Adverse items in the US
The US remains a burden for Electrolux. The ramp-up of the production of refrigerators/freezers in the new facility (Anderson) is taking longer than expected with a negative impact on volume. Furthermore, Electrolux is affected by the destocking at a big customer which is reorganising itself. Consequently, Q4 19 will be affected by higher costs ($-70m vs $-25m estimated previously) and the full effect of the cost savings is postponed to 2021 (vs 2020 previously).
16 Dec 19
Higher tariffs and raw material costs offset by price increases
Organic sales growth was low in Q3 19 (+0.8%). The good news was in North America where the deterioration in organic sales stabilised (-0.2% vs -10.8% in Q2 19 and -5% in Q1 19) despite a further decline of sales under private label. Higher trade tariffs and raw material costs and the negative currency effects were fully offset by price increases. The reported operating margin (3.7% of sales, -2.1pts) included significant restructuring costs and various non-recurring items.
27 Oct 19
Weak organic sales but resilient operating margin
Organic sales were weak in Q2 19 (-2.6% vs +1.9% in Q1 19) due to a drop in North America (-10.8%) on the back of lower sales of products under private label essentially, in Australia and a deep slowdown in Europe (+0.8% vs +4.4% in Q1 19). Conversely, Electrolux was rather successful in defending its operating margin (5.1% of sales, -0.1pt based on a restated figure in Q2 18) in a context of higher tariffs and raw material costs.
18 Jul 19
Europe and the Professional Products, best performers
Q1 19 was correct considering the persistence of a challenging environment worldwide. Organic sales grew by 1.9% thanks to all divisions except for North America which is still impacted by lower volumes of products under private label. Nevertheless, there were only two divisions that performed well and limit the erosion of the group’s operating margin (excluding restructuring costs), Europe and the Professional Products for which Electrolux planned a separation.
26 Apr 19
Focus on consumer, re-engineering investments
The financial goals are unchanged and include 4% sales growth, an EBIT margin of 6% of sales and a return on net assets (RONA) above 20% over a business cycle in Consumer. It implies high re-engineering investments that should have a full impact on the EBIT margin in 2024 (cost savings of SEK3.0bn). Finally, the details on the separation of the Professional Products division were not disclosed. This strategic move is half convincing in our view.
27 Mar 19
Price increases, restructurings, focus on consumer
Q4 18 was rather good with organic sales growth of 2.7% reflecting price increases and a positive product-mix, and a restated operating margin above consensus at 5.5% of sales (-0.8pt yoy). 2019 could be similar to 2018. 2020 looks better given the growing pay-back of significant capex in 2018-20 and the first cost savings of the restructuring in North America and Latin America. Electrolux announced its intention to separate and list its Professional Products business in order to seize growth opportunities.
01 Feb 19
Impacted by volume, raw material prices, currency fluctuations.
Q3 18 was characterized by low organic sales growth (+0.8%) reflecting price increases and a better product mix in all divisions but lower volume in a large scope that was partly due to price increases. The favourable price/mix effect was not enough to compensate for higher raw materials= costs and negative currency effects.
29 Oct 18
Impacted by higher raw material costs
Electrolux had a mixed Q2 18 with low organic sales growth (+0.4%), impacted by the collapse in organic sales in Major Appliances North America and a decrease in the operating margin (before provisions) by 1pt to 5.2% of sales. Electrolux was penalised by higher raw material costs and adverse currency fluctuations that were not offset by selling price increases and cost savings.
19 Jul 18
More pressure on Electrolux
Struggling Major Appliances North America (31% of group sales), which is involved in restructuring, masked the impressive performance of Major Appliances EMEA (35% of group sales). In addition, the upwards revision of the increase in raw material costs and negative currency impact put more pressure on Electrolux which will have to find further cost efficiencies.
27 Apr 18
Strong 2017 year-end
Q4 17 was a very good quarter. Organic sales growth was strong (+4%) following three previous weak quarters in 2017 and the operating margin increased to 6.1% of sales, in both Q4 17 (+1.1pts) and FY2017 (+0.9pt). Cost efficiencies were substantial and contributed to margin improvements in most divisions.
31 Jan 18
Great operating performance thanks to cost efficiencies
In Q3 17, organic sales decreased by 3.2%, mainly due to Major Appliances North America (-10.8%), and the group’s operating margin increased by 0.8pt to 6.7% of sales thanks to a positive product-mix and significant cost efficiencies. Q3 17 figures Sales reached SEK29,309m (-5%). There was a positive change in the perimeter (+1.4%) and a negative currency effect (-3.2%). Organic sales decreased (-3.2% vs -1.6% in Q3 16) due to four divisions out of six (Major Appliances EMEA: -1.1%, North America: -10.8%, Asia/Pacific: -1.6%, Home Care & SDA: -0.8%). Conversely, organic sales increased in Major Appliances Latin America (+7.4%) and Professional Products (+6.4%). The operating income increased to SEK1,960m (+7.3%), corresponding to a margin rate of 6.7% of sales (+0.8pt). The operating margin improved in all the divisions (EMEA: +0.8pt to 7.9%, North America: +0.1pt to 7.5%, Latin America: +1.4pts to 1.9%, Asia/Pacific: +0.6pt to 8.9%, Home Care & SDA: +2.5pts to 4.2%) except for the Professional Products division which had a stable margin rate (14.3% of sales) due to current investments in new products. Group net profit was SEK1,425m (+12.5%) after lower net financial expenses (-15% to SEK-86m) and income tax rate (-2.5pts to 24%). Financial situation In Q3 17, the cash flow from operations (SEK3,026m) decreased by 12% due to higher tax paid and an increase in the change of inventories. In 9m17, the cash flow from operations (SEK6,349m) was down 11% due to an increase in the change of WCR. Capex surged by 28% to SEK2,699m and the acquisition of companies represented SEK3,394m. On 30 September 2017, the group had a net cash position of SEK1,851m (vs a net cash position of SEK3,809m at year-end 2016).
27 Oct 17
Significant cost efficiency
Electrolux posted a strong operating income, above consensus, and an improvement in the operating margin by 1pt to 6.2% of sales thanks to significant cost efficiency. Q2 17 figures. Sales reached SEK31,502m (+5.1%). Total growth included a positive currency effect (+3.9%) and a change in the perimeter (+1.2%). Organic sales were flat, reflecting organic growth in Major Appliances EMEA (+2.1%), Asia/Pacific (+6.6%) and the Professional Products (+5.8%) which compensated for lower organic sales in Major Appliances North America (-2.4%), Latin America (-2.5%) and the Home Care & SDA (-3.4%). Operating income surged to SEK1,942m (+24%) thanks to a higher contribution from all divisions except for Major Appliances Latin America (-58% to SEK29m). Major Appliances North America was the best performer (SEK987m, +33%), contrary to Major Appliances EMEA (SEK576m, +2%) which accounted an acquisition-related fair value adjustment to inventory of SEK-23m. The increase in the operating income was also significant for Major Appliances Asia/Pacific (SEK209m, +40%) and Professional Products (SEK258m, +16%). Profitability recovered in Home Care & SDA (SEK77m vs SEK6m in Q2 16). Group net profit was SEK1,307m (+21%) after higher net financial expenses (+63% to SEK-189m) and a stable income tax rate (25.4%). The operating cash flow declined by 2% to SEK3,936m due to an increase in the change of trade receivables. It was largely above capex (SEK832m) and the acquisition of companies (SEK899m). H1 17 figures. Based on sales of SEK60,385m (+3.9%, o/w -1.4% organically), the operating income increased to SEK3,478m (+23%) corresponding to a margin rate of 5.8% of sales (+0.9pt). Group net profit was SEK2,390m (+22%) after higher net financial expenses (+32% to SEK291m) and a slightly lower income tax rate (25%, -0.2pt). The operating cash flow was down 10% to SEK3,323m due to an increase in the change of inventories and trade receivables. Capex reached SEK1,564m and the acquisition of companies represented SEK3,298m. On 30 June 2017, Group Electrolux had a net cash position of SEK310m (vs a net cash position of SEK3,809m at year-end 2016).
19 Jul 17
Margin improvements vs sales growth.
Q1 17 was a mixed quarter with a 2.8% decrease in organic sales (below consensus) and an 0.8pt improvement in operating margin to 5.3% of revenue (above consensus). Q1 17 figures. Sales reached SEK28,883m (+2.7%) thanks to a significant positive currency effect (+5.9%). Organic sales decreased by 2.8% (vs +1.8% in Q1 15) due to Major Appliances EMEA (-2.4% vs +7.1% in Q1 16), Major Appliances North America (-7% vs +5.7% in Q1 16), Major Appliances Latin America (-2.5%), and Home Care & Small Domestic Appliances (-3.3%). There were only two divisions with organic sales growth, Major Appliances Asia/Pacific (+8.1%) and Professional Products (+8%). Gross profit increased by 4% to SEK6,003m and the gross margin improved slightly to 20.8% of sales (+0.3pt). Operating income surged to SEK1,536m (+21%), corresponding to 5.3% of sales (+0.8pt), after higher selling costs (+6%), lower administrative costs (-2%), operating income of SEK104m, net (vs SEK-96m, net, in Q1 16). The increase in operating income (up SEK268m) was mainly attributable to Major Appliances North America (up SEK110m), Major Appliances Latin America (up SEK70m) and the other divisions to a lesser extent. Net profit was SEK1,083m (+24%) after broadly stable financial expenses (SEK-102m) and a lower income tax rate (-0.3pt to 24.5%). The negative cash flow from operations increased (SEK-613m vs SEK-313m in Q1 16) due principally to an increase in the change in inventories. Capex rose to SEK732m (+15%) and investments in shares amounted to SEK2,399m relating to the acquisition of Kwitkot Group and Grindmaster-Cecilware. On 31 March 2017, financial net debt amounted to SEK2.1bn (vs SEK3.5bn on 31 March 2016) representing 13% of shareholders’ equity.
26 May 17
Net cash situation, higher dividend
Q4 16 was rather in line with expectations despite some weakness at the top-line. Organic sales were down 3%, the operating income reached SEK1,616m (vs SEK-202m which included SEK-1,659m of extraordinary costs related to GE Appliances in Q4 15) and the operating margin was 5% of sales (vs 4.6% of sales restated in Q4 15). A significant increase in the dividend (+15% to SEK7.5/share) is proposed. Q4 16 figures: Group sales reached SEK32.1bn (+1.1% including a positive currency effect). Organic sales growth was down 3% due to no growth in Major appliances EMEA (+0.3%), a decline in Major appliances North America (-2%), the collapse in Major Appliances Latin America (-18%) and a decrease in Small appliances (-4%) altogether not offset by the higher organic sales in Major appliances Asia/Pacific (+1.7%) and strong growth in Professional products (+7.2%). The operating income reached SEK1,616m (+11% restated), representing 5% of sales (+0.4pt restated). Higher profitability was attributable to Major appliances North America (+24% to SEK610m reflecting lower raw material costs, higher efficiency), Major appliances Asia/Pacific (+41% to SEK173m thanks to a positive product-mix, higher efficiency), Small appliances (SEK154m vs SEK-92m including SEK190m restructuring costs in Q4 15) and Professional products (+13% to SEK293m). Conversely, there were operating losses in Major appliances Latin America (SEK-187m vs SEK69m in Q4 15). FY2016 figures: Sales were SEK121.1bn (-2%, o/w -1% attributable to currency fluctuations, +0.1% to acquisitions and -1.1%% organically). The operating income reached SEK6,274m vs SEK2,741m which included SEK-2,059m of extraordinary costs related to GE Appliances in FY2015. The operating margin improved to 5.2% of sales (+1.3pts restated). Electrolux benefited from a positive volume/price/mix effect (SEK311m) and lower raw material costs (SEK901m) at the EBIT level. The huge negative currency impact (SEK-1,662m at the EBIT level, o/w SEK-1,470m transaction effect) was offset by cost efficiencies (SEK1,670m). Group net profit was SEK4,493m (vs SEK1,568m in FY2015) after net financial costs of SEK-693m and an income tax rate of 19%. The operating cash flow reached SEK10,165m (+23%) and FCF surged to SEK6,775m (+46%) after lower investments in fixed assets (-7% to SEK3,390m). The group had a net cash situation at year-end 2016 (SEK-3,809m vs net debt of SEK1,898m at year-end 2015).
01 Feb 17
Positive effect of cost efficiencies
Q3 16 was globally a good quarter despite the weakness of the top-line in North America in a flat core appliances market and the continuing poor environment in Latin America. The group had net cash on 30 September 2016. Q3 16 results: Group sales reached SEK30,852m (-1.4%). There was a slight currency effect (+0.2%). Organic sales were down (-1.6% vs +2.1% in Q3 15) in line with our expectation. This was attributable to a decrease in Major Appliances North America (-4.6% vs +7.1% in Q3 15), Major Appliances Latin America (-6.2% vs -5.1% in Q3 15) and Small Appliances (-10.3% vs -0.5% in Q3 15) which were not offset by organic sales growth in Major Appliances EMEA (+2.1% vs +5.4% in Q3 15), Major Appliances Asia/Pacific (+10.7% vs -13% in Q3 15) and Professional Products (+4% vs +1.1% in Q3 15). Operating income surged to SEK1,826m (+21%), corresponding to a margin rate of 5.9% of sales (+1.1pts), above our expectation. The increase in the operating income was attributable to higher contributions from Major Appliances EMEA (SEK680m, +12%), Major Appliances North America (SEK824m, +11%), Major Appliances Asia/Pacific (SEK208m vs SEK54m in Q3 15) and Professional Products (SEK234m, +10%). Only two divisions out of six had lower contributions, i.e. Major Appliances Latin America (SEK19m vs SEK110m in Q3 15) and Small Appliances (SEK34m, -17%). In addition, the basis of comparison was also favourable as the Q3 15 operating result included transaction costs of SEK-128m related to GE Appliances. There was a negative currency impact of SEK-120m at the operating level (vs SEK-225m in Q3 15), o/w SEK-88m was related to a transaction effect, mainly related to the weakness of the British pound. Group net income was SEK1,267m (+25%) after net financial costs (SEK-101m, -30%) and a higher income tax rate (26.5%, +1pt). 9-month results: Electrolux posted sales of SEK88,949m (-3% and -0.4% organically), operating income of SEK4,658m (+58%) corresponding to a margin rate of 5.2% of sales (+2pts) and group net profit of SEK3,221m (+64%) after net financial costs of SEK-322m (+2%) and an income tax rate of 25.7% (+0.4pt) The cash flow from operations increased to SEK7,140m (+4%) after a lower improvement in the change in WCR and capex decreased to SEK2,113m (-12%). On 30 September 2016, Electrolux had a strong balance sheet with net cash of SEK1,471m (vs net debt of SEK2,126m on 30 September 2015 and SEK1,898m at year-end 2015) and shareholders’ equity of SEK15,714m.
28 Oct 16
Weak sales, strong results boosted by cost efficiencies
Q2 16 was a satisfactory quarter despite weak sales. The overall performance was mainly driven by the Major Appliances EMEA (volume growth, better product-mix, cost efficiency) and North America (product-mix improvement, cost efficiency). Q2 16 earnings - Group sales were down 4.4% to SEK29,983m and -0.9% organically. Organic sales grew only in two divisions, i.e. Major Appliances EMEA (+5.2%) and Professional Products (+1.1%). Organic sales decreased in the other divisions, i.e. Major Appliances North America (-1.5%), Major Appliances Latin America (-6.7%), Major Appliances Asia/Pacific (-2% due essentially to the repositioning and the reduction in sales in China), and Small Appliances (-12.3% given the exit of unprofitable product categories in North America). - Operating income surged to SEK1,564m (+70%) corresponding to a margin rate of 5.2% of sales (+2.3pts). There was a negative currency impact of SEK-478m, o/w a transaction effect of SEK-425m. Almost half of the increase in operating income (up SEK643m) came from the Major Appliances North America division (up SEK341m to SEK742m) followed by the Major Appliances EMEA division (up SEK141m to SEK567m). In addition, the group’s common costs decreased by 47% to SEK192m taking into account that there was some transaction and integration costs related to GE Appliances in Q2 15. - Group net income was SEK1,079m (+77%) after stable income tax rate (25.5%). - The group’s operations generated strong cash flow (SEK4,015m +17%) and free cash flow surged to SEK3,337bn (+32%) due to lower capex (SEK678m, -24%). H2 16 earnings - Group sales were SEK58,097m (-3.9% and +0.3% organically), operating income surged to SEK2,832m (+97%) corresponding to a margin rate of 4.9% (+2.5pts) and group net income was SEK1,954m (vs SEK947m in H1 15). - The cash flow from operations increased by 11% to SEK3,702m taking into account an increase in the change in inventory in Q1 16. Free cash flow surged by 41% to SEK2,388m due to lower capex (SEK1,314m, -20%). - On 30 June 2016, the financial net debt was low at SEK1,271m (vs SEK1,898m on 31 December 2015, SEK5,148m on 30 June 2015) and represented 9% of shareholders’ equity.
20 Jul 16
Strong growth in the two largest divisions
Electrolux released a good set of figures which included strong organic sales growth and margin improvement in EMEA, the return to a ‘normalised’ situation in North America vs Q1 15 which was affected by non-recurring costs, lower performance in Latin America and a significant adverse currency impact at the operating level. Q1 16 earnings Sales decreased to SEK28,114m (-3.3%) due to a negative currency impact (-5.2%). Organic growth was +1.8% (vs -0.5% in Q1 15) driven by Major Appliances EMEA (+7.1% vs +3% in Q1 15), Major Appliances North America (+5.7% vs -3.6% in Q1 15)) and Professional products (+4.3% vs +3% in Q1 15). Impressive growth in EMEA reflected volume increases, the improvement of the product mix and the gain in market shares which more than offset further price pressure. North America reversed the negative trend vs Q1 15 with strong growth on the back of dynamic market demand (+8% for core appliances). The emerging geographic areas (-11.3% in Latin America due to adverse macro-economics in Brazil, -5.4% in Asia/Pacific) and Small Appliances (-6.1%) weighed negatively on overall organic growth. Gross profit increased by 12% to SEK5,770m. The gross margin improved significantly to 20.5% of sales (+2.9%) thanks to a combination of volume increases, satisfactory pricing and product mix, no pressure on raw material costs and further cost efficiencies. Group operating income rebounded to SEK1,268m (vs SEK516m in Q1 15), representing a margin rate of 4.5% of sales (vs 1.8% of sales in Q1 15). The bulk of the improvement came from Major Appliances EMEA (SEK553m, +49%) and Major Appliances North America (SEK495m vs SEK-57m in Q1 15) which suffered from additional costs related to the transition of products to comply with new energy requirements and the slower than expected ramp-up of the new cooking facility in Memphis last year. Major Appliances Latin America was the only division with lower operating income (SEK31m, -82%). The currency effects were negative on the operating income, or SEK-720m (vs SEK-277m in Q1 15), o/w SEK658m related to transactions. This was mainly due to the stronger $ vs various Latin American currencies and the euro. Group net profit was SEK875m (vs SEK339m in Q1 15), after higher net financial costs (SEK-105m, +59%) and similar income tax rate (24.8%). The negative cash flow from operations deteriorated (SEK-313m vs SEK-93m in Q1 15) due principally to an increase in the change in inventories. Capex decreased to SEK636m (-16%). On 31 March 2016, financial net debt amounted to SEK3.1bn (vs SEK5.6bn on 31 March 2015 and SEK1.9bn at year-end 2015) representing 22% of shareholders’ equity.
28 Apr 16
Earnings significantly impacted by the cancelled GE Appliances acquisition
Q4 15 earnings were impacted by SEK1,659m of costs (o/w a termination fee of SEK1,493m paid to General Electric) related to the non-completion of the acquisition of GE Appliances in the US. +Q4 15 figures+ Group sales reached SEK31.8bn, +1.3% including a positive currency effect of +1%. Sales were fairly flat organically considering the strong organic growth in the Major appliances Europe/Middle East/Africa (+6.1%) and North America (+4.2%) and the drop in Latin America (-10.7%) and Asia/Pacific (-5.2%), a good development in the Professional products division (+3.4%) and lower organic sales in Small appliances (-10.1%) attributable to lower volumes of vacuum cleaners sold in the US, Brazil and Asia/Pacific. Electrolux posted an operating loss of SEK-202m (vs SEK1,395m in Q4 14) due to the GE Appliances-related costs. Excluding this item, the operating margin improved to 4.6% of sales (+0.2pts). The best operating performances were in the Major appliances EMEA (SEK765m, +51%) and North America (SEK493m vs SEK134m in Q4 14) and the Professional products (SEK260m, +38%). The contribution from the Major appliances in Latin America and Asia/Pacific dropped sharply (respectively -86% to SEK69m and -39% to SEK123m) and Small appliances turned negative (SEK-92m vs SEK173m in Q4 14) after restructuring charges of SEK190m. The Group net result was negative at SEK-394m after higher net financial expenses (SEK-323m vs SEK-103m in Q4 14) due to funding costs (SEK-187m) arising from the bridge facility for the acquisition of GE Appliances which was cancelled. +FY2015 figures+ Sales were SEK123.5bn, +10.1% o/w +7.8% attributable currency fluctuations and +2.2% organically. The reported operating income decreased by 23% to SEK2,741m. The failure of the acquisition of GE Appliances was expensive as the total cost (termination fee, transaction cost, preparatory integration work) reached SEK2,059m at the EBIT level and SEK2,246m at the pre-tax profit level including funding costs arising from the bridge facility (SEK-187m). This explains why Group net profit fell to SEK1,566m (-30%). Electrolux's strength was its ability to offset the huge negative currency impact at the EBIT level (SEK-1,418m o/w SEK-1,879m transaction effect) by a positive price/mix policy (SEK+1,812m). The main negative currency effect was attributable to Latin American currencies (SEK-1,315m). Operating cash flow improved (+5.7% to SEK8,267m) despite the cash-out related to GE Appliances. This was the combination of the improvement of the operations, lower trade receivables and a positive change in accounts payable. FCF surged to SEK4,955m (+20%) after lower investments in fixed assets (-10% to SEK3,312m). Electrolux paid a stable dividend to shareholders. At year-end 2015, the financial net debt had been significantly reduced to SEK1.9bn (vs SEK4.9bn at 31 December 14) and represented c.13% of shareholders’ equity (vs c.30% on 31 December 14).
28 Jan 16
New President and CEO at Electrolux
President and CEO of Electrolux Keith McLoughlin (60 years old) has notified the board of directors that he has decided to retire from the company. Jonas Samuelson is appointed new President and CEO of Electrolux and will take up his position on 1 February 2016. Keith McLoughlin said that his decision was motivated by returning to his family in the US. Last year, there were rumours about his departure when Electrolux was fighting against the DOJ in order to complete the acquisition of GE Appliances. He said that he will support Electrolux in North America on a consultancy basis.
11 Jan 16
Good performance in mature markets
Electrolux had an expected Q3 15, characterised by strong growth in North America and Europe, a negative trend in Latin America and China, a positive product-mix and pricing that more than offset the negative transaction currency impact. Q3 15 results: - Sales reached SEK31.3bn (+8.7% and +2.1% organically). There was a significant currency effect (+6.3%). Organic sales growth was driven by the Major Appliances EMEA (+5.4%) and North America (+7.1%). Conversely, Electrolux was affected by lower activities in the Major Appliances Latin America (-5.1%) and Asia/Pacific (-13%). Organic sales were rather flat in the Small Appliances (-0.5%) and the Professional Products (-0.4%). - The operating income increased to SEK1,506m (+8.2%) and the operating margin was stable at 4.8% of sales. This was the combination of higher contributions from Major Appliances EMEA (SEK605m, +25%) and North America (SEK743m, +43%), improvements in the performances of Small Appliances (SEK41m, +17%) and Professional Products (SEK212m, +15%) and lower contributions from Major Appliances Latin America (SEK110m, -55%) and Asia/Pacific (SEK54m, -57%). In addition, Electrolux supported transaction costs of SEK128m related to the pending acquisition of GE Appliances in the US. - There was a negative currency effect on the operating income, or SEK-225m, o/w SEK-389m were related to transactions. This was mainly due to the stronger dollar vs various Latin American currencies. - Net group income was SEK1,013m (+8.6%) after stable net financial costs (SEK145m) and income tax rate (25.5%, +0.1pt). 9m 15 cash flow and financial situation: Cash flow from operations increased to SEK6.9bn (+28%) after a strong improvement in the change of trade receivables and accounts payable. FCF reached SEK4.3bn (vs SEK3.0bn in 9m 14) after higher capex (SEK2.6bn, +11%) and exceeded the dividend paid to shareholders (SEK1.9bn). Therefore, the financial net debt was reduced significantly to SEK2.1bn on 30 September 2015 (vs SEK6.0bn on 30 September 2014 and SEK4.9bn at year-end 2014) and represented only 13% of shareholders' equity.
26 Oct 15
Good quarter in challenging markets
Q2 15 earnings: Sales surged to SEK31.3bn (+19%) due to a significant positive currency effect. Organic sales surged by 7.0% reflecting higher sales in all divisions, o/w a double-digit growth in Major Appliances North America and Latin America(both +11.4%) and significant organic growth in Professional Products (+5.1%). Group operating income was up to SEK921m (vs SEK63m in Q2 14) due mainly to the recovery in the Major Appliances EMEA division which turned positive to SEK426m (vs SEK-901m in Q2 14), and a higher contribution from the Major Appliances Asia/Pacific and Professional Products divisions (respectively SEK135m, +32%, and SEK220m, +28%). This more than compensated for the decrease in operating income of the Major Appliances North America division to SEK401m (-41%) and the Major Appliances Latin America division to SEK107m (-22%). The Small Appliances division was loss-making (SEK-4m vs SEK-41m in Q2 14). The currency effects were negative on the operating income, or SEK-146m, o/w SEK-330m were related to transactions. This was mainly due to the stronger dollar vs various Latin American currencies. Some price increases attenuated these currency effects. Net profit improved to SEK608m (vs SEK-92m in Q2 14) after lower net financial costs at SEK-106m (-42%). Key data in H1 15: Electrolux posted sales of SEK60.4bn (+16% and +3.2% organically), operating income of SEK1,437m (+81%) corresponding to a margin rate of 2.4% of sales (+0.9pt), and group net profit of SEK947m (vs SEK339m in H1 14). Cash flow from operations was flat at SEK3.3bn after the payments of SEK322m related to the ongoing restructuring, and the FCF decreased to SEK1.5bn (-21%) due to higher capex (+15% to SEK1.6bn). On 30 June 2015, the financial net debt amounted to SEK5.1bn (vs SEK7.5bn on 30 June 2014 and SEK4.9bn at year-end 2014) representing 32% of shareholders' equity.
20 Jul 15