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REVEALED: Welbilt’s American sales expose equipment giant’s financial scale

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Welbilt’s 2018 financial results show the company shipped $1.22 billion worth of foodservice equipment last year – with the Americas region accounting for 77% of that figure.

Overall year-on-year annual sales of $1.6 billion represented an increase of 10% (and 5% organically) on the previous 12 months, with the Americas region growing 5% on the same basis. 

However, operating EBITDA for the Americas division fell from $240.7m to £233.1m during the year.

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Total net earnings at the Florida-based firm plummeted by 43% to $75m, although the adjusted net earnings figure only notes a drastically smaller decrease of 0.4% year-on-year, totalling $110.5m.

Bill Johnson, CEO and president at Welbilt, said: “In the Americas segment, organic net sales grew slightly as pricing realization in the general market offset tough comparable sales from large chains and KitchenCare in last year’s fourth quarter.

“Operationally, adjusted operating EBITDA continued to benefit from solid execution of our simplification and right-sizing initiatives, higher volume, improved net pricing.”

In addition to this, Johnson explained that the company’s acquisition of Crem International contributed to its growth although it weakened its margin.

Johnson added: “Our adjusted operating EBITDA margin decreased as these benefits were offset by higher incentive compensation costs, unfavorable product mix compared to last year and higher material cost inflation related to recently-enacted tariffs and from suppliers passing higher input costs to us.

“While Crem had a positive impact on adjusted operating EBITDA dollars, it was dilutive to our margin.”

Looking ahead, the company has predicted that it will grow between 3-6% during the next financial year and has announced it will look at changing operational routines in a bid to further boost business.

Johnson added: “We are undertaking an operational review of our Simplification and Right-Sizing initiatives to validate our long-term growth and margin targets and fine-tune our execution plans.”

In its most recent quarter for the three months to 31 December 2018, sales at the firm rose 11% to $406m and 6% on an organic basis.

The new report shows that Welbilt Americas makes up for 77% of the company’s overall annual earnings, amounting to $297m.

The company’s full-year highlights show that overall net sales had increased by 10% compared to 2017, though like-for-like organic sales only increased by 5%.

There was also a large drop in profits, in year-on-year comparison, with this year’s net earnings plummeting by 43% to $75m.

However, the adjusted net earnings figure only notes a drastically smaller decrease of 0.4% year-on-year, totalling at $110.5m.

Bill Johnson, CEO and president at Welbilt, said: “In the Americas segment, organic net sales grew slightly as pricing realization in the general market offset tough comparable sales from large chains and KitchenCare in last year’s fourth quarter.

“Operationally, adjusted operating EBITDA continued to benefit from solid execution of our simplification and right-sizing initiatives, higher volume, improved net pricing.”

In addition to this, Johnson explained that the company’s acquisition of Crem International contributed to its growth although it weakened its margin.

Johnson added: “Our adjusted operating EBITDA margin decreased as these benefits were offset by higher incentive compensation costs, unfavorable product mix compared to last year and higher material cost inflation related to recently-enacted tariffs and from suppliers passing higher input costs to us.

“While Crem had a positive impact on Adjusted Operating EBITDA dollars, it was dilutive to our margin.”

Looking ahead, the company has predicted that it will grow between 3-6% during the next financial year and has announced it will look at changing operational routines in a bid to further boost business.

Johnson added: “We are undertaking an operational review of our Simplification and Right-Sizing initiatives to validate our long-term growth and margin targets and fine-tune our execution plans.”

Welbilt published its annual financial results after the release of its fourth-quarter figures, ending Dec 31 2018.

The figures show that sales were up by 11% at $406m compared to $366m last year, though organic sales had only risen by 6%.

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Carly Hacon

The author Carly Hacon

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