Groupe SEB: Provisional First-Half 2006 Sales; Favourable Trend Maintained Competitive Environment Still Challenging

Groupe SEB(Paris:SK) (ISIN:FR0000121709):
-0-
*T


(in EUR millions) %
First- First- change
half half ===================
IFRS 2005 2006 Current Constant
exchange exchange
rates rates
======== ======== ========= =========
France 238.2 237.9 -0.1 -0.1
================================ ======== ======== ========= =========
Other EU countries 278.8 293.9 +5.4 +5.4
================================ ======== ======== ========= =========
North America 135.6 161.3 +19.0 +11.0
================================ ======== ======== ========= =========
South America 74.6 110.1 +47.5 +31.8
================================ ======== ======== ========= =========
Other countries 276.4 318.7 +15.3 +15.3
================================ ======== ======== ========= =========
TOTAL 1,003.6 1,121.9 +11.8 +9.5
================================ ======== ======== ========= =========
Rounded figures Percentages based
on exact figures
*T

Consolidated sales for the six months ended 30 June 2006 showed
robust growth that is of course related to a favourable comparison
with a difficult first-half 2005, but that also confirms a positive
uptrend in business. Lagostina and Panex were consolidated for the
full six months (vs two months and one month, respectively, in
first-half 2005) and contributed thus an additional EUR 38-million to
first-half 2006 revenue. The currency effect remained positive (EUR 23
million) despite the downturn in the Turkish lira against the euro in
the second quarter. At constant scope of consolidation (i.e. Lagostina
consolidated for May and June and Panex for June) and exchange rates,
revenue was up an organic 5.7%.
This performance, which is in line with the first quarter,
reflects the Group's ongoing international expansion and the excellent
results from All-Clad in the United States. However, demand in Europe,
at constant scope of consolidation, slowed in the second quarter to
end the half stable, in an environment that remains highly competitive
and deflationary.
In France, the second quarter was shaped by a return to a more
aggressive environment and the Group did not maintain the advances
made earlier in the year. With considerable pressure on market share,
prices and, consequently, on margins, sales at comparable scope of
consolidation were down slightly for the first six months. Business
still varied depending on the product category. It was difficult in
the most competitive product families (filter coffeemakers, kettles,
toasters) but it improved in cookware, espresso machines, steam
generators and personal care appliances (hair dryers, hair removers,
etc.).
In the other European Union countries, where the growth in sales
was led by Lagostina's contribution, demand remained strong in Spain,
Austria, Greece and the Netherlands, all of which reported higher
sales for the period. The situation stabilized in Italy and Portugal.
Despite a solid second quarter, sales in Germany were down, adversely
affected by the non-renewal of the early 2005 promotional campaigns.
This was also the case in the United Kingdom, where the slowdown
observed in the first quarter worsened in the second, in a market
environment that has become challenging.
In North America, the Group's performance improved in the second
quarter. In the United States, Rowenta strengthened its positions in
upmarket irons, T-Fal maintained its sales despite a drop in
electrical appliances, Krups made up a significant portion of its
early-year shortfall and All-Clad strengthened its dynamics, led by
the thoroughly revitalized Emeril cookware line. At the same time, the
Group continued to make headway in Mexico and confirmed its recovery
in Canada.
In South America, sales kept improving despite a number of
specific slowdowns in certain markets. In Brazil, where the real's
strengthening stimulated imports despite existing customs duties, Arno
nevertheless consolidated its market share and registered a
satisfactory growth rate, while Panex focused on reorganizing its
frontline teams. Business slowed somewhat in Argentina and Chile but
remained very strong in Colombia and Venezuela.
In the rest of the word, Groupe SEB pursued its development on all
fronts and its solid performance was fairly constant over the entire
period. Sales were up in nearly all countries, with the exception of
South Korea, where business slackened. In Central Europe, the Group
reported higher sales, following a sluggish first quarter. It
continued its rapid growth in Japan, reaffirmed its momentum in the
CIS and Australia, and maintained strong sales in Turkey in a more
aggressive competitive environment. Lastly, it made new inroads in
China and its recent Asian markets.