Groupe SEB reported that consolidated sales for the third quarter 2005 were up by 1.7 percent at constant scope of consolidation and exchange rates. SEB called the results "satisfactory" and said it was achieved in an economic environment that continued to vary from one region to another - while Europe remained generally sluggish, SEB sees more buoyant conditions in North and South America and Asia.
For the first 9 months of the year, consolidated sales were up 5.8 percent to 1,596 million euros (approx. U.S. $1.912 billion). This included a positive currency effect of 23 million euros (approx. U.S. $27.5 million) for the period, as well as a 75 million euros (approx. U.S. $90 million) contribution from acquisitions. At constant scope of consolidation and exchange rates, sales were down 0.7 percent for the period, compared with a 2 percent decline in the first half.
Groupe SEB's Markets
In France, SEB said, the overall situation has not improved and consumer spending remains weak. The competitive environment is exacerbated by price wars, which were especially intense in vacuum cleaners, food and beverage preparation appliances and fryers. On the other hand, sales of non-stick cookware, espresso coffee machines and steam generators were up. SEB said its new products performed well in September, led by the second generation of the Principio line-up, the new Minute iron with a unique quick-ironing concept, the Sonic Clean stain remover, and, in particular, the totally redesigned line of Krups espresso machines.
Elsewhere in the EU, SEB said business varied from one country to the next. Although the unfavourable situation in Belgium and the United Kingdom showed no change over the 9-month period, the declining sales in Italy and Spain slowed somewhat in the third quarter, while signs of a cyclical upturn were apparent in Germany, the Netherlands, Austria, Portugal, and Greece. In Scandinavia, sales enjoy sustained growth, led by a number of flagship products.
In North America, Groupe SEB said its performance in the U.S. was very satisfactory, with sales increasing at constant scope of consolidation. Sales of T-Fal non-stick cookware was stable, while Rowenta maintained its positions in the upscale steam iron segment shaped by more organized competition. With its new line of espresso machines, Krups pursued its extensive redeployment in its core coffeemaker market. In addition, All-Clad contributed 58 million euros (approx. U.S. $69.4 million) to 9-month consolidated sales, compared with 17 million euros (approx. U.S. $20 million) for the 9 months that ended September 30, 2004, when the unit was consolidated over 2 months. In Mexico, sales were strong for the entire period, while in Canada they rebounded solidly in the third quarter as forecast.
In South America, the combination of strong demand and a positive currency effect on the translation of local sales resulted in an increase in reported growth. SEB said all the countries performed well, with Brazil sales boosted by consumer credit. SEB's product line-up was expanded with a number of new models, with blenders and semi-automatic washing machines getting off to a very fast start, thanks in part to their advertising campaigns.
SEB continued to make strides in much of the rest of the world, although in Turkey third-quarter performance was disappointing. In the Central Asian States (CIS), Groupe SEB says it has emerged as a major player in small domestic appliances. In Japan, results were excellent from the beginning of the year, led by the success of cookware, irons and kettles. In Central Europe and South Korea, the group said it strengthened its already substantial positions, while elsewhere in Asia it continued to steadily increase market penetration. The third quarter also showed the first encouraging signs of initial sales growth in China.
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