Groupe SEB Reports Strong Results for First 9 Months
Oct 27, 2010
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Groupe SEB, maker of electric housewares appliances and cookware, reported strong results for the first nine months of 2010, despite weakness in the United States and Central Europe.
The group reported nine-month revenue of €2,423 million (approx. US$3,331 million), up 15.2% over the €2,104 million reported for the first nine months of 2009. At constant exchange rates the increase is 10.3%.
Groupe SEB, based in Lyon, France, reported a "generally firm market performance, led by sustained demand," except for the weak U.S. and Central European markets.
The volatility of the U.S. dollar and other currencies resulted in an overall increase in the Group’s operating currencies against the euro during 2nd and 3rd quarters 2010. SEB said it has seen that trend reversing in the last month, with the euro strengthening, particularly against the dollar and the ruble.
SEB’s nine-month sales increased substantially in this environment, rising even faster in the third quarter with like-for-like 11.8% growth. As in the first half of the year, growth was driven mainly by higher unit sales. The positive currency effect, which became even stronger in the third quarter, has totaled €102 million since the beginning of the year.
Operating margin amounted to €276 million for the first nine months of the year, compared with €194 million for the prior-year period. The gains made in the first half were amplified in the third quarter, in line with the growth in sales volumes.
Net debt at 30 September stood at €207 million, unchanged from 30 June 2010.
FRANCE: The sales momentum in the small household equipment market in France continued in the third quarter. SEB saw a 3Q revenue increase of 3.4%, driven in particular by cookware, steam generators, vacuum cleaners, the Fresh Express small food processor, and Nespresso and Dolce Gusto single-serve pod coffeemakers.
WESTERN EUROPE. SEB saw consumer spending and demand for small household equipment hold firm in virtually all other Western European markets. The group’s revenue was up sharply for the first nine months of the year, with an especially strong third quarter that saw sales jump by 12% at constant exchange rates. SEB saw faster growth in Spain, Italy, Austria, Scandinavia, and saw a "still solid sales dynamic" in Germany and the Netherlands.
SEB also benefited from a dramatic positive turnaround in the United Kingdom and Portugal. Third-quarter revenues were stable in Belgium and lower in Greece.
NORTH AMERICA. SEB said a sluggish recovery and lower consumer confidence weighed on demand in the United States and Canada, but the company still reported robust sales in the third quarter.
In the US, revenue generated by cookware was up significantly. In small electrical appliances, the Rowenta brand saw inconsistent performance but had a "satisfactory" third-quarter. Sakes of the Krups brand continued to decline.
In Canada's difficult market, nine-month revenue declined despite a positive third quarter. In Mexico, sales momentum observed since the start of the year intensified in the third quarter.
SOUTH AMERICA: Strong South American demand in the first six months of 2010 continued into the third quarter, except in Venezuela. In electrical appliances, despite heavy competition, the Arno brand saw fan sales boosted by unseasonably warm temperatures. Other strong selling products: blenders, Dolce Gusto pod coffeemakers, and washing machines.
Groupe SEB continued expanding its retail operations in South America and said they performed "very satisfactorily" in the third quarter, particularly in Argentina and Chile. Store sales growth was reported strong in Columbia despite a weather-induced third-quarter drop in fan sales.
ASIA-PACIFIC: With China leading the way, SEB's Asia-Pacific sales continued to rise sharply. The Supor brand in China benefited from a fast-growing market, a strong product dynamic (in both cookware and small electrical appliances), and the increasing presence of Supor Lifestores.
In Japan, SEB reported a "good level" of performance despite a 3Q slowdown in consumer spending and decline in store traffic. South Korean sales continued rising at a sustained pace, Helped along by an expanded product offering.
The Group said it succeeded in "stabilizing" the situation in Australia in the third quarter, recovering listings with various retailers.
The business environment improved in Russia and Ukraine, with consumer spending picking up and boosting the Group’s sales, particularly of small electrical appliances.
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