Tarkett returns to growth and records a significant increase in its net result
Turnover: 1.9 billion euro EBITDA before exceptional items: 222 million euro Net result: 111 million euro
Tarkett, the market leader in floor coverings and sports surfaces, today announced its return to strong profitable growth in 2010.
Turnover was up 12.4% compared with 2009, achieved through organic growth (6.5%), acquisitions (2.0%) and favourable exchange rate trends (3.9%).
EBITDA before exceptional items rose 7.1%, to 222 million euro. The favourable effect of increased volumes and productivity actions conducted over 2 years has been partially cancelled out by the general increase in raw materials experienced since the end of the second quarter of 2010. To offset this increase, the group has announced sale price increases across all its markets and is extending the implementation of productivity plans within its operations.
The net result has climbed 62% to 111 million euro, benefiting in particular from a significant reduction in restructuring costs and control of financial costs.
Moreover, in spite of strong sales growth, the working capital requirement has been kept under control and only increased by 9 million euro. In 2009, it had been improved to the tune of 100 million euro as a result of reduced activity and stock control initiatives. Overall, the group generated operational cash-flow of 168 million euro. Net indebtedness has been brought down even further to 226 million euro, i.e. 1.0 times EBITDA.
"Our strategy for profitable growth has been justified by good financial results for 2010. In 2011 the Group will continue to expand its growth in emerging markets and implement its policy of targeted acquisitions” explains Michel Giannuzzi, CEO of the Tarkett Group.
Sustained growth in emerging markets
Organic growth has held up particularly well in emerging markets, notably in Eastern Europe (Russia, Ukraine, Kazakhstan, Serbia…) and in Latin America. In these regions, the group’s sales have improved 24% at same perimeter and exchange rate. Sales in emerging markets now account for 34% of turnover.
In mature economies (European Union, North America), Tarkett has posted 2% growth in floor coverings, at same perimeter and exchange rate, in spite of a market perceived to be in slight decline. On the other hand, in these same regions, the sports surfaces business (artificial turf and athletics tracks) has been badly hit by cuts in public spending, shrinking 7%
compared with 2009.
During the year Tarkett continued its external growth strategy with the acquisition of Poligras (sports surfaces in Spain), MET (production of fibres for artificial turf) and Centiva (American specialist in high quality vinyl tiles).