“We are ending a very strong third quarter with net sales and result well in line with the previous year in a currently challenging market situation.”
Third quarter
- Net sales amounted to SEK 432.0 M (435.0), a decrease of 1 percent, of which -8 percent was organic growth
- EBITA amounted to SEK 59.0 M (58.9), corresponding to a margin of 13.7 percent (13.5)
- EBIT amounted to SEK 56.7 M (55.0), corresponding to a margin of 13.1 percent (12.6)
- Items affecting comparability amounted to SEK 0.4 M (-1.3)
- Profit before tax amounted to SEK 43.4 M (52.4)
- Earnings per share amounted to SEK 0.97 (1.19)
- Free cash flow amounted to SEK 29.2 M (33.5)
First nine months
- Net sales amounted to SEK 1,363.5 M (1,394.5), a decrease of 2 percent, of which -6 percent was organic growth
- EBITA amounted to SEK 180.6 M (196.9), corresponding to a margin of 13.2 percent (14.1)
- EBIT amounted to SEK 169.0 M (186.6), corresponding to a margin of 12.4 percent (13.4)
- Items affecting comparability amounted to SEK -3.6 M (-2.6)
- Profit before tax amounted to SEK 136.6 M (167.3)
- Earnings per share amounted to SEK 3.09 (3.84)
- Free cash flow amounted to SEK 118.7 M (113.1)
| Financial data | July-Sep 2023 | July-Sep 2022 | Jan-Sep 2023 | Jan-Sep 2022 | R12 Oct-Sep |
Jan-Dec 2022 |
| Net sales, SEK m | 432.0 | 435.0 | 1 363.5 | 1,394.5 | 1,801.9 | 1,832.9 |
| EBIT, SEK m | 71.8 | 70.1 | 217.6 | 231.2 | 284.4 | 234.4 |
| EBIT-margin, % | 16.6 | 16.1 | 16.0 | 16.6 | 15.8 | 12.8 |
| EBITA, SEK m | 59.0 | 58.9 | 180.6 | 196.9 | 234.9 | 251.1 |
| EBITA-margin, % | 13.7 | 13.5 | 13.2 | 14.1 | 13.0 | 13.7 |
| EBITDA, SEK m | 56.7 | 55.0 | 169.0 | 186.6 | 216.8 | 298.0 |
| EBITDA-margin, % | 13.1 | 12.6 | 12.4 | 13.4 | 12.0 | 16.3 |
| Earnings per share, SEK | 0.97 | 1.19 | 3.09 | 3.84 | 3.94 | 4.90 |
| Free cash flow, SEK m | 29.2 | 33.5 | 118.7 | 113.1 | 208.2 | 202.6 |
CEO Statement
We are ending a very strong third quarter, given the challenges in the market. The net sales are almost at the same level as the previous year, mainly thanks to another strong quarter from Roper Rhodes, as well as the cost savings, efficiencies, and price adjustments implemented across the group. Profitability is also consistent with the previous year, with an EBITA of 59 MSEK (59 MSEK). Cash flow has also made a positive contribution, being +23 percent higher on a cumulative basis than the previous year.
All the companies in the group are working closely with our customers and partners, with a clear focus on creating customer interactions. We are doing this through product launches that have taken place during the quarter, as well as working on upcoming launches in the first quarter 2024. Given our high profitability targets, we are adjusting costs in line with the economy and implementing efficiencies to reach new heights.
We remain focused on profitable organic growth, while also seeking strategic acquisitions that complement our business in bathroom interior, especially in the furniture and shower categories. I am especially proud of that, following the end of the quarter and in line with our strategy, we have signed an agreement to acquire Thebalux Holding, a profitable company with a strong market position in the Netherlands.
Performance and Growth
Despite the challenges shown in the Nordic market, we have managed to maintain stable revenue at 432 MSEK, a decrease of 1 percent compared to the same period last year. This can be explained by a continued strong sales development in the UK through Roper Rhodes' three brands, as well as a positive currency effect. Organic growth decreased by 8 percent, due to the challenging market situation in the Nordic markets. Despite this, we have managed to achieve an improved EBITA margin of 13.7 percent compared to the same period last year.
Strong Development in the UK
Roper Rhodes has delivered another successful quarter, exceeding our expectations with a 2 percent increase in organic sales and improved profitability despite the market situation. We implemented the previously communicated price adjustments early in the third quarter. During the quarter, Roper Rhodes launched the bathtub product category, which has been well received in the market, and we continue to develop strong customer relationships and attractive product offerings to strengthen our market position.
We are noticing a weak development in Nordic sales due to a challenging market. The sales channel for contract agreements within the Svedbergs brand is experiencing a market downturn, negatively impacting sales for the quarter. Macro Design and Cassøe have reduced their sales but have been somewhat successful in compensating for some of the impact on results through reductions in material costs. Our geographic differentiation, strong brands, and broad sales channel mix will continue to be important success factors in maintaining and strengthening our market position going forward.
Cost Control and Efficiencies
The continued focus on streamlining operations and reducing freight rates have had a positive effect during the quarter. The new production facility in Dalstorp was also installed during the third quarter, and test production is proceeding as planned. The production facility will be fully operational during the fourth quarter, which will over time give us increased flexibility in terms of product variation, as well as the opportunity for insourcing between our brand companies.
A World-Class Workplace
During the past quarter, we have intensified our sustainability efforts and are proud of the progress we have made. The Svedbergs brand company has implemented biofuel with a new forwarder in Asia as part of our plans to reduce CO2 emissions. We are committed to continue driving our sustainability agenda forward and are preparing for the new Corporate Sustainability Reporting Directives (CSRD) as part of this. The group and the brand companies have been certified as Great Place to Work companies, underlining our committed working environment. We have also received a silver medal in connection with our EcoVadis audit, further affirming our focus on sustainability and social responsibility.
Outlook
We have continued to prioritise profitable growth as a central part of our strategy, despite the current challenging macroeconomic conditions. We have strived, and will continue to strive, to adapt the business to meet future challenges. The results show that we have been successful, and our assessment is that the investments we are making will contribute positively to the group’s development going forward. By maintaining strong gross margins, managing costs, and investing in our relationships with customers and partners, we are well positioned to meet upcoming challenges and our continued pursuit of our goal to become the leading bathroom group in Northern Europe.
Expanding to the Netherlands through the acquisition of Thebalux Holding
The acquisition of Thebalux Holding is an important step in Svedbergs Group's continued growth journey. With over 25 years of experience in the Dutch bathroom market and a strong market position, Thebalux Holding is a profitable company that shares our entrepreneurial drive and passion for innovative products in bathroom furniture. Together with Thebalux Holding, we look forward to growing in the Dutch market, which shows an underlying need for new construction and renovation.
