Kennametal reports sales decline in Fiscal 2016 results
August 9, 2016
Kennametal Inc., a global industrial technology leader delivering tooling and wear resistant solutions to customers in the aerospace, general engineering, energy, mining, and construction sectors based in Pittsburgh, Pennsylvania, USA, reported that sales for Fiscal 2016 were $2,098 million compared with $2,647 million in the previous year.
The 21% decrease was stated to be the result of an 11% decline in organic sales, 5% impact of divestiture and 5% due to unfavourable exchange rates. Operating loss was $175 million compared with adjusted operating income of $235 million in the year before.
Ron De Feo, Kennametal President and CEO, stated, “We continued to make meaningful progress to better position Kennametal to outperform over the long term, even though the operating environment remained challenging in the fourth quarter. We are diligently focused on driving growth on the commercial side of our business, as well as aggressively executing the already-announced cost reduction programs. This is in addition to pursuing substantially deeper cost reductions across our North American and EMEA operations.”
The company announced that as part of its restructuring programme, and to take advantage of the growth opportunities of its Widia hardmetal tool brand, it would be implementing a new operating structure at the start of Fiscal 2017 (July 2016). Thus ‘Industrial’ and ‘Widia’ will be formed from the 2016 Industrial segment, leaving ‘Infrastructure’ as the third segment. The restructuring plans are expected to yield incremental savings of approx. $31 million by end of Fiscal year 2017.