Nilfisk, a leading provider of professional cleaning products and services, has posted organic growth of -1.1 per cent for the branded professional business in the second quarter, negatively impacted by EMEA and APAC.
APAC was affected by low performance in Australia in particular, leading to organic growth of ‑4.4 per cent, while Americas had organic growth of 0.4 per cent helped by Latin America and Canada.
In EMEA, a weakening economy impacted the industrial segment across the region, and the German and Nordic businesses in general, leading to organic growth of -1.5 per cent.
For the business in total, Nilfisk posted organic growth of -4.4 per cent, further impacted by private label (-9.5 per cent) and consumer (-25.8 per cent), where the company said a disappointing high season was reflected in the performance of the high pressure washer category
The gross margin increased by 1.3 percentage points compared to 2018 and came to 44.1 per cent. The improvement was driven by simplification initiatives
The EBITDA margin before special items was 15.2 per cent, and 12.5 per cent excluding the impact of IFRS 16, in line with 2018.
Continuing its simplification strategy, Nilfisk initiated the implementation of a new distribution center structure in EMEA to optimise the future supply chain set-up.
The implementation of its cost saving program progressed as planned, and the company said it continued to consolidate its global organisational blueprint across more markets and functions to allow for common processes and ways of working.
Nilfisk maintains the full-year guidance for 2019 as announced on June 26, 2019, under the assumption of unchanged macroeconomic conditions
The company said it expects flat organic growth for the branded professional business, flat organic growth for the private label business and -10 per cent to -15 per cent organic growth for the consumer business, leading to an expected organic growth of approximately -1.0 per cent for the total business.
Commenting on the results, Hans Henrik Lund, CEO of Nilfisk, said: “We are disappointed with our sales performance in the second quarter of 2019.
“We experienced headwind in key markets, particularly a weakening economy in EMEA, and this had a negative impact on the growth of our business.
“While we have found it prudent to take measures to reduce our overheads, re-prioritize our investments and focus on cash generation, we remain confident in the strategic direction and potential of Nilfisk.”
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