Tarkett sales in the 3rd quarter driven by Sport, in a more difficult market

French flooring maker Tarkett reported third quarter sales up 8% to € 907,1 million, still driven by the Sport segment, and improved operational performance through cost reductions.

The group returned to organic growth (at constant scope and exchange rates) in the 3rd quarter (+ 2,6% after -0,6% in the second quarter), "despite more difficult market conditions," he said. highlighted in a press release.

In addition to the good momentum of artificial turf or other gymnasium tiles marketed by its Sport division (+ 16,1%), sales benefited from the appreciation of the dollar against the euro and from an acquisition of carpet manufacturer Lexmark last year in the United States.

The chairman of the management board Fabrice Barthélemy, quoted in the press release, urged that the measures taken to improve profitability, as part of a four-year development plan, "begin to bear fruit in the third quarter".

Adjusted gross operating surplus (EBITDA) (before application of IFRS 16) was up 10% year-on-year to 107,5 million euros, i.e. a margin of 11,8% (compared to 11,6%). XNUMX% a year ago).

But this improvement in profitability was "penalized by the weak performance in North America", underlined Fabrice Barthélemy. Sales in the region were down 2,2% at constant scope and exchange rates.

The group has therefore launched a specific action plan to "give new impetus" to this region, with various measures: merger of sales teams, grouping of products under the Tarkett brand, new product ranges more aligned with customer demand. , shorter delivery times.

The objective is to offer "a complete offer" with carpets, vinyl tiles and accessories, explained the financial director Raphael Bauer, during a conference call. He added that "industrial performance is recovering" in North America, thanks to the restructuring undertaken.

The other large regions were relatively stable over the quarter: + 0,1% for Europe on an organic basis and + 0,2% for Russia and CIS, still organic.

Referring to the outlook for the end of the year, the CFO confirmed that "the environment is less favorable than in 2018" and said he was "cautious about growth prospects".

In this context, the priorities will remain with price management to fully offset the cost increases (raw materials, energy, transport) in 2019 and accelerate cost reductions (with a target of 30 million euros for the year) .

Adjusted EBITDA should be "slightly up" in 2019 with a margin "broadly in line" with that of last year, the group predicted.

Tarkett has confirmed its target of reducing debt to 2,5 times adjusted EBITDA by the end of 2019.