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Russia/Ukraine Troubles Hurt Indesit Revenues
May 7, 2014
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Appliance maker Indesit Company (Fabriano, Italy) reported first quarter revenue of EUR 560.1 million, compared to EUR 599.5 million in the first quarter of 2013.

Lower revenue was blamed on lower sales volumes, especially in Russia, and on the significant devaluation of the Russian ruble, the Turkish lira, and the Ukrainian hryvnia.

Indesit CEO Marco Milani said 1Q 2014 results indicate that actions taken to preserve profitability are working. However, he added, “The strengthening of the euro against the currencies of important countries for the Group, such as Russia, Turkey and Ukraine, penalized turnover and margins.”

Profits were gained, however, through product cost reduction efforts, better pricing, and a better sales mix that leverages the company’s newest high-performance, high-efficiency appliances. The company saw increased profitability in all areas except Russia, where profits were hurt by currency impacts.

“Promising signs for the rest of the year are visible in market demand indicators, especially in West European countries such as Italy, which confirm forecasts of a slight improvement in 2014 compared to the previous year,” Milani said.

Indesit estimates that 1Q 2014 shipments in the home appliance market grew 2.3% in Western Europe and 1% in Eastern Europe. Demand in Greater Europe overall was up 2%.

Indesit Company has been active for decades in Eastern European countries, and is a leading appliance company in Romania, Bulgaria, and Ukraine. It also has industrial presence in Poland and Turkey.

Indesit has been active in Russia and the CIS since 1974, and it now has ten commercial offices and 300 after-sales centers in 150 cities in the region. The company also has a manufacturing base in Lipetsk, about 400 km south of Moscow, with one plant making refrigerators and another producing washing machines. Lipetsk is also home to an Indesit distribution center—the biggest logistics center for major appliances in the Russian Federation and, in fact, in Europe.

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