After a strong year of growth in 2020, Waukesha-based Generac Power Systems expects its revenue to increase by 25% to 30% in 2021, potentially growing the company to more than $3 billion in revenue for the first time.
If Generac, which crossed $2 billion in sales in 2018, were to hit its guidance, the company would have more than doubled its revenue since 2016. If the company were to hit its guidance on the high-end for 2021, Generac will have quadrupled its revenue from 2011, which was $792 million.
Net sales increased 13% to a record $2.5 billion during 2020 as compared to $2.2 billion in 2019, which includes $32 million from acquisitions. Total core sales growth for the year was approximately 12%.
The company’s continued growth was primarily due to a jump in home standby generator sales because of record Atlantic hurricane season, early winter storms and continued power shutoffs in California, said Aaron Jagdfeld, Generac chairman and chief executive officer.
Although Generac has benefited from the power outage severity environment in 2020, the emerging “Home as a Sanctuary” trend was also a factor in residential product sales for the quarter increasing by 55% to $499 million as compared to $323 million in 2019, Jagdfeld said.
“Broad-base strength was experienced across the U.S. during the fourth quarter similar to the trend seen in recent quarters,” Jagdfeld said. “With the vast majority of states showing triple digit growth, which we believe provides further validation for the emerging Home as a Sanctuary trend.”
Generac’s fourth quarter net sales increased 29% to a record $761 million compared to $591 million in the fourth quarter of the prior year. Core sales growth, which excludes both the impact of acquisitions and foreign currency, increased approximately 28%, the company announced during its earnings call today.
Generac also ended the quarter with approximately 7,300 residential dealers, an increase of approximately 800 dealers over the last 12 months – this includes a significant number of new dealers in California, which had 550 dealers at the year’s end, Jagdfeld said.
To meet the demand for standby generators, Generac announced earlier this week that it would acquire a 421,000 square-foot manufacturing facility in South Carolina. The facility will support increased demand for standby generators and associated energy technologies while serving as a distribution center to consumers in southeastern United States.
Once the facility opens, Jagdfeld expects the company will increase home standby generator capacity by approximately 75% compared to pre-pandemic levels, he said.
“We believe this increase can be attributed to several factors that are leading to the product category becoming more mainstream as homeowners have an increasing awareness of the need for power security as they continue to work, learn, entertain and shop from home,” Jagdfeld said.