STOCKHOLM, April 29, 2022 /PRNewswire/ —
Highlights of the first quarter of 2022
- Net sales went up SEK 30,118 million (29,026), representing a 3.4% organic sales decline. This was due to lower volumes compared to a strong last year, partially offset by strong price execution.
- The operating income was SEK 1,575 million (2,297), which is a margin of 5.2% (7.9).
- The operating result includes a positive non-recurring item of SEK 656 millionrelated to the US customs case, affecting the business North America. Excluding this one-time item, operating income was SEK 919 million, which translates to a margin of 3.1% (7.9). Significant cost increases and supply constraints affecting volumes were not fully offset by price increases and new product launches.
- Revenue for the period was 950 million SEK (1,556) and earnings per share was SEK 3.40 (5.41).
- Operating cash flow after investments was -5,280 MSEK (-161). In addition to a more normal seasonal outflow compared to last year, global supply chain restrictions have continued to increase inventories.
President and CEO Jonas Samuelsons comment
The beginning of the year was marked by the terrible situation in Ukraine, which also contributed to already escalating cost inflation and supply instability. At the same time, we have entered our most intensive start-up phase of all time. I am very pleased with the strong consumer demand for our new and innovative premium products.
In the first quarter, supply chain constraints continued to have a significant impact on our production and sales volumes, particularly for higher value products. As expected, the restrictions also led to significant costs for express logistics and spot purchases. In addition, this supply situation led to a further increase in inventories, which had a negative impact on cash flow. We are working closely with our suppliers to mitigate these restrictions, but we estimate that the second quarter will be just as challenging as the first quarter, with significant risks of disruption related to the coronavirus resurgence in China. From mid-2022 we expect sequential improvements.
In the first quarter, organic revenue was down 3.4% and operating margin excluding one-time items was 3.1%.
We continued to make list price increases across all regions during the quarter to offset rising inflationary pressures, with a cumulative impact of over 8% year-on-year, and continue to make increases. In the increasingly inflationary environment, price increases are now better accepted by the market. For the year as a whole, we remain confident that price will fully offset cost inflation, as it has over the past four years.
Recent geopolitical tensions, historically high inflation, global supply chain constraints and uncertainty surrounding the coronavirus pandemic result in limited visibility for the remainder of the year. We are revising our regional market demand forecast for full year 2022 in North Americamainly due to supply bottlenecks, and in Europe, due to lower consumer confidence. However, we continue to expect demand in these regions to be above pre-pandemic levels.
of Russia invasion of Ukraine is a serious violation of international law. We are very concerned about the geopolitical situation and the suffering the invasion is inflicting on our staff and community Ukraine. There is an urgent need for assistance and we have focused our efforts in supporting the International Red Cross humanitarian response Ukraine. When the war started, we suspended our operations Russia and Belarus. In Ukraineboth sales and production in the factory located in the western part of Ukraine, were stopped. After careful risk assessment, restricted sale and production in Ukraine Resumption in the second half of April. 2021, Russia, Belarus and Ukraine represented approximately 2% of the Group’s net sales.
Our ability to adapt quickly and successfully to a changing environment, as we have demonstrated over the past two years, will continue to play a crucial role. It’s a validation that we have the right strategy and culture to respond quickly to challenges and seize opportunities.
As one of the leading players in our industry, we have a great responsibility to ensure that our investments contribute to the Paris Agreement target of limiting global warming to 1.5°C. A good example is the recent investment in the Anderson manufacturing facility. In addition to increased efficiency and an attractive range of products, the investment has led to a significant reduction in the carbon footprint.
Conference call 09.00 CET
A conference call will be held today at 09:00 CET, April 29th. Jonas SamuelsonPresident and CEO and Theresa FreiburgCFO will comment on the report.
Details on how to participate by phone
Sweden: +46 8 56 61 84 67
United Kingdom: +44 8 44 48 19 752
United States: +1.646.741.3167
International: +44 2071 928 338
Slide presentation for download
Link to webcast
For more information please contact:
Sophie Arnius, Head of Investor Relations +46 70 590 80 72
Rupini Bergstrom, Electrolux Press Hotline, +46 8 657 65 07
This is information that AB Electrolux is required to make public under the EU Market Abuse Regulation. The information was sent via the agency to the above contact for publication at 08:00 CET April 29, 2022.
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