Global sales dip but Europe improves, with growth of built-in and UK market
Despite sales declining by 4.9%, as an effect of a slowdown in the Latin American market and negative impact of currencies of 1.1%, Electrolux has reported improved sales in Europe.
The group has cited higher sales of built-in appliances and growth in the UK, Poland, Germany and Switzerland in the second quarter, as providing a positive impact on sales.
The overall market in Europe slowed but still showed an increase of 1% year-on-year, with the same growth in Western and Eastern Europe. Operating income rose as a result of overhead cost reduction.
President and CEO of Electrolux Keith McLoughlin commented on the results: “A positive impact from the ongoing cost-reduction program in Europe, combined with an improved product mix in such areas as built-in kitchen products, led to a significant improvement in our operating income in EMEA.
“Market development in Europe continued to show a dispersed pattern, with growth increasing in the Iberian countries and in the UK in the second quarter, while there was a weakening in France and the Nordic countries. We reconfirm our view that European market demand will increase by 1-3% in 2014.
“As previously communicated, we have concluded a review of our manufacturing operations in Italy. In May, we reached an agreement with the Italian trade unions and authorities, which entails significant cost reductions. The agreement will contribute to our efforts to restore long-term profitability for major appliances EMEA.”
He continued: “The Group’s overall profitability shows a recovery both in the second quarter, and in the first half of the year compared with the same period in 2013. We will continue to launch new, innovative products in parallel with optimising global production with a strong focus on cost efficiency. This will enable us to continue to generate a solid cash flow and shareholder value.”