Paris, February 8,
2018
Highlights
-
Net sales up 3.7% year-on-year
at €2,841m, robust organic growth of 4.8%(1)
-
In Q4, all segments contributed
to a strong 6.9% organic growth
-
Adjusted EBITDA(2) at €315m and EBITDA margin at 11.1% (versus 12.2% in FY
2016)
-
Net profit(3) up +6.5% vs. 2016 at €126m (excluding the
French Competition Authority's penalty)
-
Leverage ratio (net
debt/adjusted EBITDA) of 1.6x
-
A stable dividend of €0.60 per
share will be proposed at the AGM
-
Eric La Bonnardière will
replace Didier Deconinck as Chairman of the Supervisory Board,
confirming the long term commitment of the family to the future of
Tarkett(4)
(1) Organic growth: at constant
scope of consolidation and exchange rates (note that in the CIS
segment, price increases implemented to offset currency
fluctuations are not included in organic growth, which only
reflects changes in volumes and the product mix). See the
definition of alternative performance indicators at the end of this
press release.
(2) Adjusted EBITDA: adjustments include expenses such as
restructuring, acquisitions and share-based payment expenses. See
the definition of alternative performance indicators at the end of
this press release.
(3) Net profit attributable to owners of the Company.
(4) Subject to the renewal of their mandates as Board members at
the Annual General Meeting on April, 26th 2018.
Net sales at
constant scope of consolidation and exchange rates grew by
4.8% in 2017. Sports delivered strong growth
(+11.7%) over the full year, led by both artificial turf and
running tracks. The CIS, APAC & Latin America segment recorded
robust growth (+10.8%) thanks to good trends in all three regions.
EMEA posted a solid +3.7% rise in sales fueled by healthy trading
across the region. North America retreated slightly (-1.8%) over
the full year, although Q4 showed improvement in all product
categories (+0.8%). After an already robust Q3 revenue performance
(+6.1%) for the Group as a whole, Q4 organic growth reached a
strong +6.9% as a result of positive momentum in all segments.
Reported
sales were up 3.7% compared to 2016.
Exchange rates accounted for a negative -1.2% impact, mainly due to
the depreciation of the US dollar and the British pound against the
euro. The acquisition of the assets of AlternaScapes, a
Florida-based landscape turf distributor and installer, had a minor
scope impact (+0.1%).
Adjusted
EBITDA amounted to €315m versus €334m in
2016 and the adjusted EBITDA margin came in at
11.1% compared to 12.2% in 2016. As
anticipated, the adjusted EBITDA was penalized by the increase in
raw material prices in all segments (-€34m) and adverse currency
effects (-€12m, excluding CIS currencies). Moreover, the ruble's
depreciation in the second part of the year has led to a full year
negative "lag effect" of -€4m (net impact of CIS currencies and
selling prices evolutions). In EMEA and North America, selling
price increases implemented during the year are now starting to
show their effect (+€3m in Q4). In Russia, a 5% selling price
increase on vinyl products was announced as of December
1st 2017.
Adjusted EBITDA of the Sports segment benefited from a US$12m
settlement payment related to a patent infringement claim against
competitor AstroTurf. Productivity gains amounted to €30m.
Following a weak Q3 in North America and Sports, productivity gains
in the fourth quarter have improved.
Net profit
attributable to owners of the Company amounted to -€39m. Excluding the €165m penalty to the French
Competition Authority, the net profit attributable
to owners of the Company was up +6.5% vs.
2016 at €126m.
Commenting on these results,
Glen Morrison, CEO, stated:
"Tarkett has
delivered a robust sales performance in 2017 with all segments
growing in the fourth quarter. Over the year, the CIS countries
have steadily strengthened. Sports' growth has accelerated and EMEA
continued to grow consistently well. North America is progressively
moving back into positive territory. As expected, we are now
benefitting from our actions regarding selling prices and this
positive contribution should continue in 2018."
Key Figures
€
million |
2017 |
2016 |
Change
(as a %) |
Revenue
of which organic growth(1) |
2,841.1
|
2,739.3
|
+3.7%
+4.8% |
Adjusted
EBITDA(2)
% of net sales |
315.1
11.1% |
334.4
12.2% |
-5.8%
|
Net
profit attributable to owners of the Company
Excluding the €165m penalty
Basic earnings per share
Excluding the €165m penalty |
(38.7)
126.3
(€0.61)
€2.00 |
118.6
-
€1.87 |
n.m.
+6.5%
|
Free cash
flow
Excluding the €165m penalty |
(65.4)
99.6 |
148.0 |
|
Return on
invested capital (ROIC)(3) |
8.9% |
9.3% |
|
Net debt
/ adjusted EBITDA |
1.6x |
1.1x |
|
Dividend
per share |
€0.60(4) |
€0.60 |
|
(1) Organic growth: at constant
scope of consolidation and exchange rates (note that in the CIS
segment, price increases implemented to offset currency
fluctuations are not included in organic growth, which only
reflects changes in volumes and the product mix). See the
definition of alternative performance indicators at the end of this
press release.
(2) Adjusted EBITDA: adjustments include expenses such as
restructuring, acquisitions and share-based payment expenses. See
the definition of alternative performance indicators at the end of
this press release.
(3) Defined as Net operating profit after tax [Adjusted EBIT * (1 -
Normative tax rate of 35%)] divided by the invested capital
[Goodwill + Tangible and intangible assets + Working capital]. See
the definition of alternative performance indicators at the end of
this press release.
(4) Will be proposed at the AGM.
Net sales by segment
€
million |
2017 |
2016 |
% Change |
o/w Organic growth(1) |
EMEA |
926.4 |
906.5 |
+2.2% |
+3.7% |
North
America |
783.4 |
816.7 |
-4.1% |
-1.8% |
CIS, APAC
& Latin America |
619.0 |
549.6 |
+12.6% |
+10.8% |
Sports |
512.3 |
466.5 |
+9.8% |
+11.7% |
Total Group |
2,841.1 |
2,739.3 |
+3.7% |
+4.8% |
€
million |
Q4 2017 |
Q4 2016 |
% Change |
o/w Organic growth(1) |
EMEA |
217.9 |
211.9 |
+2.8% |
+3.4% |
North
America |
172.8 |
189.1 |
-8.6% |
+0.8% |
CIS, APAC
& Latin America |
165.3 |
157.1 |
+5.2% |
+11.4% |
Sports |
97.6 |
88.8 |
+9.9% |
+20.6% |
Total Group |
653.6 |
646.9 |
+1.0% |
+6.9% |
Adjusted EBITDA(2) by segment
€
million |
2017 |
2016 |
2017
Margin
(% net
sales) |
2016
Margin
(% net
sales) |
EMEA |
126.8 |
136.7 |
13.7% |
15.1% |
North
America |
95.0 |
113.0 |
12.1% |
13.8% |
CIS, APAC
& Latin America |
88.5 |
81.0 |
14.3% |
14.7% |
Sports |
51.5 |
54.1 |
10.1% |
11.6% |
Central
costs not allocated |
(46.7) |
(50.4) |
- |
- |
Total Group |
315.1 |
334.4 |
11.1% |
12.2% |
(1) Organic growth: at constant
scope of consolidation and exchange rates (note that in the CIS
segment, price increases implemented to offset currency
fluctuations are not included in organic growth, which only
reflects changes in volumes and the product mix). See the
definition of alternative performance indicators at the end of this
press release.
(2) Adjusted EBITDA: adjustments include expenses such as
restructuring, acquisitions and share-based payment expenses. See
the definition of alternative performance indicators at the end of
this press release.
Comments by reporting
segment
Europe, Middle
East, Africa (EMEA)
Net sales at
constant scope of consolidation and exchange rates grew by
3.7% in 2017. France has been positive
throughout the year after several years of market decline. Nordic
countries showed growth, though Q4 was slightly down. The UK
reported further growth despite an uncertain environment. Southern
Europe enjoyed strong level of growth. Germany, the Netherlands and
Central Europe also achieved a good performance. The Middle East
reported stable sales on a full year basis.
Luxury vinyl tiles (LVT) continued
to fuel volume growth both in the residential and commercial
segments. More than €20m will be invested is this product category
over the next three years, mainly in Poland and Luxemburg. These
investments will further enhance Tarkett's strong position in the
European LVT market and facilitate customer's access to unique and
exclusive designs.
Sales were up
2.2% on a reported basis, penalized by
unfavorable exchange rate fluctuations, mainly the British
Pound.
The adjusted
EBITDA margin was 13.7% compared to 15.1%
in 2016, affected mainly by rising raw material costs and the
adverse evolution of the British Pound. Selling price increases
have been implemented in 2017 and started to bear fruits in Q4. We
anticipate seeing the full benefit of these increases in 2018.
North
America
In North America, full year 2017
sales were down -1.8% on
2016 at constant scope of consolidation and
exchange rates but increased slightly over the fourth quarter (+0.8%).
Commercial resilient flooring and
accessories posted growth in 2017, benefiting from the last two
year investments made in terms of service, products and operational
performance.
Commercial carpet remained down in
2017, mostly owing to weaknesses in the office and healthcare
sectors, although the situation improved in the fourth quarter. We
are planning to follow 2017 products launches with continued
products and services deployment in 2018.
Luxury vinyl tiles (LVT) kept
delivering good growth in North America and remain an important
driver for Tarkett. Tarkett has enriched its tile product range and
in Q3 has launched ProGen, a semi-rigid board product that has been
very well received by our customers.
Tarkett has announced investments
totaling $60 million over a three-year period to increase LVT
production at its flooring manufacturing facilities in Florence,
Alabama, including a new distribution center. These investments
increase our local LVT production capacity, improve supply chain
efficiency and enhance customer service.
Reported
sales decreased by -4.1% on the back of
the depreciation of the US dollar against the euro over the
year.
Adjusted EBITDA
margin narrowed to 12.1% from 13.8% in
2016, penalized by higher raw material prices, a slight decrease in
sales volumes as well as lower operational performance in Q3
(although Q4 has significantly improved). The selling price
increases implemented in 2017 have started to contribute positively
in the fourth quarter and will bring full benefit in 2018.
Andrew Bonham has been appointed
President and Chief Executive Officer of Tarkett North America,
effective March 5, 2018. Andrew has extensive experience in the
construction, industrial equipment and specialty chemicals
industries and has held several global leadership positions as well
as regional leadership in North America and Europe.
CIS, APAC &
Latin America
The CIS, APAC & Latin America
segment posted a robust 10.8% organic sales
growth in 2017 (excluding selling price adjustments in the CIS
region). The CIS countries continued throughout the year on a
steady upward trend. The strengthening of real wages and improving
consumer confidence have fueled a recovery in volumes as well as an
improved product mix.
Sales in the Asia-Pacific region grew over the full year, spurred
by nice trends in China and South-East Asia. Latin America saw
further growth in 2017, thanks to vigorous LVT volumes in Brazil,
despite the difficult environment in the Brazilian construction
market.
On a reported
basis, sales rose by 12.6%, thanks to
gains in the Russian ruble and the Brazilian real on a full year
basis.
In Russia, Tarkett maintained its
focused strategy of adapting selling prices to movements in
exchange rates. In December 2017, a 5% price increase on vinyl
products has been announced to cope with the ruble devaluation in
H2 2017. As a reminder, vinyl selling prices had been reduced by 5%
to 15% in Q2 2017, depending on products following several quarters
of ruble recovery.
Adjusted EBITDA
margin remained at a healthy 14.3% from
14.7% in 2016, against a tough basis of comparison in H2 2016 when
the margin had reached 17.9% thanks to a positive "lag effect" (net
impact of currencies and selling prices evolutions) of
€11.6m.
In 2017, the full-year "lag effect" on adjusted EBITDA is -€4.5m,
as a result of the depreciation of the ruble in the second half of
the year combined with lower selling prices (leading to a negative
-€12.0m impact on adjusted EBITDA in H2 2017). However, the
segment's margin has proved resilient at 14.3% thanks to a strong
contribution of additional volumes and manufacturing
productivities.
Sports
The Sports segment put in another
very good performance reaching 11.7% organic
growth in 2017, driven by growth in all product lines. The
increased share of turnkey projects, which include billings for
civil engineering work, has also contributed to reach this high
level of sales. Several high profile projects have been completed
in the course of 2017 in hybrid turf (FC Barcelona's Camp Nou and
Liverpool FC's stadiums) as well as in running tracks (Beynon
banked hydraulic track Rise-n Run in the University of
Michigan).
Sports is pursuing its
geographical expansion and has announced the acquisition of the
assets of Grassman (sales of AUS$15m, approx. €10m in 2017), a
leading artificial turf manufacturer in Australia. In addition to
reinforcing our local presence, this move gives us access to new
market segments (hockey, tennis or landscape). Sports has also
initiated a strategic partnership with Allsports Construction &
Maintenance, the market leader in the construction and installation
of high profile synthetic turf fields in Scotland.
Reported
sales were up 9.8%, penalized by the
depreciation of the US dollar against the euro.
Adjusted EBITDA
margin stood at 10.1% versus 11.6% in
2016. In H1 2017, the adjusted EBITDA benefited from a US$ 12m
settlement in connection with a patent infringement claim against
competitor Astroturf. Full year adjusted EBITDA margin was
penalized by the large proportion of turnkey projects - the civil
engineering part of which generates a lower margin - higher raw
material prices, legal costs and lower than last year performance
in operations in Q3.
In order to further streamline its operations, the Group has closed
its artificial turf facility in Spain (17 employees). The
production has been transferred to its production site in Auchel,
France.
Net profit
attributable to owners of the Company
Central costs
decreased slightly to €46.7m from €50.4m in 2016.
Adjustments to
EBIT went from -€23.0m in 2016 to -€183.6m in 2017, mainly due
to the French Competition Authority penalty of €165m.
Financial income
and expenses amounted to -€23.4m in 2017 vs. -€21.0m in 2016,
due to higher foreign exchange losses in the CIS countries.
The effective tax
rate decreased to 19.7% compared to 31.2%
in 2016 thanks a more favorable country mix and the reassessment of
tax credits due to changes in some entities' earnings profile.
Tarkett recorded a +9m€ tax income following the decision of the
French constitutional court to cancel the 3% surtax on
dividend.
Net profit
attributable to owners of the Company amounted to -€39m. Excluding the €165m penalty to the French
Competition Authority, the net profit attributable
to owners of the Company was up +6.5% vs.
2016 at €126m.
A sound financial
structure
Ongoing capital
expenditures increased moderately in 2017, totaling €110.9m, or
3.9% of net sales vs. €91.5m 2016, owing to capacity investments in
growing product categories such as LVT and further operations
productivity enhancement.
Free cash
flow amounted to €99.6m excluding the French Competition
Authority penalty from +€148.0m in 2016. The payment of the €165m
penalty to the French Competition Authority took place at the end
of December 2017.
Net debt
increased from €378m to €492m, resulting in a leverage ratio to 1.6
times adjusted EBITDA (1.1x at year-end 2016).
The Management Board will propose
payment of a €0.60 per-share
dividend at the Annual General Meeting on April 26, 2018,
stable compared to last year.
Outlook
Most of our markets are well
positioned in 2018. The Group expects positive growth driven by a
combination of innovative new products and new services to further
enhance customer experience. At constant exchange rates, EMEA
should be well oriented and grow moderately. North America should
continue to improve. The CIS and Sports segments should continue to
grow, albeit at a lower rate than in 2017.
At current prices, we anticipate
in 2018 a negative impact from raw materials of similar magnitude
to that experienced in 2017. Against this backdrop, the Group will
pursue its efforts on selling prices with the goal of compensating
raw material costs for the full year.
Moreover, the Group will further
deploy its World Class Manufacturing program to generate savings in
line with historical performances.
As a result of the commitment of
the Group to long term growth strategy and continuous optimization
of its operations, capital expenditures in 2018 should be around 5%
of net sales. This investment effort is focused on capacity and
efficiency projects, in particular through automation and notably
on the LVT category, but also in regions with potential for faster
growth (Wood production line in Russia).
US tax reforms which came into
effect in January 2018 will positively impact the Group's after tax
earnings, principally due to the reduction of the US federal
corporate income tax rate. In addition, the Group will benefit from
the evolution of its country mix and from the cancellation of the
3% tax on dividends in France. Going forward, we estimate that the
Group's effective tax rate should be circa 30%.
In October 2016, the Group
presented a strategic plan which included 2020 financial targets
(see appendix 3 for more details).
The Group maintains the objective of achieving those targets by the
end of the plan. Given the current environment of increased
inflation in raw material prices and unfavorable currency
movements, the achievement of the profitability & return
targets (adjusted EBITDA margin > 12% and ROIC > 9%) is more
challenging in 2018.
With its healthy balance sheet,
Tarkett will continue to actively seek out opportunities for
external growth.
Supervisory
Board: Evolution of the governance of Tarkett
Tarkett's Supervisory Board has
agreed that Eric La Bonnardière, currently Vice Chairman, will
become Chairman of the Supervisory Board. He will replace Didier
Deconinck who will remain on the Board as Vice Chairman.
This decision is dependent upon
the Annual General Meeting on April 26th, 2018
approving the renewal of their mandates as Board members.
Eric La Bonnardière is a grandson
of Bernard Deconinck Senior. Eric is the co-founder, Chairman, and
CEO of Evaneos, a leading European travel marketplace. Before
creating Evaneos in 2009, Eric began his career in 2006 as a
consultant at Capgemini and at the strategic consulting firm
Advancy, where he focused on projects relating to industry and
distribution. He obtained an engineering degree from Supélec, and a
Master in Business from HEC Paris.
The audited
consolidated financial statements for the full year 2017 are
available on Tarkett's website. The analysts' conference will be
held on Friday February 9, 2018 at 11:00 am CET and an audio
webcast service (live and replay) along with the results
presentation will be available on www.tarkett.com.
Financial calendar
-
April 24, 2018: Q1 2018 financial results -
press release after close of trading on the Paris
market and conference call the following morning
-
April 26, 2018: Annual General Meeting
-
July 25, 2018: H1 2018 financial results -
press release after close of trading on the Paris
market and presentation in person the following morning
-
October 23, 2018: Q3 2018 financial Results
- press release after close of trading on the
Paris market and conference call the following morning
About
Tarkett
With net sales of more than €2.8bn in 2017, Tarkett is a worldwide
leader of innovative flooring and sports surface solutions.
Offering a wide range of products including vinyl, linoleum,
rubber, carpet, wood and laminate flooring, artificial turf and
athletics tracks, the Group serves customers in over 100 countries
across the globe. With 12,500 employees and 34 industrial sites,
Tarkett sells 1.3 million square meters of flooring every day, for
hospitals, schools, housing, hotels, offices, stores and sports
fields. Committed to sustainable development, the Group has
implemented an eco-innovation strategy and promotes a circular
economy. Tarkett is listed on Euronext Paris (compartment A, ISIN:
FR0004188670, ticker TKTT) as well as on the SBF 120 and CAC Mid 60
indexes. www.tarkett.com
Investor
Relations contact
Tarkett Alexandra Baubigeat Boucheron
alexandra.baubigeatboucheron@tarkett.com
Media Relations
contacts
Tarkett Véronique Bouchard Bienaymé
communication@tarkett.com
Brunswick tarkett@brunswickgroup.com Tél. : +33 (0) 1 53 96 83
83
Disclaimer
On February 8, 2018, Tarkett's Supervisory Board reviewed the
Group's consolidated financial statements as of and for the year
ended December 31, 2017. The audit of the financial statements has
been completed and the statutory auditors' report on the financial
statements has been issued.
This press release may contain
estimates and/or forward looking statements. Such statements do not
constitute forecasts regarding Tarkett's results or any other
performance indicator, but rather trends or targets, as the case
may be.
These statements are by their nature subject to risks and
uncertainties, many of which are outside Tarkett's control,
including, but not limited to the risks described in Tarkett's
'document de référence', registered on March 21st, 2017
available on its Internet website (www.tarkett.com). These risks
and uncertainties include those discussed or identified under
'Facteurs de Risques' in the 'document de reference'. These
statements do not warrant future performance of Tarkett, which may
materially differ. Tarkett does not undertake to provide updates of
these statements to reflect events that occur or circumstances that
arise after the publication of the press release.
Appendices
1)
Bridges
Net Sales evolution by
nature in million euros- see document attached
2/ Key figures
Net sales by segment
€
million |
Q1 2017 |
Q1 2016 |
% Change |
o/w Organic growth(1) |
EMEA |
243.4 |
232.4 |
+4.7% |
+7.0% |
North
America |
190.3 |
187.2 |
+1.6% |
-2.1% |
CIS, APAC
& Latin America |
121.3 |
103.5 |
+17.2% |
+2.0% |
Sports |
56.7 |
53.2 |
+6.6% |
+3.6% |
TOTAL |
611.7 |
576.3 |
+6.1% |
+2.8% |
€
million |
Q2 2017 |
Q2 2016 |
% Change |
o/w Organic growth(1) |
EMEA |
237.9 |
239.3 |
-0.5% |
+1.5% |
North
America |
222.4 |
223.9 |
-0.7% |
-1.3% |
CIS, APAC
& Latin America |
154.4 |
131.4 |
+17.4% |
+11.3% |
Sports |
137.6 |
127.3 |
+8.0% |
+5.9% |
TOTAL |
752.3 |
721.8 |
+4.2% |
+3.2% |
€
million |
H1 2017 |
H1 2016 |
% Change |
o/w Organic growth(1) |
EMEA |
481.3 |
471.6 |
+2.1% |
+4.2% |
North
America |
412.7 |
411.1 |
+0.4% |
-1.6% |
CIS, APAC
& Latin America |
275.7 |
234.9 |
+17.4% |
+7.2% |
Sports |
194.3 |
180.5 |
+7.6% |
+5.3% |
TOTAL |
1,364.0 |
1,298.1 |
+5.1% |
+3.0% |
€
million |
Q3 2017 |
Q3 2016 |
% Change |
o/w
organic(1) |
EMEA |
227.2 |
222.9 |
+1.9% |
+2.9% |
North
America |
197.9 |
216.6 |
-8.6% |
-4.2% |
CIS, APAC
& LATAM |
178.0 |
157.7 |
+12.9% |
+15.5% |
Sports |
220.4 |
197.2 |
+11.8% |
+13.6% |
TOTAL |
823.5 |
794.3 |
+3.7% |
+6.1% |
€
million |
Q4 2017 |
Q4 2016 |
% Change |
o/w
organic(1) |
EMEA |
217.9 |
211.9 |
+2.8% |
+3.4% |
North
America |
172.8 |
189.1 |
-8.6% |
+0.8% |
CIS, APAC
& LATAM |
165.3 |
157.1 |
+5.2% |
+11.4% |
Sports |
97.6 |
88.8 |
+9.9% |
+20.6% |
TOTAL |
653.6 |
646.9 |
+1.0% |
+6.9% |
(1) Organic growth: at constant
scope of consolidation and exchange rates (note that in the CIS
segment, price increases implemented to offset currency
fluctuations are not included in organic growth, which only
reflects changes in volumes and the product mix). See the
definition of alternative performance indicators at the end of this
press release.
Quarterly Group adjusted
EBITDA(1)
€
million |
2017 |
2016 |
2017 Margin
(% net sales) |
2016
Margin
(% net sales) |
Q1 |
51.5 |
45.0 |
8.4% |
7.8% |
Q2 |
108.8 |
106.5 |
14.5% |
14.8% |
Q3 |
101.1 |
119.2 |
12.3% |
15.0% |
Q4 |
53.7 |
63.7 |
8.2% |
9.8% |
Half-year adjusted
EBITDA(1) by segment
€
million |
H1 2017 |
H1 2016 |
H1 2017 Margin
(% net sales) |
H1 2016
Margin
(% net sales) |
EMEA |
68.5 |
74.8 |
14.2% |
15.9% |
North
America |
51.7 |
59.3 |
12.5% |
14.4% |
CIS, APAC
& Latin America |
40.2 |
24.8 |
14.6% |
10.6% |
Sports |
23.0 |
18.2 |
11.8% |
10.1% |
Central
costs not allocated |
(23.1) |
(25.7) |
- |
- |
Total |
160.3 |
151.4 |
11.8% |
11.7% |
€
million |
H2 2017 |
H2 2016 |
H2 2017 Margin
(% net sales) |
H2 2016
Margin
(% net sales) |
EMEA |
58.3 |
61.9 |
13.1% |
14.2% |
North
America |
43.3 |
53.7 |
11.7% |
13.2% |
CIS, APAC
& Latin America |
48.3 |
56.2 |
14.1% |
17.9% |
Sports |
28.5 |
35.9 |
9.0% |
12.6% |
Central
costs not allocated |
(23.6) |
(24.7) |
- |
- |
Total |
154.8 |
183.0 |
10.5% |
12.7% |
(1) Adjusted EBITDA: adjustments
include expenses such as restructuring, acquisitions and
share-based payment expenses. See the definition of alternative
performance indicators at the end of this press release.
Simplified consolidated income statement
€
million |
2017 |
2016 |
Net sales |
2,841.1 |
2,739.3 |
Adjusted EBITDA(1)
% net sales |
315.1
11.1% |
334.4
12.2% |
Depreciation and amortization |
(118.8) |
(120.7) |
Adjustments to EBIT |
(183.6) |
(23.0) |
Result from operations (EBIT)
% net sales |
12.7
0.4% |
190.7
7.0% |
Financial
income and expenses |
(23.4) |
(21.0) |
Profit
before income tax |
(7.7) |
172.3 |
Income
tax
Effective tax rate(2) |
(30.3)
19.7% |
(53.0)
31.2% |
Net profit attributable to owners of the Company |
(38.7) |
118.6 |
Basic
earnings per share |
€(0.61) |
€1.87 |
(1) Adjusted EBITDA: adjustments
include expenses such as restructuring, acquisitions and
share-based payment expenses. See the definition of alternative
performance indicators at the end of this press release.
(2) Excluding the effect of the €165m French Competition Authority
penalty, non tax deductible.
3/ 2017-2020
financial objectives communicated in October 2016, unless
transforming acquisition, based on relatively stable raw material
prices (as of October 2016)
-
Net Sales of €3.5bn in 2020, including
acquisitions
-
Adjusted EBITDA margin(1) >
12%
-
Return On Invested Capital (ROIC)(2) >
9%
-
Additional sales by 2020 of ~€500m through
acquisitions
-
Net debt / adjusted EBITDA(1) <
2.5x
-
Dividend: at least €0.60 per share
(1) Adjusted EBITDA: adjustments
include expenses such as restructuring, acquisitions and
share-based payment expenses. See the definition of alternative
performance indicators at the end of this press release.
(2) Defined as the Net operating profit after tax [Adjusted EBIT *
(1 - Normative tax rate of 35%)] divided by the Capital employed
[Goodwill + Tangible and intangible assets + Working capital].
4/ Definition of
alternative performance indicators
(not defined by IFRS)
The Tarkett Group uses the
following non-IFRS financial indicators:
These indicators are calculated as described below.
-
Organic growth:
-
Organic growth measures the change in net sales
as compared with the same period in the previous year, at constant
scope of consolidation and exchange rates.
-
The exchange rate effect is calculated by
applying the previous year's exchange rates to sales for the
current year and calculating the difference as compared with sales
for the current year. It also includes the impact of price
adjustments in CIS countries intended to offset movements in local
currencies against the euro.
-
The scope effect reflects:
-
current-year sales for entities not included in
the scope of consolidation in the same period in the previous year,
up to the anniversary date of their consolidation;
-
the reduction in sales relating to discontinued
operations that are not included in the scope of consolidation for
the current year but were included in sales for the same period in
the previous year, up to the anniversary date of their
disposal.
Year-on-year
net sales trends can be analyzed as follows:
€
million |
2017 |
2016 |
%
Change |
o/w Exchange rate effect |
o/w
Scope effect |
o/w
Organic growth |
Total Group - Q1 |
611.7 |
576.3 |
+6.1% |
+3.3% |
0.0% |
+2.8% |
Total Group - Q2 |
752.3 |
721.8 |
+4.2% |
+0.9% |
+0.1% |
+3.2% |
Total Group - H1 |
1,364.0 |
1,298.1 |
+5.1% |
+2.0% |
+0.1% |
+3.0% |
Total Group - Q3 |
823.5 |
794.3 |
+3.7% |
-2.5% |
+0.1% |
+6.1% |
Total Group - Q4 |
653.6 |
646.9 |
+1.0% |
-5.9% |
+0.1% |
+6.9% |
Total Group - H2 |
1,477.1 |
1,441.2 |
+2.5% |
-4.0% |
+0.1% |
+6.4% |
Total Group - FY |
2,841.1 |
2,739.3 |
+3.7% |
-1.2% |
+0.1% |
+4.8% |
-
Adjusted EBITDA:
-
Adjusted EBITDA is calculated by deducting the
following income and expenses from result from operations before
depreciation and amortization:
-
restructuring costs intended to increase the
Group's future profitability;
-
capital gains and losses recognized on
significant asset disposals;
-
provisions and provision reversals for loss in
value;
-
costs arising on corporate and legal
restructuring;
-
share-based payment expenses;
-
other one-off items considered non-recurring
owing to their nature.
-
Note 3.1 to the consolidated financial
statements includes a table that reconciles operating income with
adjusted EBITDA, as well as the effect of adjustments by
type.
|
|
Of which adjustments: |
|
(in millions of euros) |
2017 |
Restructuring |
Gains/losses on asset sales/impairment |
Business combinations |
Share-based payments |
Other* |
2017 adjusted |
|
Net revenue |
2,841.1 |
- |
- |
- |
- |
- |
2,841.1 |
Cost of sales |
(2,138.1) |
1.6 |
3.9 |
- |
1.0 |
0.0 |
(2,131.6) |
Gross profit |
703.0 |
1.6 |
3.9 |
- |
1.0 |
0.0 |
709.5 |
Other operating income |
30.1 |
0.2 |
0.1 |
(1.9) |
- |
(0.1) |
28.4 |
Selling and distribution expenses |
(319.4) |
(1.2) |
- |
- |
0.5 |
- |
(320.1) |
Research and development |
(36.4) |
0.4 |
- |
- |
0.3 |
- |
(35.7) |
General and administrative expenses |
(187.5) |
0.8 |
0.6 |
0.6 |
10.3 |
0.4 |
(174.8) |
Other operating expenses |
(177.1) |
0.3 |
- |
- |
- |
165.8 |
(11.0) |
Result from operating activities
(EBIT) |
12.7 |
2.1 |
4.6 |
(1.3) |
12.1 |
166.1 |
196.3 |
Depreciation and amortization |
122.3 |
1.0 |
(4.5) |
- |
- |
- |
118.8 |
EBITDA |
135.0 |
3.1 |
0.1 |
(1.3) |
12.1 |
166.1 |
315.1 |
*Others: includes the adjustment linked
to the €165m booked following the French Competition Authority
decision. |
Net cash flow from operations for
the year can be broken down as follows:
€
million |
2017 |
2016 |
Cash
generated from operations |
91.1 |
297.3 |
Acquisitions of property, plant and equipment and intangible
assets |
(111.1) |
(91.9) |
Restatement of non-recurring capital expenditure |
0.2 |
0.4 |
Net cash flow from operations |
(19.8) |
205.8 |
Note: Cash generated from
operations decrease significantly due to the penalty paid to the
French Competition Authority.
-
Free cash flow:
-
Net cash flow from operations, as defined above,
to which the following inflows are added to (or outflows are
subtracted from) the cash flow statement:
-
Net interest received (paid);
-
Net taxes collected (paid);
-
Miscellaneous operational items deposited
(disbursed); and
-
Proceeds (losses) from disposals of fixed
assets.
-
Free cash flow may be broken down as follows:
€
million |
2017 |
2016 |
Net cash
flow from operations |
(19.8) |
205.8 |
Net
interest paid |
(11.3) |
(15.3) |
Net taxes
paid |
(37.8) |
(41.1) |
Miscellaneous operational items |
(1.0) |
(2.1) |
Proceeds
from sale of property, plant and equipment |
4.5 |
0.7 |
Free Cash Flow |
(65.4) |
148.0 |
Note 3.5 to the consolidated financial statements includes a table
showing the reconciliation of the line items in the Statement of
Cash Flows to operating cash flow and free cash flow.
Net operating profit after taxes (NOPAT) is
calculated as follows:
€ million |
2017 |
2016 |
Result from operating activities
(EBIT) |
12.7 |
190.7 |
Adjustments |
|
|
Restructuring costs |
2.1 |
5.0 |
Gains (losses) on disposal of fixed assets/Impairment |
4.6 |
2.4 |
Business combinations |
(1.3) |
4.6 |
Share-based payments |
12.1 |
8.7 |
Other |
166.1 |
2.3 |
Adjusted EBIT |
196.3 |
213.7 |
Normative tax rate(1) |
35% |
35% |
Net operating profit after taxes (NOPAT) (A) |
127.6 |
138.9 |
(1) At this stage, 35% has been
kept for coherence purpose with the 2020 objective calculation
formula.
Invested capital is calculated as follows:
€ million |
2017 |
2016 |
Property, plant and equipment |
467.4 |
488.6 |
Intangible assets |
91.4 |
108.5 |
Goodwill |
510.5 |
550.4 |
Working capital(1) |
365.1 |
347.8 |
Total invested capital (B) |
1,434.4 |
1,495.3 |
(1) Working capital includes
inventory, trade and other receivables, deferred tax assets and
liabilities, trade payables, other liabilities, and other
short-term provisions, restated for financial items (€3.3m) and for
amounts payable on fixed assets (€5.8m).
The Group's return on invested capital is as
follows:
€ million |
2017 |
2016 |
Return on invested capital (ROIC) (A/B) |
8.9% |
9.3% |
Link to PDF
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Tarkett via Globenewswire
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