Kenosha, Wisconsin headquartered Snap-on Incorporated saw sales rise in Q2 2018, bolstered by new product launches and ‘industry tailwinds’.
Net sales of $954.6 million increased 3.6% or $33.2 million from 2017 levels. That $33.2 million included $12.1 million organic sales gain (1.3%), $8.1 million acquisition-related sales and $13 million favourable foreign currency translation.
Commercial & Industrial Group segment sales of $337.8 million in Q2 increased $27.8 million, or 9%, from 2017 levels, reflecting a $13.9 million, or 4.4%, organic sales gain, $8.1 million of acquisition-related sales, and $5.8 million of favourable foreign currency translation. The organic sales increase primarily includes higher sales to customers in critical industries and slightly higher sales in the segment’s European-based hand tools business, partially offset by lower sales of power tools.
Snap-on Tools Group segment sales of $411.9 million in the quarter decreased $1.9 million, or 0.5%, from 2017 levels, reflecting a $6.1 million, or 1.5%, organic sales decline, partially offset by $4.2 million of favourable foreign currency translation. The organic sales decrease includes lower sales in the company’s US franchise operations, while sales in the international franchise operations were essentially flat.
Snap-on expects to make continued progress in 2018 along the paths it has defined for coherent growth, leveraging capabilities already demonstrated in the automotive repair arena and developing and expanding its professional customer base, not only in automotive repair, but in adjacent markets, additional geographies and other areas, including extending in critical industries, where the cost and penalties for failure can be high.
“Our second quarter 2018 results demonstrated encouraging progress along our defined runways for growth and improvement,” said Nick Pinchuk, Snap-on Chairman and CEO. “Net sales growth in our Commercial and Industrial Group reflects the strength of Snap-on’s value proposition of making work easier for serious professionals in critical industries beyond vehicle repair. In our businesses serving vehicle repair, the Repair Systems and Information Group again realised strong sales of diagnostics and repair information products resulting from both successful new product launches and industry tailwinds, and we did make some progress in overcoming our challenges in the Snap-on Tools Group.
“We believe the overall macro-economic environment for the vehicle repair and critical industries markets we serve generally remains robust and affords significant ongoing opportunities. Our commitment to our Snap-on Value Creation Processes helped drive a 30 basis point improvement in operating margin before financial services and, coupled with benefits of the new tax legislation in the United States, a 20% year-over-year increase in earnings per diluted share. Finally, our results are only possible with the significant effort and contributions from our franchisees and associates worldwide; I thank them for their ongoing dedication and commitment.”
Snap-on acquired Norbar in 2017.