STOCKHOLM, Feb. 2, 2023 /PRNewswire/ --
Highlights of the full-year of 2022
- In full-year 2022, net sales were SEK
134,880m (125,631) and operating income excl. non-recurring
items was SEK 831m (7,528). Earnings
declined due to lower volumes, as a result of weaker market demand,
and to elevated cost levels from production inefficiencies in
North America. Strong price
execution and attractive product and brand offering contributed
positively to earnings.
Highlights of the fourth quarter of 2022
- In the fourth quarter, net sales amounted to SEK 35,769m (35,372) and operating income to
SEK -1,964m (882), corresponding to a
margin of -5.5% (2.5).
- Operating income includes non-recurring items of SEK -1,352m (-727). Excluding these non-recurring
items, operating income amounted to SEK
-612m (1,609), corresponding to a margin of -1.7% (4.5). The
year-over-year decline was a result of lower volumes in all four
business areas and significantly higher cost levels in Business
Area North America, which reported an underlying loss of
SEK 1.2bn.
- Income for the period amounted to SEK
-1,922m (596) and earnings per share were SEK -7.12 (2.09).
- Operating cash flow after investments was SEK 242m (2,103).
- The Board of Directors proposes that no payment of dividend
will be made for 2022.
- Decision on February 1, 2023, to
discontinue production at the Nyíregyháza factory in Hungary from the beginning of 2024 will result
in a negative non-recurring item of approximately SEK 550m in the first quarter of 2023.
President and CEO Jonas
Samuelson's comment
In 2022, new challenges presented themselves in addition to
supply chain constraints: high general inflation, raised interest
rates, soaring energy prices, and increased geopolitical tensions.
These negatively impacted consumer demand for household appliances,
especially evident in the latter part of the year.
In the fourth quarter, significantly lower sales volumes
resulted in an organic sales decline of 8.4%. The volume decline
across all regions was coupled with severely elevated cost levels
in our North American operation. This resulted in an operating loss
for the Group of SEK 612m, excluding
non-recurring items. We have firm plans in place to structurally
lower costs under the Group-wide cost reduction and North America turnaround program and in the
quarter we continued to reduce discretionary spending. A strong
focus on inventory management and adjusting production rates to the
current demand environment resulted in an overall inventory
reduction from previously high levels, especially of in-house
produced finished products that at the end of the year were at
overall normal levels.
On a positive note, I am pleased with how well received our
product launches across all regions have been during 2022. This was
particularly evident in the fourth quarter with the strong earnings
contribution from our attractive product offering, even in this
challenging demand environment with reduced consumer purchasing
power. This strengthens my confidence in our ability to drive mix
improvement also going forward, with an average consumer star
rating of 4.64 for the Group in 2022. Another achievement was the
strong net price realization across all regions, despite
promotional activity returning to normal levels towards the end of
2022. I am very pleased that we through price increases fully
offset significant cost inflation, primarily in raw material and
logistics, both in the full-year as well as in the quarter.
It is encouraging that we have reduced our climate footprint
significantly and already in 2022 reached the 2025 science-based
climate target to reduce CO2 emissions in our own operations by 80%
compared to 2015. We are now reviewing our targets going forward,
raising the bar on our own sustainability agenda even further.
Based on our review of production capacity needs, we have
decided to discontinue production at the Nyíregyháza factory in
Hungary from the beginning of
2024. The strategic direction is to optimize the refrigeration
production footprint from a cost perspective through both
outsourcing and own production leveraging Group scale.
Looking into 2023, consumer sentiment is anticipated to continue
to be negatively impacted by a high inflation and interest rate
environment, although with regional differences. Demand for core
appliances in 2023 full-year is therefore expected to be negative
for all regions except for the Asia-Pacific, Middle
East and Africa region,
which is assessed to be flat compared to 2022.
On the back of this, we estimate our volumes in 2023 to decline
year-over-year, partly mitigated by mix improvements from our
strong offering. We expect External factors to be negative for the
year, driven by energy and labor cost inflation as well as currency
headwind and most of this will impact Europe and Latin
America. Although we foresee benefits from lower raw
material costs, the positive impact on earnings is reduced as a
higher share than normal of raw material procured at last year's
rates will be consumed in 2023. This as a consequence of higher
inventory levels of supplies and reduced production rate in the
fourth quarter of 2022. Given the regional variations in cost
inflation and demand outlook, we anticipate differences in the
price dynamic for our business areas, with high promotional
activity in North America. Hence,
we see a challenge to fully offset an anticipated negative impact
from External factors in 2023 full-year with price on a Group
level. The expected positive year-over-year earnings contribution
of SEK 4-5bn from Cost efficiency and
reduced investments in innovation and marketing combined, related
to the Group-wide cost reduction and North America turnaround program, is
reconfirmed.
I am convinced that we have the right strategy as well as the
experience and the organizational structure needed to navigate in
volatile environment and seize opportunities. A successful
implementation of the Group-wide cost reduction and North America turnaround program will be our
number one priority for 2023.
Telephone conference 09.00 CET
A telephone conference is held at 09.00 CET today, February 2. Jonas
Samuelson, President and CEO and Therese Friberg, CFO will comment on the
report.
To only listen to the telephone conference, use the link:
https://edge.media-server.com/mmc/p/8eaqsfgt
OR
To both listen to the telephone conference and ask questions,
use the link:
https://register.vevent.com/register/BI65b67024ad8a475d8cbf46557c37880e
Presentation material available for download
www.electroluxgroup.com/ir
This is information that AB Electrolux is obliged to make public
pursuant to the EU Market Abuse Regulation. The information was
submitted for publication, through the agency of the contact person
set out above, on 02-02-2023
08:00 CET.
For further information, please contact:
Sophie
Arnius, Investor Relations, +46 70 590 80 72
Electrolux Press Hotline, +46 8 657 65 07
The following files are available for download:
https://mb.cision.com/Main/1853/3707525/1821459.pdf
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Interim Report Q4
2022
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