Double-edged weapon

20 October 2004 By Marianne Brun-Rovet

But there are doubts about how radical these will be. And Electrolux s strong balance sheet may ensure survival but delay reform. The homeappliance maker plans some changes to deal with fierce competition and soaring raw materials costs.

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Electrolux cut its 2004 outlook as it reported thirdquarter profits that were hit by rising raw material prices and fierce competition from lowcost producers.

The world's largest homeappliance maker reported thirdquarter net income of SKr677m compared with SKr767m a year ago on revenues of SKr29.6bn. Its margins have fallen from 5.5% this time last year to 4.1%.

Electrolux said operating income for the full year would be significantly lower than in 2003, whereas three weeks ago it had said it would be somewhat lower. The group plans to cut costs by moving production abroad and increasing the proportion of raw materials it buys from lowcost countries.

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