Electrolux, Volvo and more to come on the switch chart

The last time I wrote about Volvo and Electrolux it was back in October and I concluded that the former had a 'better combination of variables'. 

Well the spread between them today is an amazing 11% (Volvo -1%, Electrolux +10%).  So why did Electrolux perform so well given that sales and ebit were only up low single digit percentages?

Of course the answer is expectations.  Versus these the company did much better than anticipated.  This was not particularly the US (thanks the weather!) where the company has performed quite well for the last couple of quarters...

 

...but in a small positive year-on-year move in Europe. 

Globally, emerging market sales were also strong albeit not at the margins seen elsewhere in the world

So Electrolux is recovering?  Well the outlook statement was 'slightly positive'.  Interesting too that whilst cost savings are apparent, so is higher R&D/marketing spend. 

 

And it is still hardly cheap at a mid teens 'recovery' EV/ebit ratio despite a good balance sheet and a 3.8% dividend yield.  At least though Electrolux is not Volvo, trading on a bigger multiple, generating a lower yield and having much more mixed/complex results. 

 To me the 12 month return on equity statistic says it all...

So how about that switch chart then?  Well having a look over the last six months, this snap back by Electrolux is not over relative to Volvo. 

Big day today but more to come re the closing of the spread gap.