CEO’s review
Orthex purpose is to improve consumers’ everyday life with practical, beautiful, and sustainable products. We want to give consumers the opportunity to choose products that are better for the environment, therefore we constantly strive to improve the sustainability of our products and our operations.
From Q1/2024 Interim report: Momentum builds – strong sales and improving profitability
Alexander Rosenlew, CEO:
“Orthex had a strong start to the year. In the first quarter, Orthex’s net sales increased by 7.5% to 22.0 million euros (20.5). Constant currency net sales growth was 8.3% driven by campaigns, strong in-store activities, and normalising demand in the Nordics.
Invoiced sales in the Nordics improved by 8.4% compared to a weak comparison period and were 17.5 million euros (16.2). Rest of Europe saw solid invoiced sales growth of 9.9% resulting in 5.3 million euros in sales (4.9). Invoiced sales in the Rest of the world declined to 0.1 million euros (0.2).
The biggest category Storage performed well and grew by 10.0% compared to January-March last year. The Kitchen category is strong in the Nordic countries and the normalising Nordic demand is visible in the sales growth of 7.9%. The newly implemented SmartStore rebranding of food storage products shows positive effects in the form of increasing customer interest.
In reporting, Orthex has combined the categories Home & Yard and Plant care from 1 of January 2024 to a new category called Home & Garden. The new Home & Garden reporting category includes all the same items as the previous two, now combined categories in reporting. The Home & Garden category sales declined slightly by 2.1% compared to the same period last year. The slight decline is due to careful pre-orders for the season.
Orthex’s profitability improved compared to the same period in the previous year, with adjusted EBITA margin at 12.6% (11.7) and the adjusted EBITA at 2.8 million euros (2.4). A more stable raw material price level had a positive effect on EBITA. Cost increases are coming from strengthening the commercial organisation for future growth and from demand activation such as instore marketing, sales campaigns, and trade fairs. Cash flows in the quarter were strong at 4.1 million euros (2.5) partly affected by timing the completion of the investments made in 2023 to the start of the year. The net debt to adjusted EBITDA ratio (leverage) was down to 1.3 (2.4) at the end of the period.
Orthex’s sales and marketing teams presented Orthex in a formidable manner at the Ambiente fair in Frankfurt in January. Orthex has also invested in novelties and launched some important new products such as the SmartStore bed roller and the SmartStore Collect Biowaste container. New customer acquisition keeps progressing well in Europe with opportunities to test the sell-out of our products in the stores of some major retail chains not previously selling SmartStore products.
Changes in operational management were implemented towards increasing company-wide responsibilities. Our ambition to be the leading storage category brand in Europe and the best partner for our customers requires that our operations are structured for growth and for efficient reactions to changing conditions.
Sustainability is a core element in implementing Orthex’s growth strategy. As recognitions for our efforts, Orthex was ranked in 6th place among the Nasdaq Helsinki small-cap companies in the Nordic Business Diversity Index and reached the highest Leadership level with the top score A- in Climate Disclosure Project’s (CDP) global climate reporting for the first time.
Our strategy is working well, we adapt to changes systematically, and our results are improving. Our employees’ dedication and stakeholder support are crucial, and we keep building the positive momentum to achieve our goals. Together we will ensure strong foundations for continued growth and increasing profitability.”