Highlights of the first quarter of 2022
- Net sales increased to SEK 30,118m (29,026), corresponding to an organic sales decline of 3.4%. This was driven by lower volumes compared to a strong last year, partially offset by strong price execution.
- Operating income amounted to SEK 1,575m (2,297), corresponding to a margin of 5.2% (7.9).
- Operating income includes a positive non-recurring item of SEK 656m, related to the U.S. tariff case, impacting the business area North America. Excluding this non-recurring item, operating income amounted to SEK 919m, corresponding to a margin of 3.1% (7.9). Significant cost increases and supply constraints impacting volume were not fully compensated by price increases and new product launches.
- Income for the period amounted to SEK 950m (1,556) and earnings per share was SEK 3.40 (5.41).
- Operating cash flow after investments was SEK -5,280m (-161). In addition to a more normal seasonal outflow compared to last year, global supply chain constraints further increased inventory levels.
President and CEO Jonas Samuelson’s comment
The beginning of the year has been dominated by the terrible situation in Ukraine, which also contributed to the already escalating cost inflation and supply instability. At the same time, we have entered our most launch-intensive period ever. 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 significantly impact our production and sales volumes, particularly of higher featured products. As anticipated, the constraints also resulted in substantial costs for express logistics and spot buys. In addition, this supply situation further increased inventory levels, which negatively impacted cash flow. We are collaborating closely with our suppliers to mitigate these constraints, but we estimate that the second quarter will be as challenging as the first quarter, with significant risks of disruptions relating to the resurgence of the coronavirus in China. We expect sequential improvements from mid-2022.
In the first quarter, organic sales declined by 3.4% and operating margin excl. non-recurring items was 3.1%.
We have continued to implement list price increases in all regions during the quarter to offset the accelerating inflationary pressures, with a cumulative year-over-year impact of over 8% and are continuously implementing further increases. In the increasingly inflationary environment, price increases are now more accepted in the market. For the full year, we remain confident that price will fully offset cost inflation, as it has done for the past four years.
The recent geopolitical tensions, inflation soaring to historically high levels, global supply chain constraints and uncertainty regarding the coronavirus pandemic are leading to limited visibility for the rest of the year. We revise our regional market demand outlook for the 2022 full year in North America, mainly driven by supply constraints, and in Europe, due to lower consumer confidence. However, we still expect demand in these regions to be above pre-pandemic levels.
Russia’s invasion of Ukraine is a serious violation of international law. We are very concerned about the geopolitical situation and the suffering that the invasion is causing our employees and the people of Ukraine. There is an urgent need to help, and we have focused our efforts on supporting the International Red Cross’ humanitarian response in Ukraine. When the war commenced, we paused our operations in Russia and Belarus. In Ukraine, both sales and production in the factory, located in the western part of Ukraine, were halted. After careful risk assessment, limited sales and production in Ukraine re-started during the second half of April. In 2021, Russia, Belarus and Ukraine represented approximately 2% of Group net sales.
Our ability to adapt quickly and successfully to a changing environment, as demonstrated during the past two years, will continue to be instrumental. It is a confirmation 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 major responsibility to ensure that our investments contribute to the Paris Agreement’s goal of limiting global warming to 1.5°C. A great example is the recent investment in the production facility at Anderson. In addition to increased efficiency as well as an attractive product offering, the investment has resulted in a significant reduction of the climate footprint.
Telephone conference 09.00 CET
A telephone conference is held at 09.00 CET today, April 29. Jonas Samuelson, President and CEO and Therese Friberg, CFO will comment on the report.
Details for participation by telephone
Sweden: +46 8 56 61 84 67
UK: +44 8 44 48 19 752
U.S.: +1 646 741 3167
International: +44 2071 928 338
Slide presentation for download
Link to webcast
For further information, please contact:
Sophie Arnius, Head of Investor Relations +46 70 590 80 72
Rupini Bergström, Electrolux Press Hotline, +46 8 657 65 07
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, at 08.00 CET on April 29, 2022.