2009 1st Half Report - Indesit

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Half-year report at 30 June 2009 The gross operating profit (EBITDA 2 ) for the first half of 2009 was 83.0 million euro (136.8 million euro), representing 6.9% (9.0%) of revenue. The operating profit (EBIT 3 ) for the first half of 2009 was 15.4 million euro (72.4 million euro), representing 1.3% (4.7%) of revenue. Before non-recurring income and expenses, operating profit (EBIT) was 50.2 million euro (89.2 million euro), representing 4.2% (5.8%) of revenue. 7,0% 6,0% 5,0% 4,0% 3,0% 2,0% 1,0% 0,0% EBIT after of non recurring items by quarter Q108 Q208 Q308 Q408 IQ09 IIQ09 60 50 40 30 20 10 0 EBIT after of non recurring (million euro - right) EBIT after of non recurring (% of revenue -left ) Non recurring items - first half 2009 Non recurring charges for restructuring (41,1) Other non recurrings items 6,3 Total (34,8) The decline in operating profitability with respect to the first half of 2008 was due to negative factors associated with international market conditions, negative factors affecting the results for 2009 which will benefit the Group over the medium term, and positive factors deriving from successful actions and corporate transactions. The Group's operating results were penalised by a marked reduction in the volume of sales caused by the collapse in demand; with regard to production, this contraction in volume resulted in the lower absorption of industrial fixed costs. Unfavourable exchange rate movements during the first half of 2009 also lowered operating profits by about 33.0 million euro overall. The higher non-recurring charges will, on the other hand, benefit future years. These charges principally relate to closure of the Kinmel Park factory in the UK and the reorganisation of production at the None factory in Italy. The Group has partially offset the adverse effects described above by an improvement in the price/mix, the constant enhancement of product quality and the positive results from Service activities. Additional positive effects stemmed from a reduction in logistics costs, mainly due to lower volume despite a deterioration in the market mix with respect to the first half of 2008, as well as from the lower cost of raw materials and lower transformation costs due to the steady improvement of production processes. Efforts have also continued to lower general expenses and, in particular, to reduce advertising and promotion costs. At constant exchange rates, EBIT for the first half of 2009 would have been 48.4 million euro. Net financial expenses amounted to 36.2 million euro (13.9 million euro); this increase mainly reflects the higher cost of hedging exchange rate risks and an increase in the exchange rate losses incurred in relation to unhedged exposures, due to the greater volatility of exchange rates and a rise in the total average exposure. An additional adverse effect came from the mark-to-market adjustment of derivatives hedging the interest-rate risk on borrowings, including the income statement effect generated by financial instruments representing cash flow hedges. Net borrowing costs, on the other hand, fall due to the decline in interest rates. 2 EBITDA: operating profit reported in the consolidated income statement, stated gross of depreciation and amortisation. 3 EBIT: operating profit reported in the consolidated income statement. 7
Half-year report at 30 June 2009 The consolidated net loss for the first half of 2009 was 22.5 million euro (profit of 33.7 million euro), after recognising significant net non-recurring charges, as mentioned above, totalling 34.8 million euro (16.8 million euro). Results by segment The Group's operating segments consist of geographical areas. Pursuant to IFRS 8, these were determined with reference to the availability of separate financial information and consistent with the principal way in which results are periodically reviewed by the Chief operating decision maker, in order to evaluate performance and the effect of strategic decisions. The Group identifies the following operating segments: - Italy; - UK and Ireland; - Russia, comprising Russia and the Asian republics; - Western Europe, comprising France, Spain, Portugal, Germany, Austria, Switzerland, Benelux, Scandinavia, Lithuania, Estonia and Latvia; - Eastern Europe, comprising Poland, Ukraine, Moldova, Czech Republic, Hungary, Romania, Greece, Turkey, Bulgaria and the Balkans; - Overseas, which includes all other non-European markets. First half of 2009 (million Euro) Total Areas Costs not allocated Total Group Revenue 1.203,7 1.203,7 Operative costs (1.129,3) (59,1) (1.188,4) Operating margin 74,5 (59,1) 15,4 First half of 2008 (million Euro) Total Areas Costs not allocated Total Group Revenue 1.525,3 1.525,3 Operative costs (1.409,9) (43,1) (1.452,9) Operating margin 115,4 (43,1) 72,4 The costs not allocated to segments principally comprise corporate costs and restructuring charges. 8
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