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EGGER witnesses a financially stable half year

 Friday, December 23, 2016

logo_eggerThe EGGER Group, with headquarters in St. Johann in Tirol (AT), has completed the first half of its financial year 2016/2017 (reference date the 31st October 2016) with a consolidated turnover of EUR 1.19 billion. With a stable turnover development, the EBITDA increased by 10.1% on the previous year to reach EUR 189.6 million. The EBITDA margin increased to 15.9% (previous year: 14.4%).

 

The EGGER Group Management is generally happy with its first half-year developments. “The general economic situation was very unstable in the last half-year. Nevertheless, as compared to the previous year, we were able to grow in almost all relevant geographic markets in our main product segment, Furniture and Interior Design, which represents 75% of our total turnover. The big exception is the UK, where uncertainty following the Brexit vote led to a devaluation of the currency,” explains Thomas Leissing, Head of Finance/Administration/Logistics and spokesperson of the EGGER Group Management.

 

The UK turnover increased by +4.8% in British Pounds, but the negative currency effects caused a turnover regress in Euros of – 9.2%. Conversely, the turnover in the decorative segment developed particularly well in Russia (+7.1%) and Romania (+7.8%), but also in markets such as Spain and Portugal (+8.0%) and overseas (Asia +19.4% and Japan +12.4%). We can also see positive developments in France, Italy, and particularly Austria. In EGGER’s largest market, Germany, the development was stable as compared to the same period last year (+0.5%).

 

For EGGER Retail Products (Flooring), the turnover for the same period last year also remained stable (-0.1%) despite a difficult market situation. The strategy to consciously forego unprofitable volume deals continues to be successful and will be implemented further during the second half of the financial year.

 

The turnover development of OSB and timber in the EGGER Building Products Division also remained stable (+0.4%). The OSB products business continues to be marked by overcapacities in the market with corresponding price pressures. Nevertheless, several markets in Eastern Europe (Romania, Czech Republic and Slovakia) and overseas have developed very well.

 

Investments in production and storage capacities

In the first six months of the current 2016/2017 financial year, EGGER invested EUR 145.6 million in property, plant and equipment, as well as in intangible assets (previous year: EUR 142.8 million). EUR 36.4 million were maintenance investments. EUR 109.2 million were used for growth investments. The main ones consisted of completing the installation of the MDF/HDF production line including flooring production in the Gagarin plant (RU), investments in energy, maintenance and storage capacities in the two French plants of Rambervillers and Rion, as well as an additional edging production line in our Brilon (DE) plant. “Thanks to the continued high-level investments, we have 17 modern, environmentally-friendly and safe plants,” says Walter Schiegl, Head of Production/Technology of the EGGER Group. “At the same time, we consistently continue the strategy of backward integration and production and warehouse optimisation.”

 

New collection provides positive outlook for 2nd half-year results

For the second half of the financial year 2016/2017 the expectations for the product segments EGGER Decorative Products (Furniture and Interior Design) and EGGER Retail Products (Flooring) remain positive. Due to lasting overcapacities in the OSB market, no improvement is expected for EGGER Building Products. Thanks to the positive Western European development and the movement of volumes from weaker regions to alternative markets, EGGER expects the revenue and results growth to continue across the Group during the financial year 2016/2017. The commissioning of additional finishing capacities and investments in the optimisation of the cost structure suggest stable results can be expected.

 

A key contribution will be made by the new decorative collection for retail, shopfitting and architecture, predicts Ulrich Bühler, Head of Sales/Marketing of the EGGER Group: “The EGGER Decorative Collection 2017-2019 will be launched on the market in early January 2017. It is already receiving very positive feedback in the current prelaunch phase. With 300 decors, a service-oriented products offer, the EGGER set of matching decors and materials, and new digital service warranties, we provide our partners with a quick, reliable and successful offering. We are continuing the success story of the collection previously known as ZOOM.”

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