Egger  | 

Satisfactory figures in the first half of the year

Egger has closed the first half of its 2022/2023 fiscal year (ending October 31, 2022) with consolidated sales of EUR 2.26 billion (up 14.0 percent year-on-year). The increase in sales was primarily due to the sharp rise in raw material, energy and logistics costs, which led to higher selling prices. By contrast, the many uncertainties and crises and their impact on the energy and raw material markets, as well as massive inflation and the associated loss of purchasing power, have caused a noticeable drop in demand. As a result, the outlook for the second half of the year is subdued.

“The very strong results of the previous year can be attributed to the extremely high demand in the wake of the cocooning effect from the Corona crisis and can therefore be classified as exceptional,” said Thomas Leissing, spokesman for Egger Group Management and responsible for Finance/Administration. “This demand boom has noticeably weakened since the spring of 2022. In the meantime, we see declines in demand in almost all markets. At the same time, we continue to face a variety of uncertainties.”

In the first half of 2022/23, sales of EUR 2,255.4 million and EBITDA of EUR 353.7 million (down 26.1 percent year-on-year) were achieved. The EBITDA margin was 15.7 percent, while the equity ratio remained at the high level of 51.2 percent.

This result reflects the highly volatile conditions and developments of recent months. The decline in earnings is spread across all divisions, although the prior-year period was also characterized by an exceptionally good market environment and margin level in all areas. The decline was most pronounced in the Building Products Division, which had achieved record results in the previous year due to the construction boom. In the Decorative Products Division, volume increases were achieved only at the newest plant in Lexington, NC (US). Declines in earnings were mainly recorded by the Eastern European plants, where the effects of the Ukraine crisis were most directly felt. Earnings development in the Flooring Products Division also declined due to falling demand, particularly in the DIY sector.

Capital expenditure amounted to € 229.7 million in the first half of the year (141.1 million in the same period of the previous year). This capital expenditure went in particular towards backward integration projects, enhancing sustainability performance in production, and optimizing the internal flow of materials and enhancing efficiency in warehousing.

In the first half of 2022/23, prices on all raw material markets relevant to Egger rose significantly and remain at a very high level. Availabilities were also under pressure. With regard to a potential looming energy shortage, the company is well secured thanks to its own biomass power plants at all major locations. With this strategy, Egger is striving to largely decouple itself from fossil fuels, while at the same time avoiding the purely thermal utilization of raw materials and promoting the cascading use of the valuable raw material wood.

The overall economic outlook remains highly uncertain in the coming months and will continue to be strongly influenced by the challenges on the energy and raw material markets. This also results in subdued earnings expectations for the second half of the 2022/23 financial year. Egger anticipates unchanged high price levels and stable sales in the medium term, but moderate demand from the main markets. In the long term, the Egger Group will continue to leverage the production advantages of its state-of-the-art industrial base. Based on its sustainable business model and strong financial base, Egger will not only weather the current macroeconomic slowdown well, but will even emerge stronger.



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