UK DIY News
Stark Group Increases Net Sales By 10.3% In Challenging Year
STARK Group continued its growth journey in the financial year 2023/24, reaching net sales of EUR 7.8 billion. Operating profit (EBITDA) fell to EUR 372 million following several record years.
Despite a year and a half of historically weak demand in the building industry, STARK Group continues to grow. Driven by the acquisition of one of the UK’s largest distributors of building materials in February 2023, net sales increased by 10.3%. However, leveraging scale benefits and tight cost management were not enough to offset inflationary pressures, resulting in an 18.4% decline in operating profit.
Group CEO Søren P. Olesen says:
“We deliver a satisfactory result after a year of headwinds. Demand has been historically weak due to several years of high inflation and interest rates, along with macroeconomic challenges. This has impacted all parts of the building industry. Our focus is on running a financially sound company that is ready to win the market when it recovers. I am particularly pleased that we have accelerated our growth and transformation programme while navigating the challenges of a difficult market.”
EUR mill. | 2023/24 | Dev. | 2022/23 | 2021/22 | 2020/21 | 2019/20 |
Net sales | 7,780 | 10.3% | 7,054 | 5,995 | 4,949 | 4,095 |
Adj. EBITDA | 372 | -18.4% | 456 | 479 | 339 | 241 |
Adj. EBITDA margin | 4.8% | -1.7pp | 6.5% | 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.
Accelerated transformation programme positions for growth
STARK Group is implementing a comprehensive growth and transformation programme that will deliver synergies and scale benefits to Europe’s largest distributor of building materials. Since 2020, the company has achieved an average annual net sales increase of 17.4% and completed 31 acquisitions.
“We are investing in our business and have succeeded in accelerating our growth and transformation programme in one of the most challenging years of my ten years at STARK Group. This is important because the programme ensures we achieve scale benefits and positions us even better when markets recover.”
In the past year, STARK Group has opened 15 new branches. At the same time, the company invested in improved logistics and has recently opened a new distribution centre in Stockholm, ensuring next-day delivery to 114 out of 116 branches and the majority of all construction sites in Sweden, a country that spans over 1,600 km.
At the same time, STARK Group is investing in a better digital platform to enhance efficiency and provide improved solutions for its customers. Most recently, the company launched the industry’s leading sustainability solution, KlimaLog, which combines digital innovation and sustainability in a digital platform that makes the CO2 footprint as transparent as the price, facilitating easier evaluation and selection of products and their alternatives.
“We have our house in order and are ahead on the sustainability agenda. The next step is to translate this into solutions that are relevant to our suppliers and customers, ensuring sustainability becomes a tangible choice in the market where tradespeople face the choice between several competing products every day. It is a market that is still developing. We play a leading role in shaping it, ensuring sustainability has a practical expression in everyday life and contributes to giving our customers yet another good reason to choose us,” says Søren P. Olesen.
About STARK Group
STARK Group is a leading business-to-business merchant and distributor of heavy building materials for the construction industry in Europe, with a strategic focus on serving professional builders from its more than 1,100 branches. STARK Group has net sales of EUR 7.8 billion, serves a portfolio of 450,000 customers and collaborates with approx. 15,000 suppliers. Headquartered in Denmark, STARK Group employs more than 19,000 employees in Germany, Austria, the UK, Denmark, Sweden, Finland and Norway. The Group holds leading national or regional position in all markets.
STARK Group is committed to reaching net zero emissions by 2050 across the entire business, is a signatory to the UN Global Compact, and works within fully 2030-validated science-based targets to keep global warming below 1.5°C.
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