Indesit integration hinders Whirlpool sales
Whirlpool saw a nine per cent fall in sales in Europe, the Middle East and Africa (EMEA) in the first quarter of 2017, it has revealed.
This decline was caused by “peak complexity” related to the Indesit integration, it said, which has impacted the region’s supply chain network and product availability.
Whirlpool EMEA net sales reached $1 billion (£774 million) in Q1, compared with $1.2bn in the same period last year.
When measured by the US’s Generally Accepted Accounting Principles (GAAP), the company saw a first quarter operating loss of $17m, or 1.7 per cent of sales, compared to a GAAP operating profit of $55m in Q1 2016.
Ongoing business segment operating losses totalled $17m, or 1.7 per cent of sales, compared with an ongoing business segment operating profit of $58m last year.
Whirlpool expects operating margin performance in the second quarter of 2017 to sequentially improve and continue throughout the second half of the year.
Group revenue saw growth of four per cent in Q1, with margin expansion in the North America and Latin America regions.
First quarter net sales hit $4.8bn, compared with $4.6bn in the same period in 2016. Excluding the impact of currency, sales increased three per cent.
GAAP operating profit totalled $264m, or 5.5 per cent of sales, compared with $285m last year.
Ongoing business operating profit was $310m, or 6.5 per cent of sales, compared with $341m in Q1 2016.
“We made progress toward our goals of revenue growth and free cash flow generation, with strong growth and margin expansion in North America and Latin America,” said Jeff Fettig (pictured), chairman and chief executive of Whirlpool Corporation. “As we continue to execute our plans and work through the elevated complexity of our European integration, we remain confident in our ability to deliver both $1 billion of free cash flow and record earnings per share in 2017.”
For the full year in 2017, the company expects to generate cash from operating activities of $1.7bn to $1.75bn.