Editor’s pickEGGER Group reports stable results for FY2019/20 and optimistic outlook amid COVID-19 pandemic
EGGER Group,COVID-19 pandemic,Business Development,Financial Year
EGGER Group Management with Walter Schiegl, Thomas Leissing and Ulrich Bühler (from left) reports stable key figures despite the start of the crisis
EGGER Group has reported that despite the closing of the financial year (FY) 2019/20 coming at a particularly challenging time, they celebtrate eleven successful months and thus an overall stable business development. The Group generated revenue of EUR 2,831.5 million (- 0.4 % on the previous year) and EBITDA of EUR 424.4 million (- 0.1 % on the previous year). The EBITDA margin was 15.0 %, the same as in the previous year. At 37.9%, the shareholder’s equity ratio is higher than in the previous year (36.8%).
Around 10,100 employees (as of 30 April 2020) contributed to these results during the past financial year and to a new record production capacity of 8.9 million m3 of wood-based materials and timber. The EGGER Group is also continuing a phase of very high investment activity and invested a record sum of EUR 531.4 million in FY2019/20.
After a very positive business development in the first eleven months, the effects of the COVID-19 pandemic have slightly dampened this trend. There were regional differences in the economic impact due to differences in the spread of the virus and the measures taken nationally to combat it. While sales in Western Europe declined over the entire FY2019/20, sales in Central Europe increased slightly and in the Eastern European, American and overseas markets in some cases substantially, compared to the previous year.
The Division Decorative Products Centre generated in the last financial year a turnover of EUR 886.6 million (+ 2.8 % on the previous year). The Division Decorative Products West, with plants in the UK and France, generated sales of EUR 663.2 million, down -7.1% on the previous year. The turnover in the Division Decorative Products East rose by +5.8 % to EUR 886.5 million. The latest division, Decorative Products Americas, increased its turnover by + 14.2 % to EUR 137.3 million. In addition to the Concordia site in Argentina, this already includes market development activities in North America for the plant under construction in Lexington, NC. The Flooring Products Division, with sales of EUR 441.0 million, is -1.3 % slightly below the previous year. The Other segment includes the sawmill in Brilon (DE), smaller independent divisions and Group functions and generated a revenue of EUR 173.7 million.
Despite the challenges posed by the COVID-19 pandemic, EGGER remains committed to completing its greenfield project in Lexington, North Carolina, by the end of 2020
Optimistic outlook for FY2020/21
Despite uncertainties in the pandemic development forecasts and possible further lockdown measures, EGGER expects stable development in FY2020/21. The EGGER Decorative Collection for distributors that launched in February 2020, the additional finishing capacities that were created, the further ramp-up of the plant in Biskupiec (PL), and the start of production in Lexington, NC (US) by the end of 2020 will all make a significant contribution to this. Although some of the production and sales markets are still in crisis at present, more positive developments are already emerging in most core markets and consequently a far-reaching stabilisation of sales and earnings in almost all European markets and with all product areas. EGGER sees as a challenge the slower recovery in Great Britain as well as the high inflation and currency decline of the Argentine peso for the Argentine plant in Concordia.