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Electrolux Q1 Majap Sales Slide 12%

Stockholm, Sweden – Electrolux reported first quarter North American sales in its consumer durables segment, which includes majaps, dropped 12 percent to $1.4 billion, but U.S. shipments of core appliances were largely unchanged compared with a strong first quarter in 2002.

The company’s consumer durables operation recorded sales of $1.4 billion in the first quarter of 2003, down from $1.6 billion in the same period the previous year.

Shipments of major appliances to the United States, including room air conditioners and microwave ovens, climbed by about 6 percent in the first quarter. Group sales of core appliances in North America showed good growth in local currency, said Electrolux, mainly refrigerators and cooking products. Operating income and margin also improved.

Operating income for the Electrolux consumer durables segment decreased to $94.9 million in the first quarter, down from $104.2 million in the same three months in 2002. Margin remained about the same year-on-year, at 6.6 percent.

A restructuring program for majaps in North America, aimed at improving productivity and adjusting the cost structure, included a total fourth quarter 2002 charge of $47.1 million. In the first quarter of 2003, $17.4 million of this charge had been utilized, with estimated savings totaling $11.2 million.

Consolidated Electrolux sales in the first quarter dropped 4.5 percent, to $3.8 billion, compared with $4 billion in the same three months a year earlier. Net income for the first three months of 2003 dropped by over half, down to $148.2 million, from $352.4 million in the same quarter the previous year.

Although Electrolux acknowledges the uncertainty regarding market conditions for the remainder of 2003, the majap manufacturer anticipates demand for appliances to be at least flat in North America in the next nine months.

Consolidated operating income for the full year is expected to be somewhat lower than in 2002.