Strong sales into general market dealers and distributors helped Welbilt offset tough comparable sales from large chain rollouts and lower after-care service during the first quarter of the year.
Overall net sales increased 7% year-on-year to $375.3m, but the company faced an uphill task in the Americas due to the high level of orders related to restaurant chain projects in the same period last year.
Organic net sales at the business, which owns brands such as Convotherm, Garland and Frymaster, therefore decreased regionally despite solid demand from the dealer channel.
The Crem acquisition contributed $20.8m of net sales in the quarter and foreign currency translation had a negative impact of $8.1m.
President and CEO, Bill Johnson, said: “Both EMEA and APAC delivered double-digit organic net sales increases while the Americas decreased due to lower large chain sales following 2018’s rollouts. Operationally, our adjusted operating EBITDA margin was particularly suppressed in the quarter primarily due to higher material costs and tariffs, the dilutive impact from the Crem acquisition and increased FX/Other expenses. The majority of these cost issues are either specific to the first quarter or will be mitigated by our March pricing actions as we proceed through the year.”
Johnson insisted the group has “good top-line momentum” following five consecutive quarters of solid organic growth.
“The Transformation Program’s operational review we just concluded gives us confidence in our ability to deliver the 2019 adjusted operating EBITDA margin guidance and to execute the detailed plans to drive profitable growth going forward.”