CEO Comments, Q3 2021
The Nordic and Central European kitchen markets remained strong following the underlying demand for home renovations. In the UK, shortage of installers and drivers resulted in softer market conditions than the trajectory from previous quarter and has not yet recovered.
In the Nordics we delivered a solid result despite head wind from higher raw material prices. Sales in Denmark and project sales in Sweden continue to perform well and are the main contributors to the growth in the region. Sales of our new kitchen concepts and painted products across all our brands are also continuing to grow strongly, which supports our efforts in having design and sustainability at the centre of our strategy.
In the UK, Magnet trade performed well in the quarter whilst Magnet retail and project sales declined. We have over the past years strengthened our trade proposition which has given better traction in the market. As part of our strategy to revitalise retail we have reorganised our retail team in the quarter. Spearheaded by the new team we have launched a new brand proposition for Magnet and improved the digital experience, including a modernized website. In the London property market, we are seeing very few signs of recovery which continue to burden top line.
In Central Europe we are continuing to grow organically in both Austria and the Netherlands with strong indicators that we are taking market shares in these markets.
The period was also characterized by large supply chain disruptions and inflationary pressure in the entire value chain, including significant price increases on raw materials and components to the kitchen industry such as sheet materials, melamine, and paint. We are working closely with our suppliers to safeguard availability but believe disruptions will continue in the short- to midterm. To compensate for the cost increases we have initiated market price increases which we expect to materialize in Q4.
We are making good progress on our strategic agenda. With the latest changes in the UK, our new organisation is now completed. We are introducing new and exciting products with focus on design and sustainability. We are pushing ahead with our state-of-the-art factory in Jönköping and rolling out improved digital solutions. We still have much to do, but we are significantly accelerating on our journey.
President and CEO