Dometic reported this week that net sales for the fourth quarter were SEK 5,327 m (6,172 million USD) – a decrease of 14%, of which 13% was organic growth.
Operating profit (EBITA) before items affecting comparability was SEK 465 m (430 million USD), corresponding to a margin of 8.7% (7%).
“In a challenging market environment, impacted by geopolitical and macroeconomic uncertainty in combination with high inventory levels, we continued to demonstrate that we have become a resilient, fast-moving and more effective company. Due to the tough market situation, full year 2023 organic net sales declined by 12%, while the EBITA-margin before items affecting comparability showed solid year-on-year improvements in the second half of the year and ended at 12.5 percent (13.2 m USD) for the full year. Reducing working capital was a top priority and operating cash flow of SEK 5.2 b (2.3 b USD) for the year was our strongest ever,” said Dometic President and CEO Juan Vargues.
“In a seasonally weak quarter, organic net sales in the distribution sales channel declined by 20% as most retailers rebalance their inventories with a temporary larger negative impact on the Igloo business. As expected, the situation in the Service & Aftermarket sales channel continues to improve gradually, and organic net sales declined by 3% compared to a decline of 5% in the third quarter. Net sales in the OEM sales channel declined by 14% organically, mainly due to lower net sales in Marine and in RV Americas,” Vargues said.
“On Jan. 9, Todd Seyfert was appointed as new president for the segment. Seyfert has a vast management experience from the outdoor industry and I am convinced we will accelerate our transformation journey and drive efficiencies and margin improvements in the segment,” he said.
Dometic’s long-term trends in the Mobile Living industry are strong; however it remains difficult to predict how the current macroeconomic situation and market conditions will impact the business in the short term.
“Our planning assumptions from the third quarter 2023 remain largely unchanged; we anticipate the recovery in demand in the Service & Aftermarket sales channel to continue. In the Distribution sales channel, we expect a gradual recovery coming quarters as retail inventories continue to decline. In the OEM sales channel, we foresee a continued weak demand coming quarters. In this environment we will continue to relentlessly drive our strategic agenda to deliver on our targets, prioritize margins before volumes, and at the same time remain agile to quickly respond to short-term market trends,” Vargues said.
“We are very proud of the results that we have achieved in a very challenging 2023. Thanks to our dedicated employees around the globe, we continued to take several important steps on our strategic transformation journey while we at the same time took necessary short-term cost reduction actions to protect margins and cash flow.”