TTI Delivers Record Sales, Gross Margin and Profit for 2016

HONG KONG —┬áHong Kong-based global power equipment and floor care company Techtronic Industries Co. Ltd. (“TTI” or the “Group”) (stock code: 669, ADR symbol: TTNDY) announced its results for the financial year ended December 31, 2016.

Revenue increased 8.8% over 2015 to US$5.5 billion, through continued investments in new product development, R&D and marketing. Revenue before currency adjustment rose 9.8% with all geographic regions delivering solid growth.

Its core strengths of innovation, execution and speed to market are the prime competitive advantages driving TTI’s success. Gross profit margin improved from 35.7% to 36.2% driven by new product introductions, mix, operating leverage and productivity gains. Earnings before interest and taxes, increased by 12.6% to US$450 million, with margin improving by 30 basis points to 8.2%.

Shareholders’ profits rose 15.4% to US$409 million, with earnings per share increasing by 15.2% over 2015 to US22.32 cents. Working capital as a percentage of sales remained low at 16.4% and our gearing at 5.2%. The Board is recommending a final dividend of HK30.00 cents (approximately US3.86 cents) per share, which will result in a full-year dividend that is 27.4% higher than last year.

– Revenue increased 8.8% to a record US$5.5 billion
– Revenue adjusted for foreign currency grew 9.8%
– MILWAUKEE business continues to grow with strong momentum
– RYOBI business delivered double-digit revenue growth
– Gross margin expanded from 35.7% to 36.2%, an increase of 50 basis points
– Net profit increased 15.4% for the year, delivering double-digit growth for nine consecutive years
– Efficient working capital management at 16.4% of revenue

TTI’s largest business, Power Equipment, had another exceptional year with sales growth of 12.6% to US$4.5 billion, accounting for 81.6% of total sales, and an increase in operating profit of 13.4% to US$430 million from US$379 million in 2015.

Sales from the Floor Care and Appliance business slightly below last year by 5.3%, but delivered encouraging growth in the second half in North America. The Group is confident that the strategy is driving innovation through product development with technology-driven solutions and a focus on cordless and professional cleaning will drive the turnaround in the coming years.

Mr. Horst Pudwill, Chairman of TTI, said, “I am delighted to announce that 2016 was our seventh consecutive year of record sales and ninth consecutive year of record profit. We achieved this with a disciplined focus on our four key strategic drivers of powerful brands, innovative products, exceptional people and operational excellence which enabled us to further drive our financial performance and build on our business milestones.”

Mr. Joseph Galli, CEO of TTI, commented, “Our new product flow will continue and I am extremely excited about the innovation that we have coming which will feed into our product pipeline well into the future.We will continue exploring new strategic initiatives while at the same time expanding our core business into new categories and geographies.” –