Half Year 2026 Orthex Oyj Earnings Call Transcript
Key Points
- Orthex Corp (FRA:4QU) achieved strong sales growth in the Nordics, with a 12% increase in Q2, driven by volume and price increases.
- The company demonstrated resilience in managing unprecedented raw material price hikes, with only a EUR300,000 decline in adjusted EBITA.
- Orthex Corp (FRA:4QU) maintained strong cash flow of EUR1.8 million and reduced net debt by EUR4.3 million, keeping leverage at a healthy 1.1 times.
- The company received prestigious design awards, including the Red Dot Winner for its SmartStore Module range, enhancing brand recognition.
- Orthex Corp (FRA:4QU) successfully implemented price increases in the Nordics with customer understanding, and most price negotiations in Europe are now resolved, allowing a return to growth initiatives.
- The company's strategy remains focused on European growth, with new product launches and in-store campaigns driving consumer preference.
- Sales in the rest of Europe declined by 12.9% during Q2 due to price increase negotiations, slowing growth initiatives.
- Raw material prices peaked in May and remain at high levels, creating uncertainty and impacting profitability.
- Demand weakened during the price peak, with customers limiting purchasing activity, and ongoing Middle East tensions pose risks to supply chains.
- Adjusted EBITA declined by EUR300,000 year-on-year, and the company incurred EUR600,000 in items affecting comparability, reducing reported EBITA to EUR800,000.
- The company expects the full effect of price increases and raw material costs to impact coming quarters, with uncertainty on when costs will be fully absorbed.
- Year-to-date growth outside the Nordics slowed to just 1.8%, below the long-term target of 20% growth in that region.
(audio in progress) Together with me, I have Saara Makela, our CFO; and Hanna Kukkonen, our CMSO. We'll take you through the last quarter and of course, at the same time, the first half of the year. I will start with just a short recap of what we are.
We're a European household company with strong brands, strategic brands, SmartStore, GastroMax from Orthex, three production facilities where we produce almost 90% of everything we sell. Then in addition to that, we have a strong presence throughout Europe, which we are aiming to make our home market. That in very short about who we are.
We make functional products, long-lasting for an enjoyable and organized home. It's key here that the products are usable. They all serve a purpose. In that purpose, the storage category is our biggest range or biggest category under the brand SmartStore. It's about 70% of our sales in the kitchen category, where we also have kitchen storage products. We have baking utensils and whatnot to make the life of the home chef easier.
Then we have
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