As reported by Jonas Samuelson, Electrolux president and CEO, company’s operating income for the first quarter increased to SEK 1,536 million, an improvement of 21% compared to the same period last year. The operating margin increased to 5.3% from 4.5% and results improved across all business areas. “Our operations – explained Samuelson – in Major Appliances EMEA and North America continued to deliver good profitability and Professional Products also reported a good earnings trend. The performance for Major Appliances Latin America and Home Care & SDA recovered during the quarter. Portfolio management and continued measures to increase net cost efficiency in the Group are tracking well and contributed to the solid results in the quarter”. Major Appliances EMEA achieved an operating margin of 6.3%. “Focus on the most profitable products and continued good contribution from cost efficiency actions mitigated currency and raw material headwinds – said the CEO -. Market demand for appliances in Europe was stable, although the UK declined. Demand in Middle East and Africa also declined. We confirm our outlook for the European market and expect a market growth of approximately 1% in 2017. The acquisition of Kwikot Group, a profitable water heater company in South Africa, was completed during the quarter. Kwikot fits well with our strategy to broaden Electrolux offering and expertise within home comfort and increasing our market reach in Southern Africa”. In North America, operating income continued to develop favorably and the operating margin for the first quarter increased to 6.1% from 5% last year. “Active product portfolio management and price pressure led to a decline in net sales in the quarter – commented Samuelson -. However, actions to improve the cost structure and efficiency within operations significantly contributed to earnings. Market demand for core appliances in the first quarter of 2017 remained solid and grew by slightly less than 3%. We expect market demand for appliances in North America to grow by 2-3% in 2017”. As regards to Latin America, “the operations in this region have recovered following several quarters of weak performance, driven by the very unfavorable macro-economic environment – added Samuelson -. Although market demand remained negative in Brazil in the quarter, demand increased in Argentina and Chile. Business restructuring and improved cost efficiency, together with tailwinds from major currencies, contributed to the recovery in earnings. The earnings trend in Asia/Pacific remained solid in the quarter and operating income increased. Performance benefitted mainly from continued higher sales volumes in the region and good profitability in Australia”.
Besides, Professional Products showed good organic growth in the quarter of 8% and a continued improvement in the operating margin. Sales in all markets increased, particularly in Western Europe and Japan. Finally, “the work to restore profitability in Home Care & Small Domestic Appliances is making good progress with continued focus on mix improvements and exiting non-profitable categories and markets. In April we completed the acquisition of Anova, the U.S. based provider of the Anova Precision Cooker, an innovative connected device for sous vide cooking that enables restaurant-quality results in the home. The acquisition provides a significant opportunity for profitable growth in this emerging product category”, commented Samuelson.
