Fluidra provides update on its financial performance in Q3 and full-year outlook

Rhea-AI Summary

Fluidra anticipates third-quarter sales of approximately 520 million, a 7% year-on-year decline (forex adjusted), with EBITDA around 95 million. The company's total forecast for 2022 is 2.4 billion in sales and over 500 million in EBITDA, reflecting nearly a 10% growth year-on-year. A channel inventory correction and a challenging macroeconomic environment are impacting short-term performance, particularly in North America and Europe. However, Fluidra's simplification program aims to generate savings of about 100 million over three years.

Positive

• Full-year sales forecast of 2.4 billion implies nearly 10% growth year-on-year.
• Savings of approximately 100 million expected from the simplification program.
• Continued pricing power despite inflation.
• Higher aftermarket demand due to an increased installed base.

Negative

• Third-quarter sales expected at 520 million, down 7% (forex adjusted).
• Short-term performance affected by inventory correction and uncertain economic conditions.
• Low consumer confidence in Europe due to higher energy costs and inflation.

• The company now anticipates third-quarter sales around 520 million and EBITDA about 95 million
• Fluidra expects sales around 2.4 billion this year and EBITDA over 500 million

BARCELONA, Spain--(BUSINESS WIRE)-- Fluidra, global leader in pool and wellness equipment and connected solutions, today provided an update on its third quarter financial results and its full year outlook as trading conditions have been weaker than anticipated during the third quarter.

Fluidra now anticipates third-quarter sales around 520 million, down year-on-year 7% forex adjusted; and EBITDA about 95 million. Net Debt/LTM EBITDA leverage ratio is expected at c.2.4x. The company will provide more details on third-quarter results on October 28.

The company’s financial performance is affected in the short term by a higher than expected channel inventory correction in a more uncertain economic environment. Supply chain disruptions coupled with accelerated demand in 2020 and 2021 generated high stock levels along the supply chain. Inflation further accelerated the inventory build-up as, particularly in North America, distribution bought additional stock to beat price increases. Fluidra is now seeing a normalization of inventory levels along the supply chain.

The macro-economic environment is also uncertain, especially in Europe, leading to softer demand, driven by low consumer confidence on the back of higher energy costs, other inflationary pressures and higher interest rates.

Based on the third quarter’s performance and the outlook for the remainder of the year Fluidra is adjusting its guidance for financial year 2022. Fluidra forecasts sales around 2.4 billion this year (which implies a growth of close to 10% year-on-year) and EBITDA is expected to be over 500 million.

Taking action and well positioned for the future

Fluidra has revised upwards the targets of its simplification program, which is currently being implemented, and is now expected to deliver savings of around 100 million over the next three years. This program focuses on redesigning its product offering to deliver cost benefits, streamlining the operations to be more efficient and simplifying the organization.

The business is transitioning towards a normalized ordering pattern in line with historical mid-single digit growth, driven by installed base growth coupled with a higher average ticket due to price and technological improvements in the renewal of pools.

The company has implemented significant price increases over the last 3 years and continues to see a positive read-through of pricing despite cost inflation. Furthermore, Aftermarket demand to serve a higher installed base after the step change of the industry in 2020 and 2021 and demand for commercial pool is expected to provide resilience going forward.

“Like many businesses around the world, we are experiencing a change in our trading conditions. Nevertheless, I am confident that we are well positioned to continue to lead the pool and wellness market with our customer centric approach, high quality and service, broad product portfolio, enlarged geographic footprint as well as our ongoing investment in connected pools and the widest sustainable products offering”, explains Eloi Planes, Fluidra’s Executive Chairman.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221018006191/en/

Sarah Estébanez

sestebanez@tinkle.es

*34 636628941

Source: Fluidra

FAQ

What are Fluidra's expected sales and EBITDA for Q3 2022?

Fluidra anticipates third-quarter sales around 520 million and EBITDA about 95 million.

What is Fluidra's full-year sales forecast for 2022?

Fluidra expects full-year sales to be approximately 2.4 billion, which indicates nearly 10% growth year-on-year.

How is Fluidra addressing its inventory correction issues in 2022?

Fluidra is implementing a simplification program to normalize inventory levels and streamline operations.

What factors are impacting Fluidra's performance in 2022?

Fluidra's performance is affected by channel inventory corrections, increased inflation, and low consumer confidence due to higher energy costs.

What cost savings does Fluidra project from its simplification program?

Fluidra aims to achieve around 100 million in savings from its simplification program over the next three years.