The Swedish discount chain for construction material, Byggmax, continues its strong performance.
First half of 2014 Byggmax increased net sales by 15,3 percent.
“The Swedish and Norwegian market is stronger than the Finnish”, says CEO Magnus Agervald.
Second quarter Byggmax increased net sales by 16.5 percent and operating profit increased by 25.2 million
“Sales at new stores, as well as existing, contributed growth. The strongest month of the quarter was April. Spring was milder than last year, which is positive for sales. While the weather has been worse in May and June, which weakened the sales months”, Magnus Agervald comments.
The lower gross margin is partly due to rising prices for wood and Magnus Agervald says Byggmax is experiencing a stronger price pressure in Norway.
Byggmax has so far this year opened six new stores in Scandinavia. During the third quarter of 2014, two new stores are opening and the store in Jönköping, Sweden, will be moved.
16 stores have been converted to the 2.0-concept that has more articles and improved communication on the same retail space, as well as improved sales management.
“BYGGmax 2.0 stores continues to deliver promising sales growth and gross margin improvements after conversion,” Magnus Agervald says.
Byggmax intend to convert a further 15 stores this year. For spring 2015, the plan is to convert 20-30 stores.
Magnus Agervald says the Swedish and Norwegian market is stronger than the Finnish, but they were influenced by the weather during the quarter.
“It is uncertain if the weakness in the latter part of the quarter was only due to weather, or on the weather and the underlying market. The Finnish market has an uncertainty regarding economic development.”
“We reach more consumers in Sweden, Norway and Finland. We continue to gain market share in our categories which shows the strength of the concept, Magnus Agervald states”
Byggmax First half of 2014:
• Net sales amounted to 1 623.7 (1 407.9) million, +15.3 percent
• Net sales in comparable stores increased by 8.1 (-4.6) percent
• Gross margin excluding non-recurring items was EUR 30.0 (29.5) percent and including non-recurring items 30.5 percent
• Operating profit excluding non-recurring items was EUR 75.1 (42.5) million including non-recurring items 83.9 million
• Operating margin was 5.2 percent (3.0)
• Net income, excluding non-recurring items was EUR 50.6 (27.3) million including non-recurring items EUR 57.4 million