Kährs Group: Interim Report July-September 2024

Increased order intake in a weak market – continued focus on efficiency and growth  

Kährs' order intake increased in the third quarter by SEK 43 million, which corresponds to an increase of 11 percent compared to the previous year. Kährs’ turnover, however, decreased by 15 per cent organically in the third quarter due to continued weak demand in a cautious market in primarily new construction in the Nordics and North America. Profitability has been affected by the reduced sales, and the result was negatively impacted by greater underabsorption in production during the summer period. During the quarter, the cost-savings program announced in the second quarter was executed and will begin to take effect starting in the fourth quarter. Order intake increased in the Nordics and the USA and was stable in the rest of Europe outside the Nordics. 
 

Third Quarter 2024

• Net sales amounted to SEK 533 million (635), which was a decrease of -16 per cent. Organic change adjusted for currency was -15 per cent 
• Operating EBITA amounted to SEK -4 million (36), corresponding to an operating EBITA margin of -0.7 per cent (5.6)
• Operating profit totalled SEK -19 million (21), corresponding to an operating margin of -3.6 per cent (3.2)
• Result for the period amounted to SEK -44 million (-3)
• Cash flow from operating activities totalled SEK 12 million (6)
• Non-recurring items in the quarter amounted to SEK -11 million (-11) and were entirely attributable to customs costs in the USA
• After the end of the reporting period, Kährs has secured the company's future financing through a new bond financing of SEK 1,450,000,000 with a maturity of 4 years. The bond replaces the existing bond of the same amount
   

January – September 2024 

• Net sales amounted to SEK 1,846 million (2,285), which was a decrease of -19 per cent. Organic change adjusted for currency was -18 per cent 
• Operating EBITA amounted to SEK 69 million (218), corresponding to an operating EBITA margin of 3.7 per cent (9.5)
• Operating profit totalled SEK -25 million (155), corresponding to an operating margin of -1.4 per cent (6.8) 
• Result for the period amounted to SEK -132 million (32)
• Cash flow from operating activities totalled SEK 20 million (-36)
• Non-recurring items for the period amounted to -81 million SEK (-50), of which SEK -70 million were attributable to the write-down of Russian assets and SEK -11 million were attributable to customs costs in the USA
   

President and CEO Johan Magnusson comments:
Despite a weaker third quarter in the residential segment, we have continued to take market shares and strengthened positions in our main markets. Kährs continues to focus on further efficiency gains and investments in future growth enablers. 

During the quarter, we launched a completely new product program for the US market, with products adapted and produced in the USA. This strengthens our position as the leading European brand in parquet flooring and gives us an even broader and more competitive offering on the US market.

We look to the future with confidence and we see the first signs of that the market will recover. We expect interest rate cuts to positively affect demand in the residential market and increase sales of private homes, which will benefit demand for our high-quality flooring solutions. 

Kährs continues to invest in its long-term growth strategy, where we focus on growing faster in select markets in Europe and the USA, launching innovative and sustainable product platforms, and improving the customer experience through our distribution channels and partnerships. In parallel with this, we are adapting our operations to navigate a challenging housing market in the short term, with the objective of creating long-term value and growth.
 

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 1,067 employees and annual sales of SEK 2.5 billion. www.kahrsgroup.com