Tarkett Reports 1Q Growth
Paris— Tarkett reported first quarter overall net revenue grew 10% in the first quarter of 2019 with organic growth (+3.7%) adding $24.54. million (€22 million) of revenue compared to first quarter 2018 and with the integration of Lexmark and other 2018 acquisitions (+3.8%). It also comprised a positive impact (+2.4%) of $15.62 million (€14 million), mainly related to the appreciation of the dollar versus the euro.
The company reported the North America segment was down 0.6% year-on-year on a like-for-like basis as selling prices were materially raised and almost fully offset volume decrease. Commercial carpet activity sales stabilized in the quarter and revenues in resilient flooring were slightly below last year’s levels after a buoyant 2018. The integration of Lexmark led to a positive perimeter impact of 12.4% representing most of the revenue growth during the quarter. Reported revenues were up 19.7%, including Lexmark contribution and a positive impact of 8.0% through the appreciation of the dollar versus the euro.
“In the first quarter of 2019, Tarkett achieved sound organic growth driven by a good dynamic in EMEA and continuing momentum in Sports,” said Fabrice Barthélemy, CEO. “In North America, the focus has been on improving operational efficiencies. In the CIS and Latin America, our proactive pricing policy enabled us to offset adverse currency movements. The business environment remained challenging wit inflationary raw material and freight costs. We are very satisfied that pricing increases implemented in 2018 fully covered cost inflation in the first quarter. We will continue to manage the sales pricing with this aim and remain focused on our 2019 top priorities of sustainable profitability improvement and deleveraging.”
The group announced optimization plan in April of its manufacturing operations in North America. The manufacturing of flooring accessories in Waterloo, Canada, will transition to the recently expanded Chagrin Falls, Ohio, facility with the aim of improving the cost base of this business. The manufacturing of broadloom commercial carpets in Truro, Canada will be transferred to the Dalton, Ga., facility which was acquired with the purchase of Lexmark allowing to extract the planned cost synergies. Both movements will also enable logistics and shipments to be optimized. The closure of the Waterloo and Truro facilities is expected to be completed by the end of the year.
These moves resulted from Tarkett’s decision to optimize its industrial footprint, which is one of the Group’s top priorities. The Group already launched the process to close the jointly-owned LaminatePark plant in Germany. The closure of this site is planned by the end of 2019.
Tarkett announced new leadership in North America with the appointment of Jeff Fenwick as president and CEO of Tarkett North America after a short interim period. In his previous position, Fenwick was the chief operating officer for Tarkett North America, where he was responsible for leadership of the commercial and residential sales and customer service organizations.
For more information, visit www.tarkett.com.