Europe’s Slowdown A Drag On E&S Public Companies In Second Quarter

Weak results from Europe undercut overall sales growth for the big public foodservice equipment companies, leading to the slowest overall revenue growth for the publics since their combined sales went positive in the second quarter of 2010. Combined second-quarter revenues for the seven companies rose only 0.9%, compared with a 4.8% gain in the first quarter. The five equipment companies posted a slight gain of 0.6%; the two supplies companies’ combined revenues rose 3.1%.

Manitowoc Foodservice, Middleby Foodservice and the ITW Food Equipment Group all mentioned weakness in their European operations in their second-quarter reports. Continued weakness in institutional markets in the U.S. was mentioned as well. A slowdown in sales of cooking equipment was cited by several of the companies.

Manitowoc reported good growth from chains outside the Americas, but noted European cooking equipment sales slowed; it posted a slight 0.1% gain for the quarter. Sales at Middleby Foodservice were up 10.2% overall but 5% organically. It also mentioned stagnating European sales. Standex sales were up 3.9% as refrigeration sales offset a slowing of equipment sales. ITW FEG, the most exposed internationally and the most “spec” oriented of the companies, said sales fell 3.1%. The company said service sales, about a third of the total, also slowed. Rational Americas posted second-quarter growth of 2.2%.

Among the supplies-oriented companies, Libbey reported sales increased 5.1%, as glassware sales remained strong. Carlisle, much more institutions-oriented, said sales were off 0.2%.

Overall sales for the seven companies in the first half of ’12 are up 2.7%, with equipment gaining 2.4% and supplies companies up 5.3%.