REPORT ON THE SECOND QUARTER 2022
SECOND QUARTER 2022
- Net sales were SEK 8,498 m (5,571); an increase of 53%, of which -1% was organic growth.
- Operating profit (EBITA) before items affecting comparability was SEK 1,330 m (1,036), corresponding to a margin of 15.7% (18.6%).
- Items affecting comparability were SEK -14 m (-58).
- Profit for the quarter was SEK 827 m (560).
- Earnings per share were SEK 2.59 (1.85). Adjusted earnings per share were SEK 2.97 (2.19).
- Cash flow for the quarter was SEK 358 m (1,644). Operating cash flow was SEK 738 m (875).
- Closure of the manufacturing in Siegen, Germany, announced July 6th. This is the final activity in the 2019 global restructuring program.
- A new global restructuring program initiated targeting additional SEK 200 m in annual saving. Expected to be fully implemented by the end of 2023.
- Net debt leverage at the end of the quarter was 2.9x (1.4x).
CEO COMMENT
“In a challenging market environment we continued to execute on our strategy and delivered a net sales growth of 53 percent in the quarter. Organic net sales declined -1 percent mainly due to reduced Service & Aftermarket sales considering the strong first half of 2021 and as retailers globally are rebalancing their inventory levels. The OEM business showed strong organic growth across all vertical end markets. The order backlog is higher than a year ago, while we have started to see declining RV OEM production data.
Our acquired companies continued to perform well in the quarter. Igloo, one of the world’s leading brands in passive cooling boxes that we acquired last year, showed strong growth despite the uncertain market conditions supported by its iconic brand and new product introductions. The mobile power solutions business continued to show a strong development supported by the growing electrification trend. In mobile power solutions net sales for the last twelve months, including acquired companies proforma, have grown to more than SEK 2.2 b.
EBITA before items affecting comparability improved by 28 percent to SEK 1,330 m (1,036), corresponding to a margin of 15.7 percent (18.6). As expected at the time of the acquisition, the Igloo business had a dilutive effect on the margin. Igloo continues to perform well, showing a double-digit EBITA margin despite increasing resin costs as a consequence of the war in Ukraine. Additional price increases have already been implemented to offset this and Igloo’s margin improved significantly in June. Excluding the dilutive effect from Igloo, the EBITA-margin was negatively impacted mainly by the sales mix and inefficiencies due to supply chain constraints. In addition, the second quarter 2021 was positively impacted by a gain from sale of fixed assets in Asia Pacific of SEK 21 m.
On July 6, 2022, we announced that our manufacturing operation in Siegen, Germany, will be relocated to an existing site in Hungary. This is the final activity in the existing global restructuring program announced in 2019, and the relocation is expected to be completed by mid 2023. We are now taking the next step to further accelerate operational optimization and improve profitability with a new global restructuring program, focusing on continued consolidation of locations and rightsizing of resources. This program is expected to generate positive annualized effects on EBITA of SEK 200 m when fully implemented at the end of 2023. The implementation cost is estimated to SEK 200 m with around 700 employees affected.
Operating cash flow for the quarter was SEK 738 m (875) impacted by longer than normal inventory lead times and inventory build-up to secure availability of critical components. The net debt leverage ratio was 2.9x, compared to 2.7x at the end of the first quarter of 2022 negatively impacted by a strengthened USD and the dividend payout. A three-year private placement bond of SEK 1 b was signed in the quarter.
Given the challenging market environment it is encouraging to see the significant steps we have taken on our strategic journey and we are proud of the contribution of our employees and their dedication during the first six months of 2022. The current macroeconomic situation brings uncertainty and is leading to a weakening demand in the short term. History shows that we are able to act fast and deliver strong financial results also in challenging times, and today we are a significantly more diversified company than before. While being proactive on short-term developments, we are optimistic about the long-term trends in the Mobile Living industry and will continue to implement our strategic agenda to deliver on our targets.”
Juan Vargues President and CEO
PRESENTATION OF THE REPORT
Analysts and media are invited to participate in a telephone conference at 10.00 (CEST) July 15, 2022, during which President and CEO, Juan Vargues, and CFO, Stefan Fristedt, will present the report and answer questions.
Participant Passcode: 144540
Sweden, Stockholm: +46 (0)8 5664 2754
United Kingdom: +44 (0)330 165 3641
United States: +1 646-828-8082
Webcast URL and presentation are available at https://www.dometicgroup.com/en/investors
This information is information that Dometic Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 CEST on July 15, 2022.
FOR FURTHER INFORMATION, PLEASE CONTACT
Rikard Tunedal, Head of Investor Relations
Phone: +46 730 56 97 35, Email: rikard.tunedal@dometic.com
ABOUT DOMETIC
Dometic is a global market leader in the mobile living industry. Millions of people around the world use Dometic products in outdoor, residential, and professional applications. Our motivation is to create smart, sustainable, and reliable products with outstanding design for an outdoor and mobile lifestyle in the areas of Food & Beverage, Climate, Power & Control, and Other Applications. Dometic employs approximately 9,000 people worldwide, had net sales of SEK 21.5 billion in 2021 and is headquartered in Stockholm, Sweden.
