The year was characterized by inflation, high costs – and an enhanced focus on customers
In 2022/23, Flügger was severely impacted by rising costs for raw materials, energy, and transport, as well as a changed customer mix, which put pressure on the bottom line.
The top line of 2,550 million DKK was at the same level as the previous year and within the announced expectations of 2,500 - 2,700 million DKK. The operating result (EBIT) of 43 million DKK was at the level of the preliminary result announced on May 12, 2023.
For the upcoming fiscal year 2023/24, a turnover in the range of 2,500 – 2,700 million DKK is expected. The main markets are expected to continue to be characterized by declining activity, but price increases, export sales, and new customers are expected to compensate for the drop in volume.
EBIT is expected in the range of 60-120 million DKK, thus strengthened compared to the fiscal year 2022/23. The gross margin is expected to slowly return to its historical level when the costs of raw materials and energy are reduced combined with implemented price increases in the sales prices.
Due to the war in Ukraine and the impacts of sanctions in Russia and Belarus, there is significant uncertainty about the turnover and result for segment 3. Flügger continues its efforts to divest the companies in Russia and Belarus.
CEO of Flügger group A/S, Sune Schnack, states:
"The earnings in our core business have been under severe pressure, especially from rising raw material prices, exchange rates, and economic slowdown. We are pleased that we have nevertheless been able to retain current customers and attract new ones, even though the activity among both private and professional customers has been declining."
"In segment 3, the EBIT is immediately positive for the completed fiscal year, but this occurs in a relatively closed circuit. Since we have also written down our Russian business by 132 million DKK, the overall investment is loss-making for Flügger. We do not see a future in the Russian market and continue our efforts to responsibly divest our business there, within the parameters set by the authorities."
"Both in the past and the coming fiscal year, we are focusing on our core business and how we can assist our professional customers through what are difficult months and years for many. The commitment from Flügger's employees, customers, and shareholders has been impressive in these tumultuous times. We are cautiously optimistic about the coming year, as we continue to prioritize our customers, ensuring we remain strong with our mix of professional and private customers," concludes Sune Schnack.
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For the upcoming fiscal year 2023/24, a turnover in the range of 2,500 – 2,700 million DKK is expected. The main markets are expected to continue to be characterized by declining activity, but price increases, export sales, and new customers are expected to compensate for the drop in volume.
EBIT is expected in the range of 60-120 million DKK, thus strengthened compared to the fiscal year 2022/23. The gross margin is expected to slowly return to its historical level when the costs of raw materials and energy are reduced combined with implemented price increases in the sales prices.
Due to the war in Ukraine and the impacts of sanctions in Russia and Belarus, there is significant uncertainty about the turnover and result for segment 3. Flügger continues its efforts to divest the companies in Russia and Belarus.
CEO of Flügger group A/S, Sune Schnack, states:
"The earnings in our core business have been under severe pressure, especially from rising raw material prices, exchange rates, and economic slowdown. We are pleased that we have nevertheless been able to retain current customers and attract new ones, even though the activity among both private and professional customers has been declining."
"In segment 3, the EBIT is immediately positive for the completed fiscal year, but this occurs in a relatively closed circuit. Since we have also written down our Russian business by 132 million DKK, the overall investment is loss-making for Flügger. We do not see a future in the Russian market and continue our efforts to responsibly divest our business there, within the parameters set by the authorities."
"Both in the past and the coming fiscal year, we are focusing on our core business and how we can assist our professional customers through what are difficult months and years for many. The commitment from Flügger's employees, customers, and shareholders has been impressive in these tumultuous times. We are cautiously optimistic about the coming year, as we continue to prioritize our customers, ensuring we remain strong with our mix of professional and private customers," concludes Sune Schnack.
Download Summary of Annual Report