The two-year war in Ukraine and the current geopolitical situation in the world maintain significant uncertainty in economic conditions, as well as a high risk of maintaining supply chain continuity, which remains a negative factor influencing the FORTE Group's operations.
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Poles are not buying furniture in the face of inflation
The completed financial year 2023/2024, as well as the first reporting quarter of 2024/2025, were a major challenge for the entire European furniture industry, in particular for Polish producers who, in addition to the threats affecting all European producers, such as the war in Ukraine or the general decline in consumer sentiment, also felt negative local market conditions, such as a relatively high (compared to EU countries) level of inflation and pressure
wage, which resulted in a significant reduction in the competitiveness of Polish furniture products – the company explains in the report.
The decreasing purchasing power of consumers due to high inflation has caused people to postpone decisions on purchasing furniture as it is not a basic necessity.
Forte Group faces high costs and reduces employment
A huge challenge for the FORTE Group in the previous financial year was the high prices of raw materials and energy. All of the above factors contributed to the deterioration of the FORTE Group's financial situation and its liquidity, which had an impact on the annual financial results and had an impact on the financial results generated in the completed reporting quarter.
In order to counteract the negative effects of reduced market demand, the management board has implemented a number of corrective actions aimed at improving the profitability and liquidity situation of the FORTE Group. The focus is on reducing costs and optimizing working capital management. The most important element of the corrective plan in terms of
The cost-effective reduction in employment was implemented. The elimination of 237 positions is estimated to generate savings of up to PLN 17 million per year. The Group also optimized working capital management by: adjusting the size of inventories to current needs, better collection of overdue receivables and improving the timely
making deliveries.
Pro-sales activities of the Forte Group
In addition, the management board has implemented pro-sales initiatives aimed at increasing sales and market share. One of them is the introduction of furniture with modern EasyKlix easy assembly technology, which the Group sells under its own brand – EasyKlix by FORTE. The Group has introduced EasyKlix furniture to several major customers in Europe, and with the increase in production capacity, the Group will implement this innovative solution to a larger number of customers.
The Group is also working on strengthening the digitalization of sales by strengthening its presence on digital sales platforms and developing online sales through cooperation with key distributors offering online sales. The company is taking steps to enter into cooperation with new business partners,
renewing relationships with former partners, as well as taking over market share from failing companies.
In addition, in July this year, the management board of the parent company and the banks financing the FORTE Group finalized the conclusion of a multilateral agreement on common terms, the purpose of which was to harmonize the principles of financing the Group and the established security of credit agreements, as well as to establish covenants reflecting the current financial situation of the FORTE Group and its market position. Thanks to the concluded agreement, the FORTE Group has ensured the continuity of financing of its current operations for the period until March 2027.
No risk to the Forte Group's operations
Despite the actions taken, due to the long-term geopolitical and economic consequences that cannot be predicted in the future, the management board is not able to realistically estimate their impact on the future operating activities and financial results of the Capital Group, however, taking into account the Group's exposure to the above-mentioned factors and
In view of the action plan for medium-term financing agreed with the banks financing the company, the management board does not see any risk of a threat to the continuity of operations or key operational threats to the Group's operations – the company summed up in the report.
