25.08.2022 09:00Pörssitiedotteet / Stock exchange releases

Orthex Half-year financial report 2022: Cost inflation impacted profitability

Orthex Corporation, Stock exchange release, 25 August 2022 at 9.00 a.m. EEST

This release is a summary of Orthex Corporation’s Half-year financial report January–June 2022. The complete report is attached to this release as a pdf-file. It is also available on Orthex’s website at https://investors.orthexgroup.com/.

April–June 2022

  • Invoiced sales decreased by 4.5% and totalled EUR 21.5 million (22.5)
  • Net sales decreased by 5.3% to EUR 21.0 million (22.2)
  • Adjusted EBITDA was EUR 0.8 million (3.6)
  • Adjusted EBITA was EUR -0.2 million (2.6), representing -0.8% of sales (11.9)
  • Operating profit was EUR -0.3 million (2.4)
  • Net cash flows from operating activities were EUR -0.4 million (2.2)
  • Earnings per share, basic was EUR -0.03 (0.09)
  • Orthex conducted a sustainability materiality assessment of the company’s sustainability topics to align Orthex’s sustainability work with stakeholders’ expectations

January–June 2022

  • Invoiced sales decreased by 4.4% and totalled EUR 43.0 million (45.0)
  • Net sales decreased by 5.1% to EUR 41.6 million (43.8)
  • Adjusted EBITDA was EUR 3.5 million (7.8)
  • EBITA was EUR 1.5 million (4.4)
  • Adjusted EBITA was EUR 1.6 million (5.9), representing 3.9% of sales (13.6)
  • Operating profit was EUR 1.4 million (4.3)
  • Items affecting comparability totalled EUR 0.1 million (1.6)
  • Net cash flows from operating activities were EUR 1.5 million (5.4)
  • Net debt / Adjusted EBITDA was 2.6x (1.5)
  • Earnings per share, basic was EUR 0.03 (0.16)
  • Orthex’s Lohja factory was granted an ISCC+ certificate
  • Orthex published its Sustainability Report for the year 2021 as a part of the Annual Report

Long-term financial targets

As long-term financial targets the company has adopted to an average annual organic Net sales growth to exceed 5 per cent at the Group level and to exceed 10 per cent outside the Nordics (growth in local currencies), adjusted EBITA margin (adjusted for items affecting comparability) to exceed 18 per cent over time and net debt to adjusted EBITDA ratio to stay below 2.5x. Leverage may temporarily exceed the target range (for example, in conjunction with acquisitions).

The company aims to distribute a stable and over time increasing dividend with a pay-out of at least 50 per cent of net profit, in total, on a biannual basis.

Orthex does not publish a short-term outlook.

Key figures

EUR million 4–6/2022 4–6/2021 Change 1–6/2022 1–6/2021 Change 1–12/2021
Invoiced sales 21.5 22.5 -4.5% 43.0 45.0 -4.4% 90.6
Net sales 21.0 22.2 -5.3% 41.6 43.8 -5.1% 88.7
Gross margin 3.1 5.6 -44.4% 8.0 12.3 -35.1% 23.2
Gross margin, % 14.7% 25.1% 19.2% 28.1% 26.2%
EBITDA 0.6 3.3 -80.7% 3.4 6.3 -45.7% 13.2
EBITDA margin, % 3.0% 15.0% 8.2% 14.3% 14.9%
Adjusted EBITDA 0.8 3.6 -78.4% 3.5 7.8 -54.8% 14.8
Adjusted EBITDA margin, % 3.7% 16.1% 8.5% 17.9% 16.7%
EBITA -0.3 2.4 -112.9% 1.5 4.4 -65.7% 9.4
EBITA margin, % -1.5% 10.8% 3.6% 10.0% 10.6%
Adjusted EBITA -0.2 2.6 -106.7% 1.6 5.9 -72.5% 11.0
Adjusted EBITA margin, % -0.8% 11.9% 3.9% 13.6% 12.4%
Operating profit -0.3 2.4 -114.4% 1.4 4.3 -66.6% 9.3
Operating profit margin, % -1.6% 10.6% 3.5% 9.9% 10.4%
Net cash flows from operating activities -0.4 2.2 -118.0% 1.5 5.4 -72.6% 9.0
Net debt / Adjusted EBITDA 2.6x 1.5x 2.6x 1.5 1.7x
Adjusted return on capital employed (ROCE), % -0.6% 8.2% 4.7% 18.3% 33.0%
Equity ratio, % 33.0% 33.0% 33.0% 33.0% 35.8%
Earnings per share, basic (EUR) -0.03 0.09 -139.8% 0.03 0.16 -82.7% 0.35
FTEs 301 321 -6.4% 297 318 -6.5% 314

Alexander Rosenlew, CEO:

During the second quarter Orthex’s net sales decreased to 21.0 million euros (22.2). This was a result of both a high comparison base, as net sales in 2021 increased 25.5% vs previous year in the same period and further, especially at the beginning of the quarter, the purchase behaviour of our retail customers was negatively affected by the war in Ukraine. Nevertheless, and strategically importantly, our sales in Continental Europe grew slightly. Towards the end of the quarter, sales picked up: Importantly we gained new customers where distribution build-up will take place during the second half of the year. It is also positive that physical customer meetings and customer fair activities are finally picking up on all of our core markets after two years of COVID-related restrictions.

The rapid cost inflation had an impact on Orthex’s profitability as the adjusted EBITA margin percentage decreased in the second quarter to -0.8% (11.9) and the adjusted EBITA to -0.2 million euros (2.6). Raw material prices continued to rise, further driven by, the sudden Russian attack on Ukraine. This also negatively affected transportation and energy prices. During the period between December 2020 and June 2022, the raw material price index has increased by 78%. This is an unprecedented pace of increase.

We have been actively working with price increases, already in the past 12 months we implemented two rounds of increases. We have also announced additional price increases to mitigate more of the negative cost effect. To add to the cost issue, we were
affected by the deteriorated value of the Swedish Krona. Without the negative exchange rate effect, the Q2 EBITA would have been positive. Whereas we keep positive traction with our customers and our strategy is working well, it is disappointing to see the result we delivered in Q2.

We are committed to implementing our growth strategy with a focus on international growth and sustainability. Raw material prices reached their highest levels so far at the end of April 2022 and currently raw material prices, freight cost and energy prices are at very high levels. Even if we saw signs of decrease in raw material price indexes towards the end of the reporting period, the future development is hard to predict. Despite the prevailing short-term challenges and market uncertainty, our long-term target is to deliver an adjusted EBITA margin exceeding 18%, and we are committed to ensuring that our measures are in line with that long-term target.

We are putting strong efforts on growing sales especially outside the Nordic countries and improving profitability despite the unstable general market development. We believe that the operating environment will eventually stabilise over time, which will help us to fully focus on actively growing profitably.

As part of our core sustainability strategy, Orthex conducted a sustainability materiality assessment of the company’s sustainability topics to align Orthex’s sustainability work with stakeholders’ expectations during Q2. We received an impressive 500+ replies, and the assessment results were supplemented by interviews with selected stakeholders. This shows widespread engagement and interest in sustainability issues and further confirms our strong commitment to our sustainability. In April, Orthex was certified as a Nasdaq ESG Transparency Partner. This certification is used to show engagement in the market transparency and environmental standards.

I take the opportunity to thank our employees for the commitment to adopt to the very fast changing business conditions, which put strain both on operations and sales. We are all prepared and eager to continue improving consumers’ everyday life with practical and sustainable products and we have a strong new product and customer acquisition plan in place.

Press conference on financial results:
Orthex’s CEO Alexander Rosenlew and CFO Saara Mäkelä will present the financial report on 25 August 2022 at 11:00 a.m. EEST in a webcast. The webcast can be joined through
this link. The webcast presentation will be held in English.

Questions to the management can be sent through the meeting chat.

Presentation material:
The presentation material will be shared in the online meeting, and it can be downloaded the same day on Orthex’s website at

Recording of the event:

After the event a recording will be available on the company’s website at https://investors.orthexgroup.com/.

Further enquiries:
Alexander Rosenlew, CEO, Orthex Corporation
Tel. +358 (0)40 500 3826


Saara Mäkelä, CFO, Orthex Corporation
Tel. +358 (0)40 083 8782


Orthex is a leading Nordic houseware producer that strives to make consumers’ everyday life easier with its products that are presented under the consumer brands SmartStore™ in storage products, GastroMax™ in kitchenware and Orthex™ in home and plant care categories. Orthex aims to be the industry forerunner in sustainability.

Orthex’s net sales in 2021 was 88.7 million euros and operating profit 9.3 million euros. The company has customers in more than 40 countries and local sales offices in Finland, Sweden, Norway, Denmark, Germany, France, and the United Kingdom. Orthex is listed on the Nasdaq Helsinki stock exchange.