SOURCE: Groupe SEB

July 12, 2005 13:50 ET

Groupe SEB announce Consolidated First-Half 2005 Sales

Paris, France -- (MARKET WIRE) -- July 12, 2005 --

Press release                                                 12 July 2005

                       CONSOLIDATED FIRST-HALF 2005 SALES

                           SUSTAINED GROWTH IN SALES
                      DESPITE CHALLENGING MARKETS IN EUROPE

                                                       % Change
                                                Current        Constant 
In EUR millions        30 June     30 June     exchange        exchange
                          2004        2005        rates           rates
                                                                        
France                   256.7       238.2         -7.2            -7.2
Other EU countries       307.4       278.8         -9.3            -9.1
North America            105.7       135.6        +28.2           +34.4
South America             57.2        74.6        +30.5           +18.1
Other countries          243.8       275.9        +13.2           +12.1
TOTAL                    970.8     1,003.1         +3.3            +3.1

IFRS reporting; 2004 figures adjusted

Consolidated sales rose 3.3% to EUR1,003.1 million in the six months to 30 June 2005. This performance, achieved in a persistently difficult European business environment, illustrates the impact of the Group's long-term strategy, based on sustained international expansion and targeted acquisitions. First-half sales included an aggregate EUR47.2 million in contributions from All Clad, consolidated over the full six months, and from the more recently acquired Lagostina, over two months, and Panex, over one month. Based on a constant scope of consolidation, interim sales were down 1.5% at current exchange rates and 2% at constant exchange rates

The second quarter saw little change in the general economic environment, which remained lacklustre in Europe but much more buoyant in the Americas and the rest of the world. On the other hand, the currency effect was once again positive, led by the stronger Brazilian real and Korean won. The US dollar, however, continued to have an unfavourable impact on Group sales for the period.

In France, consumer spending remained weak and prevented the Group from making up the shortfall in sales reported in the challenging first quarter. In particular, the lack of demand affected the breakfast lines, fryers and vacuum cleaners. On the other hand, the Group's assertive strategy in the entry level and premium segments has begun to deliver results, with a very satisfactory performance from the Principio line and strong sales in several high value-added product families like Nespresso espresso machines, steam generators and Clipso pressure cookers.

In the rest of the European Union, the persistently sluggish economy led to a build-up in retailer stocks, whose slow absorption weighed on reorders, particularly in Spain, Greece and the United Kingdom. The UK did, however, experience a very slight upturn in demand at the end of the period. Business remained poor in Italy, where Lagostina has nevertheless opened up a new pathway to growth, and uneven in Germany, while Scandinavian sales continued to expand.

In North America, after a robust first quarter in the United States, led by the introduction of new Krups lines and the fast take-off of the new Rowenta irons, sales of both brands eased to more normal levels in the second quarter. T-Fal cookware sales held firm, while All Clad maintained its momentum, adding EUR35 million in sales over the first six months of the year. On a constant scope of consolidation and exchange rate basis, sales were unchanged from first-half 2004. In Canada sales were down for the half, but showed encouraging signs in the second quarter, while in Mexico, demand remained strong and of good quality. Throughout the period.

Performance in South America reflected the still generally favourable economic environment. In Brazil, the Group won new market share and widened its lead over the competition. Excluding the consolidation of Panex, sales rose nearly twice as fast as in the first quarter. They also continued to expand in Venezuela as well as in Argentina, where the Group consolidated its second-ranked position in the market. The new Peruvian business has started up in line with forecasts and initial slotting has been satisfactory

In the rest of the world, which now accounts for 27% of consolidated sales, Groupe SEB further enhanced its presence, led by the ramp-up of new subsidiaries, especially in Asia, a broader product line-up reinforced sales teams and the ongoing diversification of its distribution network. This assertive process helped to drive faster growth across the region, with a particularly satisfactory performance in Japan, where positions were consolidated in both cookware and electrical products; in Australia, where sales of food processors and irons increased during the period; and in Central Europe, notably in Poland. In the CIS and Turkey, where the Group was already highly present, the product line-up was successfully deployed and geographic coverage was expanded.

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