The Egger Group, headquartered in St. Johann in Tirol, closed the first half of its 2020/2021 financial year (reporting date 31 October 2020) with consolidated sales of EUR 1.45 billion (-2.1 % as compared to the previous year). Egger has therefore been able to recover very quickly after the first wave of the global COVID-19 pandemic. The commissioning of their 20th plant in Lexington, North Carolina (US) marked a milestone for the company during the reporting period. The outlook for the second half of the year is also optimistic, despite existing uncertainties.
The Egger Group was able to absorb the economic impact of COVID-19 in the past six months and take advantage of catch-up effects, reported Thomas Leissing, Egger Group Management Finance/Administration/Logistics:
"After a weak month of May, still influenced by the first lockdown, we saw a very rapid stabilisation in most of our core markets and a positive development since then. Overall, the construction and furnishing sectors were less affected than other industries. A lot of consumers are currently investing in their homes, buying new furniture and floors, or renovating. Our industry is benefiting from this ‘cocooning trend’," said Thomas Lessing.
The positive industry environment and thus a very high demand, favourable raw material costs as well as fixed cost reductions, which were taken as part of the measures against the COVID-19 pandemic, led to a significant increase in earnings to EUR 293.9 million (+33.5%). The EBITDA margin is 20.3%. The shareholder’s equity ratio remains at the high level of 38.6% despite major investments in recent years. The conclusion of this extensive investment programme is the 20th production site in Lexington, North Carolina, USA, which started operations in September 2020. This first non-European greenfield investment will enable Egger to serve the growing demand for wood-based materials in the North American market in future as a local producer and reliable local partner.
Contribution of all divisions
The sales performance of the individual divisions in the first half of the year was affected by the effects of the COVID-19 pandemic, which differed from region to region, and the measures taken to counteract them. Sales in the Decorative Products Central (-0.9% as compared to the previous year), Decorative Products East (+3.0%) and Decorative Products Americas (+2.1%) divisions were stable. In contrast, in the Decorative Products West Division (-11.9%), the plants in the UK and France were most affected by the regional lockdown measures. Sales growth in the Flooring Products Division was +6.2%, while the Other segment posted +3.9%. All divisions contributed to the positive earnings trend. A large proportion of this was attributable to the new plant in Biskupiec (PL) in the Decorative Products East Division and improved results in the Decorative Products Americas Division.
Stable expectations for the second half-year
Despite continuing uncertainties due to the global coronavirus pandemic, the outlook for the second half of the 2020/2021 financial year is positive overall. Challenges are posed by rising raw material costs, the possible effects of hard Brexit, and currency, inflation and economic developments in Argentina. Egger Group Management expects stable development in the key markets and emphasises that the company is very well positioned for further development with its modern industrial base, global market presence, broad product range, solid financial base and, last but not least, its approximately 10,100 motivated and loyal employees, even if new challenges arise.
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