Flügger group A/S posted revenue of DKK 736 million ($766 million) for the first quarter of the non-calendar financial year 2021-22, up from DKK 629 million ($629 million) for the prior-year period. This corresponds to an increase of 17%.
Adjusted for acquisitions and currency effects, growth was -4%, representing a normalization from last year’s very high sales to private customers. EBIT is on a par with the prior-year period.
Revenue increased by 17% in Q1, with the additional sales being ascribable to Poland and the acquisition of Eskaro. The acquisition of Eskaro has fallen into place, and the group can look forward to additional sales in Eastern Europe due to increasing activity levels in the construction industry.
On June 25, 2021, the Group acquired online paint supplier Malgodt.dk. With revenue of DKK 30 million ($30 million), Malgodt.dk is the leading webshop for sales of paints in Scandinavia.
Following the normalization of consumer sales combined with increasing raw material and transport costs, the Group’s earnings (EBIT) stagnated at DKK 124 million ($124 million) in Q1. This is on a par with the year before, which in fact saw Flügger realizing the best quarterly results ever.
During the first half of the 2021 calendar year, the Group’s production was extremely challenged by unstable raw material supplies and dramatic increases in raw material prices.
In line with the Going Green Strategy, the production of solvent-based paints was discontinued in Q1 and replaced by aqueous/environmentally friendly products.
The group’s production facilities in Bollebygd in Sweden have been closed down. Instead, a completely new factory has been established for the production of ready-to-use filler, which in recent years has become one of the group’s large product groups.
“Both our top and bottom-line results for the first quarter of our 2021/22 financial year were in many ways satisfactory,” said CEO Sune Schnack. “We’re beginning to see a normalization after COVID-19, which among other things has meant lower sales, both in our own stores, and by our franchisees and DIY stores. The bottom line is on a par with Q1 last year, primarily due to less traffic from private customers and declining outdoor sales.
“However, following our acquisitions and based on continued growth in Poland and increasing activity among our professional customers, our top line is up 17% on the previous year, which was the best ever,” added Schnack. “Like the rest of the market, we’re still facing a number of COVID-19-related challenges in the form of raw material shortages, rising cost prices and transport challenges, and we expect this situation to continue for some time to come. In the most recent quarter, we’ve launched a number of initiatives related to our Going Green strategy, including the acquisition of Eskaro and Malgodt.dk. In the coming quarters, we will remain focused on the execution of our Going Green strategy, and which we’re confident that the strategy will ensure that we meet our financial targets.”
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