Q1 2023 revenue: Sales growth +2.0% upheld by price increases
implemented in 2022 Excellent performance of Sport offsetting
slower demand in flooring
Q1 2023 revenue:
Sales growth +2.0% upheld by price increases implemented
in 2022
Excellent performance of Sport offsetting slower demand
in flooring
Results for the first quarter 2023
- Revenue up +2.0% compared to Q1 2022, benefiting from
sales price increases deployed in 2022 and a favourable foreign
exchange effect, offsetting the decline in volume
- Excellent level of activity in Sport: organic growth of
+17.8% compared with Q1 2022
- Business volume down in EMEA compared to Q1 2022 due to
continuing weakness in residential demand, tempered by the good
resistance of commercial products
- In North America, slight decline in Commercial
activity, recovery in Hospitality and marked decrease in volume in
Residential
- Stabilisation of activity level in CIS around -20%
compared with 2022, slow start to the year in Asia but continued
growth in Latin America
- The sale price increases implemented in 2022 are still
neutralising the inflation of purchasing costs which persists
despite the beginning of a downturn in raw materials
prices
Paris, 20 April 2023: the
Supervisory Board of Tarkett (Euronext Paris: FR0004188670 TKTT),
which met today, reviewed the Group’s consolidated revenue for the
first quarter of 2023.
The Group uses alternative performance
indicators (not defined under IFRS), described in detail in the
annex to this document:
Revenue in millions of euros |
Q1 2023 |
Q1 2022 |
Change |
Of which organic growth |
Organic change including price changes in CIS
(1) |
EMEA |
230.2 |
238.4 |
-3.4% |
-1.6% |
-1.6% |
North America |
214.2 |
204.2 |
+4.9% |
+0.8% |
+0.8% |
CIS, APAC & Latin America |
121.7 |
133.6 |
-8.8% |
-17.2% |
-15.4% |
Sport |
132.3 |
108.5 |
+22.0% |
+17.8% |
+17.8% |
Group Total |
698.4 |
684.7 |
+2.0% |
-0.9% |
-0.5% |
(1) Sale price adjustments in the CIS countries are historically
intended to offset currency movements and are therefore excluded
from the “organic growth” indicator (see Annex 1). Since 2022,
significant price increases have been implemented to offset the
effects of purchase price inflation, and therefore the Group also
measures the change in like-for-like sales including price
adjustments in the CIS countries.
1. Revenue for the first quarter 2023
Net revenue for the Group was
€698 million, up by +2.0% compared to the first quarter of 2022.
Organic growth was -0.5% including the sales price increases in the
CIS region. The total effect of the sales price increases
implemented across all segments is +7.3% on average compared to the
first quarter of 2022.
The EMEA segment achieved a
turnover of €230 million, down -3.4% compared to the first quarter
of 2022, including an unfavourable currency effect of -2.1% and a
scope effect of +0.2%, representing organic growth of -1.6%. The
macroeconomic environment and widespread inflation in Eurozone
countries have had a negative impact on Residential activity in all
product categories. Commercial activity is down only slightly
compared with last year, sustained by increased volumes of
resilient flooring for health and education sectors and the good
resistance of carpet tile sales. The increases in sales prices
implemented since 2022 have made it possible to offset persistently
high material and transport costs, as well as very significant wage
increases in certain European countries.
The North America segment
reported revenue of €214 million, an increase of +4.9% compared to
the first quarter of 2022, reflecting like-for-like growth of +0.8%
and a positive exchange rate effect due to the appreciation of the
dollar against the Euro (+3.7%). The Residential market is still
penalised by inflation and the increase in bank lending rates. The
Commercial segments are down slightly, whilst sales of carpets for
the Hotel sector are improving. The effect of different sale price
increases in 2022 are still having a significant positive effect on
sales in the first quarter.
Revenue in the CIS, APAC and Latin
America segment has reached €122 million, down -8.8%
compared with the first quarter of 2022 given the decrease in
organic sales of -15.4% (including increases in sale prices in CIS
countries), which was attenuated by a positive exchange rate effect
(+6.6%) linked mainly to the appreciation of the rouble. The market
in Russia has stabilised at around -20.0% in volume terms compared
with 2022. Sales in Russia made up approximately 8% of total Group
sales in the first quarter. Activity was slow in the first quarter
in a sluggish market in Asia, particularly in China. Volume growth
is still being upheld in Latin America compared to last year.
As expected, the Sport
segment continued to show very strong growth for
the third consecutive quarter. Revenue amounted to €132 million, up
by +22.0%, with +17.8% organic growth, compared to the first
quarter of 2022. The market remains dynamic in North America for
both artificial turf sports fields and athletic tracks, two
segments where Tarkett benefits from its leadership, and the order
book remains strong.
- Prospects
The macroeconomic environment will continue to
impact the level of demand in 2023, particularly due to the level
of inflation and interest rate rises.
Tarkett estimates that the business volume for
flooring products will slow down during the first half of 2023.
Activities in the Sport division continue to benefit from a buoyant
market and should continue to grow thanks to a strong order book,
albeit at a slower pace than in 2022 (+33.0% organic growth).
In this context, the Group has taken immediate
steps to reduce discretionary spending. At the same time, actions
to reduce the cost structure are being implemented in the regions
most affected by the slowdown in activity.
There has been a sequential decrease in prices
of the Group’s main raw materials but their absolute levels remain
high. Energy prices are also lower than at the end of 2022, but
further price increases in 2023 cannot be ruled out, especially in
Europe due to tensions in the gas supply chain and capacity
constraints at some electricity suppliers. Salary increases will be
higher overall than in previous years. At this stage, the Group is
therefore maintaining the sale prices reached at the end of 2022
and does not rule out further increases.
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
- 26 July 2023 : H1 2023 financial results - press release
after close of trading
- 19 October 2023 : Q3 2023 revenue - 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 Tarkett With a history of more than 140
years, Tarkett is a worldwide leader in innovative and sustainable
flooring and sports surface solutions, generating net sales of €
3.4 billion in 2022. The Group has 12,000 employees, 25 R&D
centers, 8 recycling centers and 34 production sites. Tarkett
designs and manufactures solutions for hospitals, schools, housing,
hotels, offices, stores and sports fields, serving customers in
over 100 countries. To build “The Way to Better Floors,” the Group
is committed to circular economy and sustainability, 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
***
Appendices
1/ 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 exchange rate 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 effect of changes in scope 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 related to divested businesses not
included in the current year's scope of consolidation but included
in sales for the same period in the previous year until the
anniversary date of the divestiture.
in millions of euros |
Q1 2023 revenue |
Q1 2022 revenue |
Change |
Of which volume |
Of which sales prices |
Of which CIS sales prices |
Of which exchange rate effect |
Of which effect of changes in scope |
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 sales price increases |
|
+7.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/ Bridges in millions of euros Q1 2023
Q1 2022 |
684.7 |
+/- EMEA |
-3.7 |
+/- North America |
+1.6 |
+/- CIS, APAC & Latin America |
-23.0 |
+/- Sports |
+19.3 |
Q1 2022 Like-for-like |
678.9 |
+/- Scope effect |
+1.6 |
+/- Currencies |
+7.5 |
+/- Lag effect in CIS |
+10.5 |
Q1 2023 |
698.5 |
- Tarkett_Q1 2023_Results_EN
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