Stable profitability despite lower demand
Kährs’ net sales decreased by -28 per cent in the second quarter, primarily due to weak demand in the residential segment in Europe, affected by increasing interest rates and general high cost inflation. Profitability was maintained by a continued strong gross margin and good cost control even if both the operating profit and the operating margin are down compared to the record-setting second quarter in 2022.
Second Quarter 2023
President and CEO Johan Magnusson comments:
During the second quarter, we are seeing a significantly lower demand than in the record-setting quarter in 2022, during which Kährs had record high sales. It is primarily demand in the residential segment of our main markets in Europe that continued to be weakened during the quarter compared to last year with a clear change in consumption patterns, with shrinking investments in private homes and interior products.
Kährs’ profitability-enhancing measures, with focus on customer & market optimization, capacity adaptation and continued streamlining, are continuing to generate results. Our profit margins continue to be at a higher level than in the years prior to 2022. Though, we cannot reach last year’s record-setting margin and profit, given the negative change in market development affecting both new-built, renovation and refurbishing of homes.
Despite challenging market forecasts in 2023 and into 2024, there is a large need for renovation and increased new construction in the longer term. We will continue to develop Kährs with a focus on a wider selection of sustainable innovative product offers and invest in our digital customer journey in cooperation with our distribution channels.