Welbilt CEO Bill Johnson said he remains “positive” about the long-term growth prospects for the commercial foodservice industry despite admitting that a “recent soft patch” had impacted its performance.
Overall sales during the fourth quarter fell 6% to $382m (£290m) as a result of decreases in the Americas and EMEA segments, partially offset by growth in the APAC region.
EMEA suffered a 15% downturn during the quarter, which the company put down to lower sales to large chains following a high level of roll-out activity in the same period last year as well as a decrease in general market sales. KitchenCare aftermarket sales increased, however.
Mr Johnson said the firm, which owns brands such as Convotherm and Merrychef, had “expected” difficult comparisons in both EMEA and APAC due to the significance of the project work that took place last year.
“In the face of the softening market conditions, we took steps in the fourth quarter to adjust our cost structure to limit the impact on our profitability,” he explained. “Looking at sales, we continued to see delays in some projects by large chain customers globally while the general market was weaker than expected in both the Americas and EMEA.”
Mr Johnson added manufacturing cost inefficiencies decreased sequentially from the third quarter as Welbilt worked aggressively to reduce its cost structure to better align with the current lower volume environment.
It believes it can deliver in excess of $75m (£57m) of run-rate savings by the end of 2021 through manufacturing efficiencies.
It has already completed two stages of a factory transformation program and has just begun a third involving two more plants.
Mr Johnson said Welbilt was anticipating a slow first half of the year, including a mid- to high-single digit decline in its first quarter, but growth in the second half of the year would bring it into its guidance range of -2.0% to +1% growth.
He insisted: “We are positive on the long-term growth prospects for the commercial foodservice industry despite the recent soft patch it is in.
“We are committed to successfully executing our Transformation Program and are confident that our portfolio of leading brands and our innovation pipeline will leave us well-positioned for profitable growth when industry conditions improve.”