(openPR) Challenging business conditions in Europe, sustained demand in all other regions
Attachment to the press release:
http://www.directnews.de/servlets/LoadBinaryServlet/612086/SEBsalesT105.pdf
These figures are presented in accordance with International Financial Reporting Standards, with first-quarter 2004 sales adjusted for purposes of comparison. Under IFRS, the costs of cooperation campaigns conducted with retailers and of consumer promotional campaigns are deducted from reported sales. Because these costs are no longer recorded as an operating expense, the change has no impact on operating margin.
Consolidated sales for the three months ended 31 March 2005 rose slightly to Euro 484.9 million, including sales from All-Clad, consolidated since August 2004. At constant consolidation scope and exchange rates and using 2004 accounting standards, sales were down 1.2%. The early-year business environment was marked by fierce competition and very uneven, with sluggish consumer spending in Europe contrasting with stronger growth in other regions. Competition remained fierce during the period. Entry-level products manufactured in Asia and sold through fast-growing discount retail chains increased their market share, especially in industrialized countries. The currency context remained generally unfavorable and again had a negative impact on sales - notably because of the dollar - although much less so than in 2004.
In France, the decline in sales was mainly due to heavy promotional costs for cookware associated with Chandeleur (Candlemas), a day that the French traditionally celebrate with crepes. These costs, which were much higher than in 2004, are deducted from sales under the new accounting standards. Early-year sales were also slow for irons and vacuum cleaners, following a satisfactory prior-year performance. Sales of hair dryers, steam generators, pressure cookers and espresso coffee makers were strong, however, enabling notably Krups to win back market share.
Sales were also down almost everywhere else in the European Union, reflecting both persistent difficulties in Italy and a cyclical downturn in a few countries that registered strong growth in 2004, such as Spain, the United Kingdom and Portugal. In addition, reported sales in these latter countries were penalized by high prior-year 1ST quarter comparatives. On the other hand, sales bounced back in Germany, thanks to specific, targeted promotional campaigns with a number of retailers, and were satisfactory in Scandinavia.
In North America, following a difficult 2004, the new year showed encouraging signs of growth. In the United States, sales were up 65.3% with All-Clad and 9.3% excluding All-Clad, which contributed Euro 19 million to the total. This upturn, following two years of decline, reflected a stabilization in T-FAL sales, as expressed in dollars, a turnaround in business of the Krups brand, led by new products launched in late 2004, and a confirmation of Rowenta´s momentum, driven by the successful launch of new-model irons and hand steamers. Moreover, it has to be stressed that All-Clad sales increased by 15% during the quarter.
In South America, macroeconomic indicators continued to trend favorably, enabling Groupe SEB to make further inroads. In Brazil, sales were buoyed by the introduction of new products such as blenders, dry and steam irons, and personal care appliances, while rapid expansion continued in Argentina and Venezuela.
In the other countries, sales increased in nearly all markets, notably in Southeast Asia, where the recent start-ups in Thailand, Taiwan and Singapore produced results, in Japan, where the Group gained market share, in Turkey, that still enjoys high growth potential, and in Central Europe, where Groupe SEB further strengthened its positions.
SEB S.A. invites shareholders to attend the Annual and Extraordinary Meeting:
11 May 2005 at 2:30 p.m.
Palais Brongniart, Place de la Bourse - 75002 PARIS
