Global school, stationery, art and office products manufacturer FILA has said that its US operations are back on track in early 2019 after experiencing internal issues last year.
In a recent conference call to present the group’s 2018 results, FILA CEO Massimo Candela said that the performance at its Dixon Ticonderoga business in the US had been negatively impacted following the $340 million acquisition of arts and craft company Pacon in June of last year.
Candela said that service levels were now back to normal and that renewed conversations were taking place with Dixon Ticonderoga customers, with a view to winning back product placements. As of the end of February, the division was on track to achieve its 2019 targets, he added.
Pacon moved onto an SAP ERP platform at the end of last year, and the plan is for Dixon Ticonderoga to do the same on 1 May this year. As a result of these “aggressive” targets, which will mean a single order and a single invoice for customers, Candela said the group would be able to achieve cross-selling synergies much earlier than originally forecast.
FILA’s Canson operations in the US have now been merged into Pacon, with a Canson facility in Massachusetts closing and production shifting to Pacon’s site in Wisconsin.
In Europe, there was also some disruption, and additional working capital requirements, following a move to a new centralised distribution centre in Annonay, France, but this facility is now performing in line with expectations.
The growth engines of FILA’s top line are Asia, especially India, and Latin America, which were both up in the double digits in 2018, although more than 75% of the group’s sales still come from the North American and European markets.
School and office products represented just over 67% of FILA’s total sales in 2018, and these product categories remained relatively flat during the year, down just 0.3% versus 2017.
Below is a summary of FILA’s 2018 financial results (with year-on-year comparisons):
Adjusted core business sales: €603 million (+18% as reported, +0.5% organic)
Adjusted EBITDA: €97 million (+20%)
Adjusted net profit: €27 million (-6%)