Kennametal has reported sales of US$2,647 million for 2015, compared with US$2,837 million last year. Sales decreased by 7%, driven by 5% organic sales decline and 4% unfavorable currency exchange, offset partially by 2% net increase from prior year acquisition and divestiture activity.
Operating loss was US$358 million, compared with operating income of US$263 million in the same period last year. Adjusted operating income was US$242 million, compared with adjusted operating income of US$307 million in the prior year.
‘In a challenging market environment, our efforts to lower costs, improve efficiencies and generate higher cash flows are having a favorable impact,’ said Kennametal president and CEO Don Nolan. ‘As we move ahead, we will remain focused on aligning our cost structure, expanding margins and investing in core growth opportunities.’
Weak demand
In Q4, sales were US$638 million compared with US$772 million in the same quarter last year. Sales decreased by 17%, reflecting a 10% organic sales decline, a 7% unfavorable currency exchange impact and a 1% decrease from a prior year divestiture, offset partially by a 1% increase due to more business days. Excluding the impact of currency exchange, sales remained relatively flat in general engineering, while sales decreased approximately 2% in transportation, approximately 7% in aerospace and defense and approximately 22% in energy. In the general engineering market, sales in the indirect channel grew, offset by weak demand in the energy markets. Sales in the transportation market were adversely affected by lower volumes in all regions, while aerospace and defense sales decreased due to the company exiting lower margin businesses, partially offset by production growth in aircraft frames and engines.
‘In fiscal 2016, we remain focused on increasing margins through portfolio simplification, footprint restructuring and reductions in G&A costs,’ added Nolan. ‘At the same time, we continue to invest in innovation to fuel organic growth and expand our return on invested capital to the double-digit level as part of our long-term plan.’
This story is reprinted from material from Kennametal, with editorial changes made by Materials Today. The views expressed in this article do not necessarily represent those of Elsevier.