Electrolux President and CEO Keith McLoughlin commented on Electrolux's results for the first quarter of 2011, noting that there was good growth in demand in most of the company's primary markets during the first quarter of 2011.
See these results in yesterday's ApplianceMagazine.com news item.
"In North America, profitability was pressed by increasing raw-material costs and continued pressure on prices," McLoughlin said. To help mitigate raw materials cost increases in North America, the company intends to gradually implement price increases on some appliances during the second quarter. "The stable demand in the North American market has supported the implementation of price increases," McLoughlin said.
McLoughlin said demand in Europe market also demonstrated stable development during 1Q 2011, and this market will also require price increases to offset the surge in raw materials costs. "It will, however, take time before the price increases will give effect," McLoughlin cautioned. "We hope to see the positive effects in the second half of 2011."
McLoughlin said Electrolux was continuing to launch innovative products under the AEG brand. "The new products are an important part of our work to regain market shares, and at the same time strengthen our product mix."
McLoughlin said raw materials costs, particularly plastics, keep going up, and the company expects to pay about SEK 2 billion (approx. US$330 million) more for raw materials in 2011 than it did in 2010.
"Our ambition is to gradually compensate for the increase in costs through price increases, improvements in product mix and cost savings," McLoughlin said.
Growth Potential in Floor Care and Small Appliances
McLoughlin pointed out that Electrolux is now reporting results for floor care appliances and for small domestic appliances as separate business segments. "The change is due to the good development of these operations, which today make up a significant part of the Group’s sales and profit," McLoughlin said.
Growth Potential in Emerging Markets
Electrolux business in emerging markets grew 10% in the first quarter of 2011. "The focus is to continue taking advantage of the organic growth in fast-growing markets and as a complement grow with profitable acquisitions," McLoughlin said.
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