Reduced net income for Tarkett after a difficult 2019 in North America

Annual sales reached 2,99 billion euros, up 5,5%, the group said in a statement. Organic growth (at constant scope and exchange rates) was 0,7%.

The Chairman of the Executive Board, Fabrice Barthélemy, quoted in the press release, emphasized the increase in sales and the maintenance of the adjusted gross operating surplus (Ebitda), which is the main performance indicator monitored by the group. .

Given the difficulties recorded in North America, Tarkett had revised downwards in early December its adjusted Ebitda target, which it expected to be slightly lower than in 2018.

Finally, the 2019 adjusted EBITDA increased by 0,3% (on a comparable basis, before application of the new IFRS16 standard).

The turnover is a little higher than the consensus established by the financial agency Bloomberg, which counted on 2,97 billion euros. But the operating profit, at 96,6 million euros is below 118 million of this consensus.

The group recorded activity in December in North America "very close to normal", after the resolution of operational problems which however "somewhat disrupted production" in the fourth quarter, explained Fabrice Barthélemy during a conference call .

The difficulties in North America weighed on sales in the last quarter (672,5 million euros), down 2,5% organically.

Boosting growth in North America and improving profitability will be one of the main priorities in 2020, said Barthélemy.

With the exception of North America, "all the regions held up well in a sometimes complicated economic context (...) with an improvement in margins in the second half," he continued.

The Chairman of the Executive Board also praised an "excellent performance" in 2019 in the Sport segment (artificial turf fields and athletic tracks) which recorded "a record year" with organic growth of 13%.

In his outlook for 2020, Fabrice Barthélemy remains "fairly cautious about the economic environment", judging that "the demand for floor coverings will probably remain mixed".

The boss of Tarkett wants to remain "very strict on the reduction of costs and the management of sale prices" in particular to compensate for the increase in raw material costs.

In this context, the group will aim for "an increase in the adjusted Ebitda margin" in 2020. It has also confirmed its medium-term objective of bringing this margin to 12% (compared to 9,4% in 2019, after application of the IFRS16).

Asked about the possible impact of the new coronavirus epidemic in China, Mr. Barthélemy said that the Chinese market was "a niche market" for Tarkett with high-end products. The country represents less than 1% of the group's turnover.

Tarkett has two factories in China (out of 33 in the group as a whole), located in the Shanghai and Beijing regions, which employ a total of 280 people.

The activity in these two factories resumes "very slowly", after the break of the Chinese New Year. Activity should not return to normal for "a few days, even a few weeks," said Barthélemy.