Kährs Group: Interim Report July-September 2023

Strong and increasing gross margins in a challenging market situation 

Kährs’ net sales decreased by -31 per cent in the third quarter, primarily due to continued weak demand in residential, in the business segments, Residential Nordics and Europe. Profitability was maintained by a continued strong gross margin and good cost control even if both the operating EBITA and operating EBITA% decreased compared to the record strong third quarter 2022.

Third Quarter 2023

• Net sales amounted to SEK 635 million (922), which was a decrease of -31 per cent. Organic change was -31 per cent 
• Operating EBITA amounted to SEK 36 million (84), corresponding to an operating EBITA margin of 5.6 per cent (9.1), as a result of lower demand, primarily in Europe, and negative revaluations of energy derivatives, SEK -10 million (18)
• Operating profit totalled SEK 21 million (78), corresponding to an operating margin of 3.2 per cent (8.5), of which one-off costs amounted to SEK 11 million (1), primarily linked to adjustments within the Swedish operations to meet the lower demand.
• Profit for the period amounted to SEK -3 million (43)
• Cash flow from operating activities totalled SEK 6 million (-19)

 
January-September 2023

• Net sales amounted to SEK 2,285 million (3,065), which was a decrease of -25 per cent. Organic change was -29 per cent 
• Operating EBITA amounted to SEK 218 million (357), corresponding to an operating EBITA margin of 9.5 per cent (11.6). Revaluation of energy derivates SEK -15 million, compared to SEK 46 million 2022
• Operating profit totalled SEK 155 million (336), corresponding to an operating margin of 6.8 per cent (11.0), of which one-off costs amounted to SEK 50 million (4)
• Profit for the period amounted to SEK 32 million (195)
• Cash flow from operating activities totalled SEK -36 million (72) 

President and CEO Johan Magnusson comments:
The lower demand in the residential segment of Kährs’ main markets in Europe is continuing to have a negative impact on sales also in the third quarter. Decreased consumption driven by a decrease in disposable income combined with higher interest expenses for housing consumers – are having a negative impact on consumers’ willingness to purchase interiors products. 

However, our profitability-enhancing measures and investments, in new, innovative product offers and an improved customer experience, continue to generate results and our gross profit margins are significantly higher than the record levels set in 2022. 

Kährs continues to invest in new customer channels, to broaden its selection of sustainable innovative product offers and invest in our digital customer journey in cooperation with our customers in all distribution channels.

There is clear growth potential in the Commercial segment, primarily in the subsegment for so-called public buildings, where investments have already begun to increase. There is also a large need for renovation and increased new construction in the long term. By maintaining strong gross margins, managing costs, and investing in our relationships with customers and partners, we are well equipped to meet coming challenges and opportunities and continue our efforts to reach our goal of being the leading actor in flooring solutions in selected markets in Europe and the USA.
 

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 more than 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 1,168 employees and annual sales of SEK 3.2 billion. www.kahrsgroup.com