STOCKHOLM — With the U.S. housing market continuing to improve, it's no surprise that Electrolux CEO Keith McLoughlin expects the company's North American division to maintain the strong sales and earnings growth achieved in the second quarter throughout the rest of the year.
Because of the rising appliance consumption in North America, the company anticipates that demand for appliances in the U.S. will increase by 5-7% in 2013.
"Operations in North America reported another quarter of strong earnings. In the first half of 2013, our EBIT margin was close to 7%, which is a record for the first six-month period in North America," said McLoughlin. "This strong momentum was driven by an improved U.S. appliance market, a strong product offering in all price segments and that we now have access to all major distribution channels."
Operations in Europe didn't fare as well in the quarter, and continued to suffer from weak demand resulting in negative price development. Despite the break-even result, which represents a weak bottom line result, McLoughlin describes the company's gross margin as "solid" and points out that it showed a healthy recovery compared with last year.
"This is primarily attributable to our activities to remain cost competitive by improving our manufacturing footprint, capitalizing on our shared global strength and the launch of high-end appliances under the Electrolux brand to ensure a positive product mix," added McLoughlin regarding the company's performance in Europe. "Despite these improvements, we believe that 2013 will continue to be a challenging year in Europe, although gradually improving during the second half."
Latin America showed strong top-line growth, while earnings were impacted by negative currency movements.