Dometic up 14% in a ‘solid’ 2nd quarter

Dometic has reported net sales of SEK 3.94bn for its second quarter, up 14% compared to the same period a year ago. Its operating profit for the second quarter was SEK 650m.

The company called its second quarter “solid”, noting 9% organic sales growth. “We conclude a strong second quarter, driven by strong execution on internal initiatives as well as favourable market conditions,” said chief executive Roger Johansson in a statement. “We continue to show good organic growth of 9% out of the total 14%. Underlying profitability developed well, with an EBIT margin of 17.2%.”

The company said that its cash generation levels were strong in the quarter, creating a “good platform” for continued merger and acquisition activities. “I am pleased to see that the integration of Oceanair and IPV goes according to plan,” said Johansson. “Finding more acquisition growth opportunities in attractive business segments is a top priority.”

Johansson said that its initiatives to improve logistics and distribution have yielded “good results” in its Americas and EMEA territories. “Another focus area right now is to manage a combination of productivity improvements and optimising manufacturing capacities in a high-demand situation,” he added. “All regions have action plans, one example being the recently announced consolidation in China.”

Dometic reported organic sales growth of 11% in the Americas, with total sales of SEK 1.7bn and operating profit of SEK 274m. The company said its marine OEM business experienced “good growth”, thanks to “favourable” market conditions. The RV OEM and aftermarket businesses also reported strong growth for the quarter. The Americas represents 43% of total sales.

Sales for its EMEA territory, representing 46% of companywide sales, were up 18% to SEK 1.83bn. Operating profit was SEK 277m. Organic sales growth represented 15%. Its Marine OEM division reported “strong” sales growth in Italy, France and the UK. Marine OEM sales in the UK were helped by the acquisition of OceanAir in early 2017. Dometic’s RV OEM sales experienced “good sales growth” across all markets in EMEA.

Its APAC territory, representing 11% of total sales, saw sales rise 11% to SEK 424m. Operating profit was up 5% to SEK 94m.

Dometic said OEM marine sales had a “challenging” quarter with slightly negative results, largely due to the “timing” of OEM builds. RV OEM sales reported growth in Australia and New Zealand, while in China and Japan sales growth was in double digits.

Overall, Johansson called the first half of the year “strong” for Dometic. “The outlook for our businesses remains unchanged and we have a full pipeline of activities to take us to our financial targets,” he said.