EGGER Group: Strong growth for the half-year result

Positive outlook for the entire business year 2017/2018

The EGGER Group, headquartered in St. Johann in Tirol (AT), was able to conclude the first half-year of its financial year 2017/2018 (reference day 31st October 2017) with a consolidated turnover of EUR 1.32 billion (+11.1% compared to the previous year). The result before interest, taxes and depreciation (EBITDA) increased to EUR 222.5 million (+17.4%). The EBITDA margin increased to 16.8 % (previous year: 15.9 %). The EGGER Group now has more than 9000 employees and finds itself in a growth phase. It expects a positive development for the full financial year 2017/2018.

Over the past half-year, the EGGER Group was able to profit from the largely positive economic situation and the growing building and renovation activities. The company managed to increase its turnover in Europe and all relevant geographic markets, as well as in all product segments. The largest turnover increases (+11.0%) were recorded for EGGER Decorative Products, which sells products for furniture and interior design. The largest development of this segment, with 76% of all sales, was in Central and Eastern Europe. The successful worldwide introduction of the EGGER Decorative Collection 2017-2019 had a particularly positive effect on the Decorative Products segment. Minor losses due to the exchange rate were recorded only in the UK. The Overseas segment grew significantly, particularly in Asia and North America. The turnover of the new plant in Concordia, Argentina, which joined the Group on 1st October 2017, are also included.

EGGER Flooring Products (Laminate, Comfort and Design flooring) achieved an increase in turnover of +6.4%, as compared to the same period during the previous year despite a still difficult market environment. The overall increase in the turnover primarily depends on the gradual marketing of the new flooring capacities in the Gagarin (RU) plant.However, the EBITDA development was negative, due to the incomplete utilisation of capacities, as well as increased costs for wood and chemicals.

EGGER Building Products also achieved a turnover increase of +9.2% in a market marked by increasing raw material costs and availability bottlenecks. The sales of OSB products and of timber also increased. The largest growth in the OSB segment was recorded in Eastern Europe. On the other hand, timber sales increased in Germany and certain overseas markets. In this segment the EBITDA is also under the level of the previous year, which is again due to the increase in raw material costs for wood and chemicals.

Intensive investment activity

The first half-year of the financial year 2017/18 was very eventful for the EGGER Group and marked by significant growth. EGGER took over a chipboard and MDF plant in Concordia, Argentina, on 1st October 2017. A further step is already in preparation in the US: EGGER is planning a Greenfield project in Lexington, North Carolina. The announcement was made on 24th July 2017. Construction will start in 2018. The construction of EGGER’s 19th plant has already began during the last half-year in Poland. In Biskupiec, in north-east Poland, an ultramodern production plant for 650,000 m3 of chipboard will be built by the end of 2018.

This growth strategy was already reflected in the first half-year of the financial year 2017/2018 in investments worth EUR 264.4 million (previous year: EUR 145.6 million). EUR 228.1 million (previous year: EUR 109.2 million) were spent on growth investments, including acquisitions. The main investments during the first half-year 2017/2018 were primarily the acquisition of the plant in Argentina, but also the start of the plant construction in Poland. Investments were also made in energy in France, as well as in logistics and automation projects in Austria and Germany. EUR 36.3 million (previous year: EUR 36.4 million) were spent on maintenance investments.

Positive outlook for the second half-year

The EGGER Group is also expecting a stable development of its business activity for the second half of the financial year 2017/2018. Given the positive situation in Western Europe, the new plant in Argentina, and the strategic move of volume from weaker regions to alternative markets, EGGER is expecting to increase turnover and maintain stable results throughout the Group for the financial year 2017/2018.

EGGER’s current efforts outside Europe also mean market diversification and a secure future for the entire EGGER Group, its customers and its employees. Thomas Leissing, spokesman of the EGGER Group Management, commented: “We are pursue a conservative growth strategy, commit to moderation, and make sure that every step the organisation makes is viable. A solid financial basis supports long-term supply relationships with customers and suppliers, as well as further stable growth based on our own performance.”

About EGGER

The family company, founded in 1961, employs approximately 9,000 people. In 18 plants across the world, they produce an extensive product range of wood-based materials
(chipboard, OSB, and MDF board) as well as timber. The company generated a turnover of EUR 2.38billion in the 2016/2017financial year. EGGER has global customers in the furniture industry, wood construction and flooring retailers, as well as DIY markets. EGGER products are found in countless areas of private and public life, including kitchens, bathrooms, offices, living rooms and bedrooms. EGGER is a full-range supplier for the furniture and interior design industry, for wood construction, as well as wood-based flooring (laminate, cork and design flooring) industries.

The EGGER half-year financial report for 2017/2018 is now available at

Half-year financial statement of the EGGER Group

→Turnover for the first half of the financial year 2017/2018:
EUR 1.32 billion (+11.1 % as compared to the same period last year)
→EBITDA increased to EUR 222.5 million
(+17.4 % as compared to the same period of
the previous year) / →Turnover growth in all three Divisions: EGGER Decorative Products (+11.0 %), EGGER Retail Products (+6.4 %), and EGGER Building Products (+9.2 %)
→EUR 264.4 million investments in the first half-year 2017/2018

Captions

/ The EGGER Group Management from left to right: Walter Schiegl (Head of Production/Technology EGGER Group), Thomas Leissing (Head of Finance/Administration/Logistics EGGER Group), Ulrich Bühler (Head of Marketing/Sales EGGER Group)
/ The EGGER plant at the St. Johann in Tirol (AT) headquarters.
/ The plant in Concordia, Argentina, has belonged to EGGER since 29th September 2017. It is the Group’s 18th plant and the first production facility outside Europe.
/ The construction of the new EGGER plant in Biskupiec, Poland, began in September 2017. The first board is expected to be produced there by the end of 2018.

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FRITZ EGGER GmbH & Co. OG

Holzwerkstoffe

Manuela Leitner

Weiberndorf 20

6380 St. Johann in Tirol

Austria

Phone+43 5 0600-10638

Fax+43 5 0600-90638