Profitability continued to improve in the third quarter
This release is a summary of
July-September 2023
- Invoiced sales were
EUR 22.2 million (22.2) -
Net sales decreased by 0.9% to
EUR 21.9 million (22.1) -
Adjusted EBITDA was
EUR 4.5 million (3.2) -
Adjusted EBITA was
EUR 3.5 million (2.2), representing 16.1% of sales (10.1) -
Operating profit was
EUR 3.5 million (2.2) -
Net cash flows from operating activities were
EUR 5.3 million (4.4) -
Earnings per share, basic was
EUR 0.13 (0.07)
January-September2023
- Invoiced sales decreased by 1.7% and totalled
EUR 64.0 million (65.2) -
Net sales decreased by 1.8% to
EUR 62.5 million (63.7) -
Adjusted EBITDA was
EUR 11.0 million (6.7) -
Adjusted EBITA was
EUR 8.0 million (3.9), representing 12.8% of sales (6.1) -
Operating profit was
EUR 7.9 million (3.6) -
Net cash flows from operating activities were
EUR 9.8 million (5.9) - Net debt / Adjusted EBITDA was 1.4x (2.5)
-
Earnings per share, basic was
EUR 0.27 (0.10) Orthex was granted and paid Swedish state electricity support (EUR 0.8 million included in adjusted EBITA) for the period 1 October 2021-30 September 2022.
Long-term financial targets
As long-term financial targets the company has adopted to an average annual organic Net sales growth to exceed 5 per cent at the Group level and to exceed 10 per cent outside the Nordics (growth in local currencies), adjusted EBITA margin (adjusted for items affecting comparability) to exceed 18 per cent over time and net debt to adjusted EBITDA ratio to stay below 2.5x. Leverage may temporarily exceed the target range (for example, in conjunction with acquisitions).
The company aims to distribute a stable and over time increasing dividend with a pay-out of at least 50 per cent of net profit, in total, on a biannual basis.
Key figures
EUR million | 7-9/2023 | 7-9/2022 | Change | 1-9/2023 | 1-9/2022 | Change | 1-12/2022 |
Invoiced sales | 22.2 | 22.2 | 0.3% | 64.0 | 65.2 | -1.7% | 85.8 |
Net sales | 21.9 | 22.1 | -0.9% | 62.5 | 63.7 | -1.8% | 84.0 |
Gross margin | 6.9 | 5.0 | 39.8% | 17.5 | 13.0 | 35.1% | 17.9 |
Gross margin, % | 31.6% | 22.4% | 28.0% | 20.3% | 21.3% | ||
EBITDA | 4.5 | 3.1 | 43.8% | 11.0 | 6.5 | 67.8% | 9.2 |
EBITDA margin, % | 20.6% | 14.2% | 17.6% | 10.3% | 10.9% | ||
Adjusted EBITDA | 4.5 | 3.2 | 42.1% | 11.0 | 6.7 | 64.4% | 9.3 |
Adjusted EBITDA margin, % | 20.6% | 14.4% | 17.6% | 10.5% | 11.1% | ||
EBITA | 3.5 | 2.2 | 60.3% | 8.0 | 3.7 | 114.8% | 5.3 |
EBITA margin, % | 16.1% | 10.0% | 12.7% | 5.8% | 6.3% | ||
Adjusted EBITA | 3.5 | 2.2 | 57.7% | 8.0 | 3.9 | 106.9% | 5.5 |
Adjusted EBITA margin, % | 16.1% | 10.1% | 12.8% | 6.1% | 6.5% | ||
Operating profit | 3.5 | 2.2 | 61.5% | 7.9 | 3.6 | 118.0% | 5.2 |
Operating profit margin, % | 16.0% | 9.8% | 12.6% | 5.7% | 6.2% | ||
Net cash flows from operating activities | 5.3 | 4.4 | 19.5% | 9.8 | 5.9 | 66.4% | 6.2 |
Net debt / Adjusted EBITDA | 1.4x | 2.5x | 1.4x | 2.5x | 2.8x | ||
Adjusted return on capital employed (ROCE), % | 11.5% | 7.0% | 25.2% | 11.9% | 15.9% | ||
Equity ratio, % | 37.9% | 33.3% | 37.9% | 33.3% | 36.3% | ||
Earnings per share, basic (EUR) | 0.13 | 0.07 | 87.4% | 0.27 | 0.10 | 168.3% | 0.12 |
FTEs | 280 | 298 | -6.1% | 281 | 298 | -5.5% | 295 |
"The business climate was characterized by careful consumer behaviour and cost inflation. During these challenging market conditions, profit performance was strong with 57.7% increase in adjusted EBITA compared to the third quarter in the comparison period.
In the third quarter,
International distribution build-up is progressing according to plan, delivering a growing base of customers and point of sales throughout
The third quarter sales in the Nordics were affected by careful consumer behaviour and weak currencies. The impact resulted in a flat overall Nordic invoiced sales development of +0.2%. Whereas the weak Swedish and Norwegian currencies affect the consolidated euro sales negatively, there is an adverse effect on EBITA from having a substantial amount of local costs in Swedish Krona in the Swedish production units.
The Storage category continued to grow at a pace of 6.7% compared to the third quarter last year. To keep strengthening the product offering under the SmartStoreTM brand,
Kitchen and
The strong improvement in
Active sustainability work is an important part of implementing the corporate strategy. During the third quarter,
We keep increasing our investment in commercial activity and have strengthened the commercial team and put additional focus on improving in-store execution. All of this is to support product sell-out of the stores during a period of weaker consumer demand. We are currently accelerating our pipeline of interesting new products to be launched in the coming 1-3 years. There is continued uncertainty in consumer demand, raw material price development and cost inflation development. I am happy to see that the business is progressing well thanks to consistent deployment of the strategy regardless of the prevailing conditions."
Press conference on financial results:
Q&A:
Questions to the management can be sent through the meeting chat.
Presentation material:
The presentation material will be shared in the online meeting, and it can be downloaded in the same day on
Recording of the event:
After the event, a recording will be available on the company's website at https://investors.orthexgroup.com/.
Further enquiries:
Tel. +358 (0)40 500 3826
alexander.rosenlew@orthexgroup.com
Saara Mäkelä, CFO,
Tel. +358 (0)40 083 8782
saara.makela@orthexgroup.com
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