Kährs Group: Interim Report January-March 2024

Strategic investments and optimisation of profitability continue to improve cash flow in a challenging market situation 

Kährs’ turnover decreased by 25 per cent in the first quarter due to continued weak demand in a cautious market in the residential segment in the Nordics and North America. Profitability was affected by the weaker sales but was held up by production capacity adaptations and good cost control. Cash flow was strong during the quarter, which is seasonally weak, despite lower profit, due to a decrease in working capital through gradually reduced production rates, which led to lower inventory levels during the first quarter.

January-March 2024

• Net sales amounted to SEK 643 million (863), which was a decrease of 25 per cent. Organic change, currency adjusted, was -24 per cent 
• Operating EBITA amounted to SEK 39 million (105), corresponding to an operating EBITA margin of 6.1 per cent (12.2)
• Operating profit totalled SEK 34 million (96), corresponding to an operating margin of 5.3 per cent (11.1) 
• Profit/loss for the period amounted to SEK -12 million (53)
• Cash flow from operating activities totalled SEK 36 million (-26)

 
President and CEO Johan Magnusson comments:
The very weak demand in the residential segment affects our sales in the quarter. On a positive note, we see an increased order intake in our European operations where our stock-holding distribution channels are more in balance at the same time as the renovation market is starting to recover in certain markets in Europe. We also see that our investments in new, innovative and sustainable product offerings and an improved customer experience continue to generate good results.

In the quarter, we continued to launch new products within all main categories as well as a completely new platform, developed for the North American market. 

In both Europe and the USA we have continued to strategically focus on new customers, and to further develop our position on new growing markets we have during the quarter strengthened our organisation with a new sales management. In the USA we are also in full swing establishing the sales to a nationwide distribution within our commercial business to strengthen the position of our unique environmentally certified products towards the education and healthcare segments.

We continue to develop our sustainability position and we are proud that Kährs’ science-based targets for the reduction of greenhouse gas emissions for net zero were recently validated and approved by the Science Based Targets initiative, SBTi. 

Kährs continues to adapt and optimise its operations to the prevailing market conditions with a focus on cash flow, continuous profitability-enhancing measures, and continued good cost awareness. We are well equipped to meet coming challenges and opportunities as we continue our efforts to reach the goal of being the leading actor in flooring solutions in selected markets in Europe and the USA. 

We continue to implement our strategy with great commitment.
 

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 approx. 1,100 employees and annual sales of SEK 2.9 billion (2023). www.kahrsgroup.com