Dometic reported third-quarter sales of $473.7 million (Swedish Krona 4.7 billion), up 2 percent compared to the same period a year ago. Its operating profit (EBITDA) for the quarter was $81.4 million (SEK792 million) compared to $85.9 million (SEK835 million) a year ago.
“Market conditions in the quarter remained similar to what we have seen throughout 2019,” said Juan Vargues, president and CEO in a statement. “Despite a challenging global trading environment impacting us in the quarter, we are pleased with our underlying performance delivering net sales growth of 2 percent, continued high operating profit and a strong cash flow.”
Vargues said Dometic is continuing with initiatives that support its long-term strategy, including hiring personnel to “drive new growth areas and aftermarket focus.” The company recently opened a larger distribution center in Mexico to make itself “more competitive going forward.” Dometic also has focused on increasing production efficiencies and reducing its exposure to cyclicality and seasonality.
Dometic also announced a global restructuring program. “The program focuses on outsourcing of non-core activities and consolidation of locations,” Vargues said. “The execution of this program, in combination with a strong financial position, will allow us to deliver on our financial targets and take full advantage of the many opportunities ahead.”
The program, Vargues said, will generate a boost to annual profits of about $41.2 million (SEK400 million) when fully implemented. “We anticipate that the effect will gradually become apparent from the beginning of 2021, achieving its full impact in the middle of 2022,” he said. “The cost of implementing the program will be around [$77.2 million]. It is estimated that the majority of the cost will be charged in the coming 18 months. Approximately 20 locations, including manufacturing, warehouses and offices, and 1,500 employees working in these locations will be affected by the program.”
Vargues said that due to “continued challenging market conditions” in the Americas and the additional impact of U.S. tariffs, Dometic has issued a new full-year 2019 outlook with “negative organic growth and an EBIT margin around 13.5 percent.”