Electrolux Reports Results and Restructuring Plans, Delists from NASDAQ
Feb 15, 2005
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Sweden-based appliance maker Electrolux reported results for the fourth quarter and full-year for 2004. Additionally, the company announced plans to separate its outdoor products unit in order to focus on appliances and its decision to delist from NASDAQ.
The company reported that for the fourth quarter of 2004, net sales were SEK 28.7 billion (approx. U.S. $4.1 billion), up 1.1 percent to SEK 28.3 billion (approx. $4 billion) in the prior-year period. Electrolux posted a net income of SEK 728 million (approx. $103.9 million) for the quarter, compared with SEK 1.2 billion (approx. $171.7 million) from the fourth quarter in 2003.
For the full-year in 2004, Electrolux reported net sales of SEK 120.7 billion (approx. U.S. $17.3 billion), compared to SEK 124.1 billion (approx. $17.7 billion) for the full-year period in 2003. Full-year net income totaled SEK 3.1 billion (approx. $443.2 million), down from SEK 4.8 billion (approx. $687 million) in 2003.
Net sales for the company's consumer durable segment declined 1.6 percent for the year to SEK 104.5 billion (approx. $14.9 billion), compared to SEK 106.3 billion (approx. $15.2 billion) in 2003. Net sales for the professional product segment declined 9.3 percent to SEK 16.1 billion (approx. $2.3 billion) compared to SEK 17.7 billion (approx. $2.5 billion) for the full-year of 2003.
The company said it experienced a strong fourth quarter for appliances in Europe and the U.S., and a substantial decline in income for appliances in Asia. "We had a strong fourth quarter for white goods in both North America and Europe. Launches of new products contributed to a positive trend," Hans Straeberg, CEO, said. "We also made good progress in our work on building the Electrolux brand."
In addition, Electrolux announced its decision to spin off its outdoors unit, which includes the Weed-Eater and Poulan brands, was in line with the company's goal of focusing on appliances. The company said the separation is expected to be complete by 2006.
The company also said it will continue to relocate and restructure its production. Electrolux warned that it would consider shifting production plants from Europe and North America to Asia, eastern Europe, and Mexico. The company currently operates 27 manufacturing plants across Europe and North America. It didn't say how many of them could be closed or moved.
When completed, the moves are expected to result in annual savings of SEK 2.5 billion to SEK 3.5 billion (approx. $357 million to $499.9 million) by 2009. The overall cost of the moves is projected to be between SEK 8 billion and SEK 10 billion (approx. $1.1 billion to $1.4 billion).
Electrolux announced that it has decided to delist the company's American Depository Receipts (ADRs) from the U.S.-based NASDAQ stock market. The company said the majority of Electrolux shares are on the Stockholm Stock Exchange and trading volume in ADRs is low and does not justify a listing. Electrolux said it will continue to submit annual and quarterly reports to the American Securities and Exchange Commission (SEC).
For 2005, the Electrolux said demand for appliances is expected to show some growth in both Europe and the U.S., while higher material costs are also expected to impact operating income. Electrolux says it will continue to invest in product development and brand recognition in the next year.
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