Highlights of the third quarter of 2023
- Net sales amounted to
SEK 33,427m (35,244). The organic sales decline of 7.9% was mainly driven by continued weak market demand and consumers shifting to lower price points. Mix was positive, supported by the innovative product offering, despite this market shift. Price was negative year-over-year as promotional activity has returned to high levels this year. -
Operating income amounted to
SEK 608m (-385), corresponding to a margin of 1.8% (-1.1). Operating income included a previously announced positive non-recurring item ofSEK 294m from the divestment of the Nyíregyháza factory inHungary . Excluding this, operating income amounted toSEK 314m (-35), corresponding to a margin of 0.9% (-0.1). -
The Group-wide cost reduction and
North America turnaround program continued to progress well, resulting in a positive year-over-year impact of approximatelySEK 2.4bn . The substantial savings contributed to a positive underlying operating income development year-over-year, despite the negative impact from volume and price. -
Income for the period amounted to
SEK 123m (-605) and earnings per share wereSEK 0.46 (-2.23). -
Operating cash flow after investments improved to
SEK 1,147m (-1,483). -
Acceleration of cost reduction efforts to restore margins have been initiated and are expected to result in net cost savings of
SEK 10-11bn in 2024 vs 2022, compared to previous cost reduction target of overSEK 7bn . This is expected to lead to a restructuring charge ofSEK 2-2.5bn in the fourth quarter of 2023.
President and CEO
Organic sales declined by 7.9% in the third quarter. Like in the previous quarter, volumes declined significantly and as expected, net price was negative. We continued to execute well on the Group-wide cost reduction and
Lower residential construction and remodeling activity continued to lead to weaker market demand in the for
Due to the lower consumer demand and the end of post-pandemic supply chain constraints, promotional activity remained high in all major markets, especially in
It is disappointing that our North American business area, although delivering a significant year-over-year improvement, reports a loss in the third quarter. Despite execution of the turnaround program ahead of plan, the industry's high promotional activity negatively impacted primarily gross margin realization, but also sales volumes. I firmly believe we have the right strategy in place to return to profitability in
With today's announcement, we are stepping up our cost reduction efforts significantly. This also means that we focus our growth efforts on selected mid- and premium categories under our three main brands and drive even more targeted portfolio management and simplification enabling faster cost reductions. Hence, the cost reduction target for 2024 vs 2022 is increased to
We remain committed to achieving at least 6% EBIT margin mid-term. In addition to an attractive offering driving commercial growth in targeted areas, a key component to deliver on this under current market conditions will be to continue to annually reduce product cost at a similar rate as during the period 2023-2024. This is enabled by a new, more focused business approach and simplified organizational structure.
The Group will reorganize into three regional business areas and two global product lines reporting directly to me, leveraging the Group's global scale with fewer layers, and resulting in increased focus and reduced costs. The new organizational setup is expected to affect approximately 3,000 positions, resulting in a restructuring charge in the fourth quarter of 2023 of
Consumer sentiment related to consumer durables purchases is projected to remain negatively impacted by the high inflation and interest rate environment throughout 2023. However, given high promotional activity we revise the market demand outlook in terms of units for
We are making progress on our strategic divestment initiatives of non-core assets with a combined potential value of approximately
Our main priority remains executing on our cost reduction targets and to implement the new organization. We thereby aim to successfully strengthen our position in selected mid- and premium categories to restore margins and return to profitable growth.
Telephone conference 09.00 CET
A telephone conference is held at 09.00 CET today,
To only listen to the telephone conference, use the link:
https://edge.media-server.com/mmc/p/hcdw3ekw
OR
To both listen to the telephone conference and ask questions, use the link:
https://register.vevent.com/register/BIcabd606149f449a5a594d9432d6abf8d
Presentation material available for download
www.electroluxgroup.com/ir
This is information that
For more information:
Sophie Arnius, Investor Relations, +46 70 590 80 72
Electrolux Group Press Hotline, +46 8 657 65 07
https://news.cision.com/electrolux-group/r/electrolux-group-q3-2023-interim-report,c3863901
https://mb.cision.com/Main/1853/3863901/2389733.pdf
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