Trading update

good start to the year until mid-March; end of the quarter and short term outlook significantly affected by coronavirus situation

Paris, April, 8, 2020: Tarkett today gives an update on its sales and expected performance for the first quarter. The Group is also providing initial views on business trends for the second quarter which is expected to be severely affected by the escalation of travel and social restrictions decided by public authorities in various geographies over the last few weeks.

Q1 net sales
In EMEA, net sales were performing in line with management’s expectations until mid-March. North America was recording improving trends following a depressed fourth quarter 2019 with commercial carpet better oriented than initially anticipated. The Sport business, which is in its low season, was also doing well with a sustained level of growth. The level of activity in CIS countries was stable compared to last year, while Latin America was continuing to grow double digit on an organic basis.

The deployment of lockdown measures accelerated mid-March in both Europe and North America. It resulted in the halt of construction projects and the shutdown of many flooring retailers and distributors in several areas, primarily in South Europe. To adapt to this reduced demand, some of our manufacturing sites have been operating at reduced capacity or have been temporarily shutdown. In Europe, facilities concerned by the temporary shutdown are progressively reopening but operate at reduced capacity. Until now, most sites which have suspended operations continued satisfying customer demand by delivering products from existing inventories. Tarkett has applied all required actions to protect its employees, customers and partners in all geographies, including social distancing on production sites and remote work for support functions.

China focus
For Tarkett, China is represents less than 1% of consolidated net revenues. Net sales were affected by the coronavirus outbreak and lockdown measures in February. Since then, there has been a rebound of the activity: revenues in March were only slightly down compared to last year. The two manufacturing sites in China, which focus on the Chinese and South-East Asian markets, were closed during the lockdown phases. They both resumed production early March and are now back to normal production level.