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.
“We deliver a satisfactory result after a year of headwinds," says Group CEO, Søren P. Olesen. "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.”
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 1,600km.
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.
