Q3 2020 preliminary information
Q3 revenue still trending below last year’s level in most segments:
- Sequential improvement in EMEA versus Q2 2020 resulting in single digit revenue decrease compared to last year and stable revenue growth in CIS, APAC & LATAM, in particular thanks to the recovery of residential activities;
North America sequentially improving versus Q2 2020 but still trading down double digit compared to last year as commercial is improving slowly and exposure to the more dynamic residential segment is lower than in other regions;- As expected, Sports revenues to decline double digits. The level and seasonality of Tarkett Sports’ activities have been impacted globally by projects being delayed, postponed, and cancelled due to the Covid-19 pandemic.
Q3 profitability will be preserved by solid level of cost reduction in the quarter:
- Structural actions now estimated to generate savings above €45 million in 2020 thanks to Q3 performance (versus previous expectation to be above €30 million);
- Improvement in raw material costs expected to exceed €15 million in H2 2020 compared to H2 2019 based on Q3 trend;
- Q3 Adjusted EBITDA margin expected above last year’s level (12.7% of revenues in Q3 2019).
FY 2020 outlook
Significant uncertainties remain on demand level as the pandemic remains active with new lockdowns looming in several regions.
As a result of ongoing achievements in cost reduction,
The longer-term impact of the Covid-19 pandemic on demand has yet to be seen. However,
The Group will release its Q3 earnings as planned on
This press release may contain forward-looking statements. Such forward-looking 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 annual report registered in
Investor Relations Contact
Media contacts
Brunswick - tarkett@brunswickgroup.com - Tel. : +33 (0) 1 53 96 83 83
Hugues Boëton – Tel. : +33 (0)6 79 99 27 15 –
About
With a history of 140 years,
Alternative performance measures definition (as per our 2019 Universal Registration Document)
- Adjusted EBITDA is the operating income before depreciation, amortization and the following adjustments: restructuring costs, gains or losses on disposals of significant assets, provisions and reversals of provisions for impairment, costs related to business combinations and legal reorganizations, expenses related to share-based payments and other one-off expenses considered non-recurring by their nature.
- Financial leverage is the ratio financial net debt including leases recorded under IFRS 16 to LTM (Last Twelve Months) Adjusted EBITDA. As per our credit documentation, the financial leverage retained for the covenant is calculated before IFRS16 application. The covenant attached to our bank loans is tested at the end of each semester. It has to be below 3.5x at end of June and below 3.0X at end December.
Tarkett obtained from its banking partners a covenant holiday for 2020. The covenant is also attached to the Schuldschein private placements. It is only is tested once a year and has to be below 3.0x at end December. - Net financial debt is defined as the sum of interest bearing loans and borrowings minus cash and cash equivalents. Interest bearing loans and borrowings refer to any obligation for the repayment of funds received or raised that are subject to repayment terms and interest charges. They also include leases recorded under IFRS 16 since the application of the new accounting norm.
1 Financial leverage ratio is the ratio net financial debt, including Lease liabilities, to LTM Adjusted EBITDA after IFRS16 application
Attachment
- 2020_09_28_ Tarkett Trading Update_US PR
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