Facts & History of Flügger

The strategy places the professional painter at the centre of everything we do and aims to drive profitable, organic growth.

In the new strategy, Flügger Organic, the basic attitude of being a ‘co-creator of a greener industry’ is continued, which has applied to Flügger since its origins with water-based paints. Furthermore, the strategy strengthens Flügger’s market position by introducing clear commercial options and opt-outs, while pursuing organic growth that also enhances overall profitability

Flügger Organic consists of five strategic areas: ‘The Nordic Region’, ‘International’, ‘Brand’, ‘Simplification’ and ‘Resilience’.

Read more about the Flügger Organic strategy here.

In February 2021, Flügger raised its expectations for both revenue and earnings for the fourth time in the 2020/21 financial year. This update followed a significant sales increase in the first half of the year and continued revenue growth in the following months.

Earnings expectations rose to DKK 215–235 million, equal to an EBIT margin of 10–11 % — nearly double the original forecast announced in June 2020. At the same time, revenue expectations increased to DKK 2,100–2,150 million.

In 2020/21, Flügger achieved strong sales growth in Denmark and Sweden. The growth was boosted by renovation demand during COVID-19, the Unicell acquisition, and cost efficiencies. Earnings nearly doubled, and revenue forecasts rose significantly. In summer 2020, the Going Green strategy was launched, targeting six areas for growth and long-term sustainability.

The majority of Unicell’s products are sold to distributors, home improvement stores and other retailers. The company employs approximately 200 people and has an annual turnover of approximately DKK 145 million.

The focus is on generating profitable growth and efficiency. However, it needs to be done without compromising the company’s DNA. The quality, passion, and creativity has been built up over generations. During the first year after the launch of the strategy, the initiatives already bear fruit. The results are visible on the bottom line, which is enhanced.

In the light of the above, the group chose to continue the strategy of organic growth. Thus, Flügger expanded the store network in Scandinavia as well as in Poland and the Czech Republic.

However, a weak sales trend in Denmark (which has traditionally been the group’s cash cow), significantly increased cost of raw material, and significantly increased distribution costs, resulted in that expectations for the bottom line – i.e. EBIT – in recent years have not been met despite a positive sales trend.

These markets will sustain the growth once the group has achieved its goals in Scandinavia. As can be seen from the following, the expectations were met in the short term, until the financial crisis impacted the group at the turn of the year 2008/09.

The company chose to acquire the leading paint manufacturer in Iceland and prioritized the expansion of the Flügger Farver chain, primarily in Norway and Sweden.

Additionally, the strategy for the next three years, i.e. until 2007, met the expectations set.

As a consequence of this development, a strategy was set: The group’s profitability had to be re-established, as shown by the developments in the following years.

Additionally, HP’s Norwegian company merged with Flügger Norway, and the Danish subsidiary PP Mester Maling continued as an independent company in the group.

Acquisitions and expansion

Over the following years, the Flügger group aims to become one of the main suppliers of decorative paints in Scandinavia. This lead to the acquisition of a small chain of paint retailers in Norway, and in Denmark, a wholesaler in northern Jutland is obtained. Additionally,  AdeKema – a manufacturer of cleaning products – is acquired in Sweden. The group chooses to expand the Swedish central warehouse near Gothenburg with 11,500 pallet unit spaces.

The introductory stock price was DKK 875 per share, considering the issuance of bonus shares and the non-dilutive secondary offerings. That is equivalent to DKK 52 per share today.

Post-IPO Acquisitions

With DKK 42 million in IPO proceeds, Flügger seized the opportunity to diversify its portfolio. Denmark’s largest wallpaper factory, Fiona in Faaborg, is acquired. Afterwards, the company then acquired Denmark’s largest wallpaper factory, Fiona, and also added the only sandpaper manufacturer, Dragon, to its group. In Sweden, Stiwex brush and paint tool manufacturer is acquired as well as Fobo brush factory.

Due to the 1974 economic downturn, Flügger launched the ‘Flügger Farver’ retail chain, marking a strategic shift into private customer sales.

The company designed the new Kolding facility specifically to produce aqueous, environmentally friendly decorative paint.

In 1970, Flügger converted into a publicly listed company with the next generation, the son Ulf Schnack, as CEO. The share capital corresponding to the equity amounted to DKK one million.

Ulf Schnack, then a 22-year-old newly graduated chemical engineer, led the development and production of professional-grade decorative paint there.

After a few years, the state sold the company through a commission sale. It was Michael Schnack, the company’s Danish manager, who acquired the company with the support of four major painting companies.

This occurred after the parent company in Hamburg had established sales to professional painters in Denmark, to whom they wanted to provide local service.

Afterwards, four generations of the Flügger family managed the company until a voluntary liquidation in 1973.