AUSTRIA - The wood-based materials manufacturer was able to profit from slightly positive economic developments, the recovering demand for construction services in Europe, as well as the stable raw material prices.
During the 2015/2016 financial year (30th of April 2016) turnover increased to 2.34 billion Euro (+3.4%), the EBITDA to 349.6 million Euro (+9.8%). The EBITDA margin exceeded previous years’ levels at 14.9%.
In a market environment characterized by production overcapacities and high price pressure, the turnover of the EGGER Retail Products division increased by +4.2%. The Decorative Products division (Furniture and Interior Design) obtained 1,865.9 million Euro during the financial year 2015/2016, or three quarters of the EGGER Group total turnover. The revenue of the EGGER Building Products (OSB and Timber) division also grew by +2.9% as compared to the previous year.
All EGGER plants were well utilized over the previous financial year. The quantity of rawboards, including timber, increased to 7.7 million m3 (+2%), which means the full utilization of all primary production capacities. A particularly positive development was recorded in the Western European plants. The overall development in Eastern Europe was stable over the past twelve months. Declines in the Ukraine are countered by increases in almost all other markets. In Russia, the political and currency-related crisis led to lost revenues and earnings, which did however, improve as the financial year progressed. Markets outside Europe play an increasingly important role.
The balance sheet for the 2015/2016 financial year shows an investment volume of 302.7 million Euros (previous year: EUR 263.3 million) of which EUR 63.2 million was maintenance investments and EUR 239.5 million growth investments. The expansion of the Gagarin location (Russia) was the largest investment. The ultramodern MDF/HDF production facility, with an annual capacity of 350,000 m3, started operations during the first quarter of 2016. A flooring production line, lamination and finish lines, storage and administrative surfaces, as well as a biomass power plant were also built.
Thomas Leissing, speaker of the Group Management and in charge of Finances, Administration, and Logistics, explains why EGGER invested in Russia during times of political and economic insecurity: "We don't expect a recovery of the Russian market in the short-term. In the medium to long-term, however, we see Russia as a strong growth market, and wish to produce the materials that are in demand in the region at a local plant. Our investments are aimed at achieving this." Other key investments took place in the Western European plants of St. Johann in Tirol (AT), Unterradlberg (AT), Hexham (UK), Rambervillers (FR) and Rion des Landes (FR). The investments particularly focus on logistics, modernization of the finish lines, production of elements, as well as energy and maintenance. Also in during the fiscal year polypropylene edging manufacturing started operations in Brilon (DE). The Group employee numbers also increased with the new production facilities: During 2015/2016, EGGER had 7,785 employees, an increase of 5.5%.
For the current financial year, which started in May, the EGGER Group is once more counting on a generally positive business development. A stable economic situation and steady consumption are forecast, particularly for the Western European sales markets. No improvement is anticipated in the short-term for Russia and the countries partly affected by political tension in Eastern Europe and the Middle East. Thanks to the positive Western European development and the move of volumes from weaker regions to alternative markets, EGGER expects the revenue and results growth to continue across the Group during the financial year 2016/2017.
