INSIDE INFORMATION, PROFIT WARNING: HONKARAKENNE OYJ LOWERS ITS FINANCIAL GUIDANCE FOR 2023

HONKARAKENNE OYJ         Stock Exchange Release        Inside information 1 June 2023 at 11:30

INSIDE INFORMATION, PROFIT WARNING: HONKARAKENNE OYJ LOWERS ITS FINANCIAL GUIDANCE FOR 2023

Higher interest rates, inflation and uncertain economic outlook have dropped the market for prefabricated houses and holiday homes to exceptionally low levels. The construction downturn in all of Honkarakenne’s areas of operation has a negative impact on the company's operations and on the development of the order book. The difficult market situation is expected to continue at least this year and a rapid improvement in the market situation would no longer have a significant impact on the company's result for 2023.

Honkarakenne updates its financial guidance for 2023 published on 15 February 2023:

New guidance for 2023:

According to Honkarakenne's view, the Group's net sales in 2023 will fall from the previous guidance and remain at EUR 47–52 million. The Group's operating profit will decrease and remain between EUR -0.5 and +0.8 million.

Previous guidance for 2023, published 15 February 2023:

According to Honkarakenne's view, the Group's net sales will fall from the previous year in 2023 and remain at EUR 50–56 million. The Group's operating profit will decrease and remain at EUR 1.6–2.4 million.

The company's view of 2023 development is based on the existing order book, orders received during spring, a view of continuing challenges in the operating environment, and weak market recovery. The company's order intake for the rest of the year from the home market and especially export countries has accumulated significantly slower than in previous years.

The company has initiated change negotiations at the beginning of May concerning the company's entire personnel, with the exception of the company’s top management. The aim is to conclude the change negotiations in June. The estimated total reduction need is a maximum of 27 person-years The company also adjusts its other cost structure, while continuing to develop its business in line with its updated strategy. The strategic focus areas are increasing exports in selected target markets, improving the customer experience and investing in responsible and healthy housing solutions. The company believes that the strategic focus areas will improve Honkarakenne's competitiveness also in the current challenging market situation.

Honkarakenne's half-year financial report for January-June 2023 will be published on 25 August 2023.

HONKARAKENNE OYJ

Board of Directors

Further information:

Marko Saarelainen, President and CEO, tel. 4, or

Maarit Jylhä, CFO, tel. 9,

DISTRIBUTION

Nasdaq Helsinki Ltd

Key media

Financial Supervisory Authority

Honkarakenne Oyj manufactures high-quality, healthy and ecological log homes, holiday homes and public buildings under its Honka® brand from Finnish solid wood. The company has delivered 85,000 buildings to over 50 countries. House kits are manufactured in Finland, the company's own factory is located in Karstula. In 2022, Honkarakenne Group's net sales were EUR 73.7 million, of which exports accounted for 26%.