Kährs Group: Interim Report April-June 2023

Stable profitability despite lower demand

Kährs’ net sales decreased by -28 per cent in the second quarter, primarily due to weak demand in the residential segment in Europe, affected by increasing interest rates and general high cost inflation. Profitability was maintained by a continued strong gross margin and good cost control even if both the operating profit and the operating margin are down compared to the record-setting second quarter in 2022.

Second Quarter 2023

• Net sales amounted to SEK 787 million (1,094), which was a decrease of -28 per cent. Organic change was -31 per cent
• Operating EBITA amounted to SEK 77 million (149), corresponding to an EBITA margin of 9.8 per cent (13.6)
• Operating profit totalled SEK 38 million (140), corresponding to an operating margin of 4.9 per cent (12.8), of which one-off costs amounted to SEK 34 million (3)
• Profit for the period amounted to SEK -18 million (87)
• Cash flow from operating activities totalled SEK -16 million (75)

January-June 2023

• Net sales amounted to SEK 1,650 million (2,143), which was a decrease of -23 per cent. Organic change was -28 per cent 
• Operating EBITA amounted to SEK 183 million (272), corresponding to an operating margin of 11.1 per cent (12.7)
• Operating profit amounted to SEK 134 million (258), corresponding to an operating margin of 8.2 per cent (12.1), of which non-recurring costs amounted to SEK 39 million (3)
• Profit for the period amounted to SEK 35 million (152)
• Cash flow from operating activities was SEK -42 million (91)
   

President and CEO Johan Magnusson comments:
During the second quarter, we are seeing a significantly lower demand than in the record-setting quarter in 2022, during which Kährs had record high sales. It is primarily demand in the residential segment of our main markets in Europe that continued to be weakened during the quarter compared to last year with a clear change in consumption patterns, with shrinking investments in private homes and interior products.

Kährs’ profitability-enhancing measures, with focus on customer & market optimization, capacity adaptation and continued streamlining, are continuing to generate results. Our profit margins continue to be at a higher level than in the years prior to 2022. Though, we cannot reach last year’s record-setting margin and profit, given the negative change in market development affecting both new-built, renovation and refurbishing of homes.

Despite challenging market forecasts in 2023 and into 2024, there is a large need for renovation and increased new construction in the longer term. We will continue to develop Kährs with a focus on a wider selection of sustainable innovative product offers and invest in our digital customer journey in cooperation with our distribution channels.
 

For further information, please contact:
Johan Magnusson, President and CEO
Phone: +46 70 540 13 96 
johan.magnusson@kahrs.com
 
Andreas Larsson, CFO 
Phone: +46 70 242 03 65 
andreas.larsson@kahrs.com  
 

About Kährs BondCo AB (publ)
Kährs BondCo AB (publ) is a leading manufacturer and distributor of flooring with the aim of providing customer experiences beyond expectations. Kährs’ innovations have shaped the industry throughout its history and the company is dedicated to offering flooring solutions for every room, environment and need. The company delivers sustainable and durable flooring solutions to approx. 70 countries, being a market leader in hardwood flooring in Sweden and Finland and having strong positions in other key markets, such as Norway, the UK, US, Germany, and Switzerland. The Group has approximately 1,230 employees and annual sales of SEK 4 billion (2022). www.kahrsgroup.com