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Electrolux (Stockholm, Sweden) said today that first-quarter 2006 sales showed growth due to favorable market trends. Net sales increased to SEK 33.891 billion (approx. U.S. $4.486 billion), compared to SEK 29.740 billion (approx. $3.938 billion), in the first quarter of 2005. Income for the period amounted to SEK 807 million (approx. $107 million), or SEK 2.75 (approx. $0.36) per share, compared to 2005's SEK 854 million (approx. $113 million), or SEK 2.93 (approx. $0.39) per share. Income after financial items, excluding items affecting comparability, was SEK 1.366 billion (approx. $180.9 billion), compared to SEK 1.211 billion (approx. $160.3) in 2005.
Electrolux said income for major appliances in Europe was in line with the previous year despite the strike in Germany. Other factors included strong growth in major appliance sales in North America and a substantial increase in sales and income for operations in Latin America.
"Developments in the first quarter were for the most part what we expected. Demand was favorable, our new products sold well and we have further indications that our strategy is working," said Electrolux President and CEO Hans Straberg this morning.
The strike in Germany did last longer than expected, Straberg said, and the company did suffer a downturn in sales. "However, we have made up for lost ground since then," he added. "We will continue to move production to low-cost countries. During the first quarter, production was discontinued at our refrigerator plant in Greenville, Michigan, U.S.A. Our new plant in Juarez, Mexico, is functioning well. As expected we had higher costs when we ran two plants in parallel during the quarter."
Success at Eurocucina
"At Eurocucina in Milan, probably the world’s most influential kitchen show, we showed an array of innovative products, such as Bright, our new line of sleek, illuminated appliances, and our Puzzle Hobs, which consumers can combine in any number of installations," Straberg said. "The response was very positive from both customers and architects."
Raw Materials Continuing Impact
"Although the prices for raw materials such as steel and oil remain a question mark, we expect that 2006 will be another year in which we strengthen the Electrolux brand, launch innovative new products and lower costs, i.e., a year in which we increase profit, as stated in our 'outlook'," Straberg added.
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