In 2022/23, Flügger was badly affected by the rising costs of raw materials, energy and transport, as well as a change in the customer mix. All together, these factors pressured the bottom line.
The top line of DKK 2,550 million was consistent with the previous year and within the announced expectations of DKK 2,500 – 2,700 million. Operating profit (EBIT) of DKK 43 million was in line with the preliminary result announced on 12 May 2023.
For the upcoming fiscal year 2023/24, the company expects a revenue of DKK 2,500 – 2,700 million. The main markets are expected to continue to be characterised by declining activity. However, increased sales prices, export sales and new customers are anticipated to compensate for the decline in volume.
EBIT is expected to be in the range of DKK 60-120 million. Thus we expect it to be improved compared to the fiscal year 2022/23. The gross margin is expected to slowly return to historical levels as raw material and energy costs are reduced. Furthermore, implemented increases in sales prices is expected to help the gross margin.
Due to the war in Ukraine and the impact of the sanctions in Russia and Belarus, there is considerable uncertainty about revenue and results for segment 3. Flügger is still working to divest the companies in Russia and Belarus. CEO of Flügger group A/S, Sune Schnack, comments:
-“Earnings in our core business have been under severe pressure. Especially from rising commodity prices, exchange rates and the economic decline. We are pleased that we have been able to retain existing customers and attract new ones, even though activity among both private and professional customers has been declining.”
-“In segment 3, EBIT is currently positive for the financial year just ended, although this is a relatively closed cycle. As we have also reduced our Russian business by DKK 132 million, the entire investment is unprofitable for Flügger. We see no future in the Russian market. Flügger continue to work on divesting our business there in a responsible manner and within the framework set by the authorities.”
-“In both the past and the coming financial year, we will focus on our core business. and how we can help our professional customers through the challenging months and years that many are facing. The commitment of Flügger’s employees, customers and shareholders has been impressive in these changing times. We are cautiously optimistic about the year ahead. Moreover, we will continue to put our customers first to ensure that we remain on solid ground with our mix of professional and private customers,” concludes Sune Schnack.
