Electrolux Q1 Net Up 19.4 Percent
STOCKHOLM-Despite a relatively low sales gain--including flat sales performance from its North American region--Electrolux recorded a 19.4 percent increase in net income in its first quarter, to SEK431 million (about $66.8 million).
Net sales edged up 1.2 percent to SEK25.6 billion (about $4 billion) in the quarter. Keith McLoughlin, Electrolux's president and CEO, said the quarter was characterized by 4.5 percent organic sales growth, plus an improvement in demand for appliances in Europe. Sales volume in North America was flat, due to the harsh weather of January and February, but "we remain confident that the market will continue to recover," McLoughlin said.
Organic sales growth in Latin America was 15 percent in the quarter. In the Asia-Pacific region, whose results were not quantified in Electrolux's statements, McLoughlin said the quarter brought the launch of a new product range in China, along with investments related to the company's manufacturing footprint program and the consolidation of refrigerator production from Australia to Thailand.
Gross margin in the quarter declined by 58 basis points to 18.5 percent. Operating expenses were slimmed by 4.5 percent in dollars and 93 basis points as a percentage of sales, to 15.7 percent.
McLoughlin said Electrolux is meeting the challenges of currency fluctuations through price and product mix improvements, and is continuing to reduce costs and optimize its global production. "Combined with our work to further speed up the pace of innovative product launches in the market, this provides us with the foundation for profitable growth," he said.