CEO’s review

From Financial statements release 2024: Solid performance in a sluggish market

In 2024, invoiced sales in the Nordics increased to 71.1 million euros from 68.7 million euros in 2023. Strengthened by a solid first half of the year, the consolidated full-year total invoiced sales increased by 4.9%. Invoiced sales in the Rest of Europe increased by 10.0% to a record of 20.3 million euros (18.5) in 2024 meaning that we reached our long-term invoiced sales growth target +10% outside the Nordics.

Invoiced sales for the fourth quarter in the Nordics improved only slightly year-on-year and were 18.5 million euros (18.4). Careful consumer behaviour affected the retailers’ buying volumes especially in Sweden in the latter part of the year. Rest of Europe delivered invoiced sales growth of 5.3% and Q4 sales were record high at 5.7 million euros (5.4). In the end of the fourth quarter, shipments to some customers were restricted due to increase in credit risks, and this had a negative impact on the sales growth outside the Nordics.

Orthex’s profitability improved slightly compared to Q4 in the previous year, with an adjusted EBITA margin at 12.7% (12.4) and the adjusted EBITA at 3.0 million euros (2.9). The adjusted EBITA for 2024 declined and was 10.2 million euros (10.9). Considering the one-time energy price compensation received in 2023 in Sweden (0.7 million euros), the comparable EBITA improved by 0.6%. The profitability was affected by higher costs related to increased production cost as factories were planning for higher sales, reinforced commercial resources and salary inflation. In addition, the Q4 profitability was negatively impacted by higher credit loss provisions.

The fourth quarter cash flows increased to 2.4 million euros (0.4). The net debt to adjusted EBITDA ratio (leverage) was down at a healthy 1.4 (1.5) at the end of the period.

The biggest category Storage continued to grow in Q4, and the invoiced sales increased by 5.0% compared to October–December last year. Most of the growth came from markets outside the Nordics. The Kitchen category declined by -9.8% due to a few campaigns less compared to the previous year end. The Home & Garden category grew and delivered invoiced sales growth of 3.5% compared to Q4 in the previous year.

Compared to the previous year, the Storage category continued to grow at a pace of 5.9%. Orthex is focusing on launching several new products in the Storage category. The modern range of SmartStore™ Essence storage baskets made from recycled material was a remarkable new launch in 2024 and it was also recognised at the German Design Awards 2024 for its excellent product design. The Storage category accounted for 68.9% of total invoiced sales in 2024.

Kitchen and Home & Garden categories are traditionally strong in the Nordics, and the Kitchen category’s invoiced sales grew by 4.1% year-on-year thanks to widening customer distribution and the successful rebranding of SmartStore™ food storage products. The Home & Garden category invoiced sales remained flat compared to the previous year.

Our growth strategy with a focus on accelerated European and international growth with a strong commitment to sustainability is progressing well. Orthex’s full-year invoiced sales in our European strategic markets grew by 10.0%. We focused on in-store visibility and an example of this is the building of over 500 SmartStore™ shelf implementations in major retail chains around Europe and the Nordics. We continued strengthening our international commercial teams, with more local resources in France and Germany. The stronger international presence is intended to accelerate future growth in the area. Invoiced sales outside the Nordic markets accounted for 22.9% (21.9) of Orthex’s invoiced sales in 2024.

Orthex’s main sustainability target is to aim towards carbon neutrality in production by 2030. In 2024, Orthex joined the Circular Economy Green Deal and committed to replace virgin raw materials with recycled and renewable raw materials.

The business climate in 2024 was characterized by careful consumer behaviour and customer uncertainty. Although inflation pressures slowed down, and interest rates started decreasing during the year, demand did not recover remarkably. Orthex managed, however, to grow its full-year invoiced sales in all product categories and on all geographical markets ending the year with a record sales quarter. Even if I had anticipated more favourable operating conditions and stronger growth, I am convinced that our performance builds the momentum for the future. I am incredibly proud of the teamwork, individual efforts, and dedication of our employees in executing our growth strategy. I want to extend my heartfelt thank you to everyone at Orthex for their significant contributions throughout the year, and to all our customers and stakeholders for their trust in Orthex.