Electrolux turns profit of 8% on growing demand for white goods

Evidence of an upturn in consumer demand in Europe came from Sweden's Electrolux, the white goods' manufacturer, who reported a strong increase in profits for the year to the end of 1994.

The company reported profits of 3.574bn kronor (£302m) after taking out profit from the sale of a subsidiary, representing a 65 per cent increase on the previous year. Turnover was 108bn kronor (£9.17bn), an increase of 8 per cent over 1993.

Including profits from the sale of a subsidiary, the company saw profits quadruple to 6.350bn kronor.

The upturn in demand for the company's white goods came mainly from the Nordic countries, the United Kingdom and Spain. The North American market continues to show strong volume growth.

The company said demand for commercial appliances, mainly cleaning equipment, was weak. However, demand for its air-conditioning units was strong. Sales of materials-handling equipment also increased.

The fourth quarter figures were strong, allowing the company to go into 1995 on a high note. The company said the good growth in profit can also be attributed to cost cutting and restructuring.

The company plans to return the dividend to its previous level of 12.50 kronor per share, up from 6.25 kronor.

Outdoor products, under the Husqvarna brand, reported very strong growth. However, Flymo reported sales and income lower than that of 1993 as a result of lower demand for garden equipment in Europe.

"Although the market situation was better than in 1993, the good growth in income is mainly a result of restructuring and other cost-cutting programs in recent years," an Electrolux statement said.

Included in the 1994 results is a total capital gain of 2,770m kronor during the second quarter, generated by the divestment of airbag manufacturer Autoliv and other operations.

Electrolux's net financial items improved, as proceeds from divested operations exceeded the payments made for AEG Hausgeraete, and as the level of tied-up capital was reduced, the statement said. AEG Hausgerate was included in Electrolux's figures for the first time, adding 3.1bn kronor in sales.