Board manufacturer Egger has seen a decline in sales for its 2023/24 financial year, which it has mostly attributed to a “challenging” business environment and a drop in demand.
In its half-year financial statement, Egger, which supplies wood-based products to the KBB and furniture industries, reported that were down by 7% to €2.1 billion (£1.8bn) compared with the same period last year. This has also led to a fall in profits before tax of around 15%, down to €299.2 million (£259.2m).
The manufacturer has attributed these results to persistently high inflation, volatile raw material prices and geopolitical crises, which have combined to create what it refers to as a “challenging business environment”.
Despite these challenges, Egger said it was satisfied with its stable development during the half-year period. It says that last year’s financial period was characterised by an “exceptionally” good market environment and margin level, and the change in fortune reflects the highly volatile general conditions of the last six months.
Egger has also continued to invest in expanding its plant and active backward integration progranne, as well as further increase its sustainability performance. The company has increased investment spending this year by almost 4%, for a total of €238.6m across its sites.
Looking ahead, Egger said it expects the next six months to deliver “subdued earnings expectations”, owing to the current general economic uncertainty. It realistically expects a further decline in demand, but also emphasised that it is well equipped to weather the current economic downturn.
Egger chief financial officer Thomas Leissing said that the past six months have been “demanding” for the company. He said: “Persistently high inflation in many regions, stricter capital requirements for home purchases and global geopolitical uncertainties have led to a general weakness in consumption and a decline in demand in almost all markets. Thanks to the efforts of our more than 11,000 employees, we are nevertheless able to report Group-wide sales that decreased only slightly.
“We are particularly pleased that we could successfully initiate strategically forward-looking decisions in the first half of 2023/2024, such as the acquisition of our 22nd production plant in Markt Bibart and the Egger Group’s climate protection commitment to the Net Zero 2050 target.”