Orthex Oyj — Earnings Release 2024

Nov 15, 2024

Orthex Corporation: Interim Report January-September 2024

Orthex Corporation: Interim Report January-September 2024

Orthex Corporation, Stock exchange release, 15 November 2024 at 9.00 a.m. EET
Strong sales growth outside the Nordics, higher costs affected profitability

This release is a summary of Orthex Corporation's Interim Report for the period
January-September 2024. 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/.
July-September 2024

· Invoiced sales amounted to EUR 23.3 million (22.2)
· Net sales increased by 4.2% to EUR 22.8 million (21.9)
· Adjusted EBITDA was EUR 4.0 million (4.5)
· Adjusted EBITA was EUR 2.9 million (3.5), representing 12.6% of net sales
(16.1)
· Operating profit was EUR 2.8 million (3.5)
· Net cash flows from operating activities were EUR 5.7 million (5.3)
· Earnings per share, basic was EUR 0.10 (0.13)

January-September 2024

· Invoiced sales increased by 6.0% and totalled EUR 67.9 million (64.0)
· Net sales increased by 5.3% to EUR 65.9 million (62.5)
· Adjusted EBITDA was EUR 10.5 million (11.0.)
· Adjusted EBITA was EUR 7.2 million (8.0), representing 10.9% of sales (12.8)
· Operating profit was EUR 7.1 million (7.9)
· Net cash flows from operating activities were EUR 9.4 million (9.8)
· Net debt / Adjusted EBITDA was 1.3 (1.4)
· Earnings per share, basic was EUR 0.24 (0.27)

The figures in brackets refer to the corresponding period in the previous year
unless stated otherwise. The figures are unaudited.

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 7-9/20 7-9/20 Change 1-9/20 1-9/20 Change 1-12/2023
24 23 24 23
Invoiced 23.3 22.2 5.0% 67.9 64.0 6.0% 88.0
sales
Net sales 22.8 21.9 4.2% 65.9 62.5 5.3% 85.9
Gross 6.5 6.9 -5.6% 18.9 17.5 8.0% 24.3
margin
Gross 28.6% 31.6% 28.7% 28.0% 28.3%
margin. %
EBITDA 3.9 4.5 -13.2% 10.4 11.0 -5.4% 14.9
EBITDA 17.2 20.6% 15.8 17.6% 17.3%
margin. % % %
Adjusted 4.0 4.5 -11.4% 10.5 11.0 -5.2% 14.9
EBITDA
Adjusted 17.5% 20.6% 15.9% 17.6% 17.4%
EBITDA
margin. %
EBITA 2.8 3.5 -20.6% 7.1 8.0 -10.6% 10.9
EBITA 12.3 16.1% 10.8 12.7% 12.6%
margin. % % %
Adjusted 2.9 3.5 -18.4% 7.2 8.0 -10.2% 10.9
EBITA
Adjusted 12.6% 16.1% 10.9% 12.8% 12.7%
EBITA
margin.
%
Operating 2.8 3.5 -20.1% 7.1 7.9 -9.7% 10.8
profit
Operating 12.3% 16.0% 10.8% 12.6% 12.5%
profit
margin. %
Net cash 5.7 5.3 8.0% 9.4 9.8 -4.4% 10.2
flows from
operating
activities
Net debt / 1.3x 1.4x 1.3x 1.4x 1.5x
Adjusted
EBITDA
Adjusted 8.8% 11.5% 21.8% 25.2% 31.8%
return on
capital
employed
(ROCE). %
Equity 40.0% 37.9% 40.0% 37.9% 40.2%
ratio. %
Earnings 0.10 0.13 -24.4% 0.24 0.27 -9.9% 0.39
per share.
basic (EUR)
FTEs 294 280 5.0% 292 281 3.7% 281

Alexander Rosenlew, CEO:
“In the third quarter, Orthex's net sales increased by 4.2% to 22.8 million
euros (21.9). Constant currency net sales growth for the quarter was 2.8%.
January-September net sales grew by 5.3% and amounted to 65.9 million euros
(62.5).
Invoiced sales growth outside the Nordics was one of the highlights of the third
quarter: growth of 24.1% was reached amounting to a record of 5.5 million euros
(4.4). In the Rest of Europe, increased distribution, campaigns and timing of
orders resulted in strong invoiced sales growth of 19.8%, delivering in total
5.1 million euros (4.2). The third quarter invoiced sales in the Nordics
improved only moderately by 0.3% compared to the previous year and were 17.9
million euros (17.8) as sell-out in some major accounts were slower than
expected.
The biggest category Storage continued to grow, and the invoiced sales increased
by 3.8% compared to July-September last year. Most of the growth came from
markets outside the Nordics. The Kitchen category showed healthy sales growth of
12.1%. The Home & Garden category sales remained flat compared to the third
quarter last year, well reflecting the sentiment on the Nordic market where most
of the sales of these items come from.
Orthex's profitability declined compared to Q3 in the previous year, with an
adjusted EBITA margin at 12.6% (16.1) and the adjusted EBITA at 2.9 million
euros (3.5). The lower profitability is attributed to increased production cost
planned for higher sales, commercial structural enforcement, and investment in
commercial activities and campaigns. In addition, the depreciations related to
right-of-use assets (IFRS 16) increased, and the impact on EBITA was 0.1 million
euros.
The third quarter cash flows were strong and amounted to 5.7 million euros
(5.3). The net debt to adjusted EBITDA ratio (leverage) was down at healthy 1.3
(1.4) at the end of the period.
Orthex's investments in January-September amounted to EUR 3.1 million (1.8) and
were related to growth investments in moulds for new products and capacity
increases. Orthex invests in novelties on a continuous basis and our modern
range of SmartStore[TM] Essence storage baskets, launched in the previous
quarter, are showing promising consumer take-off. Our latest novelty is a
stackable sorting solution Stack-it, an addition to our award-winning
SmartStore™ Collect range. As sorting requirements grow, we are expanding this
range to meet consumer needs and helping retailers to offer products that solve
daily sorting and waste sorting needs. Made entirely from recycled plastic, both
new product ranges mark another step towards our sustainability goals and
Orthex's ongoing commitment to increase the use of renewable and recycled
materials in production. We have prepared a rich program of new exciting
products to be launched in the coming quarters and are working systematically to
improve the distribution of already launched novelties.
Our commercial strategy is working well, and our evolvement towards a function
driven, European company is progressing according to plan. We will continue
supporting our sales growth by consumer understanding, customer partnerships,
commercial activities, innovation, and continuous improvement.
I am looking forward to continuing the interesting and rewarding journey
together with a dedicated, strong, and ambitious team at Orthex.”
Financial releases in 2025
Orthex will publish its financial statements release for 2024 and financial
reports in 2025 as follows:
12 March 2025: Financial statements release for 2024
15 May 2025: Interim report January-March 2025
21 August 2025: Half-year financial report January-June 2025
13 November 2025: Interim report January-September 2025
The Annual and Sustainability Report 2024 will be published during the week
starting 24 March 2025. The Annual General Meeting is planned to take place on
Tuesday, 29 April 2025.
Press conference on financial results:
Orthex's CEO Alexander Rosenlew, CFO Saara Mäkelä and CMSO Hanna Kukkonen will
present the report today in a webcast starting at 11.00 a.m. EET. The webcast
can be joined through this link (https://orthex.videosync.fi/q3-2024). The
webcast presentation will be held in English.
Q&A:
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 in the same day on the corporate website at Reports & presentations -
Orthex Group (https://investors.orthexgroup.com/reports-and-presentations/).
Recording of the event:
After the event, a recording will be available on the corporate website at
Reports & presentations - Orthex
Group (https://investors.orthexgroup.com/reports-and-presentations/).
Further enquiries:
Alexander Rosenlew, CEO, Orthex Corporation
Tel. +358 (0)40 500 3826
alexander.rosenlew@orthexgroup.com
Saara Mäkelä, CFO, Orthex Corporation
Tel. +358 (0)40 083 8782
saara.makela@orthexgroup.com
Distribution:
Nasdaq Helsinki Ltd
Main media
https:/investors.orthexgroup.com/
Orthex in brief
Orthex (ORTHEX, Nasdaq Helsinki, Finland) is a leading Nordic houseware company.
Orthex offers a broad assortment of practical and durable household products
with a mission to make consumers' everyday life easier. Orthex main consumer
brands are SmartStore™ in storage products, GastroMax™ in kitchenware and
Orthex™ in home and plant care categories. Orthex aims to be the industry
forerunner in sustainability and to become carbon neutral in its production by
2030. Read more www.orthexgroup.com.

Orthex's net sales in 2023 was 85.9 million euros. The company has customers in
more than 40 countries and local sales offices in the Nordics, Germany, France,
the UK, and the Benelux.

Follow Orthex on LinkedIn (https://www.linkedin.com/company/orthexgroup) |
X (https://twitter.com/OrthexGroup) | Facebook (https://www.facebook.com/Orthex
-Group-933475916759915/?fref=ts)|
Instagram (https://www.instagram.com/orthexgroup/)

Attachments: