De'Longhi Net Falls 18.6 Percent in Q3
TREVISO, Italy-The costs of integrating the Braun household business cut 18.6 percent from De'Longhi's net income in its fiscal third quarter, which ended on Sept. 30.
Net income for the quarter totaled EUR25.3 million ($34.2 million based on the average conversion rate of euros to dollars for the quarter). The bottom line was also hurt by negative currency impacts in De'Longhi's global markets and by higher depreciations due to the company's industrial investments carried out this year and in 2012.
Revenues rose 6.6 percent to EUR367.2 million ($496.4 million). According to a De'Longhi statement, the company's Kenwood-branded small appliances had a strong quarter, as did hand blenders. Sales of espresso makers and portable heaters were somewhat down. Gross margin (described in the De'Longhi statement as "net industrial margin") gained 110 basis points to finish at 48.5 percent.
The statement said the third quarter saw the extension of several patterns that have affected De'Longhi's business since the start of 2013. These include "the difficult market environment, characterized by a high volatility and a very uncertain consumption environment." Devaluations in several export currencies--such as the Japanese yen, the Australian dollar and currencies in several emerging markets--had negative effects on both revenues and margins, the statement said.