Group sales decreased by -1.6 % in 2023 and, at EUR 479,337 thousand, stagnated at the previous year´s level (487,134). In the growth and aspirant markets, overall sales revenues were at the previous year's level, but sales revenues in the companies allocated to the core markets fell slightly. While Uzin Utz France SAS, Uzin Utz Polska Sp. z o.o. and Uzin Utz Nederland B.V. recorded the strongest growth in absolute terms, the decline in sales at INTR. B.V., Uzin Utz Schweiz AG and Uzin Utz Tools GmbH & Co. KG had a particularly strong impact on the Group.

The main sources of the Group's earnings can be found in the segment reporting section in the notes to the consolidated financial statements.

Total consolidated foreign sales fell from EUR 318,017 thousand in the previous year to EUR 312,600 thousand. At 65.2%, the foreign share stagnated at the previous year's level (65.3%). We continue to strive to achieve sales growth in our other core and growth markets in addition to Germany. The proportion of sales not invoiced in euros fell to around 33.8% (34.3%). The decline was most strongly influenced by the fall in sales at Uzin Utz Schweiz AG. However, the revenue of Uzin Utz Hrvatska d.o.o., which was invoiced in euros for the first time in January 2023 due to the introduction of the euro in Croatia, also had an impact.

The development of the currencies outside the Euro zone that are relevant for the Group can be seen in the following table:

The overall impact of exchange rates on Group sales was -0.4% (2.3). The US dollar had the greatest effect.

Sales growth in the 2023 financial year was mainly due to the increase in sales prices, which rose by 8.0% on average. The price increases were necessitated by raw material prices, which fell only slowly during the year and therefore remained at a high level, and the increase in personnel costs as part of the inflation adjustment. Sales volumes fell by 6.6%. There were no shifts in the product mix in the reporting year that had a significant impact on changes in sales and earnings.

Due to the batch-oriented production and the usually very short time between order and delivery, production is generally for an anonymous market. Deliveries are made from stock, which regularly amounted to around 1.8 months' sales (2.2) across the Group due to the current situation and thus approached the pre-2022 level again. Attempts are always made to adjust the inventory to the general conditions. Information on orders on hand is therefore not meaningful.

The Group's inventories of finished goods and work in progress were reduced by EUR -4,493 thousand. In contrast, there was an increase in inventories of finished goods and work in progress in the previous year, which at EUR -12,817 thousand was significantly higher than in the previous year. The decrease in inventories in 2023 resulted from the easing in the availability of raw materials, the improved logistics situation and lower demand.

Total operating performance decreased slightly by -5.0% to EUR 474,844 thousand (499,951). While sales revenue remained at the previous year's level, the decrease in total operating performance was mainly due to the opposing trend in changes in inventories. The cost of materials ratio in the Group fell slightly from 48.4% to 44.8%. Prices for purchased materials adjusted only slowly over the course of the year, as suppliers reacted unusually quickly to the fall in demand and adjusted supply by reducing capacity accordingly. In addition to the slight fall in procurement prices, the opposite trend in inventory changes was the main reason for the reduction in the cost of materials ratio. Inventories of finished goods and work in progress were increased significantly, particularly in the first half of the year and at the end of 2022, in order to maintain delivery capacity. As a profit margin is only generated as soon as a product produced in stock is sold, the exceptionally high increase in inventories in the previous year inevitably led to a higher cost of materials ratio. In contrast, the inventory reduction that took place in 2023 contributed to the reduction in the cost of materials ratio.

The share of personnel costs in total operating performance rose slightly to 26.3% (24.3%). In absolute terms, personnel costs rose from EUR 121,420 thousand to EUR 125,009 thousand. The disproportionately high increase in personnel costs compared to the number of employees was primarily the result of salary adjustments to reduce real wage losses due to high inflation.

Depreciation and amortisation increased by 9.1% from EUR EUR 17,164 thousand to EUR 18,732 thousand. This increase is mainly due to the rise in depreciation following the commissioning of the new dry mortar plant in Waco, USA. In addition, depreciation at Uzin Utz Nederland B. V. increased as a result of investments in property, plant and equipment, which became operational in the third quarter of 2022 and whose depreciation was therefore recognized for the full year for the first time in 2023.

Compared to the previous year, other operating expenses fell by around -2.0% to EUR 89,468 thousand (91,292). The increase was largely due to higher distribution costs. These increased primarily due to higher outgoing freight and increased travel expenses. The decrease was largely due to lower outgoing freight. The reduction in outgoing freight resulted from several factors. Due to the drop in demand, lower volumes were transported and freight prices declined after several years of tension. The opening of the new dry mortar plant in the USA, which significantly reduced the average distance to the customer and thus also cut transportation costs, also had an initial impact on outgoing freight.

At EUR 34,505 thousand, earnings before interest and taxes (EBIT) were down slightly on the previous year (36,341). The main reasons for the fall in earnings were the slight decline in sales in the core markets, the increase in personnel expenses as a result of the inflation adjustment granted and the rise in depreciation and amortization due to investments in property, plant and equipment. Compared to the previous year, the impact of the net exchange rate effect was of the same magnitude as the increase in depreciation and amortization; overall, EBIT fell by EUR 1,836 thousand.

Details on the net profit for the year and the equity of the individual participations can be found in the section "Group companies" in the notes to the consolidated financial statements.

Sales by segment

The development of external sales varied from segment to segment. The sharpest absolute and relative decline was in the Netherlands segment. While sales of EUR 53,305 thousand were achieved in the area of installation systems, which were on a par with the previous year, the Wholesale segment recorded a decline of EUR 5,153 thousand. Market conditions for the Wholesale segment were difficult throughout the year, with the decline mainly due to lower demand for floor coverings.

There were also differences between the sub-segments in the Germany segment. Sales revenue in the Installation Systems segment amounted to EUR 156,524 thousand and thus reached the previous year's level. The machinery and tools segment, which was presented separately for the first time in 2023, declined by 9.3%, as the associated products are capital goods for tradespeople. A slight increase of 2.3% was recorded in surface care and finishing.

The US segment, which was also reported separately for the first time in 2023, recorded a decline due to exchange rate effects. While external sales in US dollars increased by 1.7%, there was a decline of 1.7% in euros due to the opposing exchange rate trend.

In the Southern/Eastern Europe segment, the strongest relative increase was achieved with a rise of 2.7% based on the increase in sales of Uzin Utz Polska Sp. z o.o.

Value creation

Corporate performance is calculated from total operating performance plus other operating income.