1. CEO comment

CEO comment

Performance during the first quarter was essentially in line with the forecast made when preparing the financial statements for 2009, namely:

• Slight recovery in the markets, especially in Western Europe;
• Prices stable overall;
• Positive results in areas where Indesit has decided to focus effort in 2010: built in, Hotpoint-Ariston brand, service;
• Product cost lower due to production and purchasing efficiencies;
• Increased investment in advertising.

The performance of raw materials was a feature of the quarter, with significant rises in market prices since December 2009: steel +14%; oil +5%; nickel +32%, copper +7%. The Group has already finalised contracts for the purchase of raw materials and components covering more than 90% of requirements for the year and, accordingly, can observe these increases with relative tranquillity, at least during 2010.
Overall, the Group expects sales and profitability to grow during the year, by contrast with the difficult conditions experienced in 2009. The extent of this growth nevertheless remains heavily conditioned by market demand in Russia. Despite the spread of cautiously optimistic news and information (higher exports and industrial production; lower interest rates; extremely low public sector borrowing; wage increases in January at some companies etc.), demand indicators remained negative during the first quarter of 2010 and the signs of recovery are still very weak.
Much of the overall results for the year will therefore depend on the recovery of Russia which, in terms of size and profitability, continues to be one of the Group's principal markets.