CEO’s review

From Interim Report Q1/2025: Negative consumer sentiment affected sales and profitability

Invoiced sales for the first quarter in the Nordics decreased by 1.1% to 17.3 million euros (17.5). Invoiced sales in the Rest of Europe decreased by 18.6% compared to the Q1 in the previous year. The set back came from a few customers, with quite specific different issues relating to timing of campaigns, slower sell-out, and limited shipments due to credit risk mitigation.

Storage is the biggest category representing most of the business outside the Nordic countries and the negative sales development in the Rest of Europe is visible in the Storage category’s invoiced sales which decreased by 7.0% to 14.5 million euros (15.6) compared to Q1 last year. Sales of Kitchen category decreased by 13.1% to 4.1 million euros (4.7), mostly affected by business and production disruptions in the Nordics. The Home & Garden category sales performed better increasing by 22.8% to 3.2 million euros (2.6) driven by growing flowerpot sales.

Orthex’s Q1 profitability decreased with the adjusted EBITA margin at 8.2% (12.6%) and the adjusted EBITA at 1.7 million euros (2.8) compared to the same period last year. The lower sales had the biggest negative effect on the EBITA. Overall fixed costs related to operations and organisation were kept at the last year’s level, but that was not enough to protect the profit margins with the decline in sales. The growing geopolitical and macroeconomic challenges resulted in very low consumer confidence across all our markets and influenced our first quarter performance. The outcome is weaker than our ambitions, thus the focus is on sharpening our efforts and improving our result despite the reality we operate in.

Cash flows in the quarter improved to 4.7 million euros (4.1) and the net debt to adjusted EBITDA ratio (leverage) was down at a healthy 1.2 (1.3) at the end of the period. A healthy cash flow and a strong balance sheet give us room to invest in future growth.

The Ambiente fair in Frankfurt in February was one of the commercial highlights of the quarter, the fair facilitated more relevant customer dialogue than ever. During the fair, we launched three significant storage novelties of which the SmartStore Compact Access container was awarded with the “Winner” recognition at the German Design Awards 2025. Thanks to our professional sales teams and excellent stand execution, Orthex stood out as a significant supplier of quality products in Europe. Our increasing presence in Europe was proven by the big interest in our solutions from both our existing and potential new customers. As a quality supplier and category expert, we are dedicated to becoming the number one brand in the storage category in Europe and adapt to the market conditions by increasing our in-store visibility activities, by launching new exciting products and by driving the sales through engaging campaign activation.

Orthex published its Annual and Sustainability Report for the year 2024 in March. Orthex continued its systematic work in all the key areas of sustainability. Our efforts in promoting circular economy, increasing the use of recycled raw materials, and enhancing resource efficiency mark important steps on our road towards carbon neutral production. As a manufacturer of our products, we can ensure an authentic sustainability strategy from start to finish.

The systematic implementation of our growth strategy continues customer by customer and everyone in the organisation is aligned and eager to explore ways to accelerate growth. I want to thank everyone at Orthex and especially the commercial team for perseverance during unfavourable market conditions and strike-related operational inefficiencies and for keeping the eyes on the target to strengthen our position in Europe.”