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The EGGER Group closed the first half of its 2024/2025 financial year (reporting date 31 October 2024) with consolidated sales of EUR 2.1 billion (–0.2 percent as compared to the previous year). The reported economic situation was characterized by the challenging situation in the construction industry, a generally weak consumption, major global conflicts and turbulence in economic policy.
As an internationally active family company, EGGER has felt the effects of this context on its own business. Despite the challenging market environment, the wood-based material manufacturer reports a stable development in the first half of 2024/2025 and, against this backdrop, can draw a quite satisfying conclusion.
“When navigating particularly turbulent and challenging times, it is crucial that we can rely on our strong foundations,” says Thomas Leissing, Chief Financial Officer EGGER Group and Speaker of the Group Management. “We are and always will be a family business, this is clearly anchored in our strategy. Our long-term focus is on the sustainable development of the company over generations. This enables us to utilize opportunities and continue to invest in our plants even in difficult economic times. Together with our more than 11,000 employees, we will also master the difficult market context well."
Tense demand
In the first half-year 2024/2025, the EGGER Group generated sales of EUR 2,093.5 million (–0.2 percent as compared to the first half-year 2023/2024) and an EBITDA of EUR 320.3 million (+7.0 percent as compared to the previous year). The EBITDA margin is 15.3 percent, the shareholder’s equity ratio is at the high level of 42.5 percent.
Sales were therefore maintained at a solid level across the Group despite the economic downturn. The decorative products area for furniture and interior design generated unconsolidated sales of EUR 1,860.0 million (+2.4 percent compared to the previous year). Positive effects resulted from the first-time inclusion of the plant in Markt Bibart, Germany, which was acquired at the end of 2023; the increase in sales volumes at the plant in Lexington, North Carolina; and the increase in sales at the plant in Biskupiec, Poland. The plants in Western and Eastern Europe were well utilized overall. However, the situation in the core markets in Central Europe was challenging, with the German-speaking region in particular experiencing high market and price pressure. The product area for wood construction and flooring, which generated unconsolidated sales of EUR 351.0 million (–9.4 percent compared to the previous year), is directly affected by the downturn in the construction industry. The significant drop in construction activity, particularly in the area of new residential construction, is having an inhibiting effect here.
Investments Despite the Crisis
EGGER is continuing to pursue its long-term investment strategy even in this challenging market environment. Investments totaled EUR 218.4 million in the first half of the year (in the same period last year it was EUR 238.6 million). The investments related, above all, to capacity expansion projects, such as the expansion of the Barony plant in the UK, which now also has equipment for the production of decorative-faced chipboard, and the modernization of the resin plant in Wismar, Germany. In addition, investments were made or started at the two plants in Caorso, Italy and Markt Bibart in Germany, the two most recent additions to the EGGER Group, to expand capacity and utilize synergies within the Group.
A central focus of the investment projects continues to be on increasing sustainability performance. The climate protection commitment with the target of Net Zero by 2050 is an explicit obligation to which the Group is devoted. A number of measures were initiated in the reporting period. These include the expansion of capacities for processing recycled wood as well as the establishment of additional locations for the collection of pre-consumer and post-consumer recycled wood. Most recently, two new Timberpak recycling collection sites were put into operation in Germany. The construction of an additional power plant at the St. Johann plant in Tirol, Austria, which began in spring 2024, will also significantly expand capacities for generating heat and electricity from biogenic fuels.
Product Innovations in All Areas
EGGER creates added value for its customers with automation, digitalization and an innovative and highly refined product portfolio. The Decorative Collection 24+ for furniture and interior design has already been well received by the market, and the new Flooring Collection 25+ will be available from specialist distributors and DIY stores from January 2025. Innovations in the area of structural building products respond to the increased demand for sustainable wood construction solutions, above all the EGGER EcoBox, a hybrid product made of OSB, timber and soft wood fiber insulation. This resource-efficient alternative in timber frame walls was even recently honored with the German Sustainability Award in the transformation field of resources.
Cautious Outlook
The macroeconomic outlook remains subject to great uncertainty and will continue to be strongly characterized by the challenges posed by the global crises, weak markets, continued subdued demand in the construction sector and the resulting price pressure. As a result, the EGGER Group's revenue and earnings expectations for the second half of the 2024/2025 financial year remain cautious.
With its own solid financial base, long-term, successful relationships with customers and suppliers, the productivity advantages built up over many years at the plants and, above all, the strong and reliable commitment of its more than 11,000 qualified and motivated employees, EGGER believes it is well equipped to meet the challenges ahead.
