Interim financial report, Q1 2021/22: Flügger maintains momentum

Revenue increased by 17% in Q1 – from DKK 629 million DKK to 736 million with the additional sales compared to the prior-year period being ascribable to Poland and the acquisition of Eskaro.  Adjusted for acquisitions and currency effects, growth was -4%, representing a normalisation from last year’s very high sales to consumers. After a year of working from home during the COVID-19 pandemic, many private customers are now returning to the workplace.

The acquisition of Eskaro has fallen into place, and the Group can look forward to additional sales in Eastern Europe due to increasing activity levels in the construction industry.

On 25 June 2021, the Group acquired the online paint supplier Malgodt.dk. With revenue of DKK 30 million, Malgodt.dk is the leading webshop for sales of paints in Scandinavia.

Following the normalisation of consumer sales combined with increasing raw material and transport costs, the Group’s earnings (EBIT) stagnated at DKK 124 million in Q1. This is on a par with the year before, which in fact saw Flügger realising the best quarterly results ever.

During the first half of the 2021 calendar year, the Group’s production was extremely challenged by unstable raw material supplies and dramatic increases in raw material prices.

In line with the Going Green Strategy, the production of solvent-based paints was discontinued in Q1 and replaced by aqueous/environmentally friendly products.

The Group’s production facilities in Bollebygd in Sweden have been closed down. Instead, a completely new factory has been established for the production of ready-to-use filler, which in recent years has become one of the Group’s large product groups.

CEO Sune Schnack says:

“Both our top and bottom-line results for the first quarter of our 2021/22 financial year were in many ways satisfactory. We’re beginning to see a normalisation after COVID-19, which among other things has meant lower sales, both in our own stores, and by our franchisees and DIY stores. The bottom line is on a par with Q1 last year, primarily due to less traffic from private customers and declining outdoor sales. However, following our acquisitions and based on continued growth in Poland and increasing activity among our professional customers, our top line is up 17% on the previous year, which was the best ever. Like the rest of the market, we’re still facing a number of COVID-19-related challenges in the form of raw material shortages, rising cost prices and transport challenges, and we expect this situation to continue for some time to come. In the most recent quarter, we’ve launched a number of initiatives related to our Going Green strategy, including the acquisition of Eskaro and Malgodt.dk. In the coming quarters, we will remain focused on the execution of our Going Green strategy, and which we’re confident that the strategy will ensure that we meet our financial targets.”