STOCKHOLM, April 28, 2023 /PRNewswire/ --
Highlights of the first quarter of 2023
- Net sales increased to SEK
32,734m (30,118), corresponding to an organic growth of
2.2%. Price remained solid, while weaker market demand resulted in
lower volumes for the Group as a whole. New product ranges
contributed to higher volumes and market share gains for the
business areas North America and
Latin America.
- Operating income amounted to SEK
-256m (1,575), corresponding to a margin of -0.8% (5.2).
Operating income included non-recurring item of SEK -561m (656), that for the first quarter of
2023 related to the discontinuation of production at the
Nyíregyháza factory in Hungary in
2024. Excluding non-recurring items, operating income amounted to
SEK 305m (919), corresponding to a
margin of 0.9% (3.1).
- The year-over-year decline in underlying operating income was
mainly a result of lower volumes. North
America's earnings improved significantly sequentially,
although the business area still reported a loss in the quarter.
The Group-wide cost reduction and North
America turnaround program is progressing according to plan
and had a positive contribution.
- Income for the period amounted to SEK
-588m (950) and earnings per share were SEK -2.18 (3.40).
- Operating cash flow after investments was SEK -5,092m (-5,280).
President and CEO Jonas
Samuelson's comment
Our number one priority for 2023 is a successful implementation
of the Group-wide cost reduction and North America turnaround program. I am
therefore pleased that the execution is going according to plan
with positive contribution in the quarter. Underlying operating
income improved sequentially to SEK
305m in the first quarter 2023 compared to SEK -612m in the fourth quarter 2022, mainly
driven by business area North
America. Organic sales growth in the quarter was 2.2%. Our
solid price execution continued, while volumes declined as a result
of the weaker market demand compared to last year. Lower consumer
purchasing power also resulted in pressure on sales mix.
Our strategy with the consistent focus on innovation and
efficiency, has in recent years delivered good financial results in
three of our four business areas. It is our North American business
area operating margin that has been challenged, impacting our
ability to meet Group financial targets. The investments made in
modularized product architectures and in highly automated and
modern factories have laid the foundation to lift our performance
and take out both the temporary cost challenges and the more
structural impediments to profitability in North America. I am pleased to see good
traction on these actions in the quarter.
At the Capital Markets Update on March
20, the focus was on our path to reach an operating margin
of at least 6% mid-term, both for the Group and for business area
North America. A key component is
the estimated earnings contribution of above SEK 7bn in 2024 compared to 2022 from the cost
reduction program, whereof SEK 4-5bn
is expected in 2023. The actions and performance in the first
quarter are fully aligned with our 2023 full-year cost reduction
plan.
Another key earnings contributor to reach a Group operating
margin of at least 6% mid-term is commercial growth in all four
business areas. This is mainly enabled by leveraging recent
investments in innovative, modularized product architectures that
have resulted in very competitive product ranges. For North America, the aim is to grow in higher
value categories, and already now the new products launched are
winning in the marketplace with industry-leading consumer star
ratings. This, combined with significant operational and cost
improvements, makes me confident in our ability to significantly
improve profitability in North
America.
Aftermarket growth is also an important component to deliver on
the commercial growth for the Group. The aftermarket business also
has a more than four times higher profit margin than the appliance
business. Electrolux aims to increase aftermarket sales to
approximately 10% of Group sales by 2025, from around 7% in
2022.
Sustainability is at the core of our strategy and I am proud
that we reached both of our 2025 science-based targets three years
ahead of plan. We were not only among the first 100 companies to
set a global ambitious climate target, but we are also among the
very first companies to meet it.
The business and market outlooks for 2023 full year provided in
the fourth quarter 2022 earnings report remain unchanged.
I am convinced that we have the right strategy as well as the
experience and the organizational structure needed to navigate in a
volatile environment and seize opportunities to deliver on our
financial targets.
Telephone conference 09.00 CET
A telephone conference is held at 09.00 CET today, April 28. Jonas
Samuelson, President and CEO, Therese Friberg, CFO, and Anna Ohlsson-Leijon, CCO, will comment on the
report.
To only listen to the telephone conference, use the link:
https://edge.media-server.com/mmc/p/z6tdbuoz
To both listen to the telephone conference and ask questions,
use the link:
https://register.vevent.com/register/BI3b5735a6e6734367af19229c58b765d7
Presentation material available for download
www.electroluxgroup.com/ir
For further information, please contact:
Sophie
Arnius,
Head of Investor Relations
+46 70 590 80 72
Electrolux Group Press Hotline,
+46 8 657 65 07
The following files are available for download:
https://mb.cision.com/Main/1853/3760199/2019069.pdf
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Interim Report Q1
2023
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