Sales of robots for cleaning private pools jumped by 146%; On the other hand, sales to public pools decreased by 14.5%
Mitronics last night published the results of operations in the third quarter of 2020. The company shows a 53.3% increase in sales, which amounted to NIS 252.9 million, compared with NIS 164.9 million in the corresponding quarter last year.
The company’s revenues from sales of robots for private pools amounted to NIS 203.9 million, an increase of 60.8% compared to the corresponding quarter last year. It should also be noted that as a result of the Corona crisis many pool owners in all markets stayed at home and devoted their resources and time to the home space These trends were reflected in an increase in the use of pools, their need for maintenance and significant demand for new pools.
The company’s sales in the robots sector for public pools amounted to NIS 14.5 million, a decrease of 14.5%.
Decline affected by the corona crisis that led to some closure of the hotel and spa industry due to crowd restrictions imposed in various parts of the world.
Revenues from safety products and related products for pools amounted to approximately NIS 34.5 million, an increase of approximately 63.3%, mainly due to the contribution of BF’s sales in the related products field, as well as an increase in sales of automatic covers and alarms for private pools.
Sales in Europe grew by 69% and amounted to NIS 117.8 million, which constitutes 47% of sales.
Sales in the United States grew by 41% and amounted to NIS 83.8 million, which constitutes 33% of sales.
Sales in Oceania grew by 41% and amounted to NIS 35.9 million, which constitutes 14% of sales.
Sales in the rest of the world grew by 49% and amounted to NIS 15.4 million, which constitutes 6% of sales.
The effect of the changes in the exchange rate of the currencies on sales compared to the corresponding quarter last year amounts to a negligible decrease of approximately NIS 0.8 million in sales, and an increase of NIS 1.1 million in operating profit, mainly due to the weakening of the dollar. An average strengthening of 0.5% in euros, which accounted for about 47% of sales, and the Australian dollar, which accounted for about 15% of the company’s sales, strengthened by 1.3%.
Gross profit amounted to NIS 103.1 million, an increase of 59.2% compared to the corresponding quarter last year. The gross profit rate increased by 150 basis points to a level of 40.8% compared to 39.3% in the corresponding quarter last year. Advantages of size in production beyond the fixed, continued BOM reductions and a positive effect of currency exchange rates mainly the euro and the Australian dollar.
R&D expenses amounted to NIS 7.7 million, an increase of 44.4%. The increase is mainly due to the continued development of new robot lines and development costs in the field of monitoring, control and treatment of pool water. R&D expenses in respect of the monitoring and control system amounted to approximately NIS 1.9 million in the third quarter.
Selling and marketing expenses amounted to NIS 28.8 million, an increase of 21.9%. Selling and marketing expenses increased at a moderate rate relative to the increase in sales. Most of the increase is due to additional staff in most of the territories that have occurred over the past year, an increase in sales promotions and digital marketing costs, and a decrease in travel expenses abroad, conferences and seminars.
The rate of sales and marketing expenses decreased to 11.4% of sales compared to 14.3% of sales in the corresponding quarter last year.
General and administrative expenses amounted to NIS 23.3 million, a total increase of NIS 5.1 million. Most of the increase is attributed to an increase in information and manpower systems in favor of supporting the company’s Mitronics 2025 strategy.
The rate of operating expenses in the quarter decreased to 23.7% of sales compared to 28.6% of sales in the corresponding quarter last year.
Operating profit amounted to NIS 43.2 million, an increase of 146.2% compared to the corresponding quarter. The operating profit margin rose to 17.1% of sales, compared with 10.6% in the corresponding quarter last year.
Financing expenses amounted to NIS 6.9 million, compared with financing income of NIS 1.7 million last year. The increase in net financing expenses is due to the effects of the Group’s currency exchange rates, revaluation of hedging transactions and an increase in interest rates due to an increase in credit volume. Forex and revaluation of investment portfolios.
Income taxes amounted to NIS 6.9 million, an increase of 56.7% compared to the corresponding quarter last year. The decrease in the effective tax rate from 23% to 19.1% is mainly due to a change in the profit mix between the Group companies.
Mitronics ends the third quarter of 2020 with a net profit of approximately NIS 29.4 million, an increase of 98% compared to the corresponding quarter last year.
Eyal Trier, CEO: “We conclude a quarter and nine months with particularly impressive double-digit growth reflecting the lengthening of the season in the major markets in the US and Europe, a strong season opening in the southern hemisphere markets and a continuing trend of increased demand for robots to clean private pools. From the owners of the pools to stay at home, the use of private pools has increased and the need for their maintenance has increased significantly.The global presence balanced in about 65 countries around the world These significant assets, combined with excellent operational assessments and the support and cooperation of all the Company’s employees in Israel and around the world and the business partners, have contributed to our ability to fully utilize the trends in the markets.
The company continues to work resolutely to realize the enormous potential in all markets and in particular in the American market where we grew by 41% in the quarter and 32% in nine months. This growth rests on excellent collaborations with leading companies in the territory, and the capabilities we have built in the online channel that help us in general and the United States in particular.
The acquisition of a distribution company in Germany that we made a few months ago contributed to the company’s performance in Europe, we are very pleased with the acquisition and combined with the existing distribution system we are advancing to realize the great potential in the German market and Europe in general.
Despite the achievements and positive trends, we managed our spending budgets more faithfully while balancing the risks and opportunities, as a result of which we achieved a significant improvement in profitability.
At the end of 2017, the company set a long-term goal of NIS 1 billion and operating profitability in the range of 16% to 19% in 2021. The company estimates that it will precede the achievement of the long-term goal by one year and achieve it by the end of 2020.