Illinois Tool Works’ foodservice equipment division has started the year by showing growth, as sales for the first quarter rose 2% to $518m (£400m).
The company, which owns Hobart, Bonnet, Foster Refrigerator and a string of other brands, posted operating income of $129m (£100m) for the period, achieving an operating margin of 24.9%.
Foodservice equipment proved to be a ray of light for the business during the quarter as overall group revenues of $3.6 billion (£2.8 billion) slipped 5% year-on-year.
The company said the drop was largely down to an unfavorable foreign currency translation impact of 3.4%.
Only ITW’s welding division grew faster than the foodservice equipment arm.
Scott Santi, chairman and CEO, insisted the business had still made a solid start to 2019.
“We expanded operating margin to 24.3%, excluding the impact from accelerated restructuring, as enterprise initiatives contributed 100 basis points and price/cost was more favourable than expected. We grew free cash flow 21%, with conversion of 90%, well above our seasonal average.”
Santi said the company had encountered a slow start in January, but sales trends improved across the board as the quarter progressed.
“Looking ahead, our view that continued contributions from enterprise initiatives, improving price/cost dynamics, restructuring benefits, more favourable sales and foreign currency comparisons, and stabilising auto production in Europe and China will all contribute to a stronger operating environment in the back half of the year is unchanged.
“As a result, we remain firmly on track to deliver on our full year EPS guidance. As the ITW team continues to execute on our ‘Finish the Job’ agenda, I am confident that we will continue to deliver differentiated financial performance in 2019 and beyond.”