gasworld’s Business Intelligence provides you with the latest analysis of Airgas’ Q1 2015 earnings reports.
- Total sales at $1.3bn in CYQ1 slower than in previous three quarters at +3%. Sequentially down -2% on prior quarter.
- Organic growth of +2%, combined with +1% contribution from acquisitions. Gases and Hardgoods sales both up +2%.
- Weak performance in key customer segments including Chemicals and Manufacturing, driven by energy prices and strong dollar impacts. Construction stronger, up +5% in Q1.
- Acquired 14 businesses with combined sales of $55m in FY15 – target acquisition of $100m sales in FY2016.
- Reported Operating Income down -2% YoY, its weakest performance for several years, with Operating Margin also below recent years.
- Operating Margin in Distribution segment (90% of business) slightly above the corporate performance, but margins slipped in both Distribution segment and Other Operations (10% of business).
- Selling, Distribution & Administration costs up +4% YoY, including 1% for acquisitions – remainder reflects inflation plus costs of new inititaives, such as e-business platform and expansion of telesales (now approaching 10% of total sales).
- Free Cash Flow significantly down on previous year due to increased capex.
- EPS guidance for FY16 shows increase of 0% to +6% based on organic sales growth in low to mid single digits split equally between volume and price.
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