Tarkett (TKTT) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue declined by 3.1% year-over-year to €1,558.7 million, with organic revenue down 2.2% amid a declining market.

• Adjusted EBITDA rose 17.5% to €148.2 million (9.5% margin), and net profit increased to €18.0 million from €2.8 million in H1 2023.

• Operational performance improved, with cost controls, lower raw material costs, and productivity gains offsetting lower volumes and stable selling prices.

• Financial debt and leverage were reduced compared to June 2023, with leverage at 2.0x adjusted EBITDA.

Financial highlights

• Q2 2024 revenue fell 2.1% year-over-year; H1 revenue down 3.1% (organic -2.2%).

• Adjusted EBITDA margin improved to 9.5% from 7.8% in H1 2023.

• EBIT increased to €59.9 million (+23.5% year-over-year); net profit reached €18.0 million (EPS €0.27).

• Free cash flow was negative at €-75.9 million, reflecting seasonal working capital needs.

• Net financial debt at €620 million, down from €649 million in June 2023.

Outlook and guidance

• No short-term improvement expected in the building market; high interest rates and inflation continue to weigh on demand.

• European market remains sluggish; cost structure and organization adapted for agility and profitability.

• North America commercial segments show improvement; Sports segment expected to generate annual revenue growth.

• Group aims for positive cash flow and further debt reduction by year-end.

• Sports segment supported by strong order book and recent acquisition.