Bulten's Q2 net sales were down almost 44% on the same period last year, amounting to SEK 441 million, due to the effects of Covid-19.
The global automotive industry has been significantly affected by factory shutdowns and lockdown restrictions, with vehicle production in Europe and the USA griding to a halt at the beginning of the quarter.
Operating earnings (EBIT) saw a decrease of SEK 59 million, equating to an operating margin of -13.3%, due to significantly lower volumes as a result of Covid.
Meanwhile, order bookings totalled SEK 409 million, a decrease of over 45% on the same period last year (SEK 752 million). Cash flow from operating activities amounted to SEK 51 million, but while it was affected by the lower EBITDA level, measures to reduce working capital has led to a reduction in net debt and a positive overall cash flow.
Anders Nyström, President and CEO of Bulten, said: "The effects of Covid-19 have had a serious impact on the global automotive industry, and by extension also on Bulten. Vehicle production in Europe and the USA came to a virtual standstill at the beginning of the quarter, although there has since been a partial recovery.
"In China, volumes are now nearly back to pre-pandemic levels. Measures and adjustments to the company's operations have been implemented in each market."
Nyström stated that around 1,200 of Bulten's employees have been included in various forms of working time reductions and short-term furloughing at the company's units in Europe and North America. However, the degree of furloughing fell during the quarter as volumes began to rise.
"Sales and production, however, remain at a significantly reduced level," Nyström continued. "It is difficult to predict at this time how vehicle production will be affected for the rest of this year but with measures taken, we can adjust our production rate to the market situation at short notice."
During Q2, Bulten acquired a minority stake in TensionCam Systems AB at a purchase sum of SEK six million. TensionCam specialises in developing sensors for measuring clamp loads in screw joints, with Bulten hoping the acquisition will further strengthen its technical offering. Meanwhile, PSM, which was acquired in February, has developed well and synergy activities are going according to plan, the firm said.
For the year to date (January to June 2020) net sales are down by 20% to SEK 1,262 million compared to the same period last year, while operating margin is at -1.2%. The equity to assets ratio was 54.4% at the end of the period.
Bulten has also signed a Full Service Provider (FSP) contract for the supply of fasteners to a European automotive manufacturer, which is also an existing customer, with an annual order value of approximate €60 million at full pace. The delivery date is set for 24 July 2020, with start-up costs estimated to amount to €1 million.
"The contract is a transfer of an ongoing FSP set up for two assembly plants," explained Nyström. "Deliveries are planned to begin on 24 July 2020 and will progress over five years. The knowledge and experience Bulten has amassed over many years as a global manufacturer and Full Service Provider to a range of customers was a key factor in winning the contract."
He added: "2020 is a different and challenging year. We will remain focused on health, as well as on cash flow, profitability and growth."
In a recent flurry of recruitment, Bulten has appointed Markus Baum to a newly established position as Chief Commercial Officer (CCO) effective 1 November 2020. Claes Lundqvist fills the position of Acting Chief Financial Officer (CFO), starting 1 August 2020, after Helena Wennerström announced her resignation in April. and Fredrik Bäckström has assumed another newly established position as Chief Operating Officer (COO) with immediate effect.
