Orthex Corporation, Stock exchange release, 15 May 2025 at 9.00 a.m. EEST
Negative consumer sentiment affected sales and profitability
This release is a summary of Orthex Corporation's Interim Report for the period
January-March 2025. The complete report is attached to this release as a pdf
-file. It is also available on Orthex's website at
https://investors.orthexgroup.com/.
January-March 2025
· Invoiced sales amounted to EUR 21.8 million (22.9)
· Net sales decreased by 4.7% to EUR 21.0 million (22.0)
· Adjusted EBITDA was EUR 2.9 million (3.8)
· Adjusted EBITA was EUR 1.7 million (2.8), representing 8.2% of net sales
(12.6)
· Operating profit was EUR 1.7 million (2.8)
· Net cash flows from operating activities were EUR 4.7 million (4.1)
· Net debt / Adjusted EBITDA was 1.2 (1.3)
· Earnings per share, basic was EUR 0.07 (0.09)
The figures in brackets refer to the corresponding period in the previous year
unless stated otherwise. The figures are unaudited.
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.
Orthex does not publish a short-term outlook.
Key figures
EUR million 1-3/2025 1-3/2024 Change 1-12/2024
Invoiced sales 21.8 22.9 -4.9% 92.3
Net sales 21.0 22.0 -4.7% 89.7
Gross margin 5.8 6.7 -13.0% 25.7
Gross margin. % 27.7% 30.4% 28.6%
EBITDA 2.9 3.8 -23.4% 14.3
EBITDA margin. % 14.0% 17.4% 15.9%
Adjusted EBITDA 2.9 3.8 -23.4% 14.6
Adjusted EBITDA 14.0% 17.4% 16.3%
margin. %
EBITA 1.7 2.8 -37.9% 9.8
EBITA margin. % 8.2% 12.6% 11.0%
Adjusted EBITA 1.7 2.8 -37.9% 10.2
Adjusted EBITA margin. 8.2% 12.6% 11.4%
%
Operating profit 1.7 2.8 -37.8% 9.8
Operating profit 8.2% 12.5% 11.0%
margin. %
Net cash flows from 4.7 4.1 14.6% 11.8
operating activities
Net debt / Adjusted 1.2x 1.3x 1.4x
EBITDA
Adjusted return on 5.1% 8.2% 29.7%
capital employed
(ROCE). %
Equity ratio. % 44.2% 41.0% 41.9%
Earnings per share. 0.07 0.09 -16.8% 0.34
basic (EUR)
FTEs 283 287 -1.3% 288
Alexander Rosenlew, CEO:
“The first quarter was influenced by uncertainty coming from geopolitical
challenges, careful consumer behaviour and strikes in Finland continuing the
tough business climate. In the first quarter, Orthex's net sales decreased by
4.7% to 21.0 million euros (22.0) compared to a strong first quarter in 2024.
Constant currency net sales decreased by 4.8% to 21.0 million euros (22.0).
During the quarter, credit risks continued in some customers, and as a
precaution we restricted shipments, which had a negative sales impact especially
outside the Nordics. In the Nordics, strikes hit us and the Finnish trade,
therefore we missed a week of overall efficient operations and two weeks of
goods delivery to Finnish customers.
Invoiced sales for the first quarter in the Nordics decreased by 1.1% to 17.3
million euros (17.5). Invoiced sales in the Rest of Europe decreased by 18.6%
compared to the Q1 in the previous year. The set back came from a few customers,
with quite specific different issues relating to timing of campaigns, slower
sell-out, and limited shipments due to credit risk mitigation.
Storage is the biggest category representing most of the business outside the
Nordic countries and the negative sales development in the Rest of Europe is
visible in the Storage category's invoiced sales which decreased by 7.0% to 14.5
million euros (15.6) compared to Q1 last year. Sales of Kitchen category
decreased by 13.1% to 4.1 million euros (4.7), mostly affected by business and
production disruptions in the Nordics. The Home & Garden category sales
performed better increasing by 22.8% to 3.2 million euros (2.6) driven by
growing flowerpot sales.
Orthex's Q1 profitability decreased with the adjusted EBITA margin at 8.2%
(12.6%) and the adjusted EBITA at 1.7 million euros (2.8) compared to the same
period last year. The lower sales had the biggest negative effect on the EBITA.
Overall fixed costs related to operations and organisation were kept at the last
year's level, but that was not enough to protect the profit margins with the
decline in sales. The growing geopolitical and macroeconomic challenges resulted
in very low consumer confidence across all our markets and influenced our first
quarter performance. The outcome is weaker than our ambitions, thus the focus is
on sharpening our efforts and improving our result despite the reality we
operate in.
Cash flows in the quarter improved to 4.7 million euros (4.1) and the net debt
to adjusted EBITDA ratio (leverage) was down at a healthy 1.2 (1.3) at the end
of the period. A healthy cash flow and a strong balance sheet give us room to
invest in future growth.
The Ambiente fair in Frankfurt in February was one of the commercial highlights
of the quarter, the fair facilitated more relevant customer dialogue than ever.
During the fair, we launched three significant storage novelties of which the
SmartStore[TM] Compact Access container was awarded with the “Winner”
recognition at the German Design Awards 2025. Thanks to our professional sales
teams and excellent stand execution, Orthex stood out as a significant supplier
of quality products in Europe. Our increasing presence in Europe was proven by
the big interest in our solutions from both our existing and potential new
customers. As a quality supplier and category expert, we are dedicated to
becoming the number one brand in the storage category in Europe and adapt to the
market conditions by increasing our in-store visibility activities, by launching
new exciting products and by driving the sales through engaging campaign
activation.
Orthex published its Annual and Sustainability Report for the year 2024 in
March. Orthex continued its systematic work in all the key areas of
sustainability. Our efforts in promoting circular economy, increasing the use of
recycled raw materials, and enhancing resource efficiency mark important steps
on our road towards carbon neutral production. As a manufacturer of our
products, we can ensure an authentic sustainability strategy from start to
finish.
The systematic implementation of our growth strategy continues customer by
customer and everyone in the organisation is aligned and eager to explore ways
to accelerate growth. I want to thank everyone at Orthex and especially the
commercial team for perseverance during unfavourable market conditions and
strike-related operational inefficiencies and for keeping the eyes on the target
to strengthen our position in Europe.”
Press conference on financial results:
Orthex's CEO Alexander Rosenlew, CFO Saara Mäkelä and CMSO Hanna Kukkonen will
present the report today in a webcast starting at 11.00 a.m. EEST. The webcast
can be joined through this link (https://orthex.events.inderes.com/q1-2025). The
webcast presentation will be held in English.
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 the corporate website at Reports & presentations -
Orthex Group (https://investors.orthexgroup.com/reports-and-presentations/).
Recording of the event:
After the event, a recording will be available on the corporate website at
Reports & presentations - Orthex
Group (https://investors.orthexgroup.com/reports-and-presentations/).
Further enquiries:
Alexander Rosenlew, CEO, Orthex Corporation
Tel. +358 (0)40 500 3826
alexander.rosenlew@orthexgroup.com
Saara Mäkelä, CFO, Orthex Corporation
Tel. +358 (0)40 083 8782
saara.makela@orthexgroup.com
Distribution:
Nasdaq Helsinki Ltd
Main media
https:/investors.orthexgroup.com/
Orthex in brief
Orthex (ORTHEX, Nasdaq Helsinki, Finland) is a leading Nordic houseware company.
Orthex offers a broad assortment of practical and durable household products
with a mission to make consumers' everyday life easier. Orthex main consumer
brands are SmartStore™ in storage products, GastroMax™ in kitchenware and
Orthex™ in home and garden products. Orthex aims to be the industry forerunner
in sustainability by offering safe and long-lasting products and reducing its
carbon footprint by increasing the share of recycled and renewable raw
materials. Read more www.orthexgroup.com.
Orthex's net sales in 2024 were 89.7 million euros. The company has customers in
more than 40 countries and local sales organisations in the Nordics, Germany,
France, the UK, and the Benelux.
Follow Orthex on LinkedIn (https://www.linkedin.com/company/orthexgroup) /
Facebook (https://www.facebook.com/Orthex-Group-933475916759915/?fref=ts) /
Instagram (https://www.instagram.com/orthexgroup/)