EGGER Group Closes Financial Year with Revenue of $4.89 Billion in a Volatile Market
Wood-based materials manufacturer reports a moderate increase in revenue and a decline in earnings due to ongoing economic challenges.
EGGER Group is closing its 2022-23 financial year in an extremely volatile environment. Rising interest rates, high inflation, declining new construction figures and geopolitical uncertainties have had an impact on the raw materials and energy markets. However, despite these challenges, EGGER Group is reporting stable development.
EGGER experienced an increase in revenue, but a decline in earnings for the financial year 2022/23. Group-wide sales were $4.89 billion (4.5 billion euros), up 5.1% compared to the previous year and EBITDA amounted to $662.75 million (602.5 million euros), a 31.3% decrease compared to 2021/22. The EBITDA margin decreased to 13.5% (previous year was 20.7%) following extraordinarily high demand during the pandemic. However, the result is settling at a level that is sustainable in the long term. The equity ratio remains at a high level of 45.9%.
“Our stable financial basis as well as our approach of sustainable and responsible management, which we have always lived by, provide us with stability even in a challenging situation,” says Thomas Leissing, Chief Financial Officer of EGGER Group Management. “We were also able to successfully reach a decisive growth milestone in the past financial year. Thanks to the majority shareholding in the Italian wood-based material manufacturer SAIB, EGGER Group’s 21st plant is located in Caorso, Italy.”
Investments Under the Sign of Sustainability
Throughout the 2022-2023 fiscal year, investments including acquisitions nearly doubled ($594.6 million [540.6 million euros]) compared to the previous year ($319.6 million [293.6 million euros]). In the United States, approximately $95 million in new investments have been completed or are under construction at the company’s Lexington, N.C. facility.
The investments provide greater production capacity and flexibility, expand on the company’s sustainability initiatives and reflect EGGER’s ongoing commitment to its North American operations.
The U.S. investments, which will add approximately 50 new jobs, include:
- A third lamination line – which was completed in February, 2023. The $21 million investment increased thermally fused laminate (TFL) production capacity by 50% while providing additional production flexibility during maintenance, upgrades and repairs. The new line created 15 jobs.
- A $41 million wood recycling facility – which was completed in March, 2023. The facility processes post-consumer recycled materials collected at an off-site facility owned by EGGER’s wholly-owned subsidiary, Timberpak (a $6 million investment completed in January, 2023). The facility removes metal, stones, plastics, and other foreign materials while processing the used wood into properly-sized wood chips for particleboard production. This investment supports EGGER’s sustainability initiatives, turning waste wood into new products while sequestering the carbon to reduce future CO2 emissions. The recycling facility created 10 new employees.
- A third truck dumper – dedicated to receiving waste wood for the wood recycling facility, was completed in May, 2023. The $5 million investment allows trucks to unload deliveries of wood material in a matter of minutes.
- Construction of a $22 million paper impregnation line – which began in May, 2023 will be complete in September. The new line will infuse decorative papers with a resin adhesive necessary for TFL production. Local impregnation will allow the company to increase its capacity, alleviating supply chain issues and logistical costs. It will also allow greater flexibility in regards to different formats for our customers in the North American market. The new line will create 25 new jobs.
Subdued Expectations for the 2023-2024 Financial Year
The ongoing crisis in Ukraine, volatile energy and raw materials markets, persistent high inflation in key sales regions, and further impending geopolitical crises, as well as the enormous challenges of climate change, are determining elements in the overall economic outlook.
Despite a subdued outlook for revenue and earnings development, EGGER continues to adhere to its company strategy driving long-term growth.
Full details of the 2022-2023 financial year can be found in the annual financial report at www.egger.com/credit-relations.
About EGGER
Founded in 1961 in St. Johann in Tyrol, Austria, EGGER Group is a more than $4.89 billion privately-held, family-owned company that employs more than 11,200 associates. EGGER is a global leader in the manufacturing of wood-based materials for the furniture and interior design, flooring and building products industries. The company’s extensive, value-added product range includes thermally fused laminate (TFL), laminates, edge banding, raw particleboard, medium density fiberboard (MDF) and MDF Mouldings. EGGER operates 21 plants globally, including EGGER Wood Products LLC in Lexington, N.C., the company’s first production facility in North America. The state-of-the-art particleboard manufacturing plant, with TFL lamination capacity, started production in September 2020. The total investment of the project, once completed, will be more than $700 million and will create an estimated 770 direct jobs. For more information about EGGER, visit www.egger.com.
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