An unpredictable year marked by the rising cost of raw materials and war in Ukraine
For continuing operations, Flügger delivers 7% growth in revenue and – before a write-down of DKK 74 million due to the war in Ukraine – an EBIT of DKK 173 million. After the write-down, the EBIT is DKK 99 million. The results for the 2021/22 financial year are marked by rising prices of raw materials and the war in Ukraine. The outlook for the 2022/23 financial year (excluding segment 3, Eskaro) projects the revenue to be in the region of DKK 2,200–2,400 million, and EBIT in the region of DKK 80–130 million. For continuing activities in segment 3, which are associated with significant uncertainty, an EBIT in the range of +/- DKK 10 million is expected.
Sune Schnack, CEO:
“2021/22 has once again been an unpredictable year for Flügger. The financial year has been marked by significant acquisitions, momentous increases in the cost of raw materials, energy and transport, war in Ukraine and our decision to divest our operations in Russia and Belarus, together with a normalisation of sales to consumers after record sales during COVID-19. Despite the many challenges, Flügger has done well throughout the year, and we are solidly equipped for the future. In 2022/23, we expect earnings to be put under pressure due to high inflation and a slowing of sales to consumers. Depending on the development of the costs of raw materials, we do not expect to see an improvement in earnings until the end of the 2022/23 financial year”.
- In May 2021, Flügger purchased 70% of Eskaro Group AB for DKK 44 million, and invested a further DKK 164 million in capital expansion – a total investment of DKK 208 million.
- As a result of the war between Russia and Ukraine, in April 2022 Flügger decided to explore the possibility of selling the Eskaro companies in Russia and Belarus. As a consequence, the companies concerned were classified as discontinuing operations.
- Net revenue for the continuing operations was DKK 2,322 million, compared with DKK 2,162 million the previous year – representing a growth of 7%.
- Net revenue including the discontinuing operations was DKK 2,520 million compared with DKK 2,162 million the previous year, representing a growth of 17%.
- EBIT for continuing operations was – before a write-down of DKK 74 million due to the war in Ukraine – DKK 173 million, compared with DKK 228 million the previous year. After the write-down, EBIT was DKK 99 million.
- In the 2022/23 financial year, earnings are expected to be put under pressure. This is not only due to high inflation that cannot be fully transferred to the sales prices, but also the slowing of sales to consumers, which usually contributes to higher margins.
- The outlook for the 2022/23 financial year for segments 1 and 2 is a revenue in the region of DKK 2,200–2,400 million, and EBIT in the region of DKK 80–130 million. For the continuing part of segment 3, EBIT is expected in the range of +/- DKK 10 million.