The efficiency-focused SBA furniture sector has increased profitability and forecasts more significant growth

According to audited data, SBA Furniture Group, which includes five furniture factories, a management company, a logistics centre and a robotics company, had a consolidated revenue of EUR 333 million in 2023. Consolidated operating profit amounted to EUR 16.4 million, while an operating loss of EUR 25 million was recorded in 2022 due to asset write-offs.

SBA furniture manufacturing.<br>SBA photo.
SBA furniture manufacturing.<br>SBA photo.
Jurgita Radzevičė, Head of SBA Home.<br>SBA photo.
Jurgita Radzevičė, Head of SBA Home.<br>SBA photo.
Egidijus Valentinavičius.<br>SBA photo.
Egidijus Valentinavičius.<br>SBA photo.
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Jun 18, 2024, 3:44 PM, atnaujinta Jun 18, 2024, 3:45 PM

Projected growth in the sector

Egidijus Valentinavičius, Vice President of SBA and Head of SBA Furniture Group: „The bouncing back from its downturn in the global furniture market and the efficiency-enhancing decisions we have made have improved the performance of SBA’s manufacturing businesses over the past year. Investment projects in production expansion are currently providing additional momentum, reaching project scale.

As base interest rates start to decrease, consumption is likely to increase, and in the absence of geopolitical turbulence, we forecast sustained demand growth. The beginning of this year is also encouraging, so we anticipate higher sales and profits in 2024.“

According to Valentinavičius, although the company’s consolidated revenue last year was 14% lower than in 2022, gross profitability increased from 7% to 11%. Net profit in 2023 reached EUR 4.5 million.

Emphasis on efficiency and new products

„As a global participant, we are proactive in helping to stimulate stagnant demand. One of the ways is to reduce the cost of the product through efficiency and scale. For this reason, we are refining our technologies and processes to the utmost precision because victories are determined by minutes and seconds in today’s competitive battles. Another way to stimulate demand is to introduce new products. This year, the assortment of new products introduced by SBA companies has increased by about 30 per cent, and, for instance, in Visaginas Linija, this number reaches even 40 per cent,“ says Jurgita Radzevičė, the Head of SBA Home, which unites 4 SBA furniture manufacturing companies and a logistics centre.

She added that economic laws confirm that price corrections help to stimulate demand, so ways to reduce prices are being sought in collaboration with partners.

According to Radzevičienė, companies are mobilising and speeding up production to meet growing demand. Therefore, most companies are shifting from two to three shifts, whereas Inno Line is already operating in four shifts. The increase in production is also associated with an emerging demand for personnel—especially machine operators. This year alone, SBA Home companies are looking to recruit over 100 new team members, mainly at Visaginas Linija and Inno Line near Klaipėda.

Jurgita Radzevičė, Head of SBA Home: „Our strategy is to be a competitive and sustainable company that continuously invests in efficiency, technology and growth.“

This year, SBA Furniture Group also entered the capital markets. To diversify its financing sources and accumulate funds for future development, the company is issuing a EUR 8 million bond issue. The first tranche, amounting to EUR 2.7 million, was issued in the spring. Until 25 June, investors are offered a 2-year bond for EUR 5.3 million at a fixed annual interest rate of 8%. Redgate Capital, a Baltic investment banking firm, underwrites the company’s bond issue.

Bond issuer SBA Furniture Group is one of the largest furniture exporters in the Baltic States. It owns the management company SBA Home. In addition, it also owns the furniture manufacturing companies Inno Line, Klaipėdos Baldai, Visagino Linija, Šilutės Baldai, Kauno Baldai, as well as the logistics centre Innovo Logistika and the robotics and automation solutions company Robotex.

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