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ELECTROLUX HALF-YEARLY REPORT, 1992

 ELECTROLUX HALF-YEARLY REPORT, 1992
 STOCKHOLM, Sweden, Aug. 21 /PRNewswire/ -- Electrolux today reported


the following results:
 Second Quarter
 Sales for Electrolux in the second quarter of 1992 amounted to SEK 21,340m, as against SEK 21,528m in the corresponding period last year. Sales showed a marginal increase after adjustment for acquisitions and divestments.
 Operating income after depreciation declined by 3 percent to SEK 902m (934). Income after financial items was unchanged, and amounted to SEK 505m (503).
 The European market showed weaker demand than in the second quarter of 1991. A slight increase in demand was reported for several product areas in North America, however.
 Among the Group's business areas, Household appliances and Industrial products reported largely unchanged operating income, and an improvement was achieved for Outdoor products. Commercial appliances reported lower operating income.
 In geographical terms, Group operating income rose in North America but declined in Europe.
 First half of 1992
 Group sales in the first half of 1992 amounted to SEK 40,802m, as against SEK 40,765m for the corresponding period last year. Sales increased by approximately 1 percent after adjustment for acquisitions and divestments.
 Operating income after depreciation amounted to SEK 1,520m (1,732), and income after financial items to SEK 758m (917). Income for 1991 included capital gains of SEK 184m on divestment of operations in commercial services during the first quarter of the year. After adjustment for this non-recurring item, income after financial items for the first half of 1992 rose by 3 percent.
 An improvement in net financial items was reported as a result of lower USD interest rates and lower net borrowings. The geographically unfavorable fiscal situation remained, but was alleviated to some extent in comparison with the first quarter of the year.
 The business areas household appliances and Outdoor products achieved improvements in operating income, while commercial appliances reported a decline. Operating income for Industrial products was unchanged.
 Group operating income improved in North America but declined in Europe.
 Household Appliances
 Sales in the first half of 1992 increased to SEK 22,977m (22,695). Almost half of the increase in sales referred to Lehel, the Hungarian white-goods company, which was consolidated as of April, 1991.
 The European market for white goods contracted somewhat in volume in comparison with the previous year. The decline referred mainly to the Nordic countries and the UK. The group strengthened its European market share during the period.
 The North America white-goods market showed an increase in volume over the previous year. The group's market share was largely unchanged. Operating income for white goods improved during the second quarter and for the period as a whole, in both Europe and North America.
 A favorable trend for sales volume in the United States together with previously implemented restructuring also led to improved operating income for floor-care products and leisure appliances.
 However, lower sales volume resulting from cool weather in the U.S. involved a substantial decline in operating income for the room air- conditioners product line, in both the second quarter and the first half of the year as a whole. Kitchen and bathroom cabinets costs within the U.S. operation as well as lower demand and lower sales volume in the Nordic countries.
 The household appliances business area reported improved overall operating income and profitability.
 Commercial appliances
 Sales in the first half of 1992 amounted to SEK 4,391m (4,374).
 Demand for food-service equipment declined in Europe, where sales volumes for the group were lower than in the previous year. The difficult market situation also led to greater price competition. This product line reported a substantial drop in operating income. An increase in market share was achieved, however.
 Operating income also declined for industrial laundry equipment as a result of lower sales volume and greater price competition, primarily in Sweden and the U.S.
 Lower sales, mainly in the Nordic market, also led to lower operating income for commercial cleaning equipment. An improvement was achieved for commercial refrigeration equipment, however, mainly as a result of previously implemented restructuring.
 Operating income and profitability for this business area were considerably lower than in the first half of 1991.
 Outdoor Products
 Sales rose to SEK 5,765m in the first half of 1992, as against SEK 5,583m in the corresponding period last year.
 In Europe, operating income for chainsaws increased as a result of higher sales in the professional sector, mainly in Southern and Eastern Europe, together with an improved cost structure at the Swedish production unit. Good growth in sales volume was also achieved for a new chainsaw manufactured by the group's U.S. subsidiary. For garden equipment in Europe, Flymo reported good growth in sales and operating income, primarily in the United Kingdom, while sales in the Nordic countries were somewhat lower than last year.
 In North America, chainsaws also showed higher sales volume and operating income. Sales of garden equipment in North America were relatively unchanged for 1991.
 This business area reported improved operating income and profitability.
 Industrial Products
 Sales declined to SEK 7,293m (7,452) in the first half of 1992. The decline refers mainly to lower invoicing and to divestment of operations within Granges.
 Lower prices for aluminum and lower margins led to a decline in operating income for Granges in the first half of the year. Higher productivity generated an improvement in the second quarter, however.
 Lower sales volumes for materials handling equipment in both Europe and the U.S. led to substantially lower operating income for this product line. However, higher sales and operating income were reported for compressors and for safety equipment.
 Operating income and profitability for this business area were unchanged from last year.
 Comments on the market situation
 Uncertainty regarding market trends during the second half of the year has increased in recent months. Demand in Europe has gradually weakened, mainly in the Nordic Countries, but in the U.K. as well. The recent rise in German interest rates will also act as a damper on the European economies. At the same time the recovery in the U.S. will probably continue to be slower and weaker than anticipated.
 Following the major investments of recent years in new production facilities and an improved production structure, a comprehensive program is in progress within the group for development of new products. This program is aimed at offering consumers products with improved performance and new functions, and at meeting the criteria for environmental compatibility and energy consumption which will be gradually introduced during the 1990s. In parallel with launchings of these products, extensive market investments are being made with a view to strengthening the group's major brand names in various parts of the world. These programs will be implemented despite the current relatively low profitability and weak markets.
 The group is continuing its efforts to reduce operating costs and capital employed. Priority has been assigned to a continued increase in the rate of inventory turnover.
 Major Changes in the Group
 On June 23, 1992, Electrolux and AEG of Germany signed a Letter of Intent regarding cooperation between Electrolux and the AEG subsidiary AEG Hausgerate AG on manufacture and product development of specific household appliances.
 Initially, the cooperation will cover washing machines, tumble dryers and dishwashers. The goal is to strengthen both companies' long-term competitive positions through rationalization and greater specialization. The cooperation will involve the restructuring of both companies' production units in these product areas. Electrolux and AEG will continue to compete in the market under their respective brand names.
 The Letter of Intent also stipulates the acquisition by Electrolux of a 10 percent stake in AEG Hausgerate, with an option to acquire another 10 percent as cooperation is expanded. In addition, AEG will subscribe to a debenture loan issued by Electrolux, with an option for conversion to Electrolux B-shares.
 The cooperation requires approval by the appropriate anti-trust authorities. The final agreement is subject to the approval by an Electrolux shareholders' meeting of the issuance of the convertible debenture loan to AEG.
 As of July 1, 1992, the group acquired the operation for manufacture and sale of commercial refrigeration and freezing equipment within UPOREF of Finland. This operation has annual sales of approximately SEK 300 million.
 Parent Company:
 Sales for AB Electrolux in the first half of 1992 amounted to SEK 2,266 million, as against 2,453 million in the corresponding period last year. Operating income before allocations and taxes amounted to SEK 125 million (51).
 Gross capital expenditure amounted to SEK 42 million (56), and liquid funds at the end of the period amounted to SEK 3,227 million (6,366).
 ELECTROLUX
 Consolidated Income Statement
 (SEK in millions)
 Second quarter First half Full year
 1992 1991 1992 1991 1991
 Sales 21,340 21,528 40,802 40,765 79,027
 Operating expenses (19,593) (19,731) (37,591) (37,343) (73,117)
 Operating income
 before depreciation 1,747 1,797 3,211 3,422 5,910
 Depreciation according
 to plan (845) (863) (1,691) (1,690) (3,322)
 Operating income
 after depreciation 902 934 1,520 1,732 2,588
 Financial items, net (397) (431) (762) (815) (1,557)
 Income after financial
 items and before taxes 505 503 758 917 1,031
 Taxes paid and
 deferred taxes (254) (263) (481) (393) (595)
 Income after taxes 251 240 277 524 436
 Minority interests (12) (13) (23) (35) (59)
 Net income 239 227 254 489 377
 Consolidated Balance Sheet
 (SEK in millions)
 6/30/92 6/30/91
 Liquid funds 9,222 10,707
 Accounts receivable 16,641 16,591
 Inventories 14,961 16,572
 Other current assets,
 including blocked accounts 3,564 3,691
 Fixed assets 23,804 25,500
 Total assets 68,192 73,061
 Current liabilities 32,712 33,082
 Long-term liabilities 20,151 23,365
 Minority interests 252 229
 Shareholders' equity 15,077 16,385
 Total liabilities and shareholders' equity 68,192 73,061
 Net interest-bearing liabilities less liquid funds amounted to SEK 22,253 million (23,372) as of June 30, 1992. The corresponding figure for the full year 1991 was SEK 19,765 million.
 Sales By Business Area
 (SEK in millions)
 Second Percent First half Percent Full
 quarter change change year
 1992 1991 1992 1991 1991
 Household
 appliances 11,999 11,997 -- 22,977 22,695 +1.2 45,481
 Commercial
 appliances 2,372 2,358 +0.6 4,391 4,374 +0.4 8,971
 Outdoor
 products 3,021 3,028 -0.2 3,765 5,583 +3.3 8,941
 Industrial
 products 3,797 3,834 -1.0 7,293 7,452 -2.1 14,370
 Commercial
 services 151 311 -51.4 376 661 -43.1 1,264
 Total 21,340 21,528 -0.9 40,802 40,765 +0.1 79,027
 Second quarter First half Full year
 1992 1991 1992 1991 1991
 Key Ratios
 For the period
 Earnings per share
 after full tax, SEK(A) 3.30 3.10 3.50 6.70 5.20
 Earnings per share
 according to US GAAP,
 SEK(A) 3.50 3.30 4.00 6.70 5.50
 Capital expenditure,
 (In SEK millions) 1,388 1,533 3,414
 Sales outside Sweden 89 pct. 88 pct. 88 pct.
 Annual Basis
 Return on equity
 after full tax 3 pct. 6 pct. 2 pct.
 Return on net assets 8 pct. 9 pct. 7 pct.
 (A) -- The number of shares amounts to 73.2 million (73.3).
 This report is unaudited.
 The result for the third quarter will be published on Nov. 20, 1992.
 -0- 8/21/92
 /CONTACT: Asa Mattssom of Electrolux, in Stockholm, 011-468-738-6494/ CO: Electrolux ST: IN: HOU SU: ERN


SH-KW -- NY008 -- 2068 08/21/92 10:27 EDT
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