2009 1st Half Report - Indesit

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Half-year report at 30 June 2009 Italy Area (million Euro) 30 June 2009 30 June 2008 Change Revenue 229,0 250,2 (21,2) Operating Margin 26,0 25,0 1,0 Operating Margin % 11,4% 10,0% 1,4% The Industry shipment of household appliances sales to retailers in Italy declined in the first half 2009 by approximately 8.6% compared to the comparative prior year period. This fall in demand has contributed significantly to the erosion of the revenue generated by the Italy Area. In particular, the decline in the market for built-in appliances was somewhat greater than that for free-standing items. The total revenue deriving from the Group's Italian sales reflects this trend, although the effect has been attenuated by a noticeable price-mix effect combined, essentially, with the maintenance of market share and therefore market leadership. In this context and despite the higher provision for doubtful accounts with respect to 2008, the operating profit for the period achieved by the Italy Area was in line with that for the comparative prior year period. This was due to the improvement in the price/mix, a focus on fixed costs and an inevitable reduction in advertising and promotional costs. 140,0 135,0 130,0 125,0 120,0 115,0 110,0 105,0 100,0 120,6 107,6 Italy Area Revenue (million Euro) 129,6 121,3 2008 2009 50,0 45,0 40,0 35,0 30,0 25,0 20,0 15,0 10,0 5,0 - 14,7 Italy Area Operating Margin (million Euro) 9,2 10,3 16,8 2008 2009 Q1 Q2 Q1 Q2 UK and Ireland Area (million Euro) 30 June 2009 30 June 2008 Change Revenue 340,3 385,4 (45,1) Operating Margin 20,7 7,4 13,3 Operating Margin % 6,1% 1,9% 4,2% The results for the UK and Ireland Area reflect the most significant discontinuity experienced by the Group during the first half of 2009. Despite the marked depreciation of the Uk pound with respect to the comparative prior year period (15.4% drop in the average exchange rate) and the steady reduction in the proportion of production carried out in the UK (down from 40% in the first half of 2008 to 31% in the first half of 2009), the British organisation easily offset the adverse exchange rate effect with an improvement in the sales price/mix and a significant reduction in non-quality costs. Operating profit was more than the double of that achieved in 2008 and the market share also increased significantly, almost overshadowing the approximately 16% contraction in the market (industry shipment) during the first half of 2009 with respect to the comparative period. In general, all the performance indicators for the UK and Ireland Area were very good in the first half of the year. 9
Half-year report at 30 June 2009 220,0 210,0 200,0 190,0 180,0 170,0 160,0 150,0 140,0 198,6 169,1 UK and Ireland Area Revenue (million Euro) 186,8 171,2 2008 2009 50,0 45,0 40,0 35,0 30,0 25,0 20,0 15,0 10,0 5,0 - 4,7 UK and Ireland Area Operating Margin( million Euro) 3,2 2,6 17,3 2008 2009 Q1 Q2 Q1 Q2 West Europe Area (million Euro) 30 June 2009 30 June 2008 Change Revenue 261,9 293,2 (31,3) Operating Margin 6,0 2,4 3,6 Operating Margin % 2,3% 0,8% 1,5% Overall, sales in Western Europe declined faster during the second quarter than in the first, when the fall was relatively moderate. In particular, the two most significant markets in this area, France and Spain, suffered serious losses in sales due, once again, to the slump in demand by an estimated 10% in France and 22% in Spain (industry shipment). Despite the drop in sales, the Area's operating profit rose by 3.6 million euro with respect to the comparative period, largely due to an improvement in the sales price/mix for free-standing products, the reduction of fixed costs, the containment of advertising and promotion costs, and the lower incidence of distribution expenses. The sales performance of built-in appliances was less satisfactory in almost all West European countries, given the effects of the real estate market crisis afflicting this area. 180,0 170,0 160,0 150,0 140,0 130,0 120,0 110,0 100,0 90,0 80,0 144,6 West Europe Area Revenue (million Euro) 148,6 131,7 130,2 2008 2009 40,0 35,0 30,0 25,0 20,0 15,0 10,0 5,0 - -5,0 3,0 Q1 West Europe Area Operating Margin (million Euro) 1,0 -0,6 Q2 5,0 2008 2009 Q1 Q2 Russian Fed. Area (million Euro) 30 June 2009 30 June 2008 Change Revenue 152,6 274,1 (121,5) Operating Margin 17,6 58,0 (40,4) Operating Margin % 11,5% 21,2% (9,6%) In Russia, excluding the growth achieved in January 2009, the remaining months of the period experienced contractions (industry shipment) of largely more than 30% with respect to the prior year. The large decline in euro revenue from this geographical area reflects a combination of lower demand with the major depreciation of the rouble with respect to the comparative period in 2008 (20.8% drop in the average exchange rate). The decrease in operating profit, equal to 40.4 million euro, was however slowed down due to the essential self-sufficiency of the Russia Area in terms of production (74 % of sales were produced 10
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2009 1st Half Report - Indesit

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