Press release -
Ekornes QM Holding – Operational update
Ekornes QM Holding today provides an operational update regarding group initiatives to adapt to the current market development and protect the group’s resilience to ensure competitiveness in markets across the world. The group is rightsizing operations in Norway, restructuring activities in Asia, and implementing further measures to manage cost and margin development.
Ekornes is the largest furniture producer in Norway and owns the brand names Ekornes®, Stressless®, Svane® and IMG. Stressless® is one of the world’s most well-known furniture brands. Production takes place at the group’s eight factories, five of which are in Norway, one in the USA, one in Thailand and one in Lithuania. Ekornes sells its products in 48 countries via partner channels.
Adapting to the market development
While demand for home furniture increased significantly during the Covid-19 pandemic from 2020 and into 2022, demand is now returning to pre-pandemic levels. Combined with a general slowdown in the global economy, this has a negative impact on Ekornes’ sales and order development. At the same time, cost inflation puts pressure on margins, particularly within raw materials and transportation, negatively affecting group earnings in the fourth quarter of 2022 and moving into 2023.
“The market environment is changing and Ekornes must adapt production capacity and protect profitability to stay competitive. Our leading products and brands are sold across the world, and we need to be cost-efficient and flexible to take good care of our customers, partners, and employees,” says interim CEO Fredrik Ødegård Nilsen.
Ekornes is rightsizing production capacity throughout the group and plans workforce reductions bringing the organization back to pre-pandemic levels.
Operations in Norway will be downsized by up to 150 full time equivalents (FTEs). This comes in addition to a reduction in operational capacity of 80 FTEs implemented from September last year. Moreover, support functions and headquarters will be downsized by up to 40 FTEs.
In the Asia Pacific region, Ekornes will concentrate operations in Thailand, discontinue activities in Vietnam, and reduce the workforce by approximately 700 FTEs. Ekornes has made substantial investments in the production facility in Thailand to enable the concentration of all Asian operations at one location. This process will be completed during the first quarter of 2023.
Ensuring resilience and competitiveness
While Ekornes has a sharp focus on customer and partner needs, the group is implementing further price increases to mitigate the effects of increased costs. The group will also reduce capital expenditures and indirect costs, in addition to optimizing the product portfolio, to protect profitability and financial robustness. The group views resilience and flexibility as key to ensure sustainable operations and long-term competitiveness.
The effects of rightsizing operations in Norway, reorganizing activities in Asia and the other initiatives are expected to materialize from the second half of 2023.
The ability to deliver relevant products with short delivery times is core to Ekornes and has been crucial for the performance of the group, supported by a comprehensive distribution network and a favourable diversification of raw material souring and market presence.
“Efficient production, strong brands and innovative product development are at the core of the group’s competitiveness and necessary to maintain our strong market positions and attractiveness towards our customers and end-users,” Ødegård Nilsen concludes.
Ekornes QM Holding will release its financial results for the fourth quarter and full year 2022 in February.
For more information, please contact:
Fredrik Ødegård Nilsen, CFO and interim CEO Ekornes AS
Tel: +47 70 25 52 00
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About Ekornes QM Holding Group
Ekornes QM Holding AS was founded 4 January 2018 with the purpose of acquiring the Ekornes Group. In May 2018, an offer was made to purchase the shares of all Ekornes shareholders. The share purchase was completed in August 2018 and the Group was delisted from the Oslo Stock Exchange in October 2018. The Norwegian ultimate parent company Ekornes QM Holding AS is a subsidiary of Qumei Home Furnishing Group. Ekornes QM Holding AS owns 100% of the shares in Ekornes AS.
The Ekornes Group is the only operational part of the Ekornes QM Holding Group. Ekornes is the largest furniture producer in Norway and owns the brand names Ekornes®, Stressless®, Svane® and IMG. Stressless® is one of the world’s most well-known furniture brands. Production takes place at the Group’s eight factories, five of which are in Norway, one in the USA, one in Thailand and one in Lithuania. Ekornes sells its products over large parts of the world, either through its own sales companies or via importers.
