STARK Group delivered record-high net sales in 2022/23 following a significant acquisition in the United Kingdom

Following several years of extraordinarily high activity levels, the financial year 2022/23 proved more unpredictable. The first half of the financial year was characterised by strong growth and was followed by declining markets in the second half.

The 17.7% net sales growth was particularly driven by the Group’s acquisition of one of the United Kingdom’s largest builders’ merchant and distributor chains in February 2023. A firm grip on managing costs and leveraging scale benefits secured an EBITDA that was close to the record-setting previous year.

CFO Sisse Fjelsted Rasmussen said:

“We are delivering a strong result in a year that has been difficult to navigate in many ways. Within the same year, we have seen both extraordinarily strong and relatively weak activity levels. Geopolitical turmoil, the energy crises and higher inflation and interest levels started to impact construction activity levels in the second half of our financial year, as activity failed to pick up after the winter season. Our focus is on ensuring a financially sound company that is ready to seize the growth opportunities that await when the shock effects subside.”

EUR mill.	2022/23	Dev.	2021/22	2020/21	2019/20
Net sales	7,054	17.7%	5,995	4,949	4,095
Adj. EBITDA	456	-4.7%	479	339	241
Adj. EBITDA margin	6.5%	-1.5pp	8.0%	6.9%	5.9%

EBITDA has been adjusted to facilitate comparative analysis of STARK Group’s performance.
Adjusted EBITDA is defined as EBITDA excl. non-recurring items of a material and extraordinary nature.

Significant potential from UK builders’ merchant acquisition and continued investments

In February 2023, STARK Group acquired one of the UK’s largest builders’ merchant chains from French company Saint-Gobain Building Distribution Ltd. The UK business contributed with net sales of EUR 1.2bn and EBITDA of just EUR 31m in the year’s results for 5 months of the financial year.

“We acquired our UK business because we believe we can run it better. The company has underperformed for several years. We’re now changing that. Today, we have a business in the Nordics that is very strong. Our German-Austrian business improved commercially and financially since we acquired it in 2019. Our plan is to let our new British management team transfer our knowledge and concepts from the Nordics and Germany to the UK market. It’s a big task, but our British team has created a good momentum.”

STARK Group delivered annual net sales growth of 20% CAGR from 2020–23. The company has gained market share and fueled its organic growth by 30 acquisitions. Despite challenging market conditions, the Group intends to continue investing in creating a bigger and better company.

“Over the past few years, we have invested significantly in our business. We’re investing in our existing branches and a better digital platform, we’re opening new branches and we’ve been busy with acquisitions. We have decided to continue with our offensive strategy after reviewing it during the year. We have a full agenda of new initiatives to take us up to 2027. Of course, the timing of these initiatives will depend on developments in the market, but we have a wide range of opportunities, and we are not running out of initiatives to make life easier for professional tradespeople and will build on our position as their favourite builders’ merchant and trusted partner,” Sisse Fjelsted Rasmussen said.