Tarkett - FY2020 results
FY 2020 results: Sequential sales
improvement in H2 versus H1Stable adjusted EBITDA
and increase of margin
Significant deleveraging
FY 2020 Results
- Net revenues down -12.0% in 2020 (-9.5% organically)
reflecting progressive recovery in H2;
- Stable Adjusted EBITDA compared to 2019 at €277.9
million in 2020, including €14.8 million of insurance
indemnification received in December for the loss generated by Q2
cyber-attack;
- Adjusted EBITDA margin up 120 basis point year-on-year
at 10.6% thanks to significant cost savings and lower purchasing
costs;
- €105.9 million of cost reduction in 2020, including a
successful mitigation plan and €46.3 million of structural
savings;
- Net loss of -€19.1 million, impacted by non-cash
impairment charge taken in H1 2020 (H1 net loss: -€64.9 million, H2
net profit: €45.8 million);
- Solid free cash-flow generation of €163.5 million in
2020 compared to €105.1 million in 2019 (free cash flow excluding
implementation of factoring programs);
- Significant debt reduction with reported financial
leverage at 1.7x (after IFRS16 application) at end of December 2020
compared to 2.3x at end of December 2019;
- Solid fundamentals to cope with a muted recovery and
inflation in purchasing costs in 2021, mid-term financial
objectives still valid but the environment may slightly delay the
timing of the profitability objective.
Paris, February 18, 2021: The
Supervisory Board of Tarkett (Euronext Paris: FR0004188670 TKTT)
met today and reviewed the Group’s consolidated results for the
full year 2020.
The Company uses alternative performance
indicators (not defined by IFRS) described in appendix 1 (page
8):
€ million |
FY 2020 |
FY 2019 |
Change |
Net sales |
2,632.9 |
2,991.9 |
-12.0% |
of which organic change |
-9.5% |
- |
Adjusted EBITDA |
277.9 |
280.0 |
-0.8% |
% net sales |
10.6% |
9.4% |
Result from operations (EBIT) |
47.4 |
96.6 |
-50.9% |
% net sales |
1.8% |
3.2% |
Net profit attributable to owners of the
Company |
-19.1 |
39.6 |
-148.2% |
Fully diluted Earnings per share (€) |
-0.29 |
0.61 |
Free cash-flow |
163.5 |
231.4(1) |
-29.3% |
Net Debt |
473.8 |
636.8 |
-25.6% |
Leverage (net debt to adjusted EBITDA) |
1.7x |
2.3x |
(1) FCF benefited from the implementation of factoring programs in
2019 (positive net contribution of €126.3million) |
Commenting on these results, CEO Fabrice
Barthélemy said: “Our performance in 2020 demonstrated the
resilience of our business model in a depressed and complex
environment. Thanks to structural savings and a rigorous mitigation
plan, we have been able to improve our Adjusted EBITDA margin by
120 basis points. We have tightly managed working capital,
generated strong free cash-flow and deleveraged significantly.
Demand continued to pick-up sequentially in Q4, and we ended the
year in a healthy financial situation. We have implemented new cost
reduction actions in the fourth quarter while pursuing our Change
to Win top line initiatives. We are also continuing to tackle the
climate emergency through eco-design, circular economy and
reduction of our greenhouse gas emissions at our industrial sites.
We are well advanced on our strategic roadmap. The environment,
however, remains challenging and we are cautious on the pace of
recovery.”
- Q4 2020 key highlights
Sales at €619.1 million, down -7.9% in Q4 2020
reflected an organic change of -1.5% and a negative forex impact of
-6.4% mainly driven by the US dollar, the Russian ruble and the
Brazilian real.
Sales performance was better than anticipated at
the end of Q3, mostly driven by the recovery in residential
activities in all geographies and a sequential improvement of some
commercial end-user segments versus Q3 2020. The performance in
North America was supported by a favorable comparison basis, as
sales were penalized by ERP-related operational issues in
commercial carpet in Q4 2019. Commercial activities were still
lagging behind during the quarter as the Workplace and Hospitality
end-user segments remained penalized by the resurgence of the
pandemic and the lack of visibility which affected investment
decisions. As expected, Sports remained on downward trends in Q4 as
the context weighted negatively. Nevertheless, the rate of organic
decline in Sports was only single-digit after a double-digit
decline in Q3 2020.
in euro millions |
Q4 2020 |
Q4 2019 |
% change |
Organic change |
EMEA |
205.3 |
216.4 |
-5.1% |
-4.7% |
North America |
152.3 |
166.6 |
-8.5% |
-1.3% |
CIS, APAC & LATAM |
148.4 |
160.8 |
-7.7% |
+6.3% |
Sports |
113.0 |
128.7 |
-12.2% |
-6.2% |
TOTAL |
619.1 |
672.5 |
-7.9% |
-1.5% |
Adjusted EBITDA amounted to €53.8 million in Q4
2020 compared to €38.4 million in Q4 2019 with margin up 300 basis
points at 8.7% thanks to:
- Insurance indemnification related to May 2020 cyber-attack of
€14.8 million, received before year end (reported in the volume
effect on FY 2020 bridge page 10, but presented in one-offs in Q4
and H2 bridge page 11);
- Strong cost reduction (+€21.7 million versus 2019) and lower
purchasing costs (+€4.6 million versus Q4 2019);
The weak ruble penalized the results and the
“lag effect” (net of price and currency effects in the CIS) was
negative by -€9.5 million.
The Group focus on circular economy and
reduction of its carbon footprint have been recognized by improved
ratings both from the Carbon Disclosure Project (CDP rating: B –
management level compared to C in 2018) and EcoVadis (Platinum
versus Silver, the highest level in sustainability ratings a
company can reach).
Tarkett GHG emissions intensity (scope 1 and 2,
kg CO2 e/sqm) has been reduced by 27% between 2010 and 2020 versus
a target of -20%. Recycled content in raw materials amounted to 13%
in 2020 versus 10% in 2018.
- Group FY 2020 results
Group net revenues amounted to
€2,632.9 million, down -12.0% on a reported basis and down -9.5%
organically. The negative currency impact was mostly driven by the
US dollar and the Russian ruble and mainly occurred in H2.
Like-for-like revenues were impacted by the Covid-19 pandemic
during the whole year. In Q2 in particular, restrictions enforced
due to the pandemic resulted in a significant sales drop in all
flooring markets while Sports remained more resilient. The activity
was also disrupted in May by a cyber-attack. In H2, revenues
benefited from a global rebound in residential activities and a
sustained level of activity in Healthcare and Education, while
Hospitality and Workplace remained depressed with investment
decisions being postponed. Organic change sequentially improved
compared to H1 (-12.6% in H1 / -6.7% in H2), but was still
penalized by the pandemic and restrictions.
Adjusted EBITDA amounted to
€277.9 million in 2020 compared to €280.0 million in 2019 and
reached 10.6% of net sales compared to 9.4% in 2019. H1 decline
caused by the outburst of the pandemic and the first waves of
strict lockdown were fully offset by the profit recovery in H2.
Earnings in H2 2020 were positively impacted by the structural cost
reduction measures and the decrease in raw material prices. In
addition, H2 Adjusted EBITDA benefited from the aforementioned
cyber insurance indemnities.
The slowdown of activity penalized the Adjusted
EBITDA by -€113.5 million in 2020 (including +€14.8 million of
insurance indemnification offsetting the impact of the cyber-attack
in Q2).
In response to the health crisis, Tarkett
implemented with success a mitigation plan while pursuing its
Change to Win initiatives to improve the cost structure. In sum,
the Group delivered €105.9 million of cost savings in 2020.
The mitigation plan was introduced at the early
stage of the pandemic and maintained during the course of the year.
These measures yielded €44.3 million of savings, mostly in Q2 and
Q3, out of which €14.6 million was helped by governmental support
measures such as furlough schemes. In 2020, Tarkett also pursued
its optimization program across its manufacturing sites, while
substantially accelerating its SG&A cost savings plan. Net
productivity gains and SG&A cost savings totaled €61.5 million,
out of which €46.3 million is structural.
Purchasing costs improved by +€28.5 million
compared to 2019, mainly reflecting lower oil prices. Freight costs
started to bounce back in Q4, and freight forwarders faced a lack
of capacity. Wage inflation amounted to -€15.1 million in 2020,
reflecting salary increases implemented late 2019 and early
2020.
Exchange rates (CIS countries excluded) had a
negative effect amounting to -€9.1million. This decrease reflected
the depreciation of the dollar versus the euro and negative
exchange rate fluctuations in Norway, Sweden and Brazil. Most of
the selling price increases implemented 2020 aimed at mitigating
this negative forex impact. Overall pricing increases generated a
positive impact of +€8.5 million. The net impact of currency and
selling price movements in the CIS countries also had a negative
effect (lag effect of -€13.5 million) driven by the significant
devaluation of the ruble.
EBIT amounted to €47.4 million
and Adjusted EBIT to €119.4 million. The adjustments to
EBIT (details in page 9) represented €72.0 million in
2020, compared to €25.2 million in 2019, including €53.1 million of
non-cash asset impairments in H1 2020 mostly related to the impact
of the pandemic on the Hospitality business. These adjustments also
included restructuring costs of €14.5 million due to the global
SG&A cost savings program and footprint rationalization in
Europe.
Financial expenses decreased by
€5.1 million to reach €33.7 million in 2020 as a result of lower
interest-bearing financial debt and decrease of US dollar interest
rates. Income tax charge amounted to €31.5 million
in 2020. Net loss amounted to -€19.1 million,
representing a fully diluted EPS of -€0.29. Restated from the
post-tax effect of the impairment charge, net income would have
amounted to €22.7 million compared to €39.6 million in 2019.
- Cost reduction
Q4 2020 cost reduction
€ million |
Productivity gains and SG&A |
o/w structural actions |
Covid-19 specific measures |
o/w governmental support |
Total cost reduction |
Gross profit |
4.6 |
4.6 |
0.0 |
0.1 |
4.6 |
SG&A |
11.1 |
7.0 |
6.0 |
0.2 |
17.2 |
Total Q4 |
15.7 |
11.6 |
6.0 |
0.4 |
21.7 |
FY 2020 cost reduction
€ million |
Productivity gains and SG&A |
o/w structural actions |
Covid-19 specific measures |
o/w governmental support |
Total cost reduction |
Gross profit |
26.3 |
26.3 |
12.1 |
8.9 |
38.4 |
SG&A |
35.2 |
20.0 |
32.2 |
5.8 |
67.4 |
Total FY |
61.5 |
46.3 |
44.3 |
14.6 |
105.9 |
- Net sales and Adjusted EBITDA by
segment
For ease of comparison, figures for 2020 are
presented in the table below for the full year and in appendix 3
(page 11) for the second half of the year.
|
Net Sales |
Adjusted EBITDA |
€m |
FY 2020 |
FY 2019 |
% change |
Organic change |
FY 2020 |
FY 2019 |
FY 2020 Margin |
FY 2019 Margin |
|
EMEA |
823.6 |
910.4 |
-9.5% |
-9.0% |
108.9 |
105.3 |
13.2% |
11.6% |
|
North America |
694.5 |
825.9 |
-15.9% |
-14.1% |
58.9 |
59.9 |
8.5% |
7.3% |
|
CIS, APAC & LATAM |
527.9 |
587.4 |
-10.1% |
-2.0% |
97.4 |
85.8 |
18.4% |
14.6% |
|
Sports |
586.9 |
668.1 |
-12.1% |
-11.1% |
60.5 |
75.2 |
10.3% |
11.2% |
|
Central Costs |
- |
- |
- |
- |
(47.8) |
(46.1) |
- |
- |
|
TOTAL |
2,632.9 |
2,991.9 |
-12.0% |
-9.5% |
277.9 |
280.0 |
10.6% |
9.4% |
|
The EMEA segment reported net
revenues of €823.6 million, down -9.5% compared to 2019 and mainly
reflected an organic decline. Organic trends progressively improved
in H2 thanks to sustained growth in residential business. In
Commercial, resilient products have also progressively recovered
and are supported by a sound level of activity in Healthcare and
Education. Commercial carpet remained weak until year end as the
Workplace segment was still penalized by the pandemic and
restrictions. France and Germany were at the forefront of the
sequential improvement in H2.
The EMEA segment recorded an Adjusted EBITDA
margin of 13.2%, up 160 basis point compared to 2019. The volume
decrease was fully offset by cost reduction and lower purchasing
costs. On top of the structural actions at the SG&A level and
further footprint optimization, a vigorous mitigation plan was
deployed at the end of March and various measures are still in
place.
The North American segment
reported net revenues of €694.5 million, down -15.9% compared to
2019, reflecting an organic change of -14.1% and a negative forex
impact related to the depreciation of the dollar versus the euro
over the period. After a good start of the year, the level of
activity was significantly down in Q2 2020 with the deployment of
shelter-in-place measures and travel restrictions. Sales trends
sequentially improved in Q3 and Q4. This improvement was led by
growth in Residential resulting from increased home renovation and
some commercial success at key distributors. The recovery of
commercial activities was slow and muted in H2 and the level of
activity remained weak. Workplace and Hospitality were still
penalized by the high level of uncertainties over H2.
The Adjusted EBITDA margin amounted to 8.5% in
2020 compared to 7.3% in 2019. The significant decline in
activity was largely offset by strong cost reduction and lower
purchasing costs. The strategic initiatives to restore the
profitability were topped by drastic cut in discretionary spending
and furlough schemes, mostly in Q2 and Q3. As part of the recovery
plan, a simplified organization has been implemented and additional
cost saving actions are being deployed.
Net revenues in the CIS, APAC and Latin
America segment amounted to €527.9 million, down -10.1% in
2020, largely driven by unfavorable exchange rate fluctuations. The
organic change was limited to -2.0% in 2020. After a steep decline
in activity in Q2, sales recovered in H2 in CIS countries. Volumes
increased driven by a dynamic demand and some replenishment of
inventories at distributors. This good performance was, however,
partially offset by a negative lag effect (net effect of currency
and selling price adjustments) in H2. The level of activity in APAC
remained disrupted all along 2020 as some countries were affected
by second waves of Covid-19 and lockdown. Revenue trends were,
however, improving toward year end, in particular in Australia.
After a severe drop in Q2, sales recovered in Latin America in H2
and recorded solid growth, mainly driven by price increases.
The CIS, APAC and Latin America segment recorded
an Adjusted EBITDA margin of 18.4%, up 380 basis points.
Profitability increased thanks to a strong productivity level and
significant SG&A cost reduction. These savings are both
structural and related to specific Covid-19 measures, including
temporary wage cost reduction. Purchasing costs also decreased
while their localization in CIS increased. The return to growth in
CIS countries also supported this rocket margin increase.
Net revenues of the Sports
segment amounted to €586.9 million, down -12.1% mostly
reflecting the revenue decline on a like-for-like basis. After
showing strong resilience in H1 thanks to the sustained level of
business in North America despite shelter-in-place measures, sales
were slowed down in H2. The business has been affected by projects
being delayed, postponed or cancelled. This mostly affected Q3,
which is the peak season quarter. Sales trends sequentially
improved in Q4 but activity remained weaker than 2019. The slowdown
mostly affected the artificial turf business, which had been
particularly buoyant over the past few years. Conversely, running
tracks activity was solid and up compared to 2019.
The Sports recorded an Adjusted EBITDA margin of
10.3%, down 90 basis point compared to last year. However, 2019
margin included a positive IP settlement. Restated from this
one-off, the Adjusted EBITDA margin was roughly stable year-on-year
thanks to significant cost reduction and a higher level of
efficiency.
- Balance sheet and cash flow
statement
In the context of Covid-19 pandemic, Tarkett
took all necessary actions to protect its cash-flows and adapt the
Group to this new environment.
Given the decrease in activity and the tight
management of customer receivables and inventory, Tarkett recorded
a positive change in working capital of €64.5 million at the end of
December. The factoring programs which were implemented in 2019
amounted to a net funding of €131.0 million at the end of December
2020, slightly above end of December 2019 (€126.3 million).
Customer payments were not reduced or delayed significantly during
the whole year, and the level of default remained low. Tarkett
successful managed its inventory down to 80 days of inventory at
end 2020 versus 85 days at end 2019. Working capital reached a low
point at the end of December.
The Group also reduced its capital spending as
announced in March. Capex amounted to €74.1
million, down -€50.5 million compared to last year. After two years
of higher capital spending, the Group decided to focus on
productivity, safety and targeted capacity investment in LVT to
preserve its cash-flows.
Successful roll-out of these actions generated a
positive free cash-flow of €163.5 million in 2020,
compared to €105.1 million in 2019 (2019 reported free cash-flow of
€231.4 million included a net cash positive impact of €126.3
million related to the implementation of factoring programs).
Reported net financial debt
amounted to €473.8 million at the end of December including €108.8
million of leases recorded under IFRS 16 (€636.8 million at the end
December 2019). This represents a financial leverage of
1.7x Adjusted EBITDA at the end of December 2020, which is
at the low end of the mid-term target range set up by the Group as
part of Change to Win strategic roadmap (between 1.6x and 2.6x at
each year end for the period 2019-2022). The documentation of
Tarkett financing agreements provides that the effect of changes in
accounting standards should be neutralized. Accordingly, net debt
and adjusted EBITDA are considered before IFRS 16 and the
applicable leverage ratio is 1.5x at the end of December 2020.
On top of this healthy financial structure, the
Group ended the year with a strong level of
liquidity of €1,203.6 million, out of which €875.0 million
in undrawn committed credit lines and €328.6 million in cash.
- Dividend, contemplated PGE
reimbursement
Given the latest developments regarding the
Covid-19 situation, the level of near-term uncertainty remains high
and the management will remain focused on preserving its cash-flows
in 2021. In addition, the distribution policy is based on a pay-out
ratio comprised between 30% and 50% of the reported net income,
which is a loss in 2020. The management Board will therefore not
propose in 2021 the payment of a dividend in respect of 2020.
Given its sound financial situation at year end,
the Group contemplates to reimburse the €70 million loan, granted
within the “PGE” framework (guaranteed by the French State). The
Group will also consider seizing bolt-on acquisition opportunities
to strengthen in selected geographies or segments, or support its
sustainability focus.
- 2021 Outlook and mid-term financial
objectives
Significant uncertainties remain on demand level
with the resurgence of the pandemic and new restriction measures
taken globally since January 2021. The lack of visibility is
therefore still weighting on investment decisions and sales in
several end-user segments (mainly Workplace, Hospitality, Sports).
As a result, Tarkett expects the volume recovery to be spread over
2021 and 2022, implying a muted recovery of commercial activities
in 2021. Residential is expected to keep on growing, but could be
affected if stricter lockdown measures are applied across Tarkett’s
key regions. The Group anticipates a challenging Q1 and improvement
in activity from Q2.
In this context, Tarkett is pursuing its Change
to Win strategic roadmap to foster sustainable growth and gain
market shares. This includes leveraging its strong expertise in
Healthcare and Education, developing innovative and
environmentally-friendly solutions for customers, and accelerating
the deployment of an ambitious circular economy program.
The Group will maintain a strong focus on
improving its cost base and pursue its cost reduction initiatives,
including actions on its industrial footprint and on the SG&A
cost base. Tarkett expects its structural actions to achieve €30
million of annual cost savings in 2021 and 2022.
Lower purchasing costs supported the margin
recovery in 2020, but the pick-up in oil prices in H2 2020, a
recovering demand and capacity reduction at suppliers will result
in raw material inflation from H1 2021. Freight costs are also on
the rise. Current trends suggest that purchasing cost inflation
could generate a negative impact on 2021 Adjusted EBITDA of around
€50 million. Tarkett will manage proactively its selling prices to
mitigate this inflation.
Given the lack of visibility on the economic
recovery, Tarkett will also remain selective in its capital
spending and will tightly monitor working capital. The Group’s
priority is to preserve cash-flow to nurture its development.
The Group’s mid-term financial objectives remain
valid thanks to Change to Win strategic initiatives:
- Organic growth CAGR above GDP growth in key regions in 2021 and
2022;
- Adjusted EBITDA margin at least at 12% by 2022;
- Net debt to adjusted EBITDA comprised between 1.6x and 2.6x at
each year end of 2021 and 2022.
The increase in purchasing costs combined with
uncertainties about the pace of recovery could slightly delay the
timing of the profitability objective. Nevertheless 2020
performance demonstrated the resilience of Tarkett business model
in a depressed environment.
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 France with the French Autorité des
Marchés financiers available on its website (www.tarkett.com).
These statements do not reflect the future performance of the
Company, which may differ significantly. The Company does not
undertake to provide updates of these statements.
The audited consolidated financial statements
for 2020 results are available on Tarkett’s website
https://www.tarkett.com/en/content/financial-results. The analysts’
conference will be held on Friday February 19, 2021 at 11:00 am CET
and an audio webcast service (live and playback) along with the
results presentation will be available on
https://www.tarkett.com/en/content/financial-results.
Financial calendar
- April 28, 2021: Q1 2021 financial results - press release after
close of trading on the Paris market and conference call the
following morning
- April 30, 2021: Annual General Meeting
- July 29, 2021: H1 2021 financial results - press release after
close of trading on the Paris market and conference call the
following morning
- October 28, 2021: Q3 2021 financial results - press release
after close of trading on the Paris market and conference call the
following morning
Investor Relations
ContactTarkett – Emilie Megel –
emilie.megel@tarkett.com
Media contactsTarkett -
Véronique Bouchard Bienaymé - communication@tarkett.com Brunswick -
tarkett@brunswickgroup.com - Tel.: +33 (0) 1 53 96 83 83
About Tarkett
With a history of 140 years, Tarkett is a
worldwide leader in innovative flooring and sports surface
solutions, with net sales of € 2.6 billion in 2020. Offering a wide
range of products including vinyl, linoleum, rubber, carpet, wood,
laminate, artificial turf and athletics tracks, the Group serves
customers in over 100 countries across the globe. Tarkett has more
than 12,000 employees and 33 industrial sites, and sells 1.3
million square meters of flooring every day, for hospitals,
schools, housing, hotels, offices, stores and sports fields.
Committed to change 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, fully aligned with
its Tarkett Human-Conscious Design™ approach. Tarkett is listed on
Euronext Paris (compartment B, ISIN: FR0004188670, ticker: TKTT).
www.tarkett.comAppendices
1. Reconciliation table for alternative performance
indicators (not defined by IFRS)
- Organic growth measures the change in net
sales as compared with the same period in the previous year, at
constant scope of consolidation and exchange rates. The exchange
rate effect is calculated by applying the previous year’s exchange
rates to sales for the current year and calculating the difference
as compared with sales for the current year. It also includes the
impact of price adjustments in CIS countries intended to offset
movements in local currencies against the euro. In 2020, a -€34.9
million negative adjustment in selling prices was excluded from
organic growth and included in currency effects.
- Scope effects reflect:
- current-year sales for entities not included in the scope of
consolidation in the same period in the previous year, up to the
anniversary date of their consolidation;
- the reduction in sales relating to discontinued operations that
are not included in the scope of consolidation for the current year
but were included in sales for the same period in the previous
year, up to the anniversary date of their disposal.
€ million |
Net Sales 2020 |
Net Sales 2019 |
% Change |
o/w exchange rate effect |
o/w scope effect |
o/w organic change |
|
|
Total Group – Q1 |
610.7 |
624.5 |
-2.2% |
0.7% |
- |
-2.9% |
|
Total Group – Q2 |
626.3 |
787.8 |
-20.5% |
-0.2% |
- |
-20.3% |
|
Total Group - H1 |
1,237.0 |
1,412.3 |
-12.4% |
0.2% |
- |
-12.6% |
|
Total Group – Q3 |
776.9 |
907.1 |
-14.4% |
-3.8% |
- |
-10.5% |
|
Total Group – Q4 |
619.1 |
672.5 |
-7.9% |
-6.4% |
- |
-1.5% |
|
Total Group – H2 |
1,395.9 |
1,579.6 |
-11.6% |
-4.9% |
- |
-6.7% |
|
Total Group – FY |
2,632.9 |
2,991.9 |
-12.0% |
-2.5% |
- |
-9.5% |
|
- 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.
€ million |
Adjusted EBITDA 2020 |
Adjusted EBITDA 2019 |
% margin 2020 |
% margin 2019 |
|
|
Total Group – Q1 |
42.4 |
43.1 |
6.9% |
6.9% |
|
Total Group – Q2 |
64.0 |
83.6 |
10.2% |
10.6% |
|
Total Group – H1 |
106.3 |
126.7 |
8.6% |
9.0% |
|
Total Group – Q3 |
117.7 |
115.0 |
15.2% |
12.7% |
|
Total Group – Q4 |
53.8 |
38.4 |
8.7% |
5.7% |
|
Total Group – H2 |
171.5 |
153.4 |
12.3% |
9.7% |
|
Total Group – FY |
277.9 |
280.0 |
10.6% |
9.4% |
|
€ million |
Of which adjustments |
FY 2020 |
Restucturing |
Gains/losses on assets sales / impairment |
Business combination |
Share-based payments |
Other |
FY 2020 adjusted |
Result from operating activities (EBIT) |
47.4 |
14.5 |
49.6 |
2.4 |
2.9 |
2.7 |
119.4 |
Depreciation and amortization |
211.2 |
(1.2) |
(53.1) |
- |
- |
(0.2) |
156.8 |
Others |
1.7 |
- |
- |
- |
- |
- |
1.7 |
EBITDA |
260.2 |
13.3 |
(3.5) |
2.4 |
2.9 |
2.6 |
277.9 |
- Free cash-flow is defined as cash generated
from operations, plus or minus the following inflows and outflows:
working capital, payment of lease liabilities, net capital
expenditure (investments in property plant and equipment and
intangible assets net from proceeds), net interest received (paid),
net income taxes collected (paid), and miscellaneous operating
items received (paid).
Free cash-flow reconciliation table (in €
million) |
FY 2020 |
FY 2019 |
Operating cash flow before working capital changes excl.
payment for lease liabilities |
248.6 |
258.2 |
Payment of lease liabilities |
(31.7) |
(31.9) |
Operating cash flow before working capital
changes |
216.9 |
226.3 |
Change in working capital |
64.5 |
190.4 |
o/w change in factoring programs (implemented in 2019) |
4.7 |
126.3 |
Net interest paid |
(17.4) |
(22.7) |
Net taxes paid |
(25.1) |
(30.5) |
Miscellaneous operational items paid |
(6.4) |
(11.2) |
Acquisitions of intangible assets and property, plant and
equipment |
(74.1) |
(124.6) |
Proceeds from sale of property, plant and equipment |
5.2 |
3.7 |
Free Cash Flow |
163.5 |
231.4 |
- 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.
- 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. At the end of December, the financial leverage
as per our credit documentation was at 1.5x Adjusted EBITDA. 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 Schuldschein private placements are also
subject to a leverage covenant. It is only tested once a year and
has to be below 3.0x at the end of December.
in million euros |
|
December 2020 |
June 2020 |
December 2019 |
Net Financial Debt |
A |
473.8 |
728.0 |
636.8 |
of which Lease Liabilities |
|
108.8 |
97.2 |
89.3 |
Net Financial Debt pre-IFRS 16 |
B |
364.9 |
630.8 |
547.5 |
Adjusted EBITDA LTM |
C |
277.9 |
259.7 |
280.0 |
Lease charge |
|
(30.9) |
(31.2) |
(30.5) |
Adjusted EBTIDA LTM pre-IFRS16 |
D |
247.0 |
228.5 |
249.5 |
Financial leverage (1) |
A/C |
1.7x |
2.8x |
2.3x |
Leverage as per covenant (2) |
B/D |
1.5x |
2.8x |
2.2x |
IFRS16 impact on leverage |
|
0.2x |
0.0x |
0.1x |
(1) Reference for Mid-term
objective: Leverage comprised between 1.6x and 2.6x at
year-end |
|
(2) Credit documentation is
based on pre-IFRS 16 accounting standards - Covenant is 3.5x end of
June, 3.0x end of December |
2. Bridges (€ million) FY 2020, H2 and
Q4
Cyber-insurance indemnification to Q2 2020
cyberattack amounted to €14.8 million, was paid before year end by
the insurer and therefore included in Q4 Adjusted EBITDA. While it
is presented as a one-off in H2 and Q4 bridges, it has been
reported in the volume effect in FY 2020 bridge analysis, as the
cyber-attack impacted H1 performance.
Net sales by segment |
Adjusted EBITDA by nature |
FY 2019 |
280.0 |
+/- Volume / Mix |
(113.5) |
+/- Sales Pricing |
8.5 |
+/- Raw Material & Freight |
28.5 |
+/- Salary Increase |
(15.1) |
+/- Productivity |
26.3 |
+/- SG&A |
35.2 |
+/- Covid-19 measures |
44.3 |
+/- One-offs & Others |
6.2 |
+/- Selling price lag effect in CIS |
(13.5) |
+/- Currencies |
(9.1) |
FY 2020 |
277.9 |
FY 2019 |
2,991.9 |
+/- EMEA |
(81.6) |
+/- North America |
(116.4) |
+/- CIS, APAC & LATAM |
(11.5) |
+/- Sports |
(74.3) |
FY 2020 LfL |
2,708.0 |
+/- Currencies |
(40.3) |
+/- Selling price lag effect in CIS |
(34.9) |
FY 2020 |
2,632.9 |
H2 2019 |
1,579.6 |
+/- EMEA |
(20.7) |
+/- North America |
(36.6) |
+/- CIS, APAC & LATAM |
13.2 |
+/- Sports |
(61.6) |
H2 2020 LfL |
1,473.8 |
+/- Currencies |
(47.0) |
+/- Selling price lag effect in CIS |
(30.9) |
H2 2020 |
1,395.9 |
H2 2019 |
153.4 |
+/- Volume / Mix |
(50.5) |
+/- Sales Pricing |
7.2 |
+/- Raw Material & Freight |
20.0 |
+/- Salary Increase |
(7.2) |
+/- Productivity |
16.5 |
+/- SG&A |
23.1 |
+/- Covid-19 measures |
15.5 |
+/- One-offs & Others |
13.5 |
+/- Selling price lag effect in CIS |
(12.9) |
+/- Currencies |
(7.0) |
H2 2020 |
171.5 |
Q4 2019 |
38.4 |
+/- Volume / Mix |
(16.1) |
+/- Sales Pricing |
4.5 |
+/- Raw Material & Freight |
4.6 |
+/- Salary Increase |
(3.4) |
+/- Productivity |
4.6 |
+/- SG&A |
11.1 |
+/- Covid-19 measures |
6.0 |
+/- One-offs & Others |
15.7 |
+/- Selling price lag effect in CIS |
(9.5) |
+/- Currencies |
(2.0) |
Q4 2020 |
53.8 |
Q4 2019 |
672.5 |
+/- EMEA |
(10.1) |
+/- North America |
(2.1) |
+/- CIS, APAC & LATAM |
10.2 |
+/- Sports |
(8.1) |
Q4 2020 LfL |
662.3 |
+/- Currencies |
(25.5) |
+/- Selling price lag effect in CIS |
(17.8) |
Q4 2020 |
619.1 |
3. H2 Net revenues and Adjusted EBITDA by
division
|
Net Sales |
Adjusted EBITDA |
€m |
H2 2020 |
H2 2019 |
% change |
Organic change |
H2 2020 |
H2 2019 |
H2 2020 Margin |
H2 2019 Margin |
|
EMEA |
417.9 |
440.0 |
-5.0% |
-4.7% |
62.3 |
49.3 |
14.9% |
11.2% |
|
North America |
336.8 |
396.7 |
-15.1% |
-9.1% |
26.3 |
18.5 |
7.8% |
4.7% |
|
CIS, APAC & LATAM |
305.0 |
331.8 |
-8.1% |
+4.0% |
65.0 |
53.4 |
21.3% |
16.1% |
|
Sports |
336.2 |
411.1 |
-18.2% |
-15.0% |
41.5 |
57.1 |
12.4% |
13.9% |
|
Central Costs |
- |
- |
- |
- |
(23.7) |
(24.9) |
- |
- |
|
TOTAL |
1,395.9 |
1,579.6 |
-11.6% |
-6.7% |
171.5 |
153.4 |
12.3% |
9.7% |
|
Appendices
1. Reconciliation table for alternative performance
indicators (not defined by IFRS)
- Organic growth measures the change in net
sales as compared with the same period in the previous year, at
constant scope of consolidation and exchange rates. The exchange
rate effect is calculated by applying the previous year’s exchange
rates to sales for the current year and calculating the difference
as compared with sales for the current year. It also includes the
impact of price adjustments in CIS countries intended to offset
movements in local currencies against the euro. In 2020, a -€34.9
million negative adjustment in selling prices was excluded from
organic growth and included in currency effects.
- Scope effects reflect:
- current-year sales for entities not included in the scope of
consolidation in the same period in the previous year, up to the
anniversary date of their consolidation;
- the reduction in sales relating to discontinued operations that
are not included in the scope of consolidation for the current year
but were included in sales for the same period in the previous
year, up to the anniversary date of their disposal.
€ million |
Net Sales 2020 |
Net Sales 2019 |
% Change |
o/w exchange rate effect |
o/w scope effect |
o/w organic change |
|
|
Total Group – Q1 |
610.7 |
624.5 |
-2.2% |
0.7% |
- |
-2.9% |
|
Total Group – Q2 |
626.3 |
787.8 |
-20.5% |
-0.2% |
- |
-20.3% |
|
Total Group - H1 |
1,237.0 |
1,412.3 |
-12.4% |
0.2% |
- |
-12.6% |
|
Total Group – Q3 |
776.9 |
907.1 |
-14.4% |
-3.8% |
- |
-10.5% |
|
Total Group – Q4 |
619.1 |
672.5 |
-7.9% |
-6.4% |
- |
-1.5% |
|
Total Group – H2 |
1,395.9 |
1,579.6 |
-11.6% |
-4.9% |
- |
-6.7% |
|
Total Group – FY |
2,632.9 |
2,991.9 |
-12.0% |
-2.5% |
- |
-9.5% |
|
- 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.
€ million |
Adjusted EBITDA 2020 |
Adjusted EBITDA 2019 |
% margin 2020 |
% margin 2019 |
|
|
Total Group – Q1 |
42.4 |
43.1 |
6.9% |
6.9% |
|
Total Group – Q2 |
64.0 |
83.6 |
10.2% |
10.6% |
|
Total Group – H1 |
106.3 |
126.7 |
8.6% |
9.0% |
|
Total Group – Q3 |
117.7 |
115.0 |
15.2% |
12.7% |
|
Total Group – Q4 |
53.8 |
38.4 |
8.7% |
5.7% |
|
Total Group – H2 |
171.5 |
153.4 |
12.3% |
9.7% |
|
Total Group – FY |
277.9 |
280.0 |
10.6% |
9.4% |
|
€ million |
Of which adjustments |
FY 2020 |
Restucturing |
Gains/losses on assets sales / impairment |
Business combination |
Share-based payments |
Other |
FY 2020 adjusted |
Result from operating activities (EBIT) |
47.4 |
14.5 |
49.6 |
2.4 |
2.9 |
2.7 |
119.4 |
Depreciation and amortization |
211.2 |
(1.2) |
(53.1) |
- |
- |
(0.2) |
156.8 |
Others |
1.7 |
- |
- |
- |
- |
- |
1.7 |
EBITDA |
260.2 |
13.3 |
(3.5) |
2.4 |
2.9 |
2.6 |
277.9 |
- Free cash-flow is defined as cash generated
from operations, plus or minus the following inflows and outflows:
working capital, payment of lease liabilities, net capital
expenditure (investments in property plant and equipment and
intangible assets net from proceeds), net interest received (paid),
net income taxes collected (paid), and miscellaneous operating
items received (paid).
Free cash-flow reconciliation table (in €
million) |
FY 2020 |
FY 2019 |
Operating cash flow before working capital changes excl.
payment for lease liabilities |
248.6 |
258.2 |
Payment of lease liabilities |
(31.7) |
(31.9) |
Operating cash flow before working capital
changes |
216.9 |
226.3 |
Change in working capital |
64.5 |
190.4 |
o/w change in factoring programs (implemented in 2019) |
4.7 |
126.3 |
Net interest paid |
(17.4) |
(22.7) |
Net taxes paid |
(25.1) |
(30.5) |
Miscellaneous operational items paid |
(6.4) |
(11.2) |
Acquisitions of intangible assets and property, plant and
equipment |
(74.1) |
(124.6) |
Proceeds from sale of property, plant and equipment |
5.2 |
3.7 |
Free Cash Flow |
163.5 |
231.4 |
- 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.
- 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. At the end of December, the financial leverage
as per our credit documentation was at 1.5x Adjusted EBITDA. 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 Schuldschein private placements are also
subject to a leverage covenant. It is only tested once a year and
has to be below 3.0x at the end of December.
in million euros |
|
December 2020 |
June 2020 |
December 2019 |
Net Financial Debt |
A |
473.8 |
728.0 |
636.8 |
of which Lease Liabilities |
|
108.8 |
97.2 |
89.3 |
Net Financial Debt pre-IFRS 16 |
B |
364.9 |
630.8 |
547.5 |
Adjusted EBITDA LTM |
C |
277.9 |
259.7 |
280.0 |
Lease charge |
|
(30.9) |
(31.2) |
(30.5) |
Adjusted EBTIDA LTM pre-IFRS16 |
D |
247.0 |
228.5 |
249.5 |
Financial leverage (1) |
A/C |
1.7x |
2.8x |
2.3x |
Leverage as per covenant (2) |
B/D |
1.5x |
2.8x |
2.2x |
IFRS16 impact on leverage |
|
0.2x |
0.0x |
0.1x |
(1) Reference for Mid-term
objective: Leverage comprised between 1.6x and 2.6x at
year-end |
|
(2) Credit documentation is
based on pre-IFRS 16 accounting standards - Covenant is 3.5x end of
June, 3.0x end of December |
2. Bridges (€ million) FY 2020, H2 and
Q4
Cyber-insurance indemnification to Q2 2020
cyberattack amounted to €14.8 million, was paid before year end by
the insurer and therefore included in Q4 Adjusted EBITDA. While it
is presented as a one-off in H2 and Q4 bridges, it has been
reported in the volume effect in FY 2020 bridge analysis, as the
cyber-attack impacted H1 performance.
Net sales by segment |
Adjusted EBITDA by nature |
FY 2019 |
280.0 |
+/- Volume / Mix |
(113.5) |
+/- Sales Pricing |
8.5 |
+/- Raw Material & Freight |
28.5 |
+/- Salary Increase |
(15.1) |
+/- Productivity |
26.3 |
+/- SG&A |
35.2 |
+/- Covid-19 measures |
44.3 |
+/- One-offs & Others |
6.2 |
+/- Selling price lag effect in CIS |
(13.5) |
+/- Currencies |
(9.1) |
FY 2020 |
277.9 |
FY 2019 |
2,991.9 |
+/- EMEA |
(81.6) |
+/- North America |
(116.4) |
+/- CIS, APAC & LATAM |
(11.5) |
+/- Sports |
(74.3) |
FY 2020 LfL |
2,708.0 |
+/- Currencies |
(40.3) |
+/- Selling price lag effect in CIS |
(34.9) |
FY 2020 |
2,632.9 |
H2 2019 |
1,579.6 |
+/- EMEA |
(20.7) |
+/- North America |
(36.6) |
+/- CIS, APAC & LATAM |
13.2 |
+/- Sports |
(61.6) |
H2 2020 LfL |
1,473.8 |
+/- Currencies |
(47.0) |
+/- Selling price lag effect in CIS |
(30.9) |
H2 2020 |
1,395.9 |
H2 2019 |
153.4 |
+/- Volume / Mix |
(50.5) |
+/- Sales Pricing |
7.2 |
+/- Raw Material & Freight |
20.0 |
+/- Salary Increase |
(7.2) |
+/- Productivity |
16.5 |
+/- SG&A |
23.1 |
+/- Covid-19 measures |
15.5 |
+/- One-offs & Others |
13.5 |
+/- Selling price lag effect in CIS |
(12.9) |
+/- Currencies |
(7.0) |
H2 2020 |
171.5 |
Q4 2019 |
38.4 |
+/- Volume / Mix |
(16.1) |
+/- Sales Pricing |
4.5 |
+/- Raw Material & Freight |
4.6 |
+/- Salary Increase |
(3.4) |
+/- Productivity |
4.6 |
+/- SG&A |
11.1 |
+/- Covid-19 measures |
6.0 |
+/- One-offs & Others |
15.7 |
+/- Selling price lag effect in CIS |
(9.5) |
+/- Currencies |
(2.0) |
Q4 2020 |
53.8 |
Q4 2019 |
672.5 |
+/- EMEA |
(10.1) |
+/- North America |
(2.1) |
+/- CIS, APAC & LATAM |
10.2 |
+/- Sports |
(8.1) |
Q4 2020 LfL |
662.3 |
+/- Currencies |
(25.5) |
+/- Selling price lag effect in CIS |
(17.8) |
Q4 2020 |
619.1 |
3. H2 Net revenues and Adjusted EBITDA by
division
|
Net Sales |
Adjusted EBITDA |
€m |
H2 2020 |
H2 2019 |
% change |
Organic change |
H2 2020 |
H2 2019 |
H2 2020 Margin |
H2 2019 Margin |
|
EMEA |
417.9 |
440.0 |
-5.0% |
-4.7% |
62.3 |
49.3 |
14.9% |
11.2% |
|
North America |
336.8 |
396.7 |
-15.1% |
-9.1% |
26.3 |
18.5 |
7.8% |
4.7% |
|
CIS, APAC & LATAM |
305.0 |
331.8 |
-8.1% |
+4.0% |
65.0 |
53.4 |
21.3% |
16.1% |
|
Sports |
336.2 |
411.1 |
-18.2% |
-15.0% |
41.5 |
57.1 |
12.4% |
13.9% |
|
Central Costs |
- |
- |
- |
- |
(23.7) |
(24.9) |
- |
- |
|
TOTAL |
1,395.9 |
1,579.6 |
-11.6% |
-6.7% |
171.5 |
153.4 |
12.3% |
9.7% |
|
- Tarkett_FY 2020_Results_ENG
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