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Thanks, everybody, for joining our call, and welcome to everybody this morning. We are going to have a presentation with the following agenda. We'll look at what's been happening in Q1, then -- I'm accompanied today by our CFO, Raphaël Bauer, who will take us through our financial results, and then we will look forward and cover some key measures and initiatives that we are focused on, and then I will summarize at the end. And then, as ever, we will open the call for questions.So if I was to summarize the first quarter, we had slight organic growth. I would probably say its flat organic growth at EUR 568 million. Within that number, to be honest, we had some mixed results. I was -- we were -- had lower-than-expected growth in EMEA, which is -- was disappointing. Not all of the markets went down. Some went up, some went down, but Raphaël will take us through that in a little more detail. In North America, if I exclude the negative calendar effect, which was really driven by where Easter was in the quarter, we were flat. Within that, however, we saw a strong growth in our Resilient business and some weakness in our soft surface business, which also adversely affected our EBITDA for the quarter.As I said, it was mixed. I was very pleased with the growth we saw in our Sports business and also the growth we experienced in the CIS, APAC and Latin -- Latam.As it relates to EBITDA, we came in at EUR 30 million, which is down from the EUR 52 million of the last quarter. Some of the headwinds came in line with our expectations, such as raw material prices, the currency effects, although the recent volatility of the ruble is something that we'll work on going forward. Lower activity in EMEA and the lack of growth in some of our North American business, that adversely affected the EBITDA and was lower than our expectations -- were lower than our expectations, therefore it's disappointing.Having said that, we have wasted no time, and we put in place a clear set of actions that are addressing both the top line and costs, which we'll go into in a little bit more detail as we go forward.Against this backdrop, however, and again, we'll go into more detail, [ our ] markets are still well oriented as we look to the future. But that would be an overview of how we saw the quarter. We'll obviously cover that in a little more detail. I did want to just take a step back for a second and refresh everybody's mind that we have a balanced strategy. A strategy that says we are balanced by geography, by product. That has helped us, to a degree, that strategy, in the first quarter, because whilst we've seen a lack of volume in some areas, we've seen other areas counterbalancing that. So I think our strategic approach of balance is right, and it continues to help us going forward as does the broad product portfolio and the fact that we are able to address pretty much all of the end markets to give ourselves balance, not just geographically but by product and by end use.With that, I'm going to hand over for a more detailed review of the quarter to Raphaël.
Good morning, everyone. As Glen mentioned, we reached stable organic growth over the quarter. The first quarter is traditionally our lowest quarter in terms of activity, and this year, it's quite contrasted. We've seen good growth in the CIS, strong momentum in Sports; North America is flat once restated from the calendar effect,, and EMEA was down and lower than expected.In terms of reported sales, we are down 7% compared to last year due to currency effects. That's mostly the weakening of the U.S. dollar, but also of the Swedish kronor and the Brazilian real that are impacted negatively.Looking at EBITDA, we went down to EUR 30 million EBITDA, with major headwinds and, first of all, higher raw material prices. This is what we had expected. And actually, it's important to underline that the first quarter is the least favorable in terms of comparison. You'll probably recall that last year, our raw material prices increased rapidly in the second quarter of the year, therefore having stabilized towards the end of 2017. Now in the first quarter of 2018, we are at a point in time where the comparison is the least favorable. It's the worst. Hence, this significant impact of EUR 10 million. And it's high, but it's in the ballpark of what we expected, and we're still confident that on a full year basis, the full year impact of raw material cost increase will be in the same -- around the same magnitude as in 2017, which is what we have indicated already in the full year result release.In order to counter that, we have increased selling prices, and we see some pass through on the quarter for almost EUR 2 million, and that will gradually strengthen throughout the year.Now the second headwinds that we will also, to some extent, anticipating, are currencies. The dollar has been weakening. And also the ruble, compared to last year, which was at a high point in the first quarter and is lower this year, impacting us negatively by EUR 2 million. And again, here, we have measures in terms of a selling price that have been taken and that will be taken.Now the volume and mix effect is very significant on the quarter, it's minus EUR 9 million. And here, what we are seeing is really lower sales in regions and product lines that are more profitable than the average, namely in EMEA, and I will comment it on the next slide in more details. We see lower sale in France, in the Nordics; and in North America, lower sales in commercial carpet. Hence, the significant impact on this volume and mix column.Last, looking at the last bar on the chart, salary increase and SG&A. What we see in this effect is roughly 50% of this EUR 8.6 million are salary increases. They are in line with what we expected.The rest of the impact is investments in SG&A for new collection launches. For instance, in EMEA, we are fully renewing the vinyl commercial product range. And we also have some one-offs. It's a variety of small impacts, but the sum of those one-offs are around EUR 3 million. Those will not repeat in the rest of the year.Switching to EMEA. But bear in mind that EMEA last year had a very strong quarter, up by 7% in terms of organic growth. And against this high-comparison basis, organic growth this year is minus 4.6%, with a negative calendar effect of minus 1.6% due to Easter being in March this year. In addition to that, in EMEA, we've been penalized by poor weather conditions across the region that have delayed some projects in several countries.When I look at it by main areas, the Nordics that we expected to be slower this year has been down. They -- what we see that in -- we see residential sales have decreased. We see, for instance, that the credit conditions have tightened in Sweden, in particular.In France, on top of the weather conditions, we've seen destocking at some important customers. But we've seen also weakness in social housing segment, following the budget cut of last year, and that starts to delay projects in social housing segment.The U.K. has also been down after a very good year in 2017. We've finally seen some impact of the more difficult conditions in the U.K. following Brexit. We've seen, for instance, construction output being significantly lower in the first months of the year. We've seen project delayed in the wake of a major contractor, Carillion bankruptcy. And we've seen also some destocking at major customer. But here, we also see that the others are [indiscernible] so it's probably more a timing effect.Now we've got also good growth in South Europe, namely Italy, Spain and Portugal. We've got good growth in Poland and good performance in the Netherlands. And again, across the area, LVT has developed further very well, so that's also positive.The North America, as I mentioned, was flat at constant days. We've seen good growth in our residence business. That's driven both by the accessories, where we have a leadership position in North America, and also by the success of our modular products and, in particular, the rigid board, this new form of LVT that we launched last year and that is developing very well in the residential sector.On the other hand, commercial carpet was slower. The information we have is that the market was down, and we see, more specifically, some issues in education, where we believe this is more a timing issue. We've seen -- we see project in the pipeline, so it's more first quarter issue. But we've seen also a weaker Office segment. Looking at the data published by the U.S. Census Bureau, the construction spending in the Office segment in the last 6 months was below last year -- below the previous year. But we saw in the last month an improvement, and we know there has been a lag between this indicator and our sales. So that's a reason to be more positive for North America going forward.Now when we look at North America, it's also a geography where we have more inflation on raw material and freight. And that's why we announced an additional selling price increase between 5% and 7%, that will be effective 1st of May.In the CIS, we saw further positive development in volumes and mix, and that's really fueled by the good level of consumer confidence and real wages that have kept increasing until March. Of course, you've all noticed that there was recent volatility in April, on the ruble, on the back of geopolitics. We're watching the situation very closely, and we will adjust our prices when we see -- once we see ruble stabilizing. For the moment, this has no impact on our business. It's too early to make a comment going forward.In Asia-Pacific, we've had a good start in China, slower in Australia. But in Australia, we see a good pipeline of projects. And we also are taking price increase measures in Australia to counter currency and raw material regulation.And in Latin America, we saw good organic growth in Brazil.Sports had a very good start to the year. Not only turf is growing, but also landscape in North America. The acquisition we did last year in Australia is contributing very nicely, and we have a solid backlog in all businesses, so we are, at this stage, confident for the full year in Sports.Now if I had to summarize this first quarter, as Glen mentioned, I would say that it's slower than we expected due to EMEA and commercial carpet in North America. But all markets are not fundamentally weak. Our EBITDA had been impacted by the shortfall of sales in EMEA and North America as well as by raw material and currency. But to counter that, we have a set of measures both on top line and on cost that Glen will now present in more detail.
Thanks, Raphaël. So if we go from where we are to where we're going, maybe let's talk about some of the things we're doing. I think I should focus first on cost. We've taken some immediate actions on cost, which are already having a beneficial effect on our bottom line, and we'll continue to do so going forward.To give you a little bit of flavor for that, we've obviously attacked discretionary spend. In some businesses, we've delayed salary increases and we're looking at the overall headcount. And in certain areas, we're postponing, not replacing, headcount in areas that aren't affecting our ability to grow. And on an ongoing basis, we're reviewing our cost structure with a view to enhancing our profitability.To give you a flavor, maybe, for that, as an example of the kind of activity that we're doing, we had a loss-making line in our Chinese plant. We closed that line. It didn't affect our growth at all. In fact, we grew, but enhanced profit immediately. And we're taking that kind of rifle approach to areas where we can improve on cost. And we're seeing the effect of that coming through now. Having said that, we are not moving away from our goal of growth. We have to continue to grow our business, and we will continue to grow our business.On the selling side, we have increased selling prices, and we're seeing some of the carryover effect from 2017. In North America, where the raw material cost environment is higher because this isn't a global market, the cost is much more regional, we have announced a further 5% to 7% increase in prices in both our businesses, the resilient and the soft surface business, which will come into effect in -- on May 1.Complementing those, I know I've talked over the last few quarters about continuing and increasing our investment in new products because new products fuel growth. New products fuel profitability. And we are beginning to see the benefits of products that we've launched recently as a buildup to speed. An example here in EMEA would be ECO base, which is a cradle-to-cradle gold product, which uses recycled calcium carbonate on the backing. And is an example of us continuing our drive against one of our core values of sustainability. But linking our ability to be sustainable with growth and driving profitability to the bottom line. And we've seen a significant uptick in ECO base sales during the first quarter of Q1. We refreshed our range of LVT products, the fast growing area. And again, the -- we've done this with new designs, new colors, and we've seen double-digit growth above market in our LVT sales in EMEA in the first quarter.In North America, as we talked about last year, we launched a single rigid -- a semirigid board product called ProGen. And in this area, sales have exceeded our expectations, and we had pretty high expectations, and we're almost doubling the level of sales Q1 this year to Q1 last year. And it's on a very positive trend.For our Education & Healthcare segment, we've upgraded and introduced Optima range of products, and we're seeing sales here, again, up double digits. All of which are good signs that we're beginning to see the effect of our investment in new and innovative products. And as we've said all along, you launch a product, but it takes anywhere from 12 months, 18 months to 2 years to really start to accelerate because most of our products, not all of them, are aimed at the commercial market in these 2 businesses. And that does take a while to go through the specification process to the order book and then can get recognized in revenue.And this is something that we are continuing. We have a robust pipeline of products for H1. We've highlighted here just a few examples. In EMEA, we will be launching our rigid board products. They will go live shortly. And this is a range of products where we've been successful in EMEA -- in North America. We know -- we believe we will be very successful in EMEA as well, so we're launching that. We're also fully upgrading our HE line, our HE range of products, and this is really the first I think full upgrade they've had in the last 5 years. Initial feedback from our customers has been very encouraging. Very encouraging, indeed.In TEE, where we've had a strong quarter and also a track record of being the innovative leader, we've launched a new range of laminate products, which, very interestingly, combine for our customers the ability to create a room with different lengths and different widths of plank to create a unique aesthetic but without the need to drive up high level of SKUs or inventory because it's a form of mass customization, something that more and more of our products have. And all of those products are coming off of the line we invested in, in [ Matishi ]. So we are seeing the beginnings of the effect of the investment we made in [ Matishi ] with innovative new products.In North America, in Carpet, we've launched a new range of products aimed at the health care and work place market. And probably, more specifically, there is an area of the commercial carpet market in North America where I think we were probably underweight. It's called -- it's colloquially known as the Main Street market, which is the small and not our specified market. And here, we are leveraging some new designs, but also our global manufacturing footprint because we'll be making the product in our carpet factory in Suzhou. And those products will come live at the end of -- well, the end of this quarter and early into next quarter. And again, building on our sustainability values, if I look to our Sports business, growing well. We've introduced a range of infill called PureSelect, which is basically taking olive cores, and is a form of material to act within the -- infill this within the Sports turf business. It has several benefits. It's obviously a fully natural product. It has a good absorbency and makes it comfortable surface to work on. It's also very easy to maintain. It doesn't need as much watering and it also has reduced heat transfer, if the product -- if the field is going to be in a particularly hot climate. All of these products which we've been launching or will be launched are getting very positive response from our customers. And I think it's important we remain -- we apply context to the first quarter. We were slow in some areas. We're not changing our philosophy of developing new products to expand our reach in our marketplaces, and they will fuel, and are fueling medium-term to longer-term growth.If I was trying to conclude, which is obviously what I'm trying to do, because that's what the slide says, we did have a slower-than-expected sales in EMEA. Some of that, as Raphaël said, was destocking. Some of it was to do with adverse weather conditions, particularly in our French business, which was lower than we would expect. However, when we're talking to our customers, our customers order books are filling in the way that they would expect them to do, which is the basis for optimism as we move into Q2, that we would expect France to return, for example, to growth.In North America, our business in Resilient continues to be strong. In carpet, we saw some downturn, some of which we believe is the market. I also believe that we underperformed the market, if I'm candid. We are overweight in certain sectors, which [ is slow. ] One of which was education. However, whilst education was slow in Q1, again, our customers are reporting that their education order books are filling. As you all know, for the education sector, you have to deliver the order and get them delivered and installed during the school vacations. And we anticipate the uptick in the education sector as we go forward.Overall, our markets remain well oriented, and there's no reason why we should not expect to return to growth both in Q2 and over the course of the full year. Having said that, we have taken immediate cost measures, which are designed to mitigate some of the shortfall of Q1, but also to enhance our EBITDA going forward. We're taking them across the board, and we're continuing to look at opportunities that we can take to further enhance that process.Underlying that, we are seeing very positive response to the products we have launched. We have a strong pipeline, and these actions will continue to drive growth as we go forward. And we continue to have a very robust pipeline, and this will drive growth in the future.We still face raw material increases, and we are passing those aggressively in North America. And in addition, over the last few weeks, we've seen significant volatility in the ruble. We will respond to that in the normal way. The ruble is now looking like it's stabilizing, and we would expect that we will raise our selling prices -- announce a raise in this quarter to reflect the changes affected by the ruble. And again, that will enhance our profitability going forward.And on that note, I will stop the presentation and hand over for questions.
[Operator Instructions] And our first person from the queue is Elodie Rall from JPMorgan.
So I have a couple. First of all, for France, I mean, you mentioned that volumes were down because of weather and destocking. Is it possible to split the impacts of the decline between weather and destocking? And what do you think the underlying trends is actually for France given your expectations for a bounce back from Q2? Okay. Question two, on price [ cost. ] So obviously the price was negative in Q1. EBITDA, you had a positive impact [indiscernible] from prices of EUR 1.7 million, but a negative impact of EUR 10 million from variable cost. So my question is, do you expect to close that gap during the year through the price increases that you have actually announced already for Q2? And last question, please, on fixed cost this time. We've seen that Q1 has already amounted EUR 9 million, which is basically the amount that you posted for the whole year last year. So what should we expect for the year?
Okay, thank you. And I also thank you for making 3 out of 2. That's a very good principle. If I just went to France, it's very difficult to split how much was delayed by weather, how much was delayed by destocking. So maybe, if I focus on why we have some confidence going forward, I think the underlying French economy is sound, that the reports we're seeing for construction output in France for the full year are positive, which is why, I think, we're positive about that. Also, some of the destocking we saw, I'm sure was a result in the reduction in the budget on social housing made in the last part of last year, which affected the first quarter, inventory came down and then we see them building. And really, the key arbiters is that our customers are saying their order books are filling, which is in line with the market moving in a growth perspective. So that's why we have some confidence that we will be able to return to growth. And we're also well positioned in France as well. So I would think that's why we're confident about France. If we look at price, then maybe I'll let Raphaël handle that one.
Yes. When we look at pricing and raw material, as I explained for raw material, what we are seeing now is not a general increase conversely to last year, but it's more different trends according to the regions. In terms of raw material gross impact, we expect for the full year to be in the ballpark of the impact that we're faced with last year. But this year, we have both the price increase implemented in the second part of last year and also the additional price increase that we are announcing in some regions where necessary, the most significant one being in North America, 5% to 7%. To make up both for raw material inflation, mostly on the resident business side, plasticizer and PVC, but also additional freight cost. So we maintained our objective at group level for 2018 to be even between raw material price increase and the positive benefit of selling price pass-through. Now looking at your third point, Elodie, on the SG&A, what we see in the Q1 is indeed a higher impact than we have usually. What we have here is -- half of it is salary increase, so that's the normal impact and that is what one can expect on a full year basis. When we compare that to last year volumes in the same bar on the equivalent charts comparing '17 to '16, last year we had the positive settlement with a competitor in Sports by $12 million. That was improving this category, so to say. So this year, we won't have that, and it will be a difficult comparison basis for Sports in the second quarter because this settlement was in the second quarter of 2017. Now if I look at the rest of the impact this year, as I mentioned, we have some investment to fuel growth and the launch of our new collections. That, mostly, is something in marketing. And then in this quarter, and that's just for this quarter, we have around EUR 3 million of one-off that will not occur in the next quarters.
Now we'll take our next question from the queue with Keith Hughes from SunTrust.
You called out raw materials in North America being a problem. I think you may have said this in the last answer, but is the bigger issue in North America the [ input ] selling into Resilient products versus what's happening in your commercial corporate business?
In terms of -- hello Keith. In terms of raw material, you mean?
Yes. In terms of raw materials. Is that where the bigger headwinds are coming from?
Well, at this stage, as you know, things are depending on nature of raw material, but if I want to draw it in a very general manner, yes, where we see most of the pressure is on the resident business. That said, last year, there was significant increase in nylon prices, as you know. And therefore, the selling price increase that we announced for 1st of May is across the board for both Resilient and carpet. Once we said that, in Resilient, this type of price increase is moving faster because we grow through distribution mostly; whereas in carpet, as we bid for projects, there is a longer lag for the price increase to be effective.
Okay. And second question. As you go into the second quarter in North America, are you starting to see your volumes improve? We had some weather problems in North America in the first quarter. Did that impact the quarter? And has it improved in early -- in April so far?
Yes. Firstly, yes, we did see some areas of the country -- as you know, we had a stickier start in weather in certain parts of North America. So that did have some impact. The -- as we look forward, it's always difficult because as you know, in our business, Keith, we only -- we have a very short view on the order book. Having said that, we are seeing some early positive signs of intake. As we always say, we don't want to take that to the bank, because with a 1-month order book, you can have some positivity in April, and it can turn around in May. But to give some flavor, I think it would be reasonable to say we are seeing more positive signs so far with all the caveats that I just placed around that from being able to take one swallow and then say that's a fantastic summer.
Okay. Final question. The growth in Sports flooring is outstanding -- or Sports products. Is -- do you have a sense for what the market has grown? It just looks like share again, but do you have any sort of feel for where you stand versus the competition there?
It's difficult to say with any degree of accuracy right now because, as you probably know, in the Sports business, particularly the FieldTurf business, the first quarter is where most of the bidding goes on. Now we are being very successful. I must admit that. So we have a belief that we are gaining share, which we're very positive about. As you can see, we have great products, we are introducing new innovation, which is driving that. And a product that performs. So I would think we are performing better than the market. But in terms of being able to say that definitively, I'd like to hold the victory party until maybe later in the year when the bidding season is finished and we get a bit more stability so we can get a better perspective.
And now we take our next question from the queue, Mehdi Boudokhane from Raymond James.
So I have 3, if I may. First one on the Nordics, could you give us more color on your performance there? You already flagged that there should be some slowdown but it seems to have decelerated stronger than expected. Secondly on the CIS, you did highlight current volatility in the Russian ruble. Apart from oil price, current situation seems to look like what the country experienced a few years ago with ruble depreciation followed by some downturn. Based on the visibility you have in the country, could you give us your thoughts on the current situation there? And last one, could you give us an idea of restructuring costs to expect linked to your cost cutting plan?
Okay, thanks for the questions.
Thank you, Mehdi. Just on Nordics, indeed we had flagged that the growth that we have known in the past 2 years was quite outstanding, particularly in the new build and particularly in residential. So we expected some slowdown. Now things have moved fast in the first quarter; weather has impacted also to some extent. And we've seen also some contraction in credit and toughened credit conditions. So that's impacting residential refurbishing and residential new build. Now it's not -- I mean, it's not that the economy is not solid. So we're not planning for a major downturn in the Nordics as we speak. But it's a bit early to give more precise trend. We'll see how it evolves.
And also, Q1 is always a small quarter, so it's very difficult to deduce a macro trend from a good or a bad level of sales in Q1 because there are several things that can affect it. If I go on to the question about -- to Russia, yes, you're right, there has been volatility. I'm not so sure right now that there's a direct correlation between the ramifications of ruble movement back -- what was it, about 3, 4 years ago? I think the ruble volatility was based on some geopolitical issues. I think, the Russian government has built quite a large level of foreign exchange. So I don't think there is going to be, at the moment, a major geopolitical -- a major problem there. The oil price is beginning to go north, which, again, starts to mitigate the potential problem, I think, you were probably highlighting. And at the moment, consumer confidence is in a positive area. So given all of those, whilst there is a level of volatility, our view for the year is not negative. And then, the last question was around restructuring. At the moment, the measures we've taken won't incur any material restructuring costs.
And now we take our next question from the queue, Pierre Bosset from HSBC.
Two questions. First of all I just would like to come back to the selling price increase. You mentioned first of all that you will be increasing price in North America shortly. Are you planning to do anything in Europe during the rest of the year? That's my first question. Secondly, when I look again at the difference between the positive price increase impact on the EBITDA and the raw material, my question is whether or not the previous selling price increase that you have input in 2017, are they sticking to the level you expected? Or is there any loose cannon or any players who's going for market share rather than price increase either in carpet or in resident, either in the U.S. or in Europe? And my vary last question is on Russia. Just an update on Mohawk. If you are seeing them more active in the market.
Okay. So we'll probably do this as a tag team between the two of us. Selling price -- we're just looking at each other, who is going to -- you start, and I'll follow.
So selling price increase, as we said, yes, we will -- we have announced selling price increase that will be effective 1st of May, in North America. In EMEA, as you know, its many more countries, and there is no across the region announcement, and it's a negotiation country by country. In EMEA, it's true, and this is what we indicated already that it's taking more time and it's more difficult to pass through. That's for a fact. What we see in EMEA is also intensifying competition in some products. In particular, in modular product from Asia. But we're seeing some same price increase even in countries where it's difficult. In the U.K. last year, we had price increase in Nordics. So for the moment, in EMEA, as the raw materials are, generally speaking, stable, I would say, we are not planning for an across-the-board additional price increase as we are doing in North America.
Yes, I would say in terms of Europe, it's more a case of ensuring we pass the prices through in what is a more fragmented environment probably than North America. And because North America has higher raw material cost pressure, that's why we've moved the prices. In terms of loose cannons, I don't think we see any specific loose cannon. Within Europe, maybe we're seeing a little bit of pressure from Chinese imports, which are at a lower price level. But against our major competitors, our rational competitors, and I wouldn't want to categorize anybody out there as being a loose cannon at all. In terms of the competitive environment in Russia, I wouldn't want to comment specifically on any competitor. I'd rather comment on our own performance. I'm happy that we're growing. Our indication is that our market share performance is positive. So the way we're performing, servicing our customers with new products, they're reacting positively. I think that's probably the best way to give our perspective on that particular question.
And if I may ask a question again on the previous price increase of 2017, are they -- have they all stick at the level you expected?
It's a good question. I would say they are sticking. Some of the price increases, which are more through distribution, have stuck faster. The products that are going through the projecting side of our business, which is more in, let's say, the Carpet business, take longer. As a rule of thumb, we tend to say the distribution business is 2 to 5 months, and we'd say the project business is 6 to 9, even up to 12 months, where you have longer-term projects. So we're beginning to see it in the project business. We're seeing it more effectively in the distribution business and, in global terms, I would say the moves are faster in North America, perhaps than they are in Europe for the reasons we stated earlier.
And now we'll take our next question, Arnaud Lehmann from Bank of America.
Arnaud Lehmann from Bank of America. I have 3 questions, if I may, hopefully that's not too much, but they're quite short. Firstly, on the EMEA region, I think you've been quite clear that you're relatively optimistic about the outlook for France. If we think about the full year, could you help us understand if we had positive trends in France, but softer volumes in the U.K. and the Nordics, do you think that would lead to like broadly stable volumes in the EMEA? Or would you expect France to more than offset any softening in the U.K. and the Nordics? That's my first question. My second question is a bit more like structural. I mean, you gave us your view about the Russian currency and the Russia business outlook and obviously you have a very strong business there. However, if we look at the last 3 years, you've been a little bit at the mercy of the volatility of the local currency. And considering the geopolitical environment, I guess, this volatility could remain in the coming months, and coming years. I appreciate that your revenues are in local currency and some of your cost are in euros. Is there anything you can do? I'm not saying tomorrow morning, but in the coming months or coming years, to reduce this mismatch between your revenues and your cost base in Russia? And my last question, just very simply, when I look at the consensus EBITDA for the year, I think the market is expecting broadly stable EBITDA for '18, which means that what you lost in Q1, you can recover in the course of the year through price increase and cost cutting, maybe some volumes as well. Is that something you're comfortable with?
Okay. Well, thank you for those questions. Maybe if I tackle them in the order in which you asked them. EMEA, I think you've articulated well the drivers that we're considering. I would expect that if things continue the way that they're moving, that we'd see some slight growth in EMEA. So maybe a little bit above flat. Not excessive growth but maybe low single digits, I would expect overall for EMEA. If I look about the Russia situation, again, it's a very prescient question. We are in the process of exploring how we might be able to localize more of our input costs because that, obviously, reduces our visibility. We look like and feel a Russian company, because we are, on the ground, as part of our regional strategy. But the more we can move the mix of raw material inputs to the local currency, the better. So that's something we're looking at.
And just to complement that, Arnaud, today, if you take our laminate activities, it's fully localized in Russia, and we [indiscernible] in Russia. For wood, we are building line -- production line for packet in Moscow, so that we can source in Russia, and not anymore imports of finished products from Serbia. Today, the point remains on PVC, which we have to import for the resident business from Europe. And that's what we are exploring, as Glen mentioned. But it's too early to give a time line, but it's clearly what we're looking at.
And if I was to give a perspective on our profitability, and maybe if I just take a step back to contextualize a few issues, and then try to answer your question. Obviously, we had a quieter Q1 than we expected. We're seeing raw material and currency headwinds, with the exclusion of the ruble, moving kind of where we would expect them to be. We have obviously taken actions on costs that we'll continue to take. Our customers are giving us short-ish-term signs that they're seeing their orders books move in the way that they wanted, and we believe our markets are fundamentally well oriented. So when we add up the policies, takeaway the negatives and also with a further caveat, the Q1 is traditionally the quiet quarter, so it's very difficult to draw a full prognosis for the end of the year. But our goal would be that we would end with profitability, in the same vicinity as last year. I think that would be how I would describe it, with the context that we've given on the actions we've taken and we will be taking going forward.
And now we will take our next question, Eric Lemarie from Bryan Garnier.
Eric Lemarie from Bryan Garnier. I've got just one question regarding sports. You're mostly exposed to the United States, to North America. Did you have any negative impact from the weather in this division in Q1?
Q1 is really a low quarter for us. Because of the weather, installation is low. It's true that this year, we've been installing well in the region where the weather was favorable. So we've not felt significant impact for -- in this respect. Could it have been better would the weather had been better? Maybe, but it was compensated by good installation in regions where weather is okay in this part of the year. And again, it's a very small quarter for Sports, in any case.
And what's the trends regarding the turnkey project for Sport currently?
I would say that what we're seeing year to date is kind of in line with our full year average of turnkey [ projects ] for last year. So they're kind of similar. Yes, that would be where -- it is similar to what we saw last year so far. As we -- I think I said earlier on, we're right in the middle of the bidding season at the moment, so we won't get a full picture until we kind of come out of the bidding season and head into later into Q2.
And maybe last question regarding your cost-reduction actions. Do you expect a full impact next year from these actions? Or should we start to see as soon as Q2 some benefits from them?
The latter. You should expect to see some benefits in the short term and in the medium term.
Maybe a last, if I may, regarding the impact of salary, SG&A in EBITDA, in Q1, this EUR 9 million. You said EUR 3 million negative impact from one-off. Why do you -- well, it's a technical question, but why do you include this EUR 3 million negative one-off in the adjusted EBITDA?
Oh, no, when I say one-off, it's part of the business, but it's just -- I think that will not occur again in the following quarter. So it's not exceptional item. So in adjustment to EBITDA, we will book mostly restructuring cost and the total acquisitions or stuff like that.
[Operator Instructions] We will take our next question from the queue, Simon Rowe from Janus Henderson.
Just a couple of things. You mentioned destocking several times during the call. And when we've had discussions about the business before and you've talked about the emphasis on commercial carpets and projects, I find that I'm bit surprised that you've talked about destocking so much, because I would assume that there is relatively little inventory held in the project business because of the nature of that. So I'm just a bit surprised to how often you've referred to destocking. Can you explain that?
Yes, Simon, I can. Perhaps, the communication wasn't as clear as -- so let me try and be a little more precise. There hasn't really been any effect of destocking in our commercial carpet business for exactly the reason you stated. It's driven, not totally, but primarily by projects. The destocking effects that we have seen that we referred to, I think, for France, took place mainly in our Resilient business. And the hypothesis is there that it's come out of the slowdown in the social housing, which has had some effect on the first quarter. As we go to the United Kingdom, for example, the destocking there has been, again, the Resilient flooring business, not the commercial carpet business, and a resulting from a contractor liquidation and the reduction of a carpet of a retailer. Primarily for us, that's our Resilient business, not our commercial carpet business. So your assumption is correct.
Right. I'm just surprised that you referred to it so often given your overall mix.
In EMEA, when you take -- it's true that North America is much more commercial and carpet is -- has a significant share in our total activity in North America. But if you take EMEA, it's more balanced between commercial and residential. And we'll play with the Resilient both in commercial and residential. We've seen also some residential distributors in DIY destocking. So that -- those have a material impacts on EMEA. At group level, Resilient is still almost half of our activity.
Okay. Just on the U.S. business, on carpet, in the U.S. I got the impression last year that you were definitely underperforming the market. And in this quarter, you're talking about the market being down. Are you performing in line with the market? Or are you behind the market in commercial carpet in the U.S?
I think -- just to, I think, reiterate and elevate the comment that I made maybe earlier on, I believe the market is down in Q1. I believe we are down by more than the market in Q1. I think we underperformed. Reasons: we need, I think, and we are expanding our reach into all of the segments where commercial carpet can go. The segments where we have a higher share and are more dependent, particularly the education sector, was slow in the first quarter, which drove an overall performance was less than the market. It's one of the reasons we are launching a range of products aimed at what the Americas call the Main Street market where we're leveraging our global footprint to make product in China, and supply high-quality product into North America.
Right. Because I just got the impression that when we talked about commercial carpet in the U.S. before you thought you'd fixed the underperformance versus the market in the second half of last year.
Yes. I think what we said is we'd seen a strengthening in commercial carpets in the fourth quarter, which gave us a degree of confidence about Q1 or this year. If the education sector had performed a little bit better than it did, my expectation would be that the commercial carpet maybe wouldn't have featured as highly in this conversation as perhaps it has done so far.
Okay. Just one last question about this whole pricing raw materials. When you were talking about the more difficult pricing environment in the EMEA, is that included in what you've said about recovering the raw material pressure in the course of this year? Or is there a risk in terms of what you're saying about EMEA that actually -- that will mean that you don't?
Okay, good question. The simple answer is, yes, it's included in our calculation. So it is included in our calculation. And we've obviously factored in a risk factor in being able to say that's why we're maintaining our goal.
I see. So is it fair to assume then that the purchase pricing impact is more actually in the U.S. than Europe?
It actually, for at least the visible future, would be, yes, because -- actually, the market isn't a global market, and the price for our -- the cost of our raw materials in North America are under more inflationary pressure or more cost increases than they are in Europe.
So the bulk of that EUR 10 million that we see in the Q1 is perhaps in the U.S.?
It's kind of more balanced than that.
Yes -- no, no, it's much more balanced than that because Eastern Europe also sees inflation on raw materials. But it's true that in the more recent months -- the EUR 10 million that we see is really the result of last year prices being still low and all the increases that we faced in 2017. Now the more recent trends, we see more [ upward ] pressure in North America going forward, hence the price increase. And in EMEA, depending on the raw materials, sometimes it's flat, sometimes it's slightly up, sometimes slightly down. But it's not changing vastly in EMEA, I would say.
And I think what you're seeing is the EUR 10 million is the carryover effect of the price increases that were both in Europe and in North America last year and kind of accelerated in Q2. So that's why there's a variance in Q1, which is in line, I think, with kind of what we said during the Q4 call that we expected -- whilst we expect for the year to get to neutrality in terms of cost inflation. But in the first half of the year, we'd still expect it to be negative moving into positive territory in the last 6 months of the year.
And now we'll take a follow-up question from Mehdi Boudokhane from Raymond James.
Just going back actually on what you said on prices and products. I think you said actually that you had lower sales in products that are more profitable compared to last year. Is that linked to your actions on prices? And is there any risk to see that continuing going forward?
No, is the simple answer. We're not seeing the price increases inhibit demand. The change in mix that we referred to primarily out of North America in Q1 was led by a volume -- slight volume switch in the first quarter driven by slower carpets, because education was slower, a couple of other smaller factors. The price increases that we're getting, and the volume of the product groups' overall growth, there's no correlation -- or not that we could see year-to-date.
To give you an indication, maybe the type of selling price increase that we announced for North America is what you see across the industry.
And there is another follow-up question from Arnaud Lehmann from Bank of America.
Just one last, if I may. I think a few weeks ago, there were press articles about, I think, some of the products in your Sports division talking about potentially negative health effect related to contact with some of the products. Would you be able to make comments on this at this stage?
Briefly, yes. Firstly, we wouldn't knowingly sell any products that is -- that jeopardizes people's house. That's one of our values. I think you're referring to a story that ran in -- I think it was a local story in France, about some of the infill products. We -- the industry which uses the rubber infill, there are a significant number of studies, all of which have shown that the product is safe. I understand that the French government is doing its own study, which is due out in June. It's something we welcome and supporting and helping with because it's in line with our values. We don't expect anything negative because of all the previous studies. But we will watch it with interest, and we will take any findings from it as they come.
Thank you. And as there are no further questions in the queue at this time, I would like to hand the call back to Glen Morrison, CEO, for any additional or closing remarks.
Thank you very much. I've appreciated the questions. I think we've articulated the quarter and our view going forward, the actions we've taken and why we believe that over the course of the year, we will still see growth and where we think we'll end the year from a profitability perspective. It only wish -- it only leaves me now to wish you a good rest of your day, and thank you for your interest in our business, and thank you for your questions. Goodbye.