Nordic Business Report-October 13, 2006-Pergo AB sees roll-out delays in North America, lowers full-year guidance
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The Swedish flooring company Pergo AB said on Friday (13 October) that it is lowering its earnings guidance for 2006 following product roll-out delays in North America.
"Our 2006 results are being adversely affected by changes in the timing of planned roll-outs and reductions in inventory levels by certain North American customers," said Tony Sturrus, CEO of Pergo.
"The new product roll-outs, which were previously scheduled for completion in the second half of 2006, are now expected to be implemented in the first half of 2007," Sturrus added.
As a result of the timing changes in North America Pergo is lowering its 2006 sales guidance from a previously announced 15% growth to a 2-4% growth, and its earnings margin guidance from 6-7% to 3-5%. Pergo believes that the return on capital employed will amount to 12-15%, rather than the previously announced 16-18%.
Pergo's European operations are performing "solidly and in line with company expectations".
Pergo said that it expects its 2007 sales growth to be at least in line with the laminate flooring industry's projected growth of 9-14% in North America and 2-4% in Europe. The operating margin for 2007 is expected to be 8%.
Pergo is a leading flooring company with leading market positions in Europe and the US. The company has some 650 employees and reported sales of approximately SEK3bn in 2005.
One British pound (GBP) is worth approximately 13.70 Swedish kronor (SEK).
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