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2018/02/08

2017 Annual results

Robust organic growth in 2017 at 4.8%
Adjusted EBITDA of €315m
despite adverse raw material prices
and currency effects

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.”

Download the press release: EN - FR