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Andrea Guerra
September 26th, 2003
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Merloni Elettrodomestici at a glance
Headquarters
Fabriano - Ancona (Italy)
Commercial presence
Subsidiaries in 21 countries
Annual sales
12 m appliances
Turnover
 3.0 bl € expected in 2003
Major Brands
2 global: Ariston, Indesit
3 regional: Scholtès, Stinol,
Hotpoint
Product lines
Cookers, refrigerators,
washing machines, dishwashers
dryers (free standing and built-in)
Production facilities
16 plants in 7 countries
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Market overview
Demand breakdown by region
North
America
55
Big Europe
Fabriano headquarters
96
Asia and 113
Pacific
Latin
America 28
Africa
Worldwide
Population:
Major appliances sold
9
6.2 Bn people
300 Million
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Growth = focused organic growth +good acquisitions +
fast integrations+new projects
Organic Growth
Acquisitions
Organic Revenues’ Growth,
M EUR
Acquisitions
History
Total Growth 2000 - 2002
Organic
47%
240
53%
138
Acquired
182
1,419
1999
2000
2001
2002
• Maintaining momentum
• Optimizing scale effects
• Exploiting synergies
• 12 acquisitions in 25 years
• 1/3 international
• Experience in acquiring and
integrating
• Quality:

CAGR (00-02, Rev) = 20%

CAGR (00-02, EBIT) = 42%
• Basis:

Acquisition choice and
integration capabilities

Good mix of organic and
acquisition growth
The “One Single Company” concept (1 organization, 1 structure, 1 manufacturing network, …)
enables Merloni to realize synergies from acquisitions fast and efficiently
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Merloni: the third European player
1st Half 2003 (Volumes)
Electrolux
16,4%
Bosch
16,0%
Merloni
15,1%
Whirlpool
Candy
9,6%
4,6%
D vs 2002
Bosch
38,3%
-0,6
Merloni
Whirlpool
Candy
Others
+0,2
Electrolux
Others
+0,2
-0,1
0,0
+0,3
Source: GfK, AMAR, Internal Estimation
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The East/West gap represents a significant
opportunity for Merloni
West Europe: 385 mil people
East Europe: 415 mil people
‘98
‘03
‘05
Volumes (mil.)
55.0
58.0
60.0
GDP (index)
100.0
110.5
116.0
Per Capita GDP (€)
21,800
24,000
House Holds (mil.)
154
Urbanization
78%
‘98
‘03
‘05
Volumes (mil.)
12.4
17.5
20.0
GDP (index)
100.0
114.8
136.0
25,100
Per Capita GDP (€)
3,300
3,700
4,500
156
157
House Holds (mil.)
111
112
114
79%
80%
Urbanization
67%
69%
71%
MODERATE GROWTH
IN A MATURE MARKET
2003 upside +
2003
FAST GROWTH IN AN
EXPANDING MARKET
reduced volatility for the 10 East European
countries scheduled to join the EEU
Source: Company estimates on IMF & Freedonia Group data
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European market and Merloni’s KSFs
European market
Western Europe
Mln units
WE
EE
67.4
69.4
73.2
73.2
12.4
11.9
13.9
13.6
- 320 Million pop., 24,000 $ avg. GDP per
capita
- Progressive segmentation between
“commodity” and “value” driven markets
- “Substitution market” driven by fashion and
innovation
- Around 1/3 of built-in appliances on total
appliances sold
55.0
57.5
59.4
Merloni’s KSFs
- Innovation & cost
leader
- Design
- After sales
services
59.6
Central and Eastern Europe
- 430 Million pop., 3,100 $ avg. GDP per capita
1998
1999
2000
2001
2000-2001:
two years of
flat demand
- Forecast of high market growth
- Market demand driven mainly by the
upgrading of installed appliances base
- Market penetration of washing machine
around 55% in Eastern Europe
- Reliability & cost
leader
- Style and
fashion
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A truly European Group
Merloni operations
Domestic vs. international sales
% of units sold
Italy
Total sales
% of Units sold, 2002*
100%
100%
28.5
20.2
71.5
Other
Countries
79.8
2000
2001
100%
17.7%
82.3%
Eastern
Europe & 36%
Overseas
64%
Western
Europe
2002*
• Merloni Operations are distributed all over
Europe
• More than 80% sales come from international
markets
Office
Affiliate company
Plant
• Total sales are well distributed between East
Europe (29%) and West Europe (71%)
*: Including GDA, 9 months at 50%
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