KH Group Plc Inside information 15 August 2024 at 10.00 pm EEST

Inside information: KH Group’s group company Indoor Group launches an operating model reform programme aimed at improving profitability

Indoor Group, a group company of KH Group, has decided to launch an extensive operating model reform programme aimed at improving profitability. The operating model reform programme includes strategic and operational development initiatives in various areas in order to stabilise Indoor Group’s financial situation and to improve profitability in the very challenging furniture industry market environment.

With the programme, Indoor Group aims for an annual operating profit improvement of at least EUR 10 million by the end of 2026. Based on current information, a significant part of the targeted profitability improvement is estimated to be realised already during 2025.

The operating model reform programme is based on a review and a process audit, in which Indoor Group’s new ERP system, cost structure and key figures, efficiency of operating models, store operations and network, customer experience as well as cooperation and efficiency between teams have been analysed, among other things. A more detailed specification of the measures included in Indoor Group’s operating model reform programme is expected to be completed during the autumn of 2024.

One of the key conclusions of the review so far is that Indoor Group’s new ERP system and adjacent store locations create an opportunity for harmonising and enhancing operating models. Indoor Group will launch a pilot trial of a new store concept in September 2024, in which a closer integration of adjacent Asko and Sotka stores is tested while keeping both brands clearly separated. In the pilot, synergy benefits will be tested especially in customer service and sales, assortment development, processes, resourcing, as well as in skill and managerial work development.

KH Group will provide information on the progress of Indoor Group’s operating model reform programme in connection with its regular financial reporting. The company will publish its half-year report for January-June 2024 on Friday, 16 August 2024.

KH GROUP PLC

FURTHER INFORMATION: CEO Ville Nikulainen, tel. +358 40 045 9343 Indoor Group’s CEO Lauri Veijalainen, tel. +358 46 876 1648

DISTRIBUTION: Nasdaq Helsinki Ltd Major media www.khgroup.com

KH Group Plc is a Nordic conglomerate operating in business areas of KH-Koneet, Indoor Group and Nordic Rescue Group. We are a leading supplier of construction and earth-moving equipment, furniture and interior decoration retailer as well as rescue vehicle manufacturer. The objective of our strategy is to create an industrial group around the business of KH-Koneet. KH Group’s share is listed on Nasdaq Helsinki.