Q3 2023 Revenue: Organic sales growth of +6.0% Record revenue in
Sports Good levels of activity in CIS countries and resilience in
the Commercial segments in North America
Q3 2023 Revenue:
Organic sales growth of +6.0%
Record revenue in Sports
Good levels of activity in CIS countries and resilience
in the Commercial segments in North America
Third quarter 2023 results
- Revenue down -2.1% compared to Q3 2022 given the
unfavourable exchange effects (-8.1%) due to the devaluation of the
dollar and the rouble
- Organic growth of +6.0% driven by strong activity in
Sports and volumes up in CIS
- In EMEA, volumes are down slightly compared to last
year, affected by sluggish demand
- In North America, the slowdown in the Residential and
Hospitality segments is partially offset by the good performance in
the Commercial segments
- Good level of activity in CIS with volumes greater than
those in Q3 2022, which nevertheless remain lower than those in
2021 over the same period
- In a dynamic market, Sports continues to grow at a
sustained pace (+15.8% organic) despite a high basis for comparison
in Q3 2022
- Selling prices are generally stable compared to Q2
2023
Paris, 19
October 2023: The Supervisory Board of Tarkett
(Euronext Paris: FR0004188670 TKTT), which met today, reviewed the
Group’s consolidated revenue for the third quarter of 2023.
The Group uses alternative performance
indicators (not defined under IFRS), described in detail in the
Appendix of this document:
Revenue in millions of euros |
Q3 2023 |
Q3 2022 |
Change |
Of which organic growth |
EMEA |
209.4 |
220.4 |
-5.0% |
-3.8% |
North America |
228.4 |
251.4 |
-9.2% |
-2.6% |
CIS, APAC & Latin America |
165.6 |
191.1 |
-13.3% |
+10.8% |
Sports |
380.8 |
342.5 |
+11.2% |
+15.8% |
Group Total |
984.3 |
1,005.4 |
-2.1% |
+6.0% |
- Revenue for the third quarter of 2023
Net revenue of the Group
amounted to 984 million euros, down -2.1% compared to the third
quarter of 2022. Organic growth was +6.0% (or +5.7% including sales
price variations in the CIS region(1) ). The total effect of the
selling price increases implemented across all segments is +3.1% on
average compared to the third quarter of 2022. Sales prices were
generally stable compared to Q2 2023.
The EMEA segment achieved a net
revenue of 209 million euros, down -5.0% compared to the third
quarter of 2022, including an unfavourable currency effect of -1.2%
and negative organic growth of -3.8%. The economic context of high
inflation and interest rates is penalising renovation and new
construction projects throughout the area. Activity in the
Residential segment was significantly lower than in 2022 due to an
unfavourable product mix, with vinyl rolls performing better than
more expensive categories such as parquet. Activity in the
Commercial segments fell only slightly compared to 2022 thanks to
the good performance of volumes in the two main categories, vinyl
products for the health and education sector and carpets for
offices.
The North American segment
generated net revenue of 228 million euros, down -9.2% compared to
the third quarter of 2022, with a negative currency effect linked
to the depreciation of the dollar against the euro (-6.6%) and
negative organic growth of -2.6%. Commercial segment volumes
(offices, healthcare, education) are up slightly compared to 2022
in a market that is currently better positioned than in Europe. On
the other hand, business volumes in the Residential and Hospitality
segments are down in a market where demand is still suffering from
inflation and the level of interest rates.
Net revenue in the CIS, APAC and Latin
America segment amounted to 166 million euros, down -13.3%
compared to the third quarter of 2022, with a very unfavourable
currency effect mainly resulting from the depreciation of the
rouble (-31% compared to Q3 2022). Activity is well positioned with
organic growth of +10.8% (excluding sales price effects in CIS
countries). It benefited from the improvement in volumes in Russia
and Ukraine compared to Q3 2022, which was marked by a significant
decline compared with 2021. These countries respectively represent
8% and 0.8% of the Group’s net sales over the quarter. In a complex
market, selective price reduction contributed to the good
performance of vinyl roll and LVT sales for the residential market.
In Asia, activity was down, mainly due to a marked drop in sales in
China. To optimise its cost base, the Group closed the commercial
carpet production site located in Suzhou (China). Latin America
remains slightly down compared to 2022 but volumes improved over
the quarter in a more favourable economic environment.
Sports net revenue continued to
grow at a sustained pace, amounting to 381 million euros, up
+11.2%, of which +15.8% organic growth compared to the third
quarter of 2022. The market continues to be very dynamic,
particularly for artificial turf and athletics tracks in North
America. The segment also benefited from price increases which
fully offset inflation in raw material costs.
1) Selling price adjustments in the CIS
countries are historically intended to offset currency fluctuations
and are therefore excluded from the “organic growth” indicator (see
Appendix 1)
- Outlook for the end of 2023 and short-term
objectives
Over the first nine months of the financial
year, the Group’s organic growth was positive (+4.7%).
In an uncertain geopolitical and macroeconomic
environment, Tarkett expects a further slowdown in demand in EMEA
and a possible shift in business segment activity in North
America.
Nevertheless, the favourable business outlook in
Sports should allow to compensate for this slowdown and to achieve
a significantly higher Adjusted EBITDA, in value and in margin,
compared to 2022.
The Group expects a start to 2024 marked by low
business volumes in EMEA, where market indicators continue to
decline.
In North America, the Commercial segments have
so far been well oriented. However, market indicators reflect
sluggish activity, which could lag behind in the context of
maintaining high interest rates. Similarly, the residential market
shows no signs of recovery.
Conversely, activities in the Sports segment are
still benefiting from a buoyant market which should allow the Group
to continue to grow in this segment in 2024, albeit at a more
moderate pace.
Tarkett will continue to closely monitor energy
price developments and possible impacts on the price of its raw
materials.
In a context of slowing volumes in the flooring
business activity, the Group continues to adapt its production and
cost structure. Furthermore, thanks to the rigorous control of
working capital requirements, it anticipates an improvement in cash
generation and a reduction in its debt.
This press release may contain forward-looking
statements. These statements do not constitute forecasts regarding
results or any other performance indicator, but rather trends or
targets. These statements are by their nature subject to risks and
uncertainties as described in the Company’s Registration Document
available on its website
(https://www.tarkett-group.com/en/category/urd/). They do not
reflect the future performance of the Company, which may differ
significantly. The Company does not undertake to provide updates to
these statements.
Financial calendar
- 15 February 2024: Financial results for Q4 and FY2023 –
Press release after close of trading
- 25 April 2024: Financial results for Q1 2024 – Press release
after close of trading
- 25 July 2024: Financial results for Q2 et H1 2024 – Press
release after close of trading
- 24 October 2024: Financial results for Q3 2024 – Press release
after close of trading
Investor Relations and Individual Shareholders
Contact
investors@tarkett.com
Media contactsBrunswick -
tarkett@brunswickgroup.com - Tel.: +33 (0) 1 53 96 83 83Hugues
Boëton – Tel.: +33 (0) 6 79 99 27 15 – Benoit Grange – Tel.:
+33 (0) 6 14 45 09 26
About TarkettWith a 140-year
history, Tarkett is a worldwide leader in innovative and durable
flooring and sports surface solutions, generating net sales of 3.4
billion euros in 2022. The Group has 12,000 employees and 25
R&D centres, 8 recycling centres and 34 production sites.
Tarkett designs and manufactures solutions for hospitals, schools,
housing, hotels, offices, shops and sports fields, serving
customers in more than 100 countries. To build “The Way to Better
Floors”, the Group is committed to the circular economy and
sustainable development, in line with its Tarkett Human-Conscious
Design® approach. Tarkett is listed on the Euronext regulated
market (compartment B, ISIN: FR0004188670, ticker: TKTT).
www.tarkett-group.com***
Appendices1/ Definition
of alternative performance indicators (not defined under
IFRS)
- Organic growth measures the change in revenue
as compared with the same period in the prior year, outside of the
exchange rate effect and changes in scope. The foreign exchange
effect is obtained by applying the prior year’s exchange rate to
sales for the current year and calculating the difference with
sales for the current year. It also includes the effect of price
adjustments in the CIS countries intended to offset the change in
local currencies against the euro.
- The scope effect is composed of:
- current year sales by entities not included in the scope of
consolidation in the same period of the prior year, until the
anniversary of their consolidation.
- The reduction in sales due to discontinued operations that are
not included in the current year's scope of consolidation but were
included in sales for the same period of the prior year, until the
anniversary of their disposal.
In millions of euros |
2023 Revenue |
2022 Revenue |
Change |
Of which volume |
Of which selling prices |
Of which CIS selling prices |
Of which exchange rate effect |
Of which scope effect |
Group Total Q1 |
698.5 |
684.7 |
+2.0% |
-7.8% |
+6.9% |
+0.4% |
+2.3% |
+0.2% |
Of which organic growth |
-0.9% |
|
|
|
Of which selling price increases |
|
+7.3% |
|
|
|
Group Total Q2 |
909.8 |
879.3 |
+3.5% |
+2.4% |
+5.2% |
-1.2% |
-2.9% |
+0.0% |
Of which organic growth |
+7.5% |
|
|
|
Of which selling price increases |
|
+4.0% |
|
|
|
Group Total S1 |
1,608.3 |
1,564.0 |
+2.8% |
-2.1%
|
+5.9% |
-0.4% |
-0.7% |
+0.1% |
Of which organic growth |
+3.9% |
|
|
|
Of which selling price increases |
|
+5.5% |
|
|
|
Group Total Q3 |
984.3 |
1,005.4 |
-2.1% |
+2.8% |
+3.1% |
-0.2% |
-7.8% |
+0.0% |
Of which organic growth |
+6.0% |
|
|
|
Of which selling price increases |
|
+2.9% |
|
|
|
Group Total 9M |
2,592.6 |
2,569.4 |
+0.9% |
-0.2% |
+4.8% |
-0.3% |
-3.5% |
+0.1% |
Of which organic growth |
+4.7% |
|
|
|
Of which selling price increases |
|
+4.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue in millions of euros |
9M 2023 |
9M 2022 |
Change |
Of which organic growth |
Organic change incl. CIS price changes (1) |
EMEA |
652.5 |
707.4 |
-7.8% |
-6.1% |
-6.1% |
North America |
686.4 |
702.2 |
-2.2% |
-0.5% |
-0.5% |
CIS, APAC & Latin America |
443.5 |
482.1 |
-8.0% |
+4.7% |
+2.7% |
Sports |
810.1 |
677.7 |
+19.5% |
+21.3% |
+21.3% |
Group Total |
2,592.6 |
2,569.4 |
+0.9% |
+4.7% |
+4.3% |
2/ Bridge in millions of euros 2023
Revenue by segment
Q3 2022 |
1,005.4 |
+/- EMEA |
-8.3 |
+/- North America |
-6.6 |
+/- CIS, APAC & Latin America |
+20.6 |
+/- Sports |
+54.2 |
Q3 2023 at constant scope and exchange rates |
1,065.3 |
+/- Scope effect |
+0.0 |
+/- Currencies |
-37.1 |
+/- “Lag effect” in CIS |
-43.9 |
Q3 2023 |
984.3 |
9M 2022 |
2,569.4 |
+/- EMEA |
-43.3 |
+/- North America |
-3.5 |
+/- CIS, APAC & Latin America |
+22.6 |
+/- Sports |
+144.4 |
9M 2023 Like-for-Like |
2,318.6 |
+/- Scope effect |
+1.7 |
+/- Currencies |
-40.3 |
+/- “Lag effect” in CIS |
+99.3 |
9M 2023 |
2,592.6 |
***
- Tarkett_Q3 2023_Results_EN
Tarkett (EU:TKTT)
Historical Stock Chart
From May 2024 to Jun 2024
Tarkett (EU:TKTT)
Historical Stock Chart
From Jun 2023 to Jun 2024