STOCKHOLM, July 18, 2018 /PRNewswire/ --Highlights of the
second quarter of 2018
- Net sales amounted to SEK 31,354m
(30,948). Sales growth was 0.7% with organic sales growth across
most business areas.
- Operating income amounted to SEK
827m (1,919), corresponding to a margin of 2.6% (6.2).
- Operating income include costs of SEK
818m, whereof SEK 564m relates
to an investigation by the French Competition Authority and
SEK 254m to an unfavourable court
ruling in France, both impacting
Major Appliances EMEA. Excluding these non-recurring items,
operating income amounted to SEK
1,645m, corresponding to a margin of 5.2% (6.2).
- Higher prices, mix improvements and cost savings contributed
positively, however operating income was impacted by higher costs
for raw materials and currency headwinds.
- Operating cash flow after investments amounted to SEK 1,805m (3,470).
- Income for the period decreased to SEK
517m (1,291), and earnings per share was SEK 1.80 (4.49).
President and CEO Jonas
Samuelson's comment
We continue to execute on our profitable growth strategy in a
challenging cost environment. Sales growth amounted to 0.7%,
mainly driven by higher prices and improved mix in our core
appliances. Despite significantly higher raw material costs and
currency headwinds, we delivered earnings in the second quarter in
line with our overall expectation. Underlying operating income was
SEK 1,645m, corresponding to a margin
of 5.2%. It is encouraging to see that our focus on innovative
products delivering great consumer experiences result in market
share gains in our core branded product categories across the
Group. We intensified our cost actions in the quarter and
reprioritized some activities to mitigate the increased currency
headwind.
EMEA's strong performance continues, thanks to innovative
products resulting in market share gains. Earnings for our
operation in Asia/Pacific remained
solid. Professional Products had a strong quarter with an
operating margin of over 14% and a sales growth of close to 7%.
The business area has great momentum across all segments. Home Care
& SDA is in a product transition phase and is investing for
important launches within the growing cordless vacuum cleaner
segment.
Our operation in North America
was impacted by significantly lower air care volumes, which, in
combination with sharply increasing input costs, explain the drop
in operating income compared to last year's strong second quarter.
The important steps we have taken in strengthening our core
appliances under the Frigidaire brand are continuing to result in
market share gains. The Latin American business area had a
challenging quarter, including handling the nation-wide truck
driver strike in Brazil. However,
I am very pleased with the teams' focus on implementing price
increases and cost measures to mitigate the negative impact from
accelerating raw material costs and currency.
In addition to the price increases already implemented, we have
announced further price increases in key markets, primarily in
North America and Latin America. In combination with cost
reductions we are determined to mitigate the increasing headwinds
from raw material costs and currency. We now estimate the negative
year-over-year impact from raw materials to be approximately
SEK 1.8 bn in 2018 and we plan for
cost inflation following the recently announced trade actions under
Section 301 in the U.S..
Current industry trends indicate a slightly softer market demand
outlook for North America,
Latin America and Australia, to a large extent driven by higher
market prices caused by higher input costs.
We continue to take important steps in strengthening our product
portfolio. I am excited about the important product launches we
have in our pipeline for the second half of this year and
continuing into 2019. This together with our ongoing reengineering
programs in North America,
Latin America and EMEA are
important elements to achieve profitable growth.
Our focus on creating best-in-class consumer experiences,
raising prices in key markets and cost management will allow us to
mitigate the headwinds we are facing. Looking ahead, I am confident
that we are well positioned to execute on our profitable growth
strategy.
Telephone conference 09.00 CET
A telephone conference is held at 09.00 CET today, July 18. The conference will be chaired by
Jonas Samuelson, President and CEO
of Electrolux. Mr. Samuelson will be accompanied by
Anna Ohlsson-Leijon, CFO.
Details for participation by telephone are as
follows:
Participants in Sweden should
call +46-8-505-564-74
Participants in UK/Europe
should call +44-203-364-5374
Participants in US should call +1-855-753-2230
Slide presentation for download:
www.electroluxgroup.com/ir
Link to webcast:
www.electroluxgroup.com/q2-2018
For further information, please contact:
Sophie Arnius, Head of Investor Relations +46-70-590-80-72
Merton Kaplan, IR Manager,
+46(0)73-885-78-03
Arba Kokalari, Electrolux Press
Hotline, +46-8-657-65-07.
This 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 July 18,
2018.
This information was brought to you by Cision
http://news.cision.com
http://news.cision.com/electrolux/r/electrolux-q2-2018-interim-report--on-track-despite-headwinds,c2577249
The following files are available for download:
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