Interim report January-March 2023

January-March 2023

  • Net sales were 533.2 MSEK (496.6), an increase of 7.4% compared to the equivalent period in 2022. Organic growth was 3.5% for the period.
  • EBITA was 78.5 MSEK (94.3), an EBITA margin of 14.7% (19.0). The period was affected by one-off costs of 1.6 MSEK (0.0) regarding an efficiency program in Sweden.
  • Earnings per share were 1.25 SEK (1.56).
  • Cash flow after investing activities was 39.8 MSEK (-29.1).

Significant events during and after the quarter
Between February and April, FM Mattsson Group implemented an efficiency program that reduced staffing in Sweden by approximately 20 employees. Within the programme, we have chosen to strengthen the organisation in the strategically important areas of digitalisation and sustainability. The assessment is that the program should lead to annual cost savings of around 10-12 MSEK starting in the second quarter.


A good start in a challenging market

Our sales for the first quarter totalled 533 MSEK, which is 7.3% higher than those of the same quarter in 2022, with an EBITA margin of approximately 15%. Overall, we have had a good start to the year, taking into account the weaker result at the end of 2022, the general economic situation in the wider world, and comparable figures for the first quarter being at a high level.

Our sales saw varying trends in the countries we operate in, and it was primarily our sales in Sweden that developed strongly. The key factors behind this are the large order intake from large customers, after having reduced their inventory levels towards the end of 2022, and the level of activity on the project market which remains relatively high. We believe our sales in Sweden have also been boosted by the performance of the Swedish krona, when compared to competitors who do not carry out manufacturing in Sweden. We saw weaker demand in our international operations due to the general economic situation and as a higher proportion of our sales are to the private market, where we have been seeing an extended downward trend due to weaker general demand.

The general economic situation continues to affect our customers, and we expect this reduced demand to remain for the coming quarters, with new construction and renovation of private bathrooms and kitchens most affected. We believe that our significant presence in the commercial renovations market may go some way to balancing this, but overall we expect 2023 to be a challenging year in terms of sales. For this reason, we are continuing to adapt operational costs and implement initiatives to reduce staffing in Sweden, inventory adaptations, and general cost reviews. Working to adapt our inventory levels has been a longer-term project and we feel that there is still work to be done to bring levels down, particularly as major cost increases influence the value of the inventory in parallel to the need to build the inventory for new product launches.

During this quarter we have continued to develop our operations with the future in mind. A key milestone here is the opening of our new head office and central warehouse for Hotbath in the Netherlands, where we now have a state-of-the-art facility to manage continued growth. In March, Hotbath also attended ISH, a major trade fair in Frankfurt. This proved successful in a number of respects, bringing in new business contacts and providing an opportunity to showcase Archie, an upgraded range of stainless steel mixers with attractive designs and several sustainability benefits. This quarter, one element in our efforts to combine attractive design with sustainable products has been the certification of our Aqualla mixers for lower water pressures, to meet customer demand for more sustainable products and in accordance with the criteria of the Unified Water Label.

Overall, we can sum up the first quarter as showing growing sales and profitability in line with our long-term goals despite the uncertain environment. This is a pleasing acknowledgement that our organisation works well and has a dedicated team and customers who appreciate what we bring to the table.