Tarkett Q3 Global Sales Down 14.4% and Earnings Up 15.2%
Paris, FR, October 29, 2020--Tarkett announced that net sales of €776.9 to million in Q3 2020, a 14.4% decline compared to net sales of €907.1 million in Q3 2019. The company reported adjusted EBITDA amounted to €117.7 million in Q3 2020 compared to €115.0 million in Q3 2019; the adjusted EBITDA margin reached 15.2%, a steep improvement compared to last year's 12.7% due to a significant cost-savings plan.
Tarkett achieved significant cost reduction of €33.5 million in Q3 2020 compared to Q3 2019. The group pursued its optimization program across its manufacturing sites with success, while substantially accelerating its SG&A cost savings plan. Net productivity gains and SG&A cost savings totaled €23.9 million, out of which €15.9 million was structural savings. Since the beginning of the year, the group generated €34.7 million of structural savings and is on track with its annual target which has been enhanced on September 28, 2020 (above €45 million).
The North American segment reported net revenues of €184.4 million, down 19.9% compared to last year, reflecting the -15.0% revenue decline on a like-for-like basis and the depreciation of the dollar versus the euro during the quarter. The level of activity sequentially improved compared to Q2 (-32.0% in Q2 2020). Commercial activities have been slowly recovering as they were penalized by uncertainties in the workplace and hospitality segments. Conversely, residential improved due to favorable refurbishment and new home construction trends. Given the low level of demand, furlough was still in place at the beginning of the quarter.
Net revenues of the Sports segment were down -21.0% compared to last year in the quarter, driven by a lower activity (-19.1% on a like-for-like basis) and a negative forex impact related to the dollar depreciation versus the euro. The activity in North America significantly decreased compared to last year, after demonstrating resilience in Q2 despite the shelter-in-place measures.
Commenting on these results, CEO Fabrice Barthélemy said: “Since the outbreak of the Covid-19 pandemic, we have been focused on protecting the health and safety of our employees and customers and preserving profitability and cash flows. In March, we accelerated cost reduction actions and identified additional opportunities for cost savings. We have successfully delivered so far and have demonstrated the resilience of our business model. In the third quarter, we increased our profitability compared to last year, while deleveraging and maintaining a strong level of liquidity.”