Q1 2022 Net Sales: Solid performance driven by sustained
activity and the acceleration in selling price increases
Q1 2022
Net Sales: Solid
performance driven by sustained activity
and the acceleration in selling
price increases
Results for the first quarter 2022
-
Strong increase in revenue up by +22.5% compared to Q1
2021, of which +12.9% in selling
price increases, +6.4% volume and +3.3% exchange rate
effect
-
Sustained volumes in North America with a slight
decrease in EMEA and the CIS
-
Very good start to the year in the Sports
segment with a particularly high backlog
-
Step-up in selling price
increases, +15%
reached in March (compared to March
2021), offsetting 95% of the
inflation in purchasing costs
-
Continued inflation in raw materials driven by the increase
in energy prices -
New selling
price increases announced aiming
at offsetting the impact of inflation in purchasing costs
in 2022
Paris, 27 April 2022: The
Supervisory Board of Tarkett (Euronext Paris: FR0004188670 TKTT),
which met today, reviewed the Group’s consolidated net sales for
the first quarter of 2022.
The Group uses alternative performance
indicators (not defined under IFRS), described in detail in the
appendix to this document
Revenue in millions of euros |
Q1 2022 |
Q1 2021 |
Change |
Of which organic growth |
Organic change including price changes in CIS
(1) |
EMEA |
238.4 |
220.5 |
+8.1% |
+8.6% |
+8.6% |
North America |
204.2 |
160.4 |
+27.3% |
+18.1% |
+18.1% |
CIS, APAC & Latin America |
133.6 |
112.5 |
+18.7% |
+0.5% |
+20.5% |
Sports |
108.5 |
65.4 |
+66.0% |
+55.7% |
+55.7% |
Group Total |
684.7 |
558.8 |
+22.5% |
+15.2% |
+19.2% |
(1) Selling price adjustments
in the CIS countries are historically intended to offset currency
movements and are therefore excluded from the “organic growth”
indicator (see Appendix 1). Significant price increases were
implemented in 2021 and 2022 to offset the effects of inflation in
purchasing costs, 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 2022
Net revenue was 685 million
euros, up by +22.5% compared to the first quarter of 2021. Organic
growth reached +19.2% including selling price increases in the CIS
countries implemented to offset the inflation in purchasing costs
and the devaluation of the rouble (1). The total effect of the
selling price increases implemented across all segments is +12.9%
on average compared to the first quarter of 2021.
The EMEA segment achieved
revenue of 238 million euros, an increase of +8.1% compared to the
first quarter of 2021 due to the acceleration of selling price
increases. Volumes fell slightly given anticipated orders in
December 2021 ahead of selling price increases, as well as a
selective approach in the Residential segment due to a procurement
environment for raw materials that remains strained. Commercial
sales are more sustained, mostly due to the good performance of
luxury vinyl tiles and commercial carpets.
The North America segment
reported revenue of 204 million euros, an increase of +27.3%
compared to the first quarter of 2021, reflecting solid
like-for-like growth of +18.1% and a positive exchange rate effect.
Volumes and selling prices contributed to organic growth,
particularly sustained in the Commercial Health and Education
segments using vinyl or rubber accessories and flooring. Business
in the office and hospitality segments was also strong, confirming
the positive trend seen in the fourth quarter of 2021.
Revenue in the CIS, APAC and Latin
America segment was 134 million euros, an increase of
+18.7% compared to the first quarter in 2021 despite a negative
foreign exchange effect linked to the rouble, partially offset by
the appreciation of the Brazilian real. Like-for-like sales
increased by +0.5%, or +20.5% including selling price increases in
the CIS countries implemented to offset inflation and the
devaluation of the rouble.
Volumes are falling in the CIS due to the
cessation of sales in Ukraine since the beginning of the conflict
on 24 February 2022 and slower business in Russia and Kazakhstan.
Beyond selling price increases planned for the beginning of the
year, an additional significant increase was rolled out urgently in
Russia in early March to offset the devaluation of the rouble.
Sales in Russia made up approximately 9% of total Group sales in
the first quarter of 2022. The APAC region is growing and the LATAM
region achieved an excellent quarter with strong growth in volumes
while maintaining higher price levels.
As expected, business grew strongly in the
Sports segment.
Revenue was 109 million euros, up by +66.0% and including +55.7%
organic growth compared to the first quarter of 2021. North America
is the strongest geographical region thanks to sustained demand and
success of the Tarkett range. Backlog remains at a particularly
high level.
2. 2022 Environment and
Outlook
The macroeconomic environment and the
geopolitical situation in Ukraine and Russia have created a
particularly unpredictable situation and make it difficult to
assess the change in demand across our different markets.
The Group unequivocally condemns the war in
Ukraine and is monitoring the situation closely. Since the
beginning of the conflict, priority has been given to the safety of
teams in Ukraine with whom daily contact is maintained. Tarkett is
actively supporting its 375 employees and their families, notably
with salary continuance and temporary accommodation measures. The
Group has also set up an internal solidarity fund allowing to
provide financial aid to the teams based in Ukraine. Sales have
resumed at a very slow pace, however the production site located in
the west of the country is currently able to continue
operating.
In Russia, the Group has been producing flooring
for the Residential market for over 20 years. Aware of its
responsibility as an employer, particularly to its 1,550 local
employees, the Group continues to operate in the country in full
compliance with international & local regulations. However, the
Group has frozen all significant new investments in Russia.
Anticipating a fall in demand and increase in supply restrictions,
the Group expects a marked slowdown in the second quarter, although
it is currently impossible to quantify.
In Europe, the combination of inflation and the
geopolitical situation could affect demand, particularly in the
Residential segment. Trends at the beginning of the year were
stronger in North America, however the Residential segment could
also level off. In Sports, a good level of business is expected
throughout the year due to the good backlog.
Tarkett is continuing the roll out of new product ranges and its
ambitious circular economy strategy, notably with innovative and
significant investments in its recycling capabilities. The Group
also announced its new Climate Roadmap for 2030 with the objective
to reduce greenhouse gas emissions from its entire value chain by
30% and increase the recycled content of its products to 30% by
2030. These objectives will be assessed and approved by the
independent organization Science Based Targets (SBTi) by the end of
the year.
Actions to reduce the cost structure are well underway and the
Group is forecasting around 30 million euros of annual structural
savings in 2022.
The significant increase in oil and energy
prices will contribute to the increase in purchasing costs now
valued at 250 million euros compared to 2021 (against an estimated
220 million euros at the beginning of the year).
The Group continues to implement selling price
increases across all its geographies to offset the effect of
increased purchasing costs over the year. At the current level of
purchasing prices, the Group is targeting a neutral inflation
balance over the year (selling price effect compared to 2021 minus
purchasing price effect).
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 (www.tarkett-group.com). 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
- 29 April 2022:
Annual Shareholder meeting
- 26 July 2022: H1
2022 financial results - press release after close of trading
- 25 October 2022:
Q3 2022 Net Sales - 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 TarkettWith a 140-year
history, Tarkett is a worldwide leader in innovating flooring and
sports surface solutions, with revenue of 2.8 billion euros in
2021. Offering a wide range of products, including vinyl, linoleum,
rubber, carpet, parquet and laminates, artificial grass and
athletic tracks, the Group serves its customers in over 100
countries worldwide. Tarkett has more than 12,000 employees and 34
industrial sites, and sells 1.3 million square metres of flooring
every day for hospitals, schools, housing, hotels, offices or shops
and sports fields. Committed to changing the game with circular
economy and to reducing its carbon footprint, the Group has
implemented an eco-innovation strategy based on Cradle to Cradle®
principles, aligned 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 due to
discontinued operations that are not included in the current year's
scope of consolidation but were included in sales for the same
period of the prior year, until the anniversary of their
disposal.
In millions of euros |
Q1 2022 revenue |
Q1 2021 revenue |
Change |
Of which volume |
Of which selling
prices |
Of which CIS selling
prices |
Of which exchange rate effect |
Of which effect of changes in scope |
Group Total Q1 |
684.7 |
558.8 |
+22.5% |
+6.4% |
+8.8% |
+4.1% |
+3.3% |
- |
Of which organic growth |
+15.2% |
|
|
|
Of which selling price increases |
|
+12.9% |
|
|
2/ Bridges in millions of euros Q1 2022
Revenue by segment
Q1 2021 |
558.8 |
+/- EMEA |
+19.0 |
+/- North America |
+29.1 |
+/- CIS, APAC & Latin America |
+0.5 |
+/- Sports |
+36.2 |
Q1 2022 Like-for-like |
643.7 |
+/- Scope effect |
+0.2 |
+/- Currencies |
+22.8 |
+/- Lag effect in CIS |
+18.0 |
Q1 2022 |
684.7 |
***
- Tarkett_Q1 2022_Results__EN
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