All currencies in this story have been converted to Australian dollars at today’s (4 February 2014) exchange rate
Sales of Electrolux appliances in Australia “declined somewhat” in the final three months of 2013, according to the Swedish company’s quarterly results released this week.
The company’s Asia/Pacific division, which includes Australia and New Zealand, recorded $16.7 million in operating income for the fourth quarter of 2013, bringing its total yearly operating income for the region to $81.3 million. This quarterly profit result was down 55 per cent on the previous corresponding quarter while the total 2013 income was down 37 per cent.
Total sales for the Asia/Pacific region amounted to $375 million for the quarter, a decline of 4.5 per cent on the previous year.
The company reported positive sales in some Asian countries, saying, “In the fourth quarter of 2013, market demand for major appliances in Southeast Asia and China is estimated to have grown year-over-year, while market demand in Australia declined somewhat”.
Despite this overall assessment, president and CEO Keith McLoughlin added that, “Organic sales growth in Australia was positive, driven by price and mix and a gradual recovery in the market. Southeast Asia also demonstrated positive organic growth. Margins were impacted by launch costs in China and Southeast Asia.”
In what may be a sore point for some Australian Electrolux employees, the company noted that income is being affected by “start-up costs in the new refrigerator plant in Rayong in Thailand”. This is the plant that will soon takeover refrigeration manufacturing from the company’s Orange facility, which is due to close in 2016.
Overall, McLoughlin was upbeat about the results, saying that despite the company’s global net sales declining 1 per cent during calendar 2013 (to $19 billion) and operating income declining 19 per cent (to $706 million), there was reason for optimism.
“Our strategy has paid off over the past two years with a growth trajectory that hasn’t been seen in the Group for many years,” he said. “Due to headwinds in the European market and significant currency fluctuations, our earnings have declined. However, the actions that have been initiated will address the European situation to improve its profitability.
“We will also, over time, mitigate the currency headwinds through internal actions. We expect to deliver according to our strategy in terms of margins, asset velocity, return on investments and growth, to create continued economic value for all our stakeholders.”