Nilfisk maintains growth

Nilfisk, a leading global supplier of professional cleaning equipment and services, has published its Q3 2022 results and reports a revenue of €263 million. This corresponds to an overall reported growth of 9.9% compared to the same quarter last year. Results are primarily driven by strong performance in the Branded Professional business, especially in the Americas and Asia Pacific.

Organic revenue growth was 5.4%, primarily driven by 10.8% organic growth in the Branded Professional business. Earnings (EBITDA before special items) came to€29.2 million in Q3 2022, compared to €34.5 million in Q3 2021.

CEO at Nilfisk, Torsten Türling commented: “In Q3, Nilfisk managed to continue the positive development from the first two quarters of 2022, despite the current global economic slowdown. Growth was driven by our Branded Professional business in all regions and performance was especially strong in the Americas.

“This was achieved despite continued manufacturing constraints, particularly in our main US facility. Our Q3 results were also supported by a healthy demand increase in the Asia Pacific region. In Europe, higher revenue from Branded Professional largely stemmed from pricing actions.”

Global headwinds

Strong inflationary pressures have been a global topic during 2022. These headwinds have translated into declining consumer confidence, which adversely affected Nilfisk’s Consumer and Private Label business in Q3. Consumer products only cover around 10% of Nilfisk’s overall activities and the slowdown in this segment was more than offset by the continued solid demand in the Branded Professional business.

Supply chain challenges easing slightly and pricing efforts catching up

In the quarter, sales growth remained constrained by global supply chain challenges for some critical components like printed circuit boards, motors and rotomolded parts.

Increasing raw materials costs and continued high freight rates were to a larger extent than in previous quarters mitigated by pricing actions. Overall, the margin level improved over the course of the quarter and is expected to carry through into Q4 2022.

Türling added: “Global supply chain challenges continued to constrain growth, but to a lesser extent than in the first half of 2022. Challenges were limited to fewer products and production sites. Demand remained solid for our Branded Professional business and the order book was marginally higher by the end of Q3 than in Q2 2022.”

Strong revenue growth in strategically important US market

The new US Distribution Centre facility is up and running after the former facility was destroyed by a tornado earlier this year. Parts availability and parts flow were still significantly below the levels prior to the incident. Despite these impacts, revenue in the third quarter grew by 14.7% organically in the Americas and by 14.5% in the US.

Pacific and most of Asia experienced strong growth in Q3 2022. This led to organic revenue growth in APAC of 12.8%. Revenue was among other things driven by a rebound from China in Q3 as lockdowns eased.

In Europe, the Professional Floorcare and Aftermarket product lines drove growth in Q3 2022. Branded Professional revenue grew by 6.4% organically, largely due to pricing actions. Demand declined notably in Consumer and Private Label and slowed down across the high-pressure washers and vacuum cleaner segment. Overall, revenue in Europe declined 1.0% organically compared to Q3 I 2021.

Revised 2022 outlook

The full-year 2022 outlook was revised on October 26, 2022, with a company announcement. Based on the first nine months of 2022 and given current visibility the following is expected for the full year 2022:

• Organic revenue growth of between 4.5% to 6.5% (previously 4% to 7%).
• EBITDA margin before special items of around 13% (previously 13.5% to 15.5%).