Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Electrolux expects further demand decline as slips to loss

Published 10/28/2022, 02:46 AM
Updated 10/28/2022, 05:06 AM
© Reuters. FILE PHOTO: The Electrolux logo is seen during the IFA Electronics show in Berlin, Germany September 4, 2014.  REUTERS/Hannibal Hanschke

By Anna Ringstrom

STOCKHOLM (Reuters) - Europe's biggest home appliances maker Electrolux said on Friday it expects further falls in demand due to inflation and high interest rates as soaring costs, especially in North America, led to a third quarter loss.

"Market demand in both Europe and North America for the full-year of 2023 is expected to further deteriorate, i.e. be negative year-over-year," Chief Executive Jonas Samuelson said.

Electrolux in September warned profit would drop as high inflation and low consumer confidence squeezed demand and large investments in North America had yet to pay off.

On Friday it said the cost-cutting programme it announced last month would include reducing the workforce by up to 4,000.

Electrolux has invested heavily in its North American plants in recent years, but the pandemic and component shortages have delayed the ramp-up of local production.

Samuelson told analysts and media in a call that the group had massive inefficiencies in supply chain and production in North America in the quarter.

Electrolux said the group-wide cost cutting and North America turnaround programme would have a 4-5 billion crown positive earnings effect in 2023, and it would book a 1.2-1.5 billion restructuring charge relating to it this quarter.

Samuelson said most of the charge related to trimming staff at Electrolux, which had 52,000 employees at the end of 2021.

Shares in Electrolux, were up 2% at 0848 GMT. So far this year they are down 40%.

© Reuters. FILE PHOTO: The Electrolux logo is seen during the IFA Electronics show in Berlin, Germany September 4, 2014.  REUTERS/Hannibal Hanschke

The group made an operating loss of 385 million Swedish crowns in the third quarter ($35.1 million), against a year-earlier profit of 1.64 billion. The North America division reported a loss of 1.2 billion crowns.

($1 = 10.9679 Swedish crowns)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.