one global partner. And they want a good one because some of them still source many C-Parts themselves, but they do want to derisk and simplify their supply chains. And this is becoming more important. The more trade barriers there are, such as the ones caused now by Brexit, it's becoming more important because of sustainability, because of digitization and other factors. Now moving from having your own C-Parts supplier base to acquiring your C-Parts from somebody like Bufab is a time-consuming, costly, bothersome process. Our customers want to do it. They do want to do it, but they want to do it exactly once in their life. And that means that they are quite picky on who they turn to when they want to do this. And that's where Bufab comes in, of course. We can have the next one, please. Now if you look at the typical customer and look at their supplier base, it looks something like this graph. They have 50, 60 suppliers or something like that, and they order them then from big to small, along an axis like this. And if I can have the next one, please, and one more. What they do then is they consolidate from the smallest suppliers and put all those together and give that volume to the largest suppliers. So our job is basically to be one of the green suppliers on this list. And if we do a good job there, our customers will do a little bit our sales work for us and consolidate their smallest suppliers to us. And that's because we, and some other companies like us, can fulfill the most stringent demands that the customers have on things like quality, cost, delivery, performance and increasingly also sustainability, so environmental and social and governance issues. Next one, please. On this journey, it's a long journey, and we've only just gotten started. We believe that over time, a large and probably the most attractive part of the market will go to a few global players with a very good value proposition. And if we can grow 10% or 15% a year, we will double our share from our currently very low levels every 5 years or 6 years, something like that. And that leads us to our ambition, which is to become one of less than a handful global consolidators. Next one, please. And of course, how that looks, we don't know exactly. But we have today a very low market share, well below 5% globally, probably more in the neighborhood of 1%. Still, we're one of the largest players. So we think that we can keep growing our market share every year for a very long time to come and thereby present our shareholders with growth that exceeds the market. Let's have one more, please. One more. Now we don't only want to grow. We also want to grow, like Marcus underlined, with improved margin. And we have today improved our margin quite a bit last year compared to the year before and the year before that. But we still feel that there is more potential -- so can I have one more, please -- more potential to improve the market -- margin. We want to stabilize the gross margin and gradually edge it upwards. But most of all, we want to make sure that by productivity increases, we can run more sales volume, more money basically, through the company with less effort. And to do that, we work with things like digitization and centers of excellence that will all be explained later in this program today. And by having them, continued market growth and continued market share growth, we can then get what is called operational leverage. And that basically means more sales through the same machine, so to speak. And by doing that, we intend to increase the margin to 12% in short order, which is also something we'll get back to. Please, next one. So is this something that is something we just thought up now? No. In fact, it's so that we have more than doubled our share in the past 6 years. And one more and one more, please. And those investments that we were absolutely necessary to make in order to get that improvement, to get that market share increase, those investments were absorbed by our growth. So as you can see in this graph, our indebtedness, our level of debt in the company, is not larger now than it was in 2014. And the cost percentage is much, much lower despite the fact that we've invested dramatically in things like digitalization and things like our sourcing organization, quality organization, IT and things like that. One more, please. And in the future, our ambition is to accelerate this. We intend to keep outgrowing the market by more than 10%. We intend to use the excess growth, the growth above the market, to finance investment in things that I just mentioned and also more acquisitions. And in that way, we intend to grow even faster. Next picture, please. We just communicated yesterday, in fact, new financial targets, and we're going to look at all 4 of them together here. The first one is that we intend to have continued profitable growth. We intend to grow our earnings per share by 15% a year until 2025. By doing so, we intend to also increase our EBITA margin, our operating margin, to 12%, latest '23. We intend to continue to divide out significant portions of our profit to our shareholders, thereby enabling good dividend growth. And we intend to keep a good financial stability by ensuring that our net debt stays between 2 and 3x our profit before depreciation. Next one, please. Our ambition in this area, we call leadership, and it has 2 parts. Firstly, we want to be the leader in the market, exactly the way I described before. But secondly, one more, please, is that we also want to be a leadership in financial performance. And these things, in fact, strengthen each other. The better we can make our financial performance, the more we are able to invest in leadership. The more we are able to invest in leadership, the more we are able to return to our financial performance and thereby invest again. So it's a virtuous circle. One more, please. This leadership thing is something that we've been working on for a while, and we're starting to feel that we can get there. But now we're adding a new element to that, and that is sustainability. The next picture, please. And with sustainability, we're intending to make it an integrated part of our day-to-day business. We're intending to place it, in fact, at the center of everything we do. And there are 3 reasons for that. And let us have them, please. The first reason is that our customers need it. They are not good at handling C-Parts. So they do not know how to do that exactly when it comes to sustainability either. And also, our owners want it. I have a dialogue, of course, with many of our large shareholders, and they are very much into this. And our own team wants it. All of this makes us place sustainability at the center of our business model going forward, and that's why we call the new plan we have for the next 5 years sustainable leadership. And if we go on then. To reach the sustainable leadership, and one more, we have a plan which consists of 4 elements. We intend to firstly grow. And grow -- by grow, we mean to grow faster than the market, as we have done now for many years. Then we intend to improve the business. And improving here means, for instance, improving the margin but also improving the value that we bring to our customers. Then by the growth and the improvement together, we intend to keep investing in our business. And finally, we intend, of course, to acquire more companies that come into this Bufab wheel, this Bufab family, so that we can really get to the sustainable leadership level. All this is words, right? It's just 4 words, but that's why we're hoping now that you'll be able to get a little bit more insight on how we're going to do this by going through each of these 4 areas one by one in the rest of the program. So let's have one more, please. To do that, to give me a bit of a break also, I will be joined here by 2 of my colleagues. So here, we have Johan Sandberg and Carina Lööf, and they will be the ones explaining to you how we will deal with growth and how we will deal with improvement, right? So please, Johan, the word is yours.

Thank you, Jorgen. Let's see if the mic works here. Everything is okay. Good. My name is Johan Sandberg, and I am responsible for growth. You can take the next slide here. And together with me, I have Carina Lööf standing here. We can move to the next one. We will start to talk about the growth area in our sustainable leadership. I can take the next slide and push it all the way through. Brilliant. One important thing is to be able to explain what it is that we actually do for our customers more than just delivering a C part to them. To improve this, we have repackaged our complete offer -- you can go back -- we have repackaged our complete offer for clearer customer communication. As you can see on the right part of this picture, this will build better clarity and trust in the customer dialogue. It will as well open up the customer's thoughts about what actually can be achieved in efficiency if you choose the collaboration with Bufab, and that they will find more time to focus on their core business. But to do this with success, our people need to know what they talk about. And that's why we will further invest in local solution expertise to build credibility in customer meetings and professional deliveries. We -- investments will be done in training tools for our salespeople to maximize their skills to be trusted advisers in C-Parts supply chain management and know what you sell. This will increase our skills in selling all of Bufab all the time because our people will know more to grow share of wallet with current customers and also finding new. Of course, we need to continue to develop our solutions to meet more customer needs and as well be the leading partner. Here, we built a solutions investment road map in our strategy. And you can take the next slide. So I got this. Perfect. Yes, it works. Brilliant. Here, we have a customer example. I think this is quite interesting to see some stuff from reality. This is from India, and we have a railway industry manufacturer that we are supporting. We have gone from 0 to 2,500 parts in 2 years. The picture that you see on the right-hand side there was taken last week in Pune. And you can see quite a nice installation, I think, going from a rather chaotic C part management into a nice structure. This is then digitally integrated. You're seeing Bufab's easy flow programs with EasyTrack kiosks for the operators to find the parts. We will have weekly deliveries from our Pune warehouse into this, and the customer gets what's in the middle of our customer offering, peace of mind. And the next step for us is to expand this into a site near Delhi. Bufab has a history of very long customer relationships, and the majority of our customers are here for the long run. When we follow a structure, we're also more focused here. The Bufab sister companies choose their focus, then they market their solutions and find partners and plan for success. Some of our relationships has contributed to growth more than others, and one very nice example is Schneider Electric. That's been a customer for decades and we have a very good relationship with. Bufab is now one of 3 strategic C-Parts supply chain partners, and we service them with more than 4,000 unique parts in 135 factories in 34 countries. And we're extremely proud of -- that in 2019, Bufab was named most responsive out of 20,000 suppliers globally. Another area for investment is sales excellence. We have looked at our sales process, how to simplify it, how to make it more focused and also developed tools to support this. We call it sales excellence, and the aim is to grow faster and with a higher hit rate. Despite the COVID pandemic that we have had and are in, we have pushed forward in this. And in 2020, we have trained all our senior sales managers in our largest business units, and we have continued with this in 2021. So by focusing these 3 areas, invest in productivity solutions, build customer partnerships and implement sales excellence, we will create the best team. And we will generate growth that is above 10%, which is significantly above market. And it will be supported by a very much higher hit rate. And with this, we move over to the improve area, and I leave it to you, Carina. And here's the remote control. I hope it works now, yes.

Thank you very much, Johan. Thank you. So hello, everybody. My name is Carina Lööf. I'm responsible for global sourcing inside Bufab, and I will talk about sustainable improvements. And we are working to widen our margin and improve our productivity. And we are doing that by using our platform or operating system, Bufab best practice that is our guideline. And that is a guideline how we work in the most efficient way to our knowledge today. That process is constantly reviewed, and we are doing improvement there all the time. And I will show you some examples afterwards. We are also working with digitalization and digital integration with both our customers and our suppliers, and those actions really create more customer value with the same efforts there inside Bufab. So -- sorry. On the digitalization with the customers, we are on a digitalization rate now on 50% of our order lines that we have today. And we are using our Easy Connection (sic) [ EasyConnect ] solutions, and we are using EDI. And both of those give large gain in efficiency and in precision. On the supplier side, we have worked since 2019 with our supplier portal. We are on the level today with 35% of our order lines and around 110 digital supply solution. It's a really large upside here when we work with consolidation and partnership. It also helps a lot when we do the onboarding of more suppliers in our C part consolidation projects and when we're introducing new business units. Here, I will show you more in detail how we are working. And I would like to visualize how it can look like when we are working with the continuous improvement of our processes. This is a case to streamline initial sample process, where we gather cross-functional team with the stakeholders that is involved. The green notes is the part of the process that works well. And the pink, yellow and purple ones, those are the areas of improvement. So good potential, as you can see. For the large number of inquiries that we're receiving to Bufab each year, we are in this stage of implementing a new system called one-touch RFQ. So digital automation is a key process for us. Historical, if we look back to 2014 and 2019, we can see that we have had productivity gains around 2%. Most of those improvements are reinvested into the organization, both sales, sourcing, quality, business units, leadership teams and our digital tools and solutions. The latest years, if we look back to that, we have productivity gains on much higher levels. And we can see that we have a payoff of the investments that we have done in our processes, teams and digitalization. And also, during those year, we have also had cost down programs, combined with the strong organic growth that shows a really nice result. And what we can see that more is needed and actually possible. And we think that the target maybe should be somewhere between there. Then on the sourcing side, we -- of course, we are working in a very classical way when it's come to partnership and consolidation. We have our approval part, that is the C, the platform, the large tail of suppliers; B is our preferred supply unit; and A is our partners. Key to the future success is that we continue building sustainable partnership with our suppliers, a customer-focused value chain built on trust, sharing the same targets and learn more from each other. We will further focus on net working capital by different consignment solutions. We also have a long tail of approved suppliers. Those will be handled more or less digital in the future. And that is the initiative, how to handle 1,000 approved supplier, but could also be like 5,000. Who knows? We integrate a lot of suppliers all the time. The initiative that we have regarding supplier base for growth, here is our focus projects, where we do the evaluation of our largest customer growth potential in combination with the supplier gaps that we then close to grow faster. And we continue to build our teams and competencies. Since 2018, we have also been investing a lot in our centers of excellence in our key business units. Those are placed in Bufab Sweden in Värnamo, Bufab Poland in Gdansk and Bufab Benelux in Eindhoven. And these are competent centers where we have the responsibility for best practice sourcing, quality, logistic and sustainability in our business units. They are also the tool for driving productivity, and it's here where we concentrate our investments. So by all those actions, we will reach the EBITA margin level of 12% by improving the margin, productivity and precision, partnership and consolidation, mainly driven from our centers of excellence.

All right. So thank you so much, Johan and Carina. And you talked a lot about centers of excellence.

Yes, indeed.

So again, we have them in Sweden, Bufab Sweden, Bufab Poland.

In Gdansk.

Yes. And...

Bufab Benelux in Eindhoven.

So I think the viewers also are really excited to look at those centers of excellence. So shall we give them a little bit of a tour, so to say?

Sounds like a really good idea.

Yes. Because for a couple of days ago, we were at one of those centers of excellence at Bufab Sweden here in Värnamo. So from us here to you, here is a film from Bufab Sweden. There you go. [Presentation]

Wow, what a place to work at, Johan.

Thank you. thank you.

That was one of those centers of excellence, a little bit glimpse from Bufab Sweden. I'm standing here together with the manager of segment North, and that's what we're going to talk about right now. So Johan Lindqvist, the stage is yours.

Thank you very much. Thank you very much. So my name is Johan Lindqvist. I'm the manager for segment North. And I've been in Bufab for 23 years now, so a long time. And I will see if I can explain a little bit more what we do in segment North there. So we are approximately 11 companies in 4 countries: Denmark, Finland, Norway and Sweden. And we are 500 employees and stands for about 43% of the group total sales. And if you look at net sales in the last 6 years, we have had annual growth of 8%, a quite good figure, I think, but mainly of this growth had come from the acquisition company, Magnetfabriken, Rudhäll and HT BENDIX. The organic growth hasn't been so good, but now we see that we catch up quite a lot in the last years. Then if you go to the margin instead, we've had a tough year last year, 2020, due to corona, of course, especially in the manufacturing companies. They have pretty much full closed down in the Q2. So that affect us quite a lot, I will say. But the target is 12%, and we think we can reach it. Why? Because we have companies already now in the segment that are above 15%. And we also think that we have a lot to do regarding productivity, restructuring, growing and also pricing and savings. So I am quite sure that we can reach that level. Now I'm going to go to see a customer example. Siemens is a world-leading gas turbine manufacturer, and they have a lot of C-Parts to their products. The administration and handling internally is a big thing for them, and that takes a lot of time and effort for them. So we offer them our supplier consolidation package, and that was a really good thing to offer them, to be honest, because today, we see that we supply 2,500 unique part numbers, and we have reduced these 220 suppliers to 1, Bufab. And of course, during that years, 4 years I think now, we have had a lot of different products that we didn't have before. So weekly deliveries, and we're also using our logistics solutions, [ EasyFlow ]. About the future then. We think that we can add even more products into our category. And that's nice, of course, because that we can also use for other customers. And we also would like to follow Siemens to other countries. And next in line is U.K. and Germany, and that will be a really fun trip to do. And so what have we done with Siemens then? Yes, we have helped them with sourcing and also simplify, meaning the customer says to us, "We have a problem. The administration handling of these products drives more costs than the parts themselves." Okay. Then we go for the C-Parts consolidation and also the logistics solution, [ EasyFlow ]. And you can say, of course, this is a really good business in itself with Siemens, but this also develop us to do this consolidation solution and also go to other customers with the same solution. We also entry a lot of new product categories that we didn't have before, and that's also an opportunity for us in the future. And then last, of course, we can go together with the customer to other countries. And Siemens, as you know, they are located pretty much everywhere. Then I will talk a little bit about our acquisition. And we have HT BENDIX, a big company in Denmark working with C-Parts for kitchen and furniture. We acquired them 2019, and I think it has been a really good fit for both us and HT BENDIX. And why? Yes, we try to help them. And we can help them to improve their business outside Denmark because we are located in many countries in Europe, that's Eastern Europe but also Central Europe, where they are weak today. But we see big opportunities to help them there. We also think that IKEA could be the good business for them because we have had them for many years, and it's a new customer for HT BENDIX. So that will be also a good opportunity for us, I think. And the growth for HT BENDIX last year, even for this corona year and the quite big shutdown, you can say, in Q2, it was a really good growth even then. So I'm really happy with this acquisition, to be honest. And now I think it's time for an interview with Kaj, the manager of HT BENDIX. So welcome, Kaj.

Hello, and welcome to Capital Market Day, Kaj.

Thank you very much. Nice to see you.

Nice to see you. And for those that don't know you and your company, tell us a little bit about your company.

We founded HT BENDIX in 1975, and we are a trade and service company. We make business for fittings and accessories, and we make business to furniture and kitchen factories. And we have an opinion, it is very important, with long-term cooperation with customers, so we look for that. Our product and our idea is to develop together with the customers also. So we are ready to make new products together with customers. We are ready to make drawers and ready to make -- 3D print and something like that to the customers.

So when did you become a sister company in Bufab?

Yes. We become a sister company in 2019. And for me, it was important to be sure, there will be a long-term owner in the company because I have a lot of employees who has done an excellent job in many years in the company. So for me, it's important they also have a good company in the next generation.

So what has the first time in Bufab been like? Has it been as you expected it to be?

Yes. It has been -- we have good experience for the 2 years we have been there. I will say, all employees are satisfied, and we have a lot of dialogue. The management team in our company and all people in the company have a good dialogue with people from Bufab, even the management team in Bufab and also some operation people in Bufab. It has been very good. And I must also say the Bufab management team are very good to -- they have a good empathy, and they understand what we would like, and they understand our business also very well.

All right. Thank you so much, Denmark, and thank you, Kaj. I'm really looking forward to follow your journey, and good luck to you.

Thank you very much, brother. You are very welcome. And if you will know more about our company, you're always welcome to contact us.

Thank you. Goodbye.

Thank you. Bye-bye.

So that was Kaj from Herning in Denmark from HT BENDIX. So what's coming up next couple of years then? Regarding grow, we will continue to develop our logistics solutions and roll out also among our customers. We will also focus a lot with sales, of course. We will, as said before, with Siemens, widen our product range quite much, I will say. We will also try to cooperate more between the companies in the group but also in the segment, of course, to, if we have a big and great customer in Finland, try to follow them to other countries and also try to do this, what we -- the segments that they have and also bring them to Sweden or Norway, whatever it is. We have some work to do in the restructuring regarding manufacturing companies, and we'll also invest quite heavily in sales, I would say. And improve. We need to improve, of course, also. I will mention maybe most this digitalization because I think this is a future for us also. There is a lot of internal processes and manual handling that we can move to digitalization instead. We have this one-touch RFQ, and we have a lot of other stuff going on in the company right now to develop that because we can save a lot of time and instead focus on the customer and their needs, I think. We will also, as maybe Carina said before, working hard with a partnership with the key suppliers because we also think there is a big benefit for us, but also for our customers, of course, if we can have great suppliers that have a good quality and delivery position and also sustainability, of course. And then last, we have this time to market. If we can shorten the time to market and the lead time, we can be more efficient but also get much better service to our customer, of course. So thank you very much for that. Now I think it's time to go to Jorgen in the segment West, I think.

You're exactly correct on that one. Johan, thank you so much. That was segment North. And as you said, we're going to move on to Jörn because I think we have Germany now on the line. So this is live, for sure. So hello, Jörn. How are you?

Hello, Jonas. Hello. I'm pretty fine. Thanks. Can you hear me and see me well?

We can hear you, and we see you really, really well. So welcome to this Capital Markets Day. We're standing live from Värnamo, and we just recently talked about segment North. And now it's your turn to talk a little bit about segment West. So by [ wait ], Jörn, the stage is yours.

Thank you very much, Jonas, and hello again, and good afternoon from Frankfurt, Germany. Or maybe I should say [Foreign Language]. I know why Swedish is not pretty well, but I never give up, I would say. First of all, may -- I can introduce myself very briefly. My name is Jörn Maurer, located, as already mentioned, in Frankfurt, Germany. I'm 46 years old. I'm married, having 2 children, teenagers, so quite challenging time. And I'm having the pleasure to work for Bufab since now -- yes, since 2003. So I'm pretty familiar with Bufab and that exciting journey in the last years, you can say. Over the years, I went through several positions and responsibilities. Yes, that's pretty much about me. And this is the segment West, 22% of the group sales. We are having 7 sister companies, met about 244 colleagues, we can say, which is approximately 10% less than 2019. That's about the segment West. And when we jump to the next slide, a look on some numbers and facts about the segment West. West is doing pretty fine. Net sales developed positively. We are able to grow annually by approximately 12%, mainly organically, but we also made one very successful acquisition in 2015. In a moment, we will have the chance to listen to the previous co-owner and today's MD of that acquired company called FLOS and the guy called Toine van der Sanden from the Netherlands. Overall, I would say it's a pretty nice development apart from the COVID circumstances and that economy -- economical impact. But we are looking very positive forward. And the effort which we put into it shows us already a very nice sales pipeline. Next part of that slide shows us the operating margin. We were in line. We see net sales development before West took, approximately 1.5 years ago, care on one restructuring process of one large company inside Western Europe. We are not yet on the target of 12% but not at least due to very good progress in this restructuring process and the fact that the biggest margin drivers of the segment West developing pretty, pretty fine. We are more than confident to close that gap, which we can see here on the right side, pretty, pretty soon. On the next slide, we want to show you one customer solution example out of our offering concept, CCS, Creative Component Solutions. It's about the Dutch-based international agriculture -- family-owned agriculture company. They supply from milking to cleaning, everything what you need as a farmer, you can say. And the background overall was that the customer, of course, want -- not of course, but the customer want from in-house to outsource the assembly of that milking units, which you can see here on this slide, directly under that nice black cow. That milking unit is a pretty complex product. It is consisting out of 86 different components. It's screws. It's nuts, springs, plastic components, ceilings, et cetera. It's completely assembled and tested by Bufab, plus technical improvement or further research and developing work, which we've done for the customer. And it's an excellent example of our concept, Creative Component Solutions, which offers us in segment West a very strong growth area. And this is also, as we say, a mega trend in our industry, the needs from the customer for those assembly services. On the next slide, we can say if we should pinpoint exactly the customer example and reflecting the customer needs, I would say it's all about peace of mind. As the customer said, the subassembly process is not efficient for us to be handling ourselves. And what is it? What Bufab offers? It's the overall solution. It's the peace of mind feeling, so to say. It's the complete assembly. It's the technical improvement, and that is exactly what they were looking for. Overall, it's a great partnership with the customer called Lely. It offers us a very good growth opportunity. We have a happy partner in place. You can see that here on the bars on the left side. So it develops fantastic slowly at the beginning, but then one moment in a super, super good way. And on this year, 2021, it looks even better, I would say, much, much better. So the outlook for -- with that customer and those kind of services are really promising. It's an ideal showcase also for our concept, CCS concept. And it is a great opportunity also for other companies and subsidiaries in the segment West. On the next slide, I mentioned it already at the beginning. We made just one acquisition, but a very successful one, 2015, a company called FLOS. And it's a Dutch C-Parts supply chain partner, which we are focused already at that time, 2015, pretty much on a similar concept as we call it now, Creative Component Solutions. It were the first acquisition in the new wave after the IPO. And the development so far is strong, is super positive. Yes, we had a small dip in last year. Everybody knows about the circumstances with COVID and the effect, but it looks more than promising also for this year and for the years beyond. But I would like to open up and speak with our MD in the company in the Netherlands called FLOS, the previous co-owner, Toine van der Sanden.

It's time for Netherlands and Toine. Hi, Toine.

Hi, Jonas. Nice to see you.

Hope everything is good with you. And tell us a little bit about your company in Holland.

Yes. It's an honor to tell something about one of the most beautiful companies in Holland, FLOS, a very old company. We are located in the Brainport region, the region in the neighborhood of Eindhoven, where all the things are happening in Holland at this moment. We have a lot of beautiful companies in our region, which we also supply like DAF, Philips, ASML, [ van der Leegte ], so big companies. And yes, we are a spin in the web. So we are very happy that we are located over here.

When did you become a sister company in Bufab?

In 2015, we became a sister company. And I can tell you also why.

Please do that.

Yes. Because in 2014, we have a lot of companies from over the world who have -- who wants to deal with us. And one of them was Bufab. And why did we choose Bufab? I think 2 reasons are very important. And Bufab is, one thing, very popular, and that MD is king. And when you want to be an entrepreneur in your own country and you know the best, what's happening in your country, then it's very important that you can be an entrepreneur in a big company. That's one thing. The second thing is that we have a lot of young people in this Brainport region, which a lot of companies are very -- yes, pulling on those people. And young people, they want to live in an environment in the world, yes? And within Bufab, we have a lot of companies in the world. So they can talk with a lot of people in the world, and that's young people like, so they can develop a lot. So that's for us also very important. So that are 2 things, yes, that bring us forward.

So Toine, thank you so much for that report from the Netherlands.

Thank you also. So until next time.

Until next time. Goodbye.

Bye-bye.

Well, thanks for that short interview of my nice colleague from the Netherlands, Toine van der Sanden. Nice guy. On the next slide here, which you can already see, I want to summarize a bit and look also a bit ahead of our strategy. We will gain more growth with a complete peace of mind offering. We see even a better team. We want to keep fast, flexible and, of course, innovative working mentality that are all in combination with improvements through smarter way of working and end of the restructuring and full turnaround of one of the companies in West, better partnerships and as well add one solution to protect and widen our margins, which you can see on the next part of that slide. We will demonstrate the potential of Bufab. And when I should give a statement or should describe why we are able to do that, I would say we do things with passion, and we are always ready to do a little bit more. So overall, we are -- in segment West, we are confident -- convinced that we can look forward to a great future, definitely. I'm absolutely sure. And that's about segment West. I would like to thank you for the attention and wish you a good day.

Thank you so much, Jörn. It was a pleasure to hear from your segment West. We have done 2 segments, and we have 2 more to go, but it's time for a little bit of a break now. We're going to have a break for 10 minutes, so check your watch right now because we have a break for 10 minutes. But this is also a time for you to actually take some time and figure out some questions that you want to ask maybe for something that you heard up here on the stage during this afternoon. [Operator Instructions] And as many as we have time for, we will answer them. We promise you that. So time for a break, and we see you here in 10 minutes. [Break]

Welcome back. We're sitting here in the lounge area of this Capital Markets Day here at Bufab, and thank you so much for your questions. It has been a lot of questions, Jorgen.

Okay.

And Jorgen, I think we're going to start off directly. So this is a good one, typing like this. "Hello. Nice and easy to be a part of this Capital Markets Day. Thank you so much. I'm a retired high school teacher who has placed a lot of my economics in Bufab. We are a group here who meets and discuss shares together. Interesting, but we should have started earlier. But now to the question. I'm wondering, is there any of Bufab components in my car? I have a Passat."

So a Passat.

Yes, a Passat, in particular right now.

Okay. Good. Well, it's a really good question. I'll try to look at you when I answer. I hope that you're seeing this now. We don't sell directly to carmakers because carmakers are not usually so -- they're so advanced that they basically do not have any C-Parts. But we sell some bit actually, maybe 5%, 10% or so of our sales go to the transportation industry. And there, we have many customers who, in turn, deliver to carmakers. So if it's in the actual Passat, I cannot tell you. But it's quite possible that there is a bit of a part in the rearview mirror or in the seat or in the steering wheel maybe or so. And that's really hard to tell. But if you take it all apart, I'm sure that there's a good chance that you find a part from Bufab. And generally, Bufab sells to almost everybody in the industry. So there are lots and lots of Bufab parts around us, furniture, trucks, everything.

So we think it's in there, yes.

There's a good chance.

Yes. We take one more. And we're also going to have a Q&A later on. That will be a little bit longer, of course, so please type the questions. Talking about vehicles, how do you see the future with electrified vehicles as they contain much fewer components, so to say, less screws and so on?

Yes. That's also a very good question. Like I said, the car industry is a relatively small portion of our sales overall. And that goes for most industries. So we have an enormous spread of our sales over many, many industries in many countries. And generally, therefore, to be entirely honest, we don't think so much about such things. Because in total, there is always demand for not only screws but also any kinds of C-Parts. But secondly, specifically now about electric cars, we don't sell screws and washers and nuts. We sell C-Parts, and C-Parts are any kind of small part that goes into manufactured goods. And that will be the case also for electric vehicles. So we're absolutely unworried by this particular phenomenon, but we look forward to good electric cars.

Yes. And we will come back to -- because it has been a lot of questions about the C-Parts, but we take that later on.

Okay.

So thank you so much. As I said, please type your questions down below. But now we're going to move on in the program here because I know that markets are ready to talk about invest and acquire. And I know that Marcus and Urban will take that. So the stage is yours, Marcus.

Thank you very much, Jonas. So going into the third part of our strategy, Johan has talked about growth. Carina has talked about improve. And of course, we are aiming to both grow and improve, but we also aim to invest in our business, mainly for future growth, so to say. So I will walk you through that. Next picture, please. When it comes to invest, what we are aiming to invest in going forward is mainly in our supplier base and our customer base. And when it comes to our supplier base and customer base, what we are talking about is to make sure the operational excellence is handled in a good way. And when talking about operational excellence, we are talking about processes and tools in order to ensure customer fulfillment, warehouse logistics and manufacturing. We also aim to invest in our platform, our global platform. We are investing in making sure that we integrate more digitally with our suppliers, customers, transportation companies. And we are continuing to invest in our centers of excellence as well, as Carina talked about earlier. We also invest in an open IT architecture, open but yet secure IT architecture, it should be mentioned. We have invested in a basic, very good group-wide layer, in which each business unit more or less can choose what they want to handle on their own site but also what they want group to handle when it comes to IT services, which is a good flexibility when it comes to IT. We also invest in common digitalization solutions, which supports the global platform integration. And we also are investing in common data sharing and global governance. So going forward, we will continue to invest in best practice and in people. Let me just have a minute talking about the Bufab best practice because it's actually something that we are quite proud about. Bufab best practice, we started that work back in 2015, and it has been accelerating ever since. The Bufab best practice is basically a handbook of processes for those 5 operational areas that we are talking about today. And it's basically a commonality layer across our BUs that is owned by global BU process owners who cooperate and drive it forward. The Bufab best practice is actually a key competitive advantage in sale, it has been proved. The Bufab best practice is also, since a couple of years, also a framework for our sustainability work, and Jorgen will talk more about sustainability in a couple of minutes. Also, Bufab best practice has become the basis for digital process optimization within Bufab. So those 5 process areas, which you see on the right corner, are included in Bufab best practice. And those are the main 5 operational areas, so to say. But we also have some supporting processes, namely people, quality, finance and performance, and I will just talk a little about performance because it's one of my responsibility areas. When it comes to investments in performance, if we go back in time and start by just before the IPO in 2014, we put quite much time and effort and investment in making sure that we have a correct reporting, that we are compliant, that all our sister companies are doing correct and that we can trust the figures, et cetera, basics, so to say. Since then, we have put quite much invest into making sure that we can analyze and understand the business. We have a huge amount of data due to that we have thousands of suppliers, thousands of customers, hundreds of thousands of items. So we have good data, which can be used in order to analyze our business, so to say. So we have put a lot of time and effort into that. And we are now in the beginning of taking the next step, which is using this data and using this knowledge to trying to predict and drive business performance going forward. And in Bufab, we call this make it happen. And it's actually when we make it happen, when we have the best business decision and the best data for the best business decision, when we actually can make decisions who takes us towards our long-term financial goals. On top of this, we, of course, need to invest in one of the most important areas in Bufab, and that is our people. We will invest and strengthen our solutions and values. We will help drive personal development inside Bufab. We have been good at this also before, and a good receipt of that is due to that when people join Bufab, normally, they stay quite a long time actually. And we have several examples of people coming in, starting as trainees, becoming salespeople, becoming sales managers, MD and become an MD for yet another company, yet another company, yet another company within Bufab. But we need to continue investing in that going forward as well. Also, Bufab Academy, something that we need to invest in as well. We are investing in best practice when it comes to human resource as well, building a global teamwork of people who can cooperate and bring this forward. But we are, of course, very -- it's very important for us to keep our decentralized organization and to make sure that the business is owned by each subsidiary, so to say, but still focused on teamwork going forward globally. So this kind of concludes invest. Focus will be to invest in best practice and quality, people and performance, platform, open IT and also partnerships that Carina talked about earlier. When we do this, then we hopefully will reach global industry leadership. And by that said, that concludes invest. And the next part is actually acquire. And I believe that we have Urban Bülow on the line maybe. Hello, Urban.

Hello.

Hello.

I hope you hear me now.

We hear you well. Thank you.

Okay. Thank you. Okay. So maybe we'll step into the next and final step of the strategy, that's acquisitions. Firstly, maybe myself, I'm Urban Bülow, responsible for the North American market. And I was, before moving to the U.S., also responsible for running the Bufab acquisition show. Okay. Next slide, please. In 2014, we started the acquisition activities and has since acquired about 9 companies with SEK 1.9 billion in net sales and about 550 employees. You can say that we are a consolidator in a fragmented market. During the same time, we have organically grown about SEK 900 million, and you can see the logos of the acquired companies below. Next slide. Acquisitions provide a very good return, but organic growth is always the king. It has nearly double return on investment before pretax, up 30%; acquired growth, about 15%, depending on the price tag of the company. But it also provides a strategic strength. The acquisitions in 2015 to 2020 have dramatically strengthened Bufab. We are quite picky. We only look for well-run companies with growth synergies, and we aim for win-win deals. The recent acquisitions have, say, moved us into North America, Southeast Asia and in new products and new customer segments. Next slide, please. Our acquired companies are quite different. They're different countries, different business models, et cetera, but they are still alike. They have good, stable platform, supply chain partner approach, solutionist values, growth synergies, very important for us, and a belief in local business ownership and a global pull opportunities for cooperation as well as a commitment to long-term profitability. So common factors are low risk, good growth synergies and high return on investment. Next slide. The pull integration has been really key to our success. We never say subsidiaries. We say sister companies. We never look at the cost synergies. We always look at the growth synergies. We never improve the top-down type of integration. We aim for the pull integration. New sisters use Bufab best practice where it helps the most, not just because they have to. As a result, this has given us both opportunities to acquire and has given us a favorable pricing and a good development of the acquired companies. It also lowers the risk, I would say. Next slide. As a summary, the acquisition strategy going forward, we will continue. We shall have a pipeline in all business units. We will look for win-win deals. We will use pull integration, and we will aim for growth synergies. And we believe this will give us a growth of more than 10% and a stronger Bufab. Yes, thank you.

All right. Thank you so much, Marcus. And thank you, Urban, for talking about invest and then acquire. And we then move on again to the lounge session because, Jorgen, it's time for another topic now, and it's a topic that I know, for you, is really important. We're talking about the global footprint, and we're talking about sustainability. So please take your -- take the chance now to do a little bit of a presentation about sustainability in Bufab.

Certainly. So sustainability is a little bit hard to place on the agenda because it's really something that does, and in the future should even more, permeate the entirety of our business. But we place it here after invest because it's one of the areas that we really want to invest in also going forward. So what do we mean with sustainability? Well, there are many, many parts, and go back one, please. There are many parts in this. It means, for instance, that we have to decrease our footprint in terms of greenhouse gases that we see as part of our operations. It means other things as well. It means, for instance, that we have to have a good whistleblowing function in our company. So if something is not happening the way it should, if somebody is treated badly or if a supplier is not performing in the way they should, there should be an anonymous way to get that fact to a bureau or an agency that can investigate and alert either myself, if it's in lower levels, or if it's I'm doing something wrong, they should alert the Board or the shareholders. And it means many other things as well. All of these things, we write rather much about in our sustainable report, which is due to be published next week. So these are some of the examples from that report that are on this picture. But a lot of people, when they hear sustainability, also think about carbon dioxide and about greenhouse gases and global warming. And that's as it should be. Let's have the next picture, please. And we can have the whole picture. If we look at a C part, in this case, it's a bolt, the carbon footprint of the C part, once it is in the Passat of this school teacher who wrote in, has generated throughout its life cycle, so to speak, carbon dioxide in several different steps. And actually, the activities of Bufab are only a small portion of that, approximately 10%. The other 2 big places where the carbon dioxide gets generated is in the manufacture and transport of the C part and in the actual manufacturing of the steel, usually steel then that goes into it or some other metal. And here, in all these areas, we're going to have to work. So the easiest part is really what we do ourselves. And there, we have already started work. But we're going to have to work also together with our suppliers and our transporters to reduce the carbon that comes from that part of the chain. And we're going to have to work actually with our customers quite a lot to put pressure on changing from steel to green steel. And as some of you may know, there have been a lot of news lately about the investment and new production of green steel, for instance, using hydrogen instead of coal to reduce the iron ore to steel. This is a long journey, and we've only just started. But we're taking some important step. If I can have the next picture, please. So these are some previews, I guess, of the sustainability report from next week. So here, the shareholders who participate at our Capital Markets Day get a preview. And as you can see, there are many KPIs that we started measuring 2 years back, 3 years back, but where we now feel the confidence that we can publish them to the shareholders. So let's just take 2 examples or the numbers to the left here, the 3 first numbers are examples of how we reduce the carbon intensity of our own business. And there, we have a quite high target that we want to be entirely carbon-neutral in our own business in what is called scope 1 and scope 2 by 2030. But there is also another number here, this SEK 92 million, that we pay in tax. And we put it on there just to say that sustainability is not only about global warming. It's also about the contribution that Bufab makes to society. So sustainability, often you say people and planet, but also profit because growth and tax -- paying tax on the growth and the profits that you make is good and is a contributor to society. And last year, Bufab, we have a very explicit tax strategy, which says that we should pay taxes where we have operations so that we contribute to the societies in those countries where we also have employees basically. And last year, we increased the tax paid quite dramatically by 26%, I think, it says. And that's more money than to the societies where Bufab operates. And that's also part of our sustainability strategy and our sustainability report. Let's have the next one, please. In this year, but as a result of the preparation and the work we did on our leadership strategy last year, we have now committed to something called the science-based targets initiative, which is UN-sponsored and also connected to the World Wildlife Fund initiative, to make sure that the Paris accord for reducing the carbon emissions in the entire world is lived up to. And there, companies can sign up to, in a scientific way, make sure that their contributions to the carbon dioxide emissions worldwide and other greenhouse gases is in line with the Paris accord, which in turn means that we should keep global warming below 1.5 degrees Centigrade, Celsius then, as we say in Sweden. And now since March, we signed up for that. And within 2 years, we will come with very precise targets for how we're going to make that happen. That's one example. Let's move on. Now C part sustainability is a bit of a challenge because our customers find it, like I said before, very hard to manage the thousands, sometimes tens or sometimes hundreds of thousands of C-Parts that they have. But it's also an opportunity because for us, if we can have the second half, please, what we do is we help our customers manage the C-Parts for them. And if you look 20 years back in time, that was about having good quality maybe or good delivery performance or maybe good cost, and those 3 things are still important. But increasingly, our customers turn to us because they, in turn, have promised their customers that they have a supply -- sustainable supply chain. And with C-Parts, all they can do is turn to us or some other supply chain partner to fix that, and that's then the opportunity for us but also a big challenge, of course. It's, though, a challenge that's pretty important to many people in Bufab. And I have to say, now I'm 53 years old, but the younger people are the more important it is for them, which is perhaps natural. So it's also something we have to do to feel good about ourselves, I guess. Let's go on. That concludes the sustainability session, but there is so much more to tell about this. And unfortunately, we don't have time to go through it all. So I would like to encourage all the shareholders to read the annual report if they want to, but to absolutely download the sustainable report because they were able to tell the whole story about Bufab's sustainability work.

Yes. And also, we can say that if you think it goes quickly, 1 or 2 slides here from the stage, you will all have the chance to actually download this later on so you can go through it again. So thank you so much. Let's talk about sustainability. As Jorgen said, a really, really important topic. And we're going to move on here this session because, as you remember, before the break, we had 2 segments. We had segment North and segment West, and now it's time for segment East. Jorgen, you are sitting here, and you actually have to talk a little bit about segment East. Why?

I do, because we run into a bit of a complication here, and that is that Jaroslaw Bazeli, who lives in Gdansk, is responsible for part of segment East for the business in Eastern Europe. He has had a family issue with corona, with COVID, and is in quarantine. And it's just practically not really -- he's well and his family is well, but it's practically not possible for him to participate today, which makes him mad, but now I get the pleasure instead of speaking about segment East.

Yes. And segment East, so let's go then.

Absolutely. Let's have the next picture and the next one. So segment East looks huge on the map, and it is huge also, covers many, many time zones. It basically consists of 2 parts: West, Eastern Europe, where we have business in most of the -- in many important countries; and also a very important growth area for us, which is Asia and Southeast Asia, but we also have large operations in India. The really big part of the map, of course, is Russia, which is an important area for us and a growth area. But of course, it's on the map, it looks huge, so we're spread out there. About 14% of group sales were in 10-plus countries. It's getting on actually for closer to 15% as we expand in Southeast Asia, in particular, and a little over 200 employees. Let's have the next one, please. Now in segment East, we've had a really good development. So we grew from a little over SEK 300 million in 2014 to well over SEK 700 million last year. So a very good growth rate, most of which has been organic, but we have made one acquisition and a very good one, a company called Kian Soon in Singapore, which is now the base of our operations in Southeast Asia. Let's go on. One more, please. And when it comes to the margin, this is a problematic area for me as a boss because in segment East, the margin is actually better now, so what can you say then? It's actually several percentage points better than our target. But we have said this that business units that get to this level, with this kind of good growth and this kind of good profitability, they should grow faster. So we'll take the profit, the excess profit, if you like, invest it in more salespeople, invest it in starting more companies in Southeast Asia and we'll grow faster. That's the plan. Let's go on. Here's a customer example from Singapore. In Singapore, we invested a few years back in a cleanroom facility because just like we showed before, an example of this milking unit for this agricultural customer, we also have medtech customers, and they also want to reduce the number of parts and the complexity of their supply chain. And in this particular case, we're then, in our cleanroom, assembling parts for our customers for delivery as a complete part rather than this 10 or 20 separate parts. So let's have the next one, please. This is a segment then that is growing for us -- one more, please, and where we're doing part of the simplify but also part of the improvement part of our offering, right? So the customer wants one part and a clean and sterile part that they can with good comfort put into their very, very, of course, critical operations since this is medtech. It has to do with life and death, right? And our solution is then a variety of these creative component solutions that we talked about before but here with an emphasis on cleanroom. One more, please. And this has given us a good growth opportunity and a good growth business, but it's also something that we always try to push the envelope to try to find new ways to add values to our customers. And when Kian Soon and this newly acquired company came up with this idea to invest in the cleanroom, it was an easy decision. Let's go to the next one, please. We're going to talk about Kian Soon. We acquired Kian Soon a while back in 2017, and it is one of our most successful acquisitions. We've been looking a long time for a partner in Southeast Asia because it's a difficult area of entry, right, to enter. We have many countries, many cultures, many languages and so on, and we found the ideal partner in Kian Soon. They have come into Bufab, and they've had a very good development. But the best thing, I think, is to go directly and listen to the MD of Kian Soon, who's also a member of the family, the ex-owners. So he can tell a little bit both about what Kian Soon was like before and also now that is part of the Bufab family. And then we're turning to Chris Png, who will join us here also, I think. So go ahead, Jonas, and introduce Chris.

Yes, Chris. I talked to Chris last week. So Chris, the stage is yours. Okay. A warm welcome to Christopher. Hi.

Hello. Hi, Jonas. Nice to meet you.

Nice to meet you. I hope you are good and your family are well.

We are all well. We're all well. And I hope it's the same for you and your family in Sweden.

Yes. absolutely. So you are right now sending this message from Singapore.

That's right.

And tell me a little bit about your company, please.

Yes. My company is known as Kian Soon, okay? We're a group of companies based primarily in Singapore but with operations all around Southeast Asia, including Philippines, Indonesia and Thailand, right? We are essentially Bufab Southeast Asia's operation.

So when did you become a sister company in Bufab?

It happened on the 1st of December 2017.

All right. So why did you sell to Bufab to start with? It's a family business, you said. So why did you sell to Bufab?

That's correct. It's a family business that was founded in 1977, so many, many years, same year that Bufab was founded, okay? But as a family, we think that this business, at that point in time, was difficult to continue if we do not partner up with someone strong like Bufab, okay? And Bufab made a good offer to us in terms, not so much the money, all right, but in terms of the fact that they wanted us as family members to stay on to continue to manage the company. And also, Bufab did not have any operations in Singapore, okay? So we were not worried about any kind of redundancy because our staff, Kian Soon staff, like an extension of our family, so we care for them. So those are the 2 key reasons why we did it, yes, and why we agreed.

Thank you for that. So Christopher, it's 2021 right now. What are your plans for the future for the company?

We have an ambition to double the sales by 2025, okay? 2020 is sort of a lost year, right? So let's not talk about it. But in 2021 is the year of, to borrow the words of our CEO, Mr. Jorgen, restart, right, restart the growth initiatives, really start to look at where we need to put in our investments in order to reach this ambitious goal of doubling our revenue by 2025. So this year is, again, really get those plans going and stepping on the accelerator.

All right. Thank you so much, Christopher. Really, really glad to have your report all the way from Singapore here this afternoon at the Bufab. So I wish you really good luck 2021, and looking forward to follow your journey.

Thank you very much, Jonas. Thank you for spending time with me.

Bye.

Goodbye.

Wow.

Yes. it's very nice to see Chris here like this. And we're happy to have an ex-owner with us still after several years, working so hard to keep expanding the company. That's part of our culture and our heritage also that we try to keep improving the companies that join the Bufab family. For the whole of the region East -- or segment East, our aim, like I said before, is to grow faster, and there are many opportunities on this slide. Further expansion in Southeast Asia, further expansion in Eastern Europe and, of course, also improve the business here because we have the same digitization opportunities and other opportunities in this segment as well. But here, we will use the extra money we make off of the optimization of the improvement to invest in even further growth. But we have one more segment to talk about today.

Yes, we sure have. Thank you so much, segment East and Jaroslaw.

Yes. Jaroslaw.

Thank you. And let's move on. As Jorgen said, we have one more segment to talk about here, and it's time for North America and U.K., and that will be Johan and Urban again. So welcome, Johan, again on stage.

Thank you. Thank you.

And now it's time to talk a little bit about North America and U.K. And I know that Urban is with us on the line directly from the other side of the Atlantic. So let's hit it off.

Thank you very much. Let's try if we have Urban there also. Are you there, Urban?

Yes, I'm here.

Brilliant. Good. Let's try the technology first. Good. So Johan Sandberg again and Urban Bülow. I'm responsible for U.K. and Ireland, and Urban is responsible for North America. North America, U.K., it has 20% of Bufab Group's sales. We are 7 sister companies in 4 different countries and 255 employees. The net sales has grown quite a lot since 2014, as you can see, and they are mainly acquired in U.K., and also, we acquired ABS in U.S. However, we have had very good organic growth in all the acquired companies in 2020. When it comes to the margin, we are, in 2020, delivering 12.7%, and that's actually above the target, 0.7% above the 12% target. It's a good level. But we've also done restructuring in one of the business units in this segment, and we have further improvements in U.S. to provide additional upside on the margin side. And now over to you, Urban.

Okay. I think we will start now, obviously, an interview with Cynthia Alvarez. She is the CEO of our newly acquired sister company, American Bolt & Screw, that we acquired end of 2019. And over to you, Jonas.

Good morning or good afternoon to Cynthia and Bufab U.S. Very glad to have you with us. Everything good with you, Cynthia?

Good morning. Yes, everything is good. Everything is good out here. A little bit of rain, but other than that, we are good and just busy, very busy.

Yes. Busy time. So tell me something about your company in the U.S.

Well, American Bolt & Screw is the name of our company in the U.S., and we are a distributor of fasteners and hardware. We sell to OEM, and we mostly import from Asia. That's the majority of our product is coming from Asia, China and Taiwan, mostly.

What has the first time in Bufab been like for yourself and the team?

So it's been a difficult year, for sure. Very strange, definitely. But working through all of it with Bufab has actually been very good. Bufab has been great about everything. I think if I have to say anything that I would maybe want to change is, Bufab has given us a lot of work, a lot of meetings. No, but seriously, I think the workload has gotten heavier. We have had to make a lot of changes to improve our efficiencies, which we have, and I'm very proud of the changes that we've made, and we've become much more efficient than we were in the past. But the workload is very heavy. So bringing people back, maybe bringing some more people back to alleviate the workload, that's been, I think, my biggest struggle with Bufab. Other than that, I have no complaints. They have let us do our thing for the most part. And they don't really get too involved unless they have to, but thankfully, they haven't really had to. So it's been good. It's been a good year, just very strange with COVID and everything else that's been going on.

Yes. And how has the company developed now when it's a part of the Bufab family, so to say?

Yes. Again, very interesting year because our sales actually have gone skyrocket. We are record-breaking almost every month since June. Yes. And we have done several months to -- back-to-back monthly sales of over $5 million, which for us is a record. Our biggest struggle right now with that has been inventory, getting inventory in, and I know that's a problem everybody is having. So we just -- every day is a new challenge, but we get through it.

So it seems like you had a really good year regarding business behind you. Thank you so much, U.S., and thank you, Cynthia. Great to hear about your journey in the Bufab family. Are you excited for the future?

Excited for the future, absolutely. And thank you so much for the time and the opportunity to be here and talk with you. I enjoyed it. Thank you.

Until next time. Bye-bye.

Bye-bye. Thank you.

Okay. Thank you, Jonas. Okay. To illustrate the type of customers ABS have, I will present Forest River, where we have line feed component supply and co-development. And shortly about the background, Forest River and also other recreational vehicle manufacturers have been ABS customers since decades, and they are really essential for ABS. You can see an example in the bottom low right corner, that's an RV that they are called, produced in Elkhart, Indiana. This market has a demand for continuous streamlining and manufacturing and improved productivity. And this is even though there is it -- this extreme seasonal product generation shift. So it's really a tough market to service. They're best positioned today. They are now a main supply chain partner to key RV and trailer sites. A very important factor in this is that we have a dedicated office and warehouse in Elkhart, Indiana. Elkhart is the, you could say, the RV capital of the world. ABS has also a wide solution offering, including weekly cycle counts, VMI and supplying weekly maintenance of line feed racks in the customer production. We've seen an expansion into own developed parts, for example, flush locks, which show a great potential for the future. [ Later part ], the future, we will further expand the product range covered. We will also intend to continue our own design of key components. We plan to break into even more customers in the same segment, and we will also investigate the possibilities to expand into the marine segment. You see an example up in the top right corner. That's a [ custom built ] produced by a sister company, the Forest River. Next slide.

Thank you, Urban. I like that boat, really impressive. I move over to another customer example then for U.K. It's a customer, Ocado, which is a fast-expanding, U.K.-based global automated warehouse innovator. They have really, really boomed here during the pandemic in 2020. On the right-hand side, you see a massive installation that they do. Bufab is today supplying C-Parts to Ocado, and we have helped them then to support this rapid expansion. We have used the extensive global network that Bufab has and especially the sourcing offices in Asia and warehousing in Taiwan. We see the possibility to continue the expansion together with Ocado and similar customers like that and also broaden our customer offering and parts with them and provide more cost-down opportunities and make sure that they can focus on their core business. Ocado today utilize 2 parts of our offering: the sourcing part, where we buy parts, secure the supply and then deliver. They also, on the blue part here, on the simplify side, use us because we consolidate their supply base. And instead of using 10 suppliers, they use us instead, for example, on the C-Parts. And we are moving them down into the approved area because we have started to assemble parts for them as well also so they can get ready parts to point of usage then. But the expansion has been tremendous. And you can imagine Ocado be having to force themselves to focus on C-Parts. Deliveries with this volume expansion has been hard, and we have supported them with that instead so they could have done their core business. Now I think we move into an interview with a sister company, Montrose, in U.K., where we have the MD, Liam Wheeler, connected, I think.

So it's time for the U.K. part of Bufab Group. And I think that we have Liam with us. Hi, Liam.

Hi. How are you doing?

And welcome to Capital Market Day here. Tell us a little bit about the U.K. business. What about your company in U.K.?

It looks very different than it did 3 years ago. Prefab, as a sort of end-user business, didn't really have much of a presence in the U.K., had a small sourcing office around 3 or 4 years ago. They took the decision to sort of buy a company called Montrose in December 2016. And then they also bought another business called Thunderbolts in July '17. And basically, the project has been since then is to kind of put them all together and create this new entity called Bufab U.K., which has got sort of 4 locations across the U.K. And yes, it's been an eventful journey, let's say. We did a lot of that work over the last 18 months, even during the pandemic. But we now have probably the best facilities and sort of single legal entity that we've had since we started. So it kind of -- suppose it's an exciting time and it have kind of primed and ready to grow, build a platform. We've put all these companies together. We're all on the same computer system now. And it's kind of time to get on, really, from my perspective.

So how has the company developed now when it's a part of the Bufab family?

I think if you look just beyond net sales because, obviously, that's the first measure, I think if you actually had a look at the processes, the tools we have available to us, the resource availability, it's a different animal. I think we've improved so much. We've got an electronic warehouse management system. We've got VMI offerings to our EasyTrack, those kinds of things to customers. We've got, like I said, resource that if we want to undertake large-scale projects, that the availability is there. And the brand is a big thing. Going into a customer as Bufab is a very different prospect to going in as a small private business in the U.K., and I think we've definitely benefited from that. And even the biggest customer we won last year, we're using the broader Bufab network. So we're sending goods directly from Taiwan to customers. We're using other sister businesses to help distribution. So it's a lot of different things really that's added to it. We've all had to learn, though. I mean it's not just when you're -- like myself, you come from a small business and you've worked in a small business for a long time, corporate culture is a little bit different. But I think we're learning, and I think the results are starting to show through.

Okay. That was everything from the U.K. market. Thank you so much, Liam.

Thanks very much. Take care.

Bye-bye.

Thank you. Bye-bye.

Good. That was nice to hear Liam telling us more about Montrose place in Bufab as a sister company. Now Urban, you want to conclude here and summarize the growth and improved areas in U.K., North America?

Okay. I'll make a very short summary. The very short summary is it grew fast. When it comes to growth, they will be focused on sales time. We need more hunting and less farming, will be achieved through increased focus and prioritization of sales projects, increased sales support and higher degree of digitalization. We'll also have a, let's say, a focus on the global and strategic account. There will be more emphasis on developing, identifying the right customers. We will, for example, develop a priority tool that will be rolled out. And finally, there will be an expansion of product, services and offering. There, we need to focus on value-add. We need to upskill the sales teams, and we have to have the right price/delivery/quality ratio. In regards to improve, we will really work hard with them, and we have started already since a couple of years back, but we have even more emphasis on improving the margins. Of course, this is about sourcing savings but also to getting paid for value. Furthermore, we need to develop our product expansion. This includes both boosting the skills, and not only for the sales team, as I just said, but also for the QA and sourcing people, et cetera. We also need to consolidate and widen their supply base. A key component for this is -- for the success is improved supply partnership, which we will intensify. We will also build center of excellences. For example, in Los Angeles, where we just acquired ABS, we will build up best-in-class QA facilities, kitting and other services. Okay. That was a short summary. Thank you from North America and U.K.

Thank you so much, Urban, and thank you, Johan. We have now gone through all the segments, North, West, East and North America and U.K. Now what we're going to do is -- it's up to you because on this iPad, we receive a lot of questions right now. So please, we will have a little bit of a break now but only 3 minutes. It's 3 minutes break to go and grab a cup of coffee or a glass of water and also type in your questions. And we will see and manage to get as many as we can in this time, Jorgen, in just a couple of minutes. So we see you in 3 minutes. [Break]

We're back here from the lounge area at the Capital Markets Day, and it's time for the Q&A. And thank you so much to start with for all the questions that we received on this iPad. And I think we'll just take some random questions here, Jorgen, and we'll see how many we have time for.

Absolutely. It depends on how much we talk, I guess. So...

Yes. So let's hit it off directly.

This question, "You receive many RFQs every year. How many clients do they ask for your ESG policy compared with 5 years ago?"

Yes. That's a great question. I don't have an exact number for that, but I can tell you for sure that the number has increased dramatically. And not only do they -- do more of them ask, but they also mean it now. 5 years ago, it was okay if we just showed them a piece of paper. Now they show up sometimes with large teams of people who want to go into detail how we handle ESG issues. So it's certainly becoming a key issue for many of our customers.

Yes. Good. Thanks for that answer, and we keep going here in the questions. Bufab seem to sell and deliver a number of services. How is Bufab charging for that?

Yes. That's a great question. Often -- or sometimes, we say, "Okay, we did this," or, "Here's an extra bill for that." But most of the cases, we do what the customer wants, and what the customer wants is for the price of the -- all the work we do to be baked into, so to speak, the price of the individual C-Parts because for them, it becomes a variable cost then and very easy to track. But that means that we have to charge for our C-Parts enough so we can pay our suppliers and have enough leftover to pay for salaries and so on and also a little bit for the shareholders, of course, right? So when we price our C-Parts, we price them not because -- not depending on how much they cost but depending on how much it cost, plus how much effort that particular supply chain will cost us. So pricing is a key skill in Bufab and one that we're hoping to also improve going forward and, for instance, this pricing best practice initiative that we spoke about earlier.

This is a pretty long one. I'll try to do it as clear as I can. "If Bufab were to carry out a new emission in the future, how would the company tackle the issue? Follow the example of cinch and [ BHG ] by addressing big national and international investors and then stop the trading for a day or 2 and then reopen the trade when the amount of the new emission has been reached. In this manner, Bufab can disregard all present small shareholders," and one of the small shareholders asking this.

Ask this question. Yes, okay. Yes. Jonas, to tell you truth, I don't know the answer to that because I'm not familiar with what cinch did or didn't do, and I can't speak for them. But I can say this, that, number one, Bufab has grown for a long while with its own capital because we're such a cash-generative business that we're often able to grow just financing it off of the growth, so to speak. But if we run into a huge and very important acquisition opportunity for us, that would mean an important expansion, then we will, for sure, do it, and then we will go to our shareholders and ask for more money. And when we do, we'll try to do it in a way that is fair and equitable to our shareholders. That's what I can say. cinch needs to answer for cinch.

Yes. They sure do. And -- but we take next question. "Why do you use EBITA as a measure of profitability rather than," what do you think?

I don't know.

IBETDA (sic) [ EBITDA ].

Okay. Okay. So quite a technical question. We have something we call the operating profit, and we measure that as EBITA, as we say, EBIT plus A, and that means the operating profit but before the amortization of the intangibles that occur from acquisitions. And that's because we're a very acquisitive company, we make many acquisitions. And then we want to make -- we want a profitability measure to be the actual profit of the companies and not regard so much how we amortize intangibles. EBITDA is not a measure that is relevant for us, so that has never been one of our measures. I don't know if I answered that correctly, but I guess it also requires a longer, more comprehensive answer to answer that fully.

Yes. Thanks for that answer, and we keep going here. "What kind of segment are most important for Bufab?"

Yes. Actually, we are quite happy that none of our segments is the most important for Bufab because it turned out that when you have, as we do, customers in many countries and many industries in many customer segments and also with different business models, then there is a risk, a moderation effect in that. So right now, of course, aerospace is bad, and oil and gas is bad, but medtech is good and furniture is good. Good. But we have all those 4 segments. So we have some that are doing well and some that are doing less well. Some other year, maybe aerospace is very good, and maybe furniture is bad. So we kind of like to have spread our eggs out and not put them all in one basket. And that's why we don't try actively to grow one segment at the expense of some other segments.

All right. Another -- not so much a question here but to say well done from a happy shareholder.

Well done.

That's a good one.

Thank you. Thank you. That's very nice to hear also.

And I know that we have a lot of meetings coming up now one-to-one.

That's true.

You -- that are part of this session today had the opportunity to actually book one-to-one meetings on Teams. And we would like to sit here like for a couple of hours and answering questions, but we can't answer them all because then we won't be on time for the one-to-one meetings. So Jorgen, actually, it's time for a little bit of a wrap-up now. So it's time for a summary.

So let me try to wrap up then. I'm going to just say a few words here about what we've said today. Next picture, please. So what we've been trying to show you is our past, of course, our present but also our future. And when we look at the future, we see a global mega trend where the manufacturers who are customers need to simplify, make more safe, derisk, as we say, and make more sustainable their supply chains. And that's a mega trend that's been going on for a long time, but we actually see it accelerating now as the result of recent developments. In this market, we are one of very few, less than 5 handful of global consolidators. And as a result of these 2 things, we've had a good performance. Most importantly, we've grown faster than the market. We've grown faster than competitors. And also, we've had a good development in the share market, as you can see. Now it's not so often that you run into a company where the business model allows 45 years of unbroken, profitable growth, but Bufab is such a company. And on that basis, we feel a lot of confidence when we now raise our targets for the future and intend, over the next 5 years, until 2025, to grow our earnings per share by 15% year-over-year. And in this period, we also intend to improve our operating margin to 12%. But we intend to do that not at the expense of building a stronger company but because we are building a stronger company. In fact, we're aiming now to become the world's best supply chain partner when it comes to C-Parts, and that is what we mean when we say that we're aiming for sustainable leadership. Let's have the next picture, please. This would not be possible unless -- in such a wide and decentralized and globally also present organization, unless we build it on values. So we intend to strengthen, emphasize Bufab's values going forward, and those are, as you know, that for a family of entrepreneurs, that we always deliver, no matter what, even if it's corona times, we deliver and that we're a responsible partner also, for instance, with regards to sustainability. And that underlies also or underpins our customer promise, and let's have that, please, which is that we are fast and flexible, we're dedicated and we're trustworthy. And all of this we summarize in the word solutionist. And there are 1,300 such delightful creatures, 1,300 solutionists, and they're all geared up to live by these values also for the next 5 years. So let's have the next picture, please. And then we have showed you our plan to get to sustainable leadership, and it contains 4 parts. We want to grow. We want to improve our business. And the growth and improvement together will help pay for further investment in the business, thereby restarting a virtuous circle. And into this very nice place, we also intend to bring further sister companies by acquisitions. How are we going to do this? Let's have one more, please. We're going to do it by putting, as we have in the past, customer and quality in the first place, by applying our solutionist values, by using our pull integration strategy and cooperation strategy in Bufab and by always emphasizing that the business is local, and that's where we can make fast and flexible decisions, but that in Bufab, our sister companies can also benefit from global teamwork, and our customers can also benefit from that. That's our plan. And if I can have the next one, please. That summarizes what we had to tell you today. So we talked about the past. We talked about the present. And now we've shown you a bit of what we're planning to do for the next 5 years. And with that, I'm -- left to me is wanted to say that thank you very much for joining us here today in such numbers, and thank you for all the interesting questions that we got. We'll try to find a way to answer those. But if you feel that you didn't get an answer, you can always mail us a question, and we will answer it that way instead. Thank you.

I actually have one last question for you, one last question.

One last question. Let's hear it.

And what are you looking forward the most in 2021?

I'm looking forward the most to be able to travel and visit some customers because that's been really hard in the last time.

Yes. And I know that you're really, really into that. And hopefully, we meet you live the next time.

Absolutely.

And thank you all for -- that you've been a part of this, and thank you all the solutionists out there doing the job. And again, if you didn't have the time to read it all on those slides, they can download it later on.

Absolutely. It will put on the -- on our homepage later tonight.

Yes. So -- and you can also see this session afterwards. So if you missed something or skipped something, you can go back and see it again. Jorgen, thank you so much for this Capital Markets Day.

Thank you, Jonas. It's a pleasure.

Thank you, everyone. Everyone on stage, good job, and everyone out there, good job. Thank you for your questions. And we do, as they do today, we tackle each other and say thank you.

Thank you.

Bye.

Bye now.