Tarkett sales down 2,1% in the first quarter, activity will be "severely affected" in the second

Flooring maker Tarkett on Wednesday announced first-quarter sales down 2,1% to 612 million euros, and expects activity "severely affected" by the coronavirus crisis in the second quarter.

The group estimates that it will be "significantly affected by the intensification of movement restrictions and containment measures" in the second quarter in the different geographic areas where it operates, according to a press release.

"Given the unprecedented level of uncertainty, the precise impacts cannot be quantified at this stage, either for the first half or for the full year," said Tarkett.

The group "now sees negative consequences on demand in all its geographic areas except China", where production resumed in early March and has "now returned to normal levels". China, however, represents less than 1% of turnover, recalls the group.

In the first three months of the year, sales were penalized by "a significant slowdown at the end of the quarter, particularly in Europe," said Tarkett.

Quarterly sales were down 2,1% and 2,9% at constant exchange rates and scope.

Containment measures since mid-March in Europe and North America have resulted in the cessation of construction projects and the closure of numerous resellers and distributors of floor coverings in several countries, particularly in southern Europe.

Despite "a good level of productivity" and cost reductions, containment disrupted production and logistics, which weighed on operational performance.

Adjusted gross operating surplus (Ebitda) for the first quarter is expected to be between 40 and 43 million euros (against 43,1 million a year earlier).

Faced with the crisis, Tarkett indicates that it has implemented partial unemployment and reduced working time measures at its sites, and has significantly reduced its investment spending.

The group had already announced on March 18 the abolition of its dividend.

In Europe, the production sites affected by the temporary closings are gradually starting to restart but will operate at reduced capacity, specifies Tarkett, who considers that he has a "solid level of liquidity".

The group will publish its full results for the first quarter on April 28.