European appliance maker Group SEB reported results that exceeded previously announced targets, representing a satisfactory performance, according to the company.
The appliance maker said it benefited from the full-year impact of the synergies from the integration of Moulinex-Krups in 2003.
Consolidated net sales in 2003 were 2.3 billion euros (approx. U.S. $2.8 billion), down 5.9 percent from 2002, but almost unchanged (-0.1 percent) at constant exchange rates, after the previous year's strong growth. Demand was constant in the first quarter, but decreased as the year went on, with some markets holding up better than others. Sales were also penalized by the unfavorable impact of the Moulinex brand licensing in nine European countries since the beginning of the year, the company reported.
Operating margin rose 8 percent to 234 million euros (approx. $284 million), representing 10 percent of consolidated sales versus 8.7 percent in 2002. According to SEB, the improvement was led by a combination of: industrial and logistical streamlining programs conducted worldwide, further improvement in purchasing terms, a positive operating margin at Moulinex-Krups, and a carefully managed currency effect that had a much smaller impact than on sales.
Net income amounted to 148 million euros (approx. $180 million), or 6 percent of consolidated sales. This resulted in a significant reduction in debt, which was cut by 138 million euros (approx. 167 million) to 189 million euros (approx. $229 million) on Dec. 31, 2003.
Groupe SEB said it registered a performance that exceeded its forecasts and is ahead of its 2004 objectives. In particular, the new product launch cycle, supported by higher R&D spending, and the vitality of the its brands, was successfully initiated at year-end.
The company said new product introductions, coupled with high advertising spend, are expected to drive renewed sales growth and a further improvement in the company's fundamentals. First-quarter sales growth, however, is likely to be penalized by very high prior-year comparatives.
Confident in the company's future, the board of directors has decided to carry out a one-for-ten bonus share issue, at a date to be announced. The new shares will carry rights to the 2003 dividend paid in 2004. In addition, at the next annual meeting, the board will recommend increasing the dividend by 5 percent to 2.27 euros (approx. $2.76) a share.
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