Electrolux thud in Stockholm after third quarter in the red

(Il Sole 24 Ore Radiocor) - Electrolux fell on the Stockholm Stock Exchange after announcing its third-quarter accounts, which closed with a net loss and operating profit well below expectations. The stock of the world's second-largest home appliance maker plunged more than 14 points, outperforming the Stoxx Europe 600 index. Electrolux also announced that Zanussi will not be divested and therefore the value of non-strategic divestments will be lower than initially indicated. In the third quarter the group posted a net loss of SEK 235 million compared to a profit of SEK 123 million last year. Quarterly sales, at SEK 33.3bn, remained largely stable (-0.4%) compared to Q3 2023.

On an organic basis, growth was 6.2%, but was negated by the currency impact of -6.7%. Quarterly EBIT contracted by 42% to EUR 349 million, compared to the EUR 682 million expected by analysts on average. Geographically, the decline was 67% to EUR242 million in Europe, Asia Pacific, the Middle East and Africa, in the US the loss narrowed to EUR249 million from EUR440 million, and in Latin America operating profit improved 21% to EUR490 million. Adjusted operating profit was EUR 717 million (down from EUR 314 million), but it was below expectations of EUR 933 million. For the nine months, revenues fell by 1% to 98.2 billion and the loss worsened by 39% to 1.54 billion kroner.

With regard to the Italian subsidiary Zanussi, Electrolux announced that 'during the preparations for the divestment of non-strategic assets, it has been estimated that the value of the Zanussi brand will be better monetised as part of the group's licensed assets and therefore will not currently be sold'. Consequently, the total potential value of divestments from the group "will be lower than the SEK 10 billion" previously announced. "Although market conditions remained challenging in Europe and North America, we continued to make progress in our cost reduction initiatives. Adjusted operating profit improved to SEK 717 million in the quarter, with operating cash flow of SEK 1.1 billion and a strong cash position," commented CEO Jonas Samuelson, who will hand over the position after almost 9 years, to Yannick Fierling as of 1 January 2025, as announced in August.

"As consumer demand recovers in our key markets, we will be well positioned to take full advantage of our position in certain mid-to-high categories through our competitive product and service offering. Our key priorities are to continue to implement and further accelerate our product cost reduction efforts and consumer-centric strategy," concluded the outgoing CEO. On the Outlook front, Electrolux reiterated its market outlook for the full year: negative in Europe and Asia Pacific, neutral for North America and positive for Latin America. The business outlook is reiterated on the volume/price/mix front, i.e. "negative, price-driven partly offset by growth in focus categories". External factors are reduced to a neutral level, whereas previously they were positive. Finally, investments are expected to amount to approximately SEK 5 billion, compared to previous forecasts of SEK 5-6 billion.