KH Group Plc’s Business Review January–March2024

Focus on business profitability - Seite 2

In a declining market, HTJ managed to maintain net sales at the same level as in the comparison period, but operating profit decreased. The business area’s moderate net sales and operating profit are explained by an increased project portfolio and the acquisitions made in recent years.

Nordic Rescue Group’s pro forma net sales and operating profit significantly improved year-on-year. The demand for rescue vehicles in Finland and Sweden has remained at a good level, and production capacity for 2024 has already been sold out.

During the financial period, we will continue our development efforts in our business areas, many of which are focusing on securing net sales and consequently operating profit as well as ensuring operational efficiency. We will continue to move forward with KH Group’s change in strategy as planned.

The company updated on 30 April 2024 its earlier guidance on net sales and operating profit for 2024. This is due to general economic uncertainty, the very challenging market situation and more cautious purchasing behaviour by consumers.

KH Group estimates, with the current Group structure, to reach net sales of EUR 400–420 million and operating profit of EUR 12–16 million in 2024, including the operating profit from Indoor Group’s Estonian real estate sale transaction.”

Events after th review period

After the Annual General Meeting of the company held on 24 April 2024, the parties to the KH-Koneet shareholder agreement have informed the parent company that they are exercising share put options. According to the agreement, minority shareholders have the right to sell 50% of their current holding in KH-Koneet Group Oy during 2024. The redemption of shares held by minority shareholders will be completed by June 2024 and amounts to approximately EUR 2.9 million. The redemption will increase the parent company’s holding in KH-Koneet Group Oy to 95.1%. The remaining 4.9% minority interest can be redeemed in 2025, as defined in the shareholder agreement, and its fair value based on the figures of the financial statements of 31 December 2023 was EUR 3.4 million.

The parent company’s financing agreement was renewed in April. The company has signed a new loan amounting to EUR 5.1 million. EUR 2.9 million of the loan proceeds will be used for a redemption of shares in KH-Koneet Group Oy and EUR 0.5 million for an additional investment in Nordic Rescue Group Oy.

Beginning of May, the new ERP system was successfully implemented at Indoor Group’s Asko stores.

Future outlook

KH Group’s medium-term objective is to become an industrial group built around the KH-Koneet business and to divest other business areas in line with previous strategy. At the same time, active developments will continue regarding other business areas. Exit planning and the assessment of exit opportunities for the other business areas will also continue.