STOCKHOLM–(BUSINESS WIRE)–Regulatory News:
Continued margin improvement
Electrolux (STO:ELUXA)(STO:ELUXB) operating income for the third quarter
increased by more than 20% compared to the same period previous year.
Operating income reached SEK 1.8 billion, corresponding to a margin of
5.9% (4.8). Results improved in most business areas, although Latin
America continued to be impacted by weak market demand. Four of the
Group’s six business areas achieved an operating margin of above 7%.
EMEA and North America continued to increase operating income and
margin. Moreover, the performance in Asia/Pacific was strong. Cash flow
for the Group continued the strong trend and was SEK 3 billion.
Higher sales volumes, better mix and cost efficiency contributed to
Major Appliances EMEA’s margin improvement in the quarter. The operating
margin reached 7.1%, which is the highest level for an individual
quarter since 2010. Electrolux continued to gain market share in focus
categories and premium brands. During the quarter, we introduced a range
of new AEG branded products, with solutions delivering the world’s most
responsive kitchen experience, and unprecedented care for fabrics.
Market demand remained positive, although there are signs of weakening
in some markets in Western Europe, including the UK. We confirm our
expectations of European market demand growth of 2-4% in 2016, however,
likely in the lower end of the range.
Earnings in Major Appliances North America continued to improve in the
quarter and the margin increased to 7.4%. The result was positively
impacted by improved operational efficiency and lower raw material
costs, which more than offset continued price pressure. Sales volumes of
core appliances under own brands increased, whereas private label sales
weakened, to a large extent driven by channel inventory reductions.
Market demand for core appliances was weak in the first two months of
the quarter, followed by a strong September, resulting in unchanged
market volumes for the quarter as a whole. We now expect market demand
for appliances in North America to grow by 3-4% in 2016.
Major Appliances Asia/Pacific posted strong organic growth in the
quarter driven by sales growth in Southeast Asia and a strong season for
air-conditioning in China. Electrolux development in the important
Australian market was stable. Operating income improved significantly
with an operating margin of 8.3%. The integration of the recently
acquired wine cabinet company Vintec is proceeding well. During the
quarter, appliances under the AEG brand were introduced in the Chinese
The macro-economic environment in Brazil and Argentina remained weak,
which had a negative impact on the financial performance in Major
Appliances Latin America. Price increases and cost reductions only
partly compensated lower sales volumes and a deterioration of the mix,
impacting results negatively. We have reinforced the ongoing measures to
structurally adapt costs to the current market environment.
The performance within Professional Products continued to improve at
high profitability levels. In Small Appliances, the program to restore
profitability made progress according to plan. Operating income includes
costs related to the continued refocusing of the business area, and the
underlying operations showed progress.
We are focused on achieving sustainable profitability in all our
operations, with the target to secure an operating margin over a
business cycle of at least 6% as high priority. Through continued
development of innovative products and services delivering best-in-class
consumer experiences for profitable growth, in combination with cost
productivity, we will continue to increase shareholder value.
This information is information that AB Electrolux is obliged to make
public pursuant to the EU Market Abuse Regulation and the Securities
Markets Act. The information was submitted for publication, through the
agency of the contact person set out above, at 0800 CET on October 28,
Electrolux is a global leader in home appliances and appliances for
professional use, based on deep consumer insight. We offer thoughtfully
designed, innovative and sustainable solutions, developed in close
collaboration with professional users. The products include
refrigerators, ovens, cookers, hobs, dishwashers, washing machines,
vacuum cleaners, air conditioners and small domestic appliances. Under
esteemed brands including Electrolux, AEG, Zanussi, Frigidaire and
Electrolux Grand Cuisine, the Group sells more than 60 million products
to customers in more than 150 markets every year. In 2015, Electrolux
had sales of SEK 124 billion and 58,000 employees. For more information
go to www.electroluxgroup.com
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Catarina Ihre, +46 (0)8 738 60 87
Daniel Frykholm, +46 8 657 65 07