05/02/2020

5 February 2020
5 February 2020, Comments Comments Off on Dometic reports on 2019 results
Dometic reports on 2019 results

As a result of challenging trading environments in some areas of its business and US trade tariffs, Dometic has reported a four percent decrease in sales in the fourth quarter (mainly impacted by a continued weak US market), and a one percent net sales growth for the full year in 2019.

Dometic’s net global sales for the last quarter of 2019 decreased by four percent to SEK 3,919 m (4,070 in same period in 2018). Items affecting comparability for the quarter included SEK -80 m costs from a global restructuring programme announced in the report for the third quarter 2019.

Changing market conditions caused Dometic to take several actions to continue its high profitability and the best operating cash flow in its history. At the same time, Dometic increased its investment in innovation, building the organization for new growth areas, and in IT to become even more competitive in the years to come.

The EBIT margin was 7.1 percent. The additional US tariffs and the continued volume decline in the US market could not be fully offset by all Dometic’s actions in the Americas region. The gross impact from tariffs was SEK -81 m in the quarter and SEK -258 m for the full year.

The EMEA region reported net sales growth of two percent in the fourth quarter of 2019 thanks to a good performance in Power & Control and Climate divisions, boosted by the acquisition of Kampa, and offset by a weaker results in Food & Beverage.

Since the announcement of the global restructuring program in the third quarter 2019, Dometic has shifted two more production lines from China to its new manufacturing site in Mexico, consolidated one manufacturing site in Americas and initiated the closure of two manufacturing sites in the EMEA region.

A total of 10 sites and around 200 employees have been affected during the quarter. In January, Dometic took further action in the US affecting one manufacturing site and around 200 employees.

The execution of this restructuring programme will allow Dometic to reach its financial targets and take full advantage of future opportunities.

Dometic remains confident that it will deliver on the previously communicated target of estimated annualized effects on earnings of approximately SEK 400 m when fully implemented, with full impact in the middle of 2022.

“As we enter 2020, we will continue to drive improvements in all areas in line with our strategy. We will continue to invest in new growth opportunities and innovation, while persisting with our efforts to reduce complexity, execute on the global restructuring program and improve efficiency every day in 2020, said Juan Vargues, President and CEO of Dometic.

“The many actions across the entire organization will demand full attention in order to secure successful and timely execution. We are confident about the long-term positive trends in the Mobile Living industry and the opportunities for acquisitive growth, and we will continue to deliver on our strategic direction to take Dometic to the next level,” said Juan Vargues, President and CEO of Dometic.

Dometic is organized into three regions: Americas, EMEA (Europe, Middle East, Africa) and APAC (Asia and Oceania). It manufactures and sells a diverse range of products for use in recreational vehicles, trucks and premium cars, pleasure and workboats, and for a variety of other uses.

Dometic uses two sales channels, Original Equipment Manufacturers (OEM) and Aftermarket (AM), to distribute its products. OEM customers are manufacturers of RVs, trucks, premium  cars, pleasure and work boats, while the Aftermarket comprises upgrade and replacement products, parts and consumables as well as stand-alone Aftermarket  products. These are sold through various distributors, dealers and retailers to end-users.

Dometic operates manufacturing and assembly sites in twelve countries and sells its products in approximately 100 countries.