Investor day 2019: Change to Win
Tarkett, a global leader in innovative and
sustainable flooring and sports surface solutions, is hosting its
Investor Day in Paris today. Together with the executive management
team, Tarkett CEO Fabrice Barthélemy will present the “Change to
Win” strategic plan.
Tarkett’s ambition is to be the global leader in
commercial flooring and sports surfaces, to grow selectively in
residential flooring and to change the game in circular economy.
The plan relies on 4 strategic pillars:
- Sustainable growth, resulting from an
increased focus on selected commercial end-user flooring
segments, the development of a global presence in
Hospitality and further expansion in Sports. The Group also plans
to invest in digital channels to capture future
growth ;
- A strong customer-centric mindset and an
organization driven by simplicity, agility and speed;
- An ambitious circular economy deployment with
a strong focus on recycling solutions for our customers;
- A disciplined cost savings program aiming at
delivering €120 million of savings over 2019-2022
and selective capital allocation aligned with the
focus on sustainable growth.
CEO Fabrice Barthélemy, said:
“We are expecting no tailwind from the economic environment in the
next years. Therefore we need to adapt and change to deliver above
market growth and improved profitability. We have built a solid
plan that combines a stronger focus on selected end-user segments,
an expanded presence in digital channels and further developments
in circular economy. In addition, we have started implementing an
ambitious cost reduction program and we will invest selectively to
support our sustainable growth. Our organization and teams will be
more customer-centric while working on simplifying the way we
operate. Being more agile is critical to our success and all
Tarkett teams are fully committed to this new strategic plan:
Change to Win.”
Taking into account the initiatives of the new
strategic plan, Tarkett has set mid-term objectives:
- Organic growth1: the Group aims at
growing above the GDP in each key region (North
America, Europe and CIS), in average between 2019 and 2022.
- Profitability improvement is a key objective
of the plan: the Group aims at reaching an Adjusted EBITDA2
margin above 11% in 2022 (before IFRS163
application).
- Contained leverage (Net Financial
Debt/Adjusted EBITDA): the Group plans to operate within a range of
1.5x to 2.5x Adjusted EBITDA at the end of each
year over the period.
After the application of the IFRS 16 new
accounting norm on Leases, EBITDA and leverage objectives read as
follows:
- Adjusted EBITDA margin above 12% in 2022
;
- Leverage (Net Debt to Adjusted EBITDA): within
a range of 1.6x to 2.6x Adjusted EBITDA at end of each year, over
the period.
To succeed, the Group has set priorities in
terms of capital allocation:
- Further investment in productivity, automation and
digital: capital expenditures are expected slightly above
its historical average over the period ;
- Priority to deleveraging in 2019: no sizeable
acquisition in 2019;
- M&A: going forward, seize
acquisitions opportunities in a fragmented industry
to strengthen in key end-user segments or
geographies;
- Set dividend level within a pay-out range of 30% to
50% of reported net income, subject to leverage and
M&A.
Tarkett has a clear roadmap and will give an
extreme attention to the execution of its “Change to Win” strategic
plan by keeping focus on our growth initiatives and monitoring
tightly the cost reduction actions.
Live Webcast & Replay
The event will start at 2:00pm CET Paris time on
June 19, 2019 and will be live webcasted on Tarkett’s website at
the following address:
https://onlinexperiences.com/Launch/QReg/ShowUUID=1B0E210D-FFBA-4BAF-8898-9BF606C7A566&LangLocaleID=1033&GroupID=group1
The presentations will be available before the
meeting and may be downloaded and subsequently a replay will be
made available at the same address.
Financial calendar:
- July 23, 2019: H1 2019 financial results - press release after
close of trading on Euronext Paris and conference call the
following morning
- October 23, 2019: Q3 2019 financial results - press
release after close of trading on Euronext Paris and conference
call the following morning
About Tarkett
With a history going back 135 years, Tarkett is
a worldwide leader in innovative flooring and sports surface
solutions, with net sales of more than €2.8 billion in 2018.
Offering a wide range of products including vinyl, linoleum,
rubber, carpet, wood, laminate, artificial turf and athletics
tracks, the Group serves customers in over 100 countries across the
globe. Tarkett has 13,000 employees and 36 industrial sites, and
sells 1.3 million square meters of flooring every day, for
hospitals, schools, housing, hotels, offices, stores and sports
fields. Committed to “Doing Good. Together.”, the Group has
implemented an eco-innovation strategy based on Cradle to Cradle®
principles and promotes circular economy, with the ultimate goal of
contributing to people’s health and wellbeing, and preserving
natural capital. Tarkett is listed on Euronext Paris (compartment
A, ISIN: FR0004188670, ticker: TKTT) and is included in the
following indices: SBF 120 and CAC Mid 60. www.tarkett.com.
Forward Looking Statement
The information contained in this press release
has not been independently verified and no express or implied
representations or warranties are made as to the fairness,
accuracy, completeness or correctness of the information or
opinions set out herein.This press release may contain estimates
and/or forward-looking statements. These do not represent forecasts
of Tarkett’s results or other performance indicators, but rather
trends or targets as appropriate. These statements are inherently
subject to risks and uncertainties, most of which are outside
Tarkett’s control, including but not limited to the risks described
in Tarkett’s registration document, the French version of which was
filed on March 21, 2019 and is available on www.tarkett.com. These
risks and uncertainties include those discussed or identified in
the “Risk factors” section of its registration document filed with
the AMF. These statements do not constitute guarantees as to
Tarkett’s future performance, which may differ materially from
these forward-looking statements. Tarkett disclaims any intention
or obligation to update these forward-looking statements in light
of events or circumstances that may arise subsequent to the date of
publication of this press release.
Investor Relations
ContactTarkett – Emilie Megel –
emilie.megel@tarkett.comMedia contactsTarkett -
Véronique Bouchard Bienaymé - communication@tarkett.com Brunswick -
tarkett@brunswickgroup.com - Tel.: +33 (0) 1 53 96 83 83
Appendices
1/ Definition of
alternative performance measures (not defined
under IFRS)
The Tarkett Group uses the following non-IFRS
financial indicators:
- Organic growth
- Adjusted EBITDA
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 and
Turkey 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.
- Adjusted EBITDA:
- Adjusted EBITDA is calculated by deducting the following income
and expenses from operating income 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 reversals of provisions relating to impairment
losses;
- costs arising on corporate and legal restructuring;
- share-based payment expenses;
- other one-off items considered non-recurring owing to their
nature.
2/Impact of IFRS 16 “Leases” in
2019
IFRS 16 “Leases” standard is applicable since
January 1, 2019. This new accounting standard requires lessees to
recognize, for all leases that it covers, all lease payments yet to
be paid in the form of a right of use under non-current assets on
the balance sheet, with a balancing entry under debt on the
liabilities side.
Based on existing lease contracts, applying IFRS
16 increases non-current assets and net debt by an amount of around
€100 million.
In the income statement, there is a decrease in
lease expenses recorded under EBITDA, and an increase in
depreciation of non-current assets and interest expense. The
full-year improvement in EBITDA is expected to be around €27
million in 2019, increasing EBITDA margin by around 100 basis
points.
The effect of these changes on the net
debt/adjusted EBITDA ratio is limited to around 0.1x: based on 2018
results, the ratio would have increased from 2.8x to 2.9x. The
documentation of Tarkett’s financing agreements, however, provides
that the effect of changes in accounting standards is neutralized.
As a result, the application of IFRS 16 has no consequences for the
Group’s financing.
The impact on net profit attributable to owners
of the Company is limited.
€ million |
Estimated 2019 IFRS 16 impact on Adj. EBITDA by
segment |
EMEA |
8 |
North America |
8 |
CIS, APAC & Latin America |
5 |
Sports |
3 |
Central |
3 |
Group’s estimated IFRS 16 impact for
2019 |
27 |
1 Organic growth is the revenue growth on a like-for-like basis,
i.e. at constant scope of consolidation and exchange rates, and
therefore only reflects changes in volumes, prices and the product
mix (note that in the CIS segment, price increases implemented to
offset currency fluctuations are not included in organic growth).
See the definition of alternative performance indicators (appendix
1) at the end of this press release.
2 Adjusted EBITDA adjustments include expenses such as those
relating to restructuring, acquisitions and share-based payments.
See the definition of alternative performance indicators (appendix
1) at the end of this press release.
3See details of the IFRS16 impact in appendix 2
- 2019-06-19-Investor Day Tarkett-PR_ID
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