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Electrolux Q2 Sales Increase, Earnings Fall
Jul 19, 2005
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Sweden-based appliance maker Electrolux reported sales increased 6.3 percent to SEK 33.97 billion (approx. U.S. $4.3 billion), compared to SEK 31.95 billion (approx. $4.1 billion) from the same period in 2004.

Despite the higher sales, Electrolux reported its net income fell 3.5 percent to SEK 1.20 billion (approx. $153 million) compared to SEK 1.24 billion (approx. $158 million) in the second quarter of 2004.

For the first-half of 2005, Electrolux said net sales increased to SEK 63.7 billion (approx. $8.1 billion), up 2 percent from SEK 62.4 billion (approx. $7.9 billion) from the 6-month period in 2004.

In Europe, Electrolux said that net sales of core appliances in the second quarter totaled SEK 10.1 billion (approx. $1.3 billion), up 1.86 percent from SEK 9.9 billion (approx. $1.2 billion) in the second quarter of 2004. The company said sales in Germany were lower than previously, although sales increased in Eastern Europe. Demand for floor care products in 2005 was also higher than demand in 2004, Electrolux said.

In the U.S., Electrolux reported net sales for the second quarter were SEK 8.5 billion (approx. $1.1 billion), up 10.4 percent from SEK 7.7 billion (approx. $983 million) in the same period of 2004. Shipments of major appliances, including room air-conditioners and microwave ovens increased 6 percent, the company said.

Net sales also increased in Brazil to SEK 1.4 billion (approx. $178.8 million), up 49 percent from SEK 950 million (approx. $121 million) in the second quarter of 2004. In the Asia/Pacific region, net sales for the second quarter increased 4.3 percent to SEK 2.5 billion (approx. $319 million) from SEK 2.4 billion (approx. $306 million) in the same period of 2004.

Electrolux reported net sales for its professional product segment increased to SEK 1.73 billion (approx. $221 million), up 2.7 percent from SEK 1.69 (approx. $216 million) in the same period of 2004. Demand for food-service equipment declined in Europe, as laundry equipment increased.

For the company's outdoor product group, sales for the consumer product segment for the second quarter increased to SEK 6.8 billion (approx. $869 million), up 2.5 percent from SEK 6.6 billion (approx. $843 million) compared to same period last year. Sales for the professional product segment also increased to SEK 2.9 billion (approx. $370 million), up 10 percent from SEK 2.6 billion (approx. $332 million) in the second quarter of 2004.

In addition, Electrolux's restructuring program is continuing with the closure of a refrigerator plant Fuenmayor, Spain during the third quarter of 2006 and a lawn-mower plant in Parabiago, Italy during the fourth quarter of 2005. The closures will result in the termination of approximately 450 and 100, for the respective plants.

The company said that it will also reduce the capacity of a refrigerator plant in Florence, Italy during the second quarter of 20063, affecting an estimated 200 employees.

Electrolux said demand for appliances in 2005 is expected to increase in both Europe and the U.S. and expects operating income for the full-year to be somewhat lower than that in 2004, based on material costs, demand, and new product launches.

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