Electrolux Sees Ongoing Recovery in North America, European Rebound in 2014
Jul 24, 2013
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Swedish-based appliance giant Electrolux reported net sales of SEK 27,674 million (approx. US $4,277 million) in the second quarter of 2013, down from SEK 27,763 million in the second quarter of 2012.
Income in 2Q 2013 was SEK 642 million (approx. $99 million), down from SEK 701 million in 2Q 2012.
Organic sales growth was 5.9%, but the impact of currencies was -6.2%.
The company said it continued to gain market share in North America, where the North American core appliances market was up by about 9% in 2Q 2013.
Electrolux in Latin America reported organic growth of 18%.
Electrolux in Europe, however, saw lower volumes and prices as well as negative currency movements that hurt results.
Electrolux President and CEO Keith McLoughlin said he expects the company's strong North American sales and earnings growth to continue throughout the remainder of 2013.
"All of our operations in Europe continued to suffer from weak demand resulting in negative price development," McLoughlin said. "Latin America showed strong top-line growth, while earnings were impacted by negative currency movements."
McLoughlin said the increase in appliance consumption in North America is largely a result of the strengthening housing market, which is expected to continue. "As a result, we now believe that demand for appliances in the US will increase by 5-7% in 2013."
Electrolux foresees a rebound in European appliance demand starting in 2014, which, along with the company's measures in the region, will spur a recovery in earnings in the region.
"We also expect the recovery in North America to continue for some time, considering the strong start of this year demand is still 23% below the peak year of 2006," McLoughlin added.
A more diversified revenue base means that emerging markets now account for more than 35% of Electrolux sales--and the company intends to increase that to 50%.
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