Orthex CEO’s review
From Half-Year Financial Report 1 January-30 June 2025: Strong sales growth in Europe in Q2, Nordic consumer demand still challenging
Alexander Rosenlew, CEO:
“In the second quarter, Orthex’s net sales decreased by 2.3% to 20.5 million euros (21.0) compared to the second quarter of 2024. Constant currency net sales decreased by 5.1% to 20.5 million euros (21.6). The operating environment remained challenging due to continued low consumer confidence. Despite that we managed to achieve very strong sales growth in the Rest of Europe through improving distribution, successful new product launches and effective in-store campaigns. In the Nordics, some customers have been cautious in their buying patterns due to the challenging market.
In the first half of the year, net sales decreased by 3.5% and amounted to 41.5 million euros (43.0). During the period, credit risks continued in some of our customers, and as a precaution we restricted shipments especially in the first quarter, which had a negative sales impact on sales outside the Nordics. In the Nordics, the sales were affected by some key customers buying smaller campaign volumes compared to last year. Strikes also impacted us and the Finnish trade negatively during the first quarter.
Compared to the Q2 in the previous year, Rest of Europe showed a strong growth of 22.1% to 5.1 million euros (4.2). Invoiced sales for the second quarter in the Nordics decreased by 7.6% to 15.9 million euros (17.2) The decline in the Nordics came from a few customers, relating to timing of campaigns and slower sell-out. Our extensive pipeline of new products is showing good performance, and we are happy to see strengthening customer partnerships and increased distribution in the Rest of Europe.
Storage is the Group’s biggest product category, and it represents most of the business outside the Nordic countries. The positive sales development in the Rest of Europe supported the Storage category’s invoiced sales which increased by 1.0% to 13.5 million euros (13.4) compared to Q2 last year. Sales of the Kitchen category decreased by 8.0% to 4.4 million euros (4.7), the decrease comes from lower buying volumes in the Nordics. The main part of the Kitchen category sales is still coming from the Nordic countries. The Home & Garden category sales decreased by 3.8% to 3.3 million euros (3.5).
Orthex’s Q2 profitability increased with the adjusted EBITA margin at 8.4% (7.4%) and the adjusted EBITA at 1.7 million euros (1.6) compared to the same period last year. We managed to keep our overall costs under good control, which enabled us to protect the profit margins despite the decline in sales in the Nordics.
Cash flows in the quarter were according to our plans at -0.8 million euros (-0.4). The net debt to adjusted EBITDA ratio (leverage) was down at a healthy 1.4 (1.6) at the end of the period. This positions us well to be prepared for possible strategic investments.
Orthex conducted a sustainability materiality assessment with key stakeholders during the spring. The assessment results are used to ensure that our sustainability strategy focuses on material sustainability topics. In May 2025, Orthex joined UN Global Compact. The UN Global Compact is a United Nations initiative to encourage businesses worldwide to adopt sustainable and socially responsible practices.
During the upcoming quarters, we will be updating our commercial strategy to strengthen our commercial offering and ensure efficient targeting of key channels, key customers and key markets, with a focus on becoming a truly European company. The ambition is to accelerate healthy growth, while ensuring that our operations are optimized to serve our key markets efficiently. I want to sincerely thank all our stakeholders, partners and our dedicated personnel for the good cooperation during times which require quite some extra efforts to overcome consumer carefulness under geopolitically turbulent conditions.”