Citing “challenging RV markets and negative impact from additional U.S. tariffs,” Dometic Corp. on July 17 reported second quarter earnings for the year of around $526 million in net sales, an increase of 1%.
In the same 2Q period from April to June, Dometic Americas reported net sales of $273 million, a 5% decrease as compared to a year ago, and 49% of the Sweden-based company’s overall net sales.
For the first six months of 2019, Dometic Corp.’s net sales were $970 million, representing an increase of 3% compared with the same period last year. Dometic Americas reported net sales of $502 million, a year-over-year decrease of 4%.
“The first half of 2019 was very much characterized by a continued focus on efficiency improvements and building a foundation for an even more diversified and stronger Dometic. Despite challenging RV markets and negative impact from additional U.S. tariffs, we have managed to keep improving our cost structures and implement processes and best practices across our global organization, while investing in new opportunities,” Juan Vargues, president and CEO of Dometic, stated in the company earnings report.
“The restructuring program launched in last year’s fourth quarter is proceeding well, with good progress in all regions,” Vargues continued. “We are well on track in expanding our presence in Mexico, and the new site is expected to be finalized in the third quarter. The
SKU reduction is progressing at a good pace and we remain confident in terms of our ambition to achieve a 30% reduction by the end of the year. We continued to strengthen our organization, and a number of new key positions in the areas of product development and operations were added to accelerate strategic initiatives and the pace of innovation.
“Net sales growth was 1% in the quarter with positive growth in EMEA (Europe, Middle East and Africa) and Asia, while conditions in Americas and Pacific continued to be challenging. EBIT and EBITDA margins held up well as we have intensified our focus on cost reductions. Given the current market situation, we are looking at additional initiatives in all three regions to protect profitability in the short term, while also building up a more efficient company in the long term.
“Short term, we expect organic growth to be slightly positive during the second half of the year compared to the same period last year, despite the continued inventory reduction in primarily the U.S. RV market and the revised full-year shipments forecast fpublished by the U.S. RV industry Association (RVIA). Given this, and the negative impact from the additional U.S. tariffs, the full year 2019 outlook is revised to negative organic growth and an EBIT margin above 14%. Leverage excluding acquisitions is expected to be around 2x by the end of 2019.”