Sniezka cautious on demand outlook

"We are very cautious in predicting the future, but optimistically, if the cycle for interior renovation is 3–5 years, then after the big boom in our products and durable goods during the lockdown (...) and after the time of stagnation, the cycle is already beginning to approach when the consumer should start thinking that it might be worth changing the environment," deputy CEO Joanna Wrobel-Lipa said.

"It is gratifying that the decline in volumes is in single digits, as we have measured double digits recently, but we are very cautious in our predictions. Last year in the last quarter we hoped that the situation would stabilise, and we are a bit unsatisfied with the volumes this year," she added.

As she pointed out, the group sees the greatest correlation with sales in the secondary market, this is in the area of renovations, restoration work.

"More than 80 percent of our sales go to this market. Therefore, indicators typical of construction: the number of building permits, works started are only marginally correlated. We can see an upturn in building permits and construction starts, but in terms of the long-term outlook, the condition of the consumer and their mood will influence purchasing decisions and demand, i.e. volumes," the deputy CEO said.

"Everyone in the industry wishes volumes to stabilise," she added.

Asked whether there is room for further price increases in the coming months, she replied that the situation is returning to normal and only some adjustments can be expected.

The Sniezka Group generated sales revenues of PLN 647.7 million (EUR 149.2 mln) in the three quarters of 2024, a year-on-year decrease of 8.1 percent.

The company explains that the decline in results is mainly a consequence of lower sales in volume terms across the market and the appreciation of the zloty against the forint and the hryvnia. In addition, relatively unfavourable macroeconomic conditions persist.

As reported by the company, the market situation is influenced by purchasing power and consumer sentiment, which affects limited demand in the industry. These factors are influenced by the geopolitical situation, real wage growth and changing consumer preferences, who are more likely to choose services over durable goods.

"The market situation remains difficult, which is reflected in declining sales volumes across the market," the deputy CEO said.

"Despite the difficult macro conditions in the dominant markets for the Sniezka Group, in the Polish market the company maintained its market share and increased its share in the Ukrainian market," Joanna Wrobel-Lipa added.

In the first three quarters of 2024, the group's capital expenditure amounted to PLN 23.2 million (EUR 5.3 mln). Outlays for the whole of 2024 are expected to be lower than the target of PLN 40 million (EUR 9.2 mln).

pel/ nl/ han/